[Federal Register Volume 59, Number 232 (Monday, December 5, 1994)]
[Unknown Section]
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From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29849]


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[Federal Register: December 5, 1994]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5116-6]

 

Clean Air Act Final Disapproval of Operating Permits Program; 
Commonwealth of Virginia

AGENCY: U.S. Environmental Protection Agency (EPA).

ACTION: Final disapproval.

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SUMMARY: EPA is taking final action to disapprove the Clean Air Act 
operating permits program under title V of the Clean Air Act Amendments 
of 1990 submitted to EPA by the Commonwealth of Virginia. The reasons 
for this disapproval action were fully described in EPA's notice of 
proposed disapproval (see the June 17, 1994 Federal Register) and can 
be summarized as follows: (1) Virginia's program submittal does not 
contain the necessary legal authority to allow persons who have 
participated in the permit program's public comment process to obtain 
review of the final permit decision in State court; (2) the program 
does not contain the necessary legal authority to prevent the default 
issuance of permits; (3) the submitted regulations expired on June 28, 
1994 and cannot be applied or enforced after that date; (4) the 
regulatory portion of the program submittal does not include the proper 
universe of sources required to be subject to a State operating permits 
program; and (5) the program does not ensure that permits contain all 
applicable Clean Air Act requirements and does not correctly delineate 
permit provisions enforceable only by the Commonwealth.

DATES: This action will become effective on January 4, 1995.

ADDRESSES: A copy of Virginia's submittal and other supporting 
information relevant to this action, including all public comment 
letters, are available for public inspection during normal business 
hours at the following location: U.S. Environmental Protection Agency, 
Region III, Air, Radiation & Toxics Division, 841 Chestnut Building, 
Philadelphia, PA 19107.

FOR FURTHER INFORMATION CONTACT: Mr. David J. Campbell, Air and 
Radiation Programs Branch (3AT10), U.S. Environmental Protection 
Agency, Region III, 841 Chestnut Building, Philadelphia, PA 19107, 
Telephone: 215 597-9781.

SUPPLEMENTARY INFORMATION:

I. Background

    Title V of the 1990 Clean Air Act Amendments (sections 501-507 of 
the Clean Air Act (``CAA'')) and implementing regulations at 40 CFR 
part 70 (see 57 FR 32250 (July 21, 1992)) require that States develop 
and submit operating permits programs to EPA by November 15, 1993, and 
that EPA act to approve or disapprove each program within one (1) year 
after receiving the submittal. EPA's program review occurs pursuant to 
section 502 of the CAA and the part 70 regulations, which together 
outline the criteria for approval or disapproval. If EPA has not 
approved a program by November 15, 1995 for a State, it must establish 
and implement a Federal program in that State.
    On June 17, 1994, EPA proposed disapproval of the operating permits 
program for the Commonwealth of Virginia. (See 59 FR 31183.) EPA 
received public comment on the proposal and will address those comments 
in this notice. EPA is taking final action to disapprove the operating 
permits program for the Commonwealth of Virginia. By promulgating this 
disapproval action within one (1) year of receipt of Virginia's 
November 12, 1993 operating permits program submittal, EPA has 
fulfilled its requirements for timely program review under section 
502(d).

