[Federal Register Volume 63, Number 184 (Wednesday, September 23, 1998)]
[Rules and Regulations]
[Pages 50769-50773]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-25323]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-6165-8]


Clean Air Act Final Approval Of Amendments to Title V Operating 
Permits Program; Pima County Department of Environmental Quality, 
Arizona

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is promulgating final approval of the following 
revisions to the operating permits program submitted by the Arizona 
Department of Environmental Quality (``DEQ'') on behalf of the Pima 
County Department of Environmental Quality (``Pima'' or ``County''): a 
revision to the fee provisions; and a revision that will defer the 
requirement for minor sources subject to standards under sections 111 
or 112 of the Act to obtain title V permits, unless such sources are in 
a source category required by EPA to obtain title V permits. EPA is 
also promulgating final approval under section 112(l) of Pima's program 
for delegation of section 112 standards as they apply to sources not 
required to obtain a title V permit.
    EPA took final action on Pima's title V operating permits program 
on October 30, 1996 (61 FR 55910). However, because Pima's title V 
program contains certain flaws, EPA did not fully approve it, but 
instead granted the program an ``interim approval.'' Under its interim 
approval, Pima is required to adopt and submit program changes to EPA 
that will correct its program flaws. The program revisions being 
approved in this document do not address the program issues identified 
by EPA. This final action approving revisions to Pima's title V program 
therefore does not constitute a full approval of Pima's title V 
program.

DATES: This rule is effective on October 23, 1998.

ADDRESSES: Copies of Pima's submittals and other supporting information 
used in developing this final approval are available for inspection 
(AZ-Pima-97-1-OPS and AZ-Pima-97-2-OPS) during normal business hours at 
the following location: U.S. Environmental Protection Agency, Region 9; 
75 Hawthorne Street; San Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Erica Ruhl (telephone 415-744-1171), 
Mail Code AIR-3, U.S. Environmental Protection Agency, 75 Hawthorne 
Street; San Francisco, CA 94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    As required under title V of the Clean Air Act as amended (1990), 
EPA has promulgated rules that define the minimum elements of an 
approvable state operating permits program and the corresponding 
standards and procedures by which the EPA will approve, oversee, and 
withdraw approval of state operating permits programs (57 FR 32250, 
July 21, 1992). These rules are codified at 40 CFR part 70. Title V 
requires states to develop and submit to EPA, by November 15, 1993, 
programs for issuing these operating permits to all major stationary 
sources and to certain other sources. The EPA's program review occurs 
pursuant to section 502 of the Act, which outlines criteria for 
approval or disapproval.
    On November 15, 1993, Pima's title V program was submitted. EPA 
proposed interim approval of the program on July 13, 1995 (60 FR 
36083). The fee provisions of the program were found to be fully 
approvable. On November 14, 1995, in response to changes in state law, 
Pima amended its fee provisions under Chapter 12, Article VI of Title 
17 of the Pima County Air Quality Control Code. Those changes were 
submitted to EPA on January 14, 1997, after it promulgated final 
interim approval of Pima's title V program (61 FR 55910, October 30, 
1996). EPA subsequently proposed to approve Pima's revised fee 
provisions (62 FR 16124, April 4, 1997).
    On July 17, 1997, EPA received a submittal from ADEQ on behalf of 
Pima requesting that EPA approve a revision to the applicability 
provisions of Pima's title V program. Because EPA's evaluation of 
Pima's title V fee provisions takes into account the numbers and types 
of sources requiring permits, EPA decided it would be appropriate to 
reevaluate the approvability of the fee changes in the context of the 
change to program applicability. EPA therefore withdrew its proposed 
approval of Pima's revised fee program (63 FR 7109, February 12, 1998) 
and, in the same document, proposed approval of the changes to Pima's 
fee and applicability provisions.

