[Federal Register Volume 66, Number 144 (Thursday, July 26, 2001)]
[Rules and Regulations]
[Pages 38940-38946]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-18405]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[FRL-7012-9]


Clean Air Act Full Approval of Operating Permits Program in 
Alaska

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: EPA is taking final action to fully approve the operating 
permits program submitted by the Alaska Department of Environmental 
Conservation (Alaska) for the purpose of complying with federal 
requirements for an approvable State program to issue operating permits 
to all major stationary sources, and to certain other sources. EPA 
published final interim approval to Alaska's air operating permit 
program on December 5, 1996. Alaska has revised its operating permits 
program to satisfy the conditions of the interim approval and this 
action approves those revisions.

DATES: This direct final rule is effective on September 24, 2001 
without further notice, unless EPA receives adverse comment by August 
27, 2001. If adverse comment is received, EPA will publish a timely 
withdrawal of this direct final rule in the Federal Register and inform 
the public that the rule will not take effect. The public comments will 
be addressed in a subsequent final rule based on the proposed rule 
published in this Federal Register.

ADDRESSES: Written comments should be addressed to Denise Baker, 
Environmental Protection Specialist (OAQ-107), Office of Air Quality, 
U.S. Environmental Protection Agency, Region 10, 1200 Sixth Avenue, 
Seattle, Washington 98101.
    Copies of the State of Alaska's submittal and other supporting 
information used in developing this final full approval are available 
for inspection during normal business hours at the following location: 
U.S. Environmental Protection Agency, Region 10, 1200 Sixth Avenue, 
Seattle, Washington, 98101. Copies of the State documents relevant to 
this action are also available for public inspection at Alaska 
Department of Environmental Conservation, 410 Willoughby Avenue, Suite 
303, Juneau, AK, 99801-1796 and at Alaska Department of Environmental 
Conservation, 555 Cordova Street, Anchorage, AK, 99501-2617. Interested 
persons wanting to examine these documents should make an appointment 
with the appropriate office at least 24 hours before the visiting day.

[[Page 38941]]


FOR FURTHER INFORMATION CONTACT: Denise Baker, Office of Air Quality 
(OAQ-107), EPA, 1200 6th Avenue, Seattle, WA 98101, (206) 553-8087.

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Background
A. What Is the Title V Air Operating Permits Program?
B. What Is the Status of Alaska's Title V Air Operating Permits 
Program?
II. What Changes Has Alaska Made To Address the Interim Approval 
Issues?
A. Applicability of Permit Program Requirements
B. Applicable Requirements
C. Authority To Implement Section 112 Requirements
D. Insignificant Emission Units
E. Emissions Trading Provided for in Applicable Requirements
F. Inspection and Entry Requirements
G. Progress Reports
H. Compliance Certification
I. General Permits
J. Affirmative Defense for Emergencies
K. Off-Permit Provisions
L. Statement of Basis
M. Administrative Amendments
N. Minor Permit Modifications
O. Group Processing of Minor Permit Modifications
P. Significant Permit Modifications
Q. Reopenings
R. Public Petitions to EPA
S. Public Participation
III. What Other Changes Has Alaska Made to its Program--Outside of 
Addressing the Interim Approval Issues?
IV. Final Action
V. What Happens if EPA Gets Comments on This Federal Register?
VI. Are there any Administrative Requirements That Apply to This 
Action?

I. Background

A. What Is the Title V Air Operating Permits Program?

    The Clean Air Act (CAA) Amendments of 1990 required all state and 
local permitting authorities to develop operating permits programs that 
meet certain Federal criteria. In implementing the operating permits 
programs, the permitting authorities require certain sources of air 
pollution to obtain permits that contain all applicable requirements 
under the CAA. The focus of the operating permits program is to improve 
enforcement by issuing each source a permit that consolidates all the 
applicable CAA requirements into a Federally enforceable document. By 
consolidating all the applicable requirements for a source in a single 
document, the source, the public, and regulators can more easily 
determine what CAA requirements apply to the source and whether the 
source is in compliance with those requirements.
    Sources required to obtain an operating permit under the title V 
program include ``major'' sources of air pollution and certain other 
sources specified in the CAA or in EPA's implementing regulations. For 
example, all sources regulated under the acid rain program, regardless 
of size, must obtain operating permits. Examples of major sources 
include those that have the potential to emit 100 tons per year or more 
of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, 
nitrogen oxides, or particulate matter; those that emit 10 tons per 
year or more of any single hazardous air pollutant (specifically listed 
under the CAA); or those that emit 25 tons per year or more of a 
combination of hazardous air pollutants (HAPs). In areas that are not 
meeting the National Ambient Air Quality Standards for ozone, carbon 
monoxide, or particulate matter, major sources are defined by the 
gravity of the nonattainment classification. For example, in ozone 
nonattainment areas classified as ``serious,'' major sources include 
those with the potential to emit 50 tons per year or more of volatile 
organic compounds or nitrogen oxides.