II. Analysis of State Submittal

    On November 12, 1993, as supplemented on January 14, 1994, the 
Commonwealth of Virginia submitted an operating permits program to 
satisfy the requirements of the CAA and 40 CFR part 70. EPA reviewed 
the program against the criteria for approval and disapproval in 
section 502 of the CAA and the part 70 regulations. EPA determined, as 
fully described in the notice of proposed disapproval of Virginia's 
program (see 59 FR 31183 (June 17, 1994)) and the Technical Support 
Document for this action, that the Commonwealth's operating permits 
program does not substantially meet the requirements of the CAA or part 
70. In summary, the deficiencies of the Commonwealth's program which 
require disapproval are:
    1. Inadequate provisions, pursuant to section 502(b)(6) of the CAA 
and 40 CFR 70.4(b)(3)(x) and 70.7(h), for public participation in the 
permit process and the opportunity for judicial review in State court. 
Specifically, the Commonwealth lacks statutory authority for judicial 
review of final permit decisions that meets the CAA's minimum threshold 
for judicial standing.
    2. Lack of authority, pursuant to section 505(b)(3) of the CAA and 
40 CFR 70.8(e), to prevent the default issuance of permits by 
Commonwealth.
    3. The regulations to implement the program expired on June 28, 
1994 and have not been re-promulgated.
    4. The Commonwealth's operating permits program does not require 
issuance of permits to the proper universe of sources required by 40 
CFR part 70.
    5. The program does not contain regulations meeting the 
requirements of 40 CFR part 70 to ensure issuance of permits that 
contain all applicable Federal requirements and to correctly delineate 
provisions only enforceable by the Commonwealth.
    Pursuant to section 502(d)(1) of the CAA, the Commonwealth of 
Virginia must correct these deficiencies, as well as those defined in 
the Technical Support Document by June 7, 1995, in order to receive 
approval of its operating permits program from EPA.

III. Response to Public Comments

    EPA received 32 letters of comment in response to the proposed 
disapproval of Virginia's operating permits program submittal. As 
mentioned in the June 17, 1994 notice of proposed disapproval, EPA 
received a petition from the Environmental Defense Fund, dated December 
23, 1993, to disapprove Virginia's operating permits program. That 
petition is considered in this action. EPA received a total of 26 
comment letters supporting the notice of proposed disapproval of 
Virginia's program. EPA received adverse comment letters from the 
Virginia Manufacturers Association, Virginia Aggregates Association, 
Northeast Maryland Waste Disposal Authority, AES, Ogden Martin Systems 
of Montgomery, Inc., Ogden Martin Systems of Fairfax, Inc., Ogden 
Martin Systems of Lancaster, Inc., and Ogden Martin Systems of 
Alexandria/Arlington, Inc. The Attorney General of Virginia submitted 
specific comments on the judicial standing issue. Additionally, the 
Commonwealth of Virginia Department of Environmental Quality submitted 
a separate letter which describes how it intends to address the 
deficiencies as outlined in the notice of proposed disapproval and the 
accompanying Technical Support Document, with the notable exception of 
the judicial standing issues. Finally, one letter of comment was 
received recommending specific changes to Virginia's operating permits 
program. The following is in response to comments which do not directly 
support EPA's disapproval action.
    Comment: The Commonwealth of Virginia's judicial review statute is 
legally sufficient to satisfy the requirements of title V and 40 CFR 
part 70.
    EPA Response: EPA proposed disapproval of Virginia's program 
because it, in part, fails to meet the minimum requirements for 
standing for judicial review as required by section 502(b)(6) of the 
Act and 40 CFR 70.4(b)(3)(x).
    Section 502(b)(6) states that every permit program must provide the 
applicant and ``any person who participated in the public comment 
process'' with the opportunity for judicial review of the final permit 
action in State court. The same opportunity must also be afforded to 
any other person who could obtain judicial review of the action under 
any applicable State law.
    The Commonwealth and the other contesting commenters assert that a 
reading of the language of section 502(b)(6) and the legislative 
history indicates that Congress intended that States be given 
discretion to determine who should be allowed to obtain judicial review 
of actions under a State's title V program. EPA does not agree with 
this interpretation of section 502's judicial review provision.
    EPA believes that for a State title V operating permits program to 
be approved by EPA, that program must provide access to judicial review 
to any party who participated in the public comment process and who at 
a minimum meets the threshold standing requirements of Article III of 
the U.S. Constitution. This interpretation is consistent with the 
language, structure, and legislative history of the Act which provides 
affected members of the public an opportunity for judicial review of 
permit actions to ensure an adequate and meaningful opportunity for 
public participation in the permit process. The Senate managers of the 
Clean Air Act Amendments of 1990 stated that:

    Several other provisions [in section 502(b)(6)] are included to 
ensure fair treatment in the permit process. For example, we make 
clear that judicial review of final actions by the permitting 
authority to issue or deny permits shall be available in State court 
to anyone who could obtain such review under any applicable law. 
This provision ensures that existing provisions of law governing the 
availability of review of final actions on permit applications are 
in no way limited, and that interested parties who arguably are 
affected by permit decisions are guaranteed their day in court.

    Chafee-Baucus Statement of Senate Managers, S.1630, the Clean Air 
Act Amendments of 1990, reprinted in 136 Cong. Rec. S169941 (daily ed. 
October 27, 1990). This language, together with the expansive language 
of section 502(b)(6), demonstrates the clear intent of the Congress to 
provide citizens a broad opportunity for judicial review.
    In addition, if EPA were to implement an operating permits program 
pursuant to section 502(d)(3) of the Act, citizens would have access to 
judicial review of EPA permitting decisions if they met the minimal 
standing requirements of Article III. With respect to the nature of the 
injury that an ``interested person'' must show to have standing under 
Article III, the Supreme Court held in Sierra Club v. Morton, 405 U.S. 
727, 734-35 (1972), that harm to an economic interest is not required 
to confer standing. Harm to an aesthetic, environmental, or 
recreational interest is sufficient, as long as the party seeking 
judicial review is among the injured. This holding was reaffirmed by 
the Supreme Court in Lujan v. Defenders of Wildlife, 504 U.S. ----, 112 
S.Ct. 2130, 2136, 119 L.Ed.2d 351, 365-66 (1992). See also, Middlesex 
County Sewerage Authority v. National Sea Clammers Ass'n, 453 U.S. 1, 
16-17 (1981) (citizen suit provision of CWA intended by Congress to 
apply to plaintiffs suffering noneconomic and economic injury).
    One commenter observed that in addition to the constitutional 
requirements for standing, ``prudential'' standing requirements would 
apply where a Federal court reviews an EPA-issued permit. The 
prudential standing inquiry requires that a court ask whether a would-
be challenger to Agency action is pursuing an ``interest'' arguably 
within the zone of interests Congress intended to either regulate or 
protect. Hazardous Waste Treatment Council v. EPA (HWTC IV), 885 F.2d 
918, 922 (D.C. Cir. 1989). EPA has considered the issue and has 
determined that it agrees with the commenter that courts should apply 
traditional prudential standing requirements to parties seeking 
judicial review pursuant to section 502(b)(6). Id. at 921. However, by 
requiring that States provide an opportunity for judicial review to, 
inter alia, ``any person who participated in the public comment 
process'' on a proposed permit, Congress declared that any such person 
is within the zone of interests addressed by title V. Thus, EPA 
believes that the Act clearly enables such persons to meet prudential 
standing requirements. In Virginia, however, all persons who have 
participated in the public comment process are not considered within 
the zone of interests protected by title V. Accordingly, the 
Commonwealth's standing provision is more restrictive than traditional 
prudential standing requirements. Hazardous Waste Treatment Council v. 
Thomas (HWTC II), 861 F.2d 277 (D.C. Cir. 1988), cert. denied, 490 U.S. 
1106 (1989).
    Comment: The CAA, specifically section 502(b)(6), may violate the 
Tenth Amendment of the U.S. Constitution. The commenters believe that 
Congress cannot preempt a traditional State power with the ambiguous 
language of section 502(b)(6) and that Congress cannot coerce State 
legislative action. Additionally, these commenters contend that the 
sanctions provisions in section 502(d)(2) of the Act unconstitutionally 
compel the States to enact and enforce the title V permits program.
    EPA Response: The Commonwealth and the contesting commenters assert 
that EPA's interpretation of section 502(b)(6) of the Act is an 
invasion of State sovereignty in violation of the Tenth Amendment of 
the U.S. Constitution. They assert that Congress cannot require States 