[[Page 50770]]

II. Final Action and Implications

A. Analysis of State Submission

    The analysis of the submittals given in the February 12, 1998 
proposed action is supplemented by the discussion of public comment 
made on the notice of proposed rulemaking (see section II.B. of this 
document). That analysis remains unchanged and will not be repeated in 
this final document.
1. Applicability
    The amendment to the applicability provisions of Pima's title V 
program was submitted by the Arizona DEQ on July 17, 1997. The 
submittal includes the deletion of the term ``Title V Source'' from 
Pima County Air Quality Control Code (PCC) 17.04.340.133, proof of 
adoption, evidence of necessary legal authority, evidence of public 
participation including comments submitted on the rulemaking, and a 
supplemental legal opinion from the County Attorney regarding the legal 
adequacy of Pima's title V program, including implementation of section 
111 and 112 of the Clean Air Act. In a letter dated November 7, 1997, 
Pima clarified which sections of its title V program it wished to have 
rescinded and which sections approved.
    With this change, only those sources required to obtain a Class I 
(title V) permit, (i.e., major sources, solid waste incinerators 
required to obtain a permit pursuant to section 129(e) of the CAA, and 
sources required by the Administrator to obtain a permit), are subject 
to the District's title V program. Non-major sources, including those 
regulated under sections 111 and 112 of the CAA, are deferred from the 
requirement to obtain a Class I/title V permit, to the extent allowed 
by the Administrator.
2. Program for Delegation of Section 112(l) Standards as Promulgated
    In a letter dated December 2, 1997, Pima specifically requested 
approval under section 112(l) of a program for delegation of unchanged 
section 112 standards applicable to sources that are not subject to 
mandatory permitting requirements under title V. (See letter from David 
Esposito, Director, PDEQ to David Howekamp, Director, Air and Toxics 
(sic) Division, EPA Region IX.)
3. Fees
    An amendment to the fee provisions of Pima's title V program was 
submitted by the Arizona DEQ on January 14, 1997. The submittal 
includes the revised fee regulations (Chapter 12, Article VI of Title 
17 of the Pima County Air Quality Control Code as amended on November 
14, 1995), a technical support document, and a legal opinion by the 
County Attorney. Additional materials, including proof of adoption and 
a commitment to provide periodic updates to EPA regarding the status of 
the fee program, were submitted on February 26, 1997. In a letter dated 
July 25, 1997, Pima submitted a detailed discussion of the expected 
costs of and anticipated revenue from its title V program.