to regulate. However, EPA does not believe that the Clean Air Act, and 
more specifically section 502(b)(6), is an unconstitutional invasion of 
State sovereignty.
    It is fundamental under the Tenth Amendment to the U.S. 
Constitution that Congress lacks the power directly to compel States to 
enact and enforce a Federal regulatory program. Equally fundamental, 
however, is Congress' authority to establish a program of cooperative 
federalism in which States are encouraged to enact a State regulatory 
program using Federal standards in a federally preemptible area. When 
Congress created the operating permits program in title V of the Clean 
Air Act Amendments of 1990, it could have entirely preempted State 
regulation by creating a regulatory scheme to be enforced exclusively 
by EPA. Instead, Congress created a regulatory scheme where States 
could enact permit programs meeting Federal standards or have EPA 
promulgate such a program. When Congress chooses to allow the States 
such a regulatory role in a federally preemptible area, such as it has 
done in title V, the Supreme Court has found no violation of the Tenth 
Amendment to the U.S. Constitution and therefore no unconstitutional 
invasion of State sovereignty. Hodel v. Virginia Surface Mining & 
Reclamation Assn., Inc., 452 U.S. 264, 290 (1981); FERC v. Mississippi, 
456 U.S. 742, 764 (1982). The title V operating permits program does 
not ``commandeer the legislative processes of the States by directly 
compelling them to enact and enforce a Federal regulatory program.'' 
Hodel, supra, at 288; FERC, supra, at 764-765. Rather, this program is 
clearly one of cooperative federalism that encourages the States to 
enact and enforce a State program, incorporating title V's standards, 
by offering incentives to do so.
    Congress can encourage States to regulate in a particular manner by 
attaching conditions on the receipt of Federal funds and/or offering 
States the choice of regulating an activity in conformance with Federal 
standards or having the State law preempted by Federal regulation. New 
York v. United States, 112 S. Ct. 2408 (1992). Congress has provided 
States with two incentives to encourage them to adopt and implement an 
operating permits program consistent with Federal regulations. If a 
State fails to submit an approvable program, it is subject to one or 
more of the sanctions described under section 179(b) of the Act. Again, 
it is well established that Congress is empowered to further Federal 
policy objectives by conditioning the receipt of Federal moneys upon 
compliance by the recipient State with Federal statutory and 
administrative directives. See, e.g., South Dakota v. Dole, 483 U.S. 
203 (1987); Fullilove v. Klutznick, 448 U.S. 448 (1980). In addition, 
under section 502(d)(3), if a State does not submit a title V operating 
permits program or if the State program does not meet the requirements 
of title V, EPA is required to promulgate, administer, and enforce an 
operating permits program in that State. Thus, if the Commonwealth does 
not submit a permanent program that complies with the Act and 40 CFR 
part 70, the full regulatory burden will be borne by EPA.
    The Commonwealth asserts that EPA's interpretation of section 
502(b)(6) is a violation of the Eleventh Amendment of the U.S. 
Constitution. Virginia's concern is misplaced because section 502(b)(6) 
provides for judicial review of a State's permitting decisions in State 
court and therefore does not implicate the Eleventh Amendment.
    Comment: The Commonwealth of Virginia should receive interim 
approval of its operating permits program. Several commenters believe 
that Virginia's program will meet the minimum requirements to be 
considered for interim approval as described at 40 CFR 70.4(d) once 
proposed modifications to the permits program regulations are adopted. 
It has also been stated that the issue of judicial standing is not a 
relevant criterion for assessing interim approvability.
    EPA Response: Pursuant to Sec. 70.4(d)(1), an operating permits 
program submittal that is not fully approvable must first substantially 
meet the requirements of part 70 in order to be considered for interim 
approval. Once a submittal has been deemed to substantially meet the 
requirements of part 70, the criteria established at Sec. 70.4(d)(3) 
are applied as a second test for eligibility for interim approval. On 
the basis of the five disapproval issues, EPA has determined that 
Virginia's operating permits program submittal does not substantially 
meet the requirements of part 70 and, therefore, is not eligible for 
interim approval. Moreover, the fact that the emergency regulations 
establishing the permits program have expired sufficiently indicates 
that the program does not substantially meet the requirements of part 
70.
    Comment: EPA judged the adequacy of the Commonwealth of Virginia's 
operating permits program prior to official submittal. Specifically, 
EPA notified the Commonwealth of Virginia that it lacked adequate 
statutory provisions for standing for judicial review prior to the 
receipt of its November 12, 1993 program submittal.
    EPA Response: EPA attempted to alert Virginia to potential 
impediments to the approval of any operating permits program submitted 
by the Commonwealth prior to the November 15, 1993 program submittal 
due date. It was EPA's intention to supply constructive comments to 
Virginia prior to November 15, 1993 in order to provide the 
Commonwealth with adequate time to seek any statutory or regulatory 
revisions as needed. EPA has a well-established policy of providing 
comments on draft and proposed regulations and programs which will 
later come before it for formal rulemaking action. Notwithstanding 
EPA's policy of providing timely comment, the Agency's position on the 
standing for judicial review issue has been consistent throughout its 
correspondence with the relevant parties in Virginia and that position 
has been maintained and reflected in the rulemaking actions undertaken 
in response to the official submittal of Virginia's operating permits 
program.
    Comment: EPA may be applying inconsistent approval standards among 
the various State and Local jurisdictions seeking approval of operating 
permits programs to satisfy the requirements of title V of the CAA. The 
commenter indicated that EPA is not providing a consistent level of 
review and comment of other States' standing provisions.
    EPA Response: EPA has applied consistent standards to other states. 
EPA has not proposed approval for any State operating permits program 
that does not substantially meet the requirements for standing for 
judicial review as required by section 502(b)(6) of the Act and 40 CFR 
70.4(b)(3)(x). EPA will evaluate each program separately to determine 
if it meets the requirements of 40 CFR part 70.
    Comment: The Commonwealth of Virginia Department of Environmental 
Quality submitted comments to address the regulatory deficiencies cited 
in EPA's notice of proposed disapproval and the Technical Support 
Document accompanying that action. The comments specifically exclude 
discussion of the standing for judicial review issue. The Department of 
Environmental Quality details the regulatory modifications it plans to 
make to the previously adopted regulations for its operating permits 
program.
    EPA Response: EPA is encouraged that the Department of 
Environmental Quality is working to address the regulatory deficiencies 
of its operating permits program as cited in the proposed disapproval. 
At such time that EPA receives an official submittal replacing the 
Commonwealth's November 12, 1993 submittal being considered by this 
action, the Agency will evaluate the new submittal in an additional 
rulemaking action. To comment on the adequacy of proposed modifications 
would not be appropriate in this action.
    Comment: One commenter provided EPA with letters it had previously 
submitted to the Virginia Department of Environmental Quality. The 
letters discuss the commenter's concerns regarding Virginia's operating 
permits program. The letters also offer suggested modifications to the 
program. The commenter suggested that EPA consider these letters when 
reviewing Virginia's program.
    EPA Response: EPA has considered the comments contained in the 
letters provided by the commenter. EPA's final disapproval of the 
Virginia operating permits program as submitted on November 12, 1993 
sufficiently addresses the concerns of the commenter.