B. Public Comments and Responses

    Only one comment letter was received. That letter, from Steven Burr 
of Lewis and Roca (representing the Arizona Mining Association or 
``AMA'') incorporated by reference both the comments AMA made on the 
EPA's previous proposal to approve Pima's fee provisions (62 FR 16124, 
April 4, 1997) as well as AMA's ``supplemental comments'' dated January 
2, 1998.
1. Adequacy of Fees under Section 502(b)(3) of the CAA
    Section 502(b)(3) of the Act requires that each permitting 
authority collect fees sufficient to cover all reasonable direct and 
indirect costs required to develop and administer its title V operating 
permits program. The commenter disagreed with EPA's proposed approval 
of the revision to the Pima County title V program because he contends 
the fee program fails to meet the minimum requirements of section 
502(b)(3) of the Clean Air Act. The commenter states that the 
documentation submitted by Pima County fails to demonstrate that the 
County's fees will cover the full costs of the title V program and that 
the fees Pima County collects will not cover the costs of issuing 
permits to existing title V sources.
    Pima uses a combination of emissions fees and fees for issuance and 
revision to cover program costs.
    Fees for issuance and revision. Pima's fee provisions require that 
applicants for permits to construct and operate that are subject to 
title V must pay the total actual cost of reviewing and acting upon 
applications for permits and permit revisions. See sections 
17.12.510.G. and 17.12.510.I. These fees are used to cover the cost of 
issuing permits to new sources and for processing revisions to permits. 
Pima estimated the permitting-related average hourly billing costs for 
permitting of title V facilities, including salary, fringe benefits, 
direct non-salary costs and indirect costs including cost estimates of 
various types of permit related activities. The estimated hourly cost 
is $53.60. However, because state law caps hourly fees at $53.00, 
Pima's hourly charges are capped at $53.00. See section 17.12.510.M. 
Although this cap is 60 cents per hour less than the District's 
estimated hourly costs for permit processing, EPA finds this provision 
to be fully approvable. In view of the fact that the estimation of 
program cost inherently involves projections and approximation, and of 
the fact that fee adequacy can be monitored on an ongoing basis as the 
program is implemented, EPA concludes that this provision is sufficient 
to adequately fund the program.
    Emission Fees. Emission fees are used by Pima to cover the direct 
and indirect costs of the title V related activities not covered the 
fees charged for permit issuance to new sources and revisions to all 
sources. These activities are: (1) part 70 program development and 
implementation; (2) issuance of title V permits to existing sources; 
(3) part 70 source compliance, including inspection services; and (4) 
part 70 business assistance, which helps sources determine and meet 
their obligations under part 70. Pima estimates the annual cost of 
these activities in the first three years of program implementation to 
range between $83,562 and $87,674. Based upon the fall 1996 dollar per 
ton value ($35.78), invoicing records and emissions estimates, Pima 
projects it will collect $98,275 in emissions fees annually.
    As set out in the February 12, 1998 notice of proposed approval, 
EPA finds that Pima County's fee provisions meet the requirements of 
502(b)(3). Materials submitted by Pima County demonstrate that the cost 
of issuing initial permits to existing title V sources is covered by 
annual emission fees.
2. Validity of EPA's October 30, 1996 Interim Approval
    On October 30, 1996, EPA promulgated interim approval of Pima's 
title V program. The commenter observes that Pima County adopted the 
amendment to its fee rule almost one year before EPA granted interim 
approval to the title V program. Pima County did not, however, submit 
the amended rule until after EPA had granted interim approval. The 
commenter argues that the fee rule that EPA purported to approve does 
not exist and did not exist when EPA issued its interim approval, 
therefore, Pima County's title V program does not include an approved 
or approvable fee rule. The commenter contends that a fee rule 
satisfying section 502(b)(3) is a requirement for interim approval and 
therefore, EPA should acknowledge that

[[Page 50771]]