IV. Final Action and Implications

A. Program Modification

    EPA is promulgating disapproval of the operating permits program 
submitted by the Commonwealth of Virginia on November 12, 1993, as 
supplemented on January 14, 1994. This disapproval constitutes a 
disapproval under section 502(d) of the CAA (see 57 FR 32253). Pursuant 
to section 502(d)(1), the Commonwealth has 180 days from the date of 
EPA's notification of the Governor of Virginia to revise and resubmit 
the program. EPA will notify the Governor of Virginia by letter that 
the Commonwealth has 180 days from the effective date of this final 
disapproval in which to make the necessary modifications to its 
operating permits program and resubmit it to EPA for review.
    Virginia must amend its operating permits program to correct the 
deficiencies and resubmit the program, including a revised Attorney 
General's opinion, to EPA for review. The notice of proposed 
disapproval and the Technical Support Document discuss Virginia's 
submittal in detail, and contain specific references to revisions and 
modifications necessary to obtain full approval. Once submitted, 
Virginia's operating permits program, including revised statutes and 
regulations, will undergo an additional notice and comment period 
before EPA takes final action on the program submittal.

B. Sanctions

    Based on the disapproval of its operating permits program, the 
Commonwealth of Virginia may become subject to sanctions under the CAA. 
Pursuant to section 502(d)(2)(A), EPA may, at its discretion, apply any 
of the sanctions described in section 179(b) at any time subsequent to 
the effective date of this disapproval action. Furthermore, EPA is 
compelled by the CAA to apply one of the sanctions in section 179(b), 
as selected by the Administrator, on July 5, 1996, unless prior to that 
date the Commonwealth submits a revised operating permits program for 
Virginia and EPA determines that the Commonwealth has corrected the 
deficiencies that prompted this disapproval action. If, six (6) months 
after EPA applies the first sanction, Virginia has not submitted a 
revised program and EPA has not determined that the Commonwealth has 
corrected the deficiencies, a second sanction is required. Finally, if 
the Commonwealth of Virginia does not have an approved program by 
November 15, 1995, EPA must promulgate, administer, and enforce a 
Federal operating permits program for Virginia.

Final Action

    EPA is disapproving the operating permits program submitted by the 
Commonwealth of Virginia on November 12, 1993, as supplemented on 
January 14, 1994. This disapproval constitutes a disapproval under 
section 502(d) of the CAA (see 57 FR 32253). As provided under section 
502(d)(1) of the CAA, the Commonwealth will have up to 180 days from 
the date of EPA's notification of disapproval for the Governor of 
Virginia to revise and resubmit the program. EPA is disapproving this 
program on the basis that Virginia has not met the following five 
requirements: provision for adequate judicial standing; prevention of 
default permit issuance; reliance on permanent regulations; issuance of 
permits to the proper universe of sources; and issuance of permits that 
contain all applicable Federal requirements and correctly delineate 
provisions only enforceable by the Commonwealth.
    The Office of Management and Budget (OMB) has exempted this action 
from Executive Order 12866 review.
    EPA's actions under section 502 of the CAA do not create any new 
requirements, but simply address operating permits programs submitted 
to satisfy the requirements of 40 CFR part 70. Because EPA's 
disapproval of the Commonwealth of Virginia's request under section 502 
of the CAA for approval of its operating permits program does not 
impose any new requirements, it does not have a significant impact on a 
substantial number of small entities.

List of Subjects in 40 CFR Part 70

    Administrative practice and procedure, Air pollution control, 
Environmental protection, Intergovernmental relations, Operating 
permits, and Reporting and recordkeeping requirements.

    Dated: November 15, 1994.
Peter H. Kostmayer,
Regional Administrator.

    Part 70, title 40 of the Code of Federal Regulations is amended as 
follows:
    1. The authority citation for part 70 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

    2. Appendix A to part 70 is amended by adding the entry for 
Virginia in alphabetical order to read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating 
Permits Programs

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Virginia

    (a) Department of Environmental Quality: submitted on November 
19, 1993; disapproval effective on January 4, 1995.
    (b) [Reserved]
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[FR Doc. 94-29849 Filed 12-2-94; 8:45 am]
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