its interim approval of Pima County's title V program is void.
    The proposal on which EPA is taking final action is limited to the 
question of whether the revision to Pima's fee provisions is approvable 
under part 70. As described in the notice of proposed rulemaking and in 
the preceding response, EPA has evaluated the submitted revision to 
Pima's program and has found that it meets the requirements of part 70 
and section 502(b) of the Act. An evaluation of the validity of EPA's 
grant of interim approval to Pima's title V program is beyond the scope 
of this action. The issue raised in this comment has also been raised 
as an issue in a petition to the Ninth Circuit challenging EPA's final 
interim approval of Pima's title V program. EPA believes that is the 
appropriate forum in which to resolve this issue.
3. Validity of Pima's Fee Provisions under State Law
    The commenter contends that the revision to the Pima County title V 
program cannot be approved by EPA because it is unenforceable as a 
matter of state law. The commenter notes that the Arizona Revised 
Statutes (section 49-112(B)) require that fees charged by county 
agencies must be approximately equal to or less than permit fees 
charged by the Arizona Department of Environmental Quality (ADEQ). He 
contends that, although the language in the amendment Pima adopted is 
identical to the language in ADEQ's rule,1 Pima County's 
interpretation of the rules, as described by both the County and EPA in 
its proposed approval, would result in substantially higher fees being 
paid in Pima County. The commenter states that ADEQ interprets its rule 
to apply only to new sources while Pima charges fees to both new and 
existing sources.
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    \1\ The language referenced is: ``Before the issuance of a 
permit to construct and operate a source that is required to obtain 
a permit pursuant to title V of the Act, the applicant for the 
permit shall pay to the Director a fee billed by the Director 
representing the total actual cost of reviewing and action upon the 
application.'' AMA alleges that Pima interprets this provisions to 
allow the collection of a ``fee for service'' from an existing 
source for its initial a permit to operate whereas ADEQ interprets 
this to mean that a fee for service may only be collected from new 
sources that are applying for both a permit to construct and a 
permit to operate.
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    In order to determine if the commenters allegations were well 
founded, on May 21, 1997, EPA sent a letter to Pima County requesting 
information on differences between Pima County and ADEQ with respect to 
how their fee provisions are implemented. EPA asked that Pima address 
the question of whether fees are charged for the issuance of permits to 
existing sources. On July 25, 1997, Pima County responded to EPA's 
letter. The response included an affidavit prepared by the Pima County 
Attorney's office and signed by Pima staff stating that the District 
does not charge a permit processing fee to existing part 70 sources. As 
explained above, the cost of issuing initial permits to existing 
sources is covered by revenue from emissions fees. In the absence of 
any documentation of practices to the contrary, EPA has concluded that 
Pima's implementation of the fee rule is consistent with ADEQ's 
implementation.
4. Timing of EPA Action in Light of AMA Litigation in State Court
    The commenter points out that the AMA is in the midst of litigating 
in state court the question of the validity of the Pima County fee 
rules that EPA now proposes to approve. He states his belief that it is 
not the EPA's policy to substitute its judgement for that of a state 
court on a matter of the legality of a state provision and that, at the 
very least, EPA should defer action on the approval of Pima County's 
fee rule until the court has decided the issue of its legality. The 
commenter goes on to say that if the court upholds AMA's position, the 
rule will be declared void ab initio and that EPA has no authority to 
approve a fee rule that is not enforceable as a matter of state law.
    As long as the rule is effective as a matter of state law, EPA will 
treat it as such. If a state court strikes down the law, this might be 
a basis for EPA action, consistent with 70.10(c)(1)(i)(B). For the 
purpose of this federal approval action, and without expressing further 
opinion on the validity of the commenter's suit in state court, it does 
not appear to EPA that Pima's fee provisions run afoul of state law. As 
required by Arizona Revised Statutes section 49-112(B), Pima's fee 
provisions are consistent with those of ADEQ, and as evidenced by 
Pima's submittal, County representatives have attested that the County 
will implement its fee rule in a manner consistent with that of ADEQ. 
EPA does not have reason to believe that Pima County's fee rule is 
unenforceable as a matter of state law. As explained in the February 
12, 1998 Federal Register document, EPA is satisfied that Pima's fee 
rules meet the requirements of title V of the CAA and 40 CFR part 70.
    Section 70.4(i) of part 70 does require that permitting authorities 
keep EPA apprised of any proposed changes to their basic statutory or 
regulatory structure. EPA therefore expects that if any part of a part 
70 program is deleted or modified, either by the district hearing board 
or by court action, it will be notified by the permitting authority. 
Were such changes to render a program deficient or prevent a permitting 
authority from adequately implementing the program, EPA would follow 
the procedures set of under section 70.4(i) to ensure that such 
inadequacies are promptly corrected. If corrections are not made in a 
timely manner, part 70 sets out a mechanism for the withdrawal of its 
approval of the program and for implementation of the federal operating 
permits program in its place. See section 70.10.

C. Final Action

    EPA is finalizing its approval of the submitted amendments to the 
applicability and fee provisions of Pima's title V operating permits 
program. EPA is also finalizing its approval under section 112(l) to 
include Pima's program for delegation of section 112 standards as they 
apply to those sources not required to obtain a title V permit.
    EPA's approval of the change in applicability results in the 
following revision to Pima's title V program: Rule 17.04.340.240 
(definition of ``title V source'' adopted September 28, 1993) will be 
removed from the County's title V program.
    EPA's approval of the amendments to Pima County's fee provisions 
results in the following changes to the County's title V program. Rules 
17.12.320, 17.12.500, 17.12.520 , 17.12.580 (adopted September 28, 
1993); Rule 17.12.610 (adopted November 14, 1989); and Rules 17.12.640 
and 17.12.650 (adopted December 10, 1991) will be removed. Rules 
17.12.320, 17.12.500, and 17.12.510 (adopted November 14, 1995) will be 
added. With this rulemaking, EPA is taking action to approve the fee 
changes and bring the approved version of the program in line with the 
current version in place at the county.

IV. Administrative Requirements

A. Docket

    Copies of Pima's submittal and other information relied upon for 
this final action, including public comments, are contained in dockets 
(AZ-Pima-97-1-OPS, and AZ-Pima-97-2-OPS) maintained at the EPA Regional 
Office. The docket is an organized and complete file of all the 
information submitted to, or otherwise considered by, EPA in the 
development of this final approval. The dockets are available for

[[Page 50772]]

inspection at the location listed under the ADDRESSES section of this 
document.

B. Regulatory Flexibility Act

    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the Administrator certifies that this action will not 
have a significant economic impact on a substantial number of small 
entities. The EPA's actions under section 502 of the Act do not create 
any new requirements, but simply address revisions to Pima County's 
existing operating permits program that were submitted to satisfy the 
requirements of 40 CFR part 70.

C. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (``UMRA''), 
Pub. L. 104-4, establishes requirements for Federal agencies to assess 
the effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, EPA 
generally must prepare a written statement, including a cost-benefit 
analysis, for proposed and final rules with Federal mandates that may 
result in expenditures to State, local, and tribal governments, in the 
aggregate, or to the private sector, of $100 million or more in any one 
year. Under section 205, the EPA must select the most cost effective 
and least burdensome alternative that achieves the objectives of the 
rule and is consistent with statutory requirements. Section 203 
requires the EPA to establish a plan for informing and advising any 
small governments that may be significantly or uniquely impacted by the 
rule.
    The EPA has determined that the approval action promulgated in this 
rulemaking document does not include a federal mandate that may result 
in estimated costs of $100 million or more to either state, local, or 
tribal governments in the aggregate, or to the private sector, in any 
one year. This federal action approves pre-existing requirements under 
state or local law, and imposes no new federal requirements. 
Accordingly, no additional costs to state, local, or tribal 
governments, or to the private sector, result from this action.

D. Submission to Congress and the General Accounting Office

    The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the 
Small Business Regulatory Enforcement Fairness Act of 1996, generally 
provides that before a rule may take effect, the agency promulgating 
the rule must submit a rule report, which includes a copy of the rule, 
to each House of the Congress and to the Comptroller General of the 
United States. The EPA will submit a report containing this rule and 
other required information to the U.S. Senate, the U.S. House of 
Representatives and the Comptroller General of the United States prior 
to publication of the rule in the Federal Register. A major rule cannot 
take effect until 60 days after it is published in the Federal 
Register. This rule is not a ``major rule'' as defined by 5 U.S.C. 
804(2). This rule will be effective October 23, 1998.

E. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA 
must determine whether its regulatory actions are ``significant'' and 
therefore subject to Office of Management and Budget review and the 
requirements of the Executive Order. The Order defines a significant 
regulatory action ``as one that is likely to result in a rule that may: 
(1) Have an annual effect on the economy of $ 100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or state, local, or tribal governments or 
communities; (2) create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) materially alter 
the budgetary impact of entitlement, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in the Executive 
Order. The Office of Management and Budget has exempted this action 
from Executive Order 12866 review.

F. Executive Order 13045

    Executive Order 13045, ``Protection of Children from Environmental 
Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies 
to any rule that: (1) is determined to be ``economically significant'' 
as defined under E.O. 12866, and (2) concerns an environmental health 
or safety risk that EPA has reason to believe may have a 
disproportionate effect on children. If the regulatory action meets 
both criteria, the Agency must evaluate the environmental health or 
safety effects of the planned rule on children, and explain why the 
planned regulation is preferable to other potentially effective and 
reasonably feasible alternatives considered by the Agency.
    This rule is not subject to E.O. 13045 because it is not an 
economically significant rule as defined by E.O. 12866, and because it 
does not involve decisions based on environmental health or safety 
risks.

G. Executive Order 12875: Enhancing Intergovernmental Partnerships

    Under Executive Order 12875, EPA may not issue a regulation that is 
not required by statute and that creates a mandate upon a State, local 
or tribal government, unless the Federal government provides the funds 
necessary to pay the direct compliance costs incurred by those 
governments. If the mandate is unfunded, EPA must provide to the Office 
of Management and Budget a description of the extent of EPA's prior 
consultation with representatives of affected State, local and tribal 
governments, the nature of their concerns, copies of any written 
communications from the governments, and a statement supporting the 
need to issue the regulation. In addition, Executive Order 12875 
requires EPA to develop an effective process permitting elected 
officials and other representatives of State, local and tribal 
governments ``to provide meaningful and timely input in the development 
of regulatory proposals containing significant unfunded mandates.'' 
Today's rule approves preexisting State requirements and does not 
impose new Federal mandates on State, local or tribal governments. The 
rule does not impose any enforceable duties on these entities. 
Accordingly, the requirements of section 1(a) of Executive Order 12875 
do not apply to this rule.

H. Executive Order 13084: Consultation and Coordination With Indian 
Tribal Governments

    Under Executive Order 13084, EPA may not issue a regulation that is 
not required by statute, that significantly or uniquely affects the 
communities of Indian tribal governments, and that imposes substantial 
direct compliance costs on those communities, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by the tribal governments. If the mandate is unfunded, 
EPA must provide to the Office of Management and Budget, in a 
separately identified section of the preamble to the rule, a 
description of the extent of EPA's prior consultation with 
representatives of affected tribal governments, a summary of the nature 
of their concerns, and a statement supporting the need to issue the 
regulation. In addition, Executive Order 13084 requires EPA to develop 
an effective process permitting elected and other representatives of 
Indian tribal governments ``to provide meaningful and timely input in 
the development of

[[Page 50773]]

regulatory policies on matters that significantly or uniquely affect 
their communities.'' Today's rule does not impose new Federal mandates 
on Indian tribal governments and does not significantly or uniquely 
affect the communities of Indian tribal governments. Accordingly, the 
requirements of section 3(b) of Executive Order 13084 do not apply to 
this rule.

List of Subjects in 40 CFR Part 70

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

    Authority: 42 U.S.C. sections 7401-7671q.

    Dated: September 14, 1998.
Felicia Marcus,
Regional Administrator, Region 9.

    Part 70, Chapter I, Title 40 of the Code of Federal Regulations is 
amended as follows:

PART 70--[AMENDED]

    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 revising paragraph (c) under 
Arizona to read as follows:

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

* * * * *

Arizona

* * * * *
    (c) Pima County Department of Environmental Quality:
    (1) Submitted on November 15, 1993 and amended on December 15, 
1993; January 27, 1994; April 6, 1994; April 8, 1994; August 14, 
1995; July 22, 1996; August 12, 1996; interim approval effective on 
November 29, 1996; interim approval expires June 1, 2000.
    (2) Revisions submitted on January 14, 1997; February 26, 1997; 
July 17, 1997; July 25, 1997; November 7, 1997; approval effective 
October 23, 1998; interim approval expires June 1, 2000.
* * * * *
[FR Doc. 98-25323 Filed 9-22-98; 8:45 am]
BILLING CODE 6560-50-P