B. What Is the Status of Alaska's Title V Air Operating Permits 
Program?

    The State of Alaska (Alaska or State) originally submitted its 
application for the title V air operating permits program to EPA in May 
1995.
    Where an operating permits program substantially, but not fully, 
meets the criteria outlined in the implementing regulations codified in 
40 Code of Federal Regulations (CFR) part 70, EPA is authorized to 
grant interim approval contingent on the state revising its program to 
correct the deficiencies. Because the operating permits program 
originally submitted by Alaska in 1995 substantially, but not fully, 
met the requirements of part 70, EPA granted interim approval to 
Alaska's program in an action published on December 5, 1996 (61 FR 
64463). The interim approval notice identified the 19 remaining 
conditions that Alaska must meet in order to receive full approval of 
its title V air operating permits program.
    This document describes the changes Alaska has made to its 
operating permits program since we granted Alaska's program interim 
approval and the action EPA is taking in response to those changes.

II. What Changes Has Alaska Made To Address the Interim Approval 
Issues?

    On June 2, 1998, Alaska sent a letter to EPA addressing all 19 of 
the interim approval issues and requesting full program approval of the 
State's air operating permits program. EPA has reviewed the program 
revisions submitted by Alaska and has determined that its operating 
permits program now qualifies for full approval. This section describes 
the interim approval issues identified by EPA in granting the Alaska 
program interim approval and the changes Alaska has made to address 
those issues.

A. Applicability of Permit Program Requirements

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska definition of `regulated air contaminant' in AS 46.14.990(21) is 
inconsistent with the EPA definition of the term `regulated air 
pollutant' in 40 CFR 70.2 in that it does not adequately cover 
pollutants required to be regulated under section 112(j) of the Act. As 
a condition of full approval, Alaska must demonstrate to EPA's 
satisfaction that its definition of `regulated air contaminant' is 
consistent with EPA's definition of `regulated air pollutant' in 40 CFR 
70.2.'' Alaska, in its June 2, 1998, submittal stated that ``[a]ll of 
the provisions of 40 CFR part 63, subpart B which implement section 
112(j) and relate to operating permits are either adopted by reference, 
or included in the adopting language of 18 AAC 50.040(c)(2). 18 AAC 
50.040(c)(2)(B) states that the provisions of 40 CFR part 63, subpart B 
apply to the facility on the same date that a pollutant would become a 
`regulated air pollutant' under the federal definition. AS 
46.14.280(a)(3)(B) requires a permit to be revised for a 112(j) 
equivalent emission limitation in the same manner as for any other new 
federal standard.'' EPA believes that 18 AAC 50.040(c)(2) and AS 
46.14.280(a)(3)(B) support Alaska's assertion and resolve this issue.

B. Applicable Requirements

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska definition of `applicable requirement' does not include all of 
the EPA regulations implementing title VI (40 CFR part 82) but only 
subparts B and F. Although EPA has proposed to revise 40 CFR part 70 to 
limit the definition of `applicable requirement' to only those 
provisions promulgated under sections 608 and 609 of the Act (which EPA 
has promulgated in 40 CFR part 82, subparts B and F), this proposed 
revision is not yet adopted. Should EPA revise part 70 as proposed, 
Alaska's rules will be consistent and no revisions will be needed. 
However, if EPA does not revise part 70 as proposed, Alaska must adopt 
and submit appropriate revisions as a

[[Page 38942]]

condition of interim approval.'' Alaska, in its June 2, 1998, 
submittal, provided documentation that its regulations at 18 AAC 
50.040(d) had been amended to broaden the adoption by reference to 
include all of Part 82. The amendment was effective June 14, 1998. EPA 
is satisfied that Alaska's action resolves this issue.

C. Authority To Implement Section 112 Requirements

    EPA, in its December 5, 1996, Federal Register, stated that 
``Alaska has not adopted by [sic] the requirements of 40 CFR part 61, 
subpart I (radionuclide NESHAP for facilities licensed by the Nuclear 
Regulatory Commission). EPA is requiring, as a condition of full 
approval, that Alaska update its incorporation by reference to include 
all of the NESHAP that currently apply to title V sources in Alaska.'' 
This issue was made moot by EPA publication of a rescission of subpart 
I in the Federal Register dated December 30, 1996, 61 FR 68971.

D. Insignificant Emission Units

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program improperly exempts insignificant sources subject to 
applicable requirements from monitoring, recordkeeping, reporting, and 
compliance certification requirements. Alaska must eliminate this 
exemption as a condition of full approval.'' Alaska, in its June 2, 
1998, submittal, provided documentation that it had revised its 
regulations to remove the exemption of insignificant sources from these 
requirements. The revised rules, at 18 AAC 50.335(q)(5) and (6), and 18 
AAC 50.350(m), ``specify compliance certification for IEUs based on 
reasonable inquiry, and, if necessary to assure compliance with air 
quality control requirements identified in the permit, monitoring, 
record keeping, or reporting.'' The revisions were effective June 14, 
1998. EPA is satisfied that Alaska's action resolves this issue.

E. Emissions Trading Provided for in Applicable Requirements

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not contain a provision implementing the part 70 
requirement that the permitting authority must include terms and 
conditions, if the permit applicant requests them, for trading of 
emissions increases and decreases in the permitted facility, to the 
extent that the applicable requirements provide for trading such 
increases without a case-by-case approval of each emissions trade. See 
40 CFR 70.6(a)(10). As a condition of full approval, Alaska must ensure 
that its program includes the necessary provisions to meet the 
requirements of 40 CFR 70.6(a)(10).'' Alaska, in its June 2, 1998, 
submittal, provided documentation that it had revised its regulations 
at 18 AAC 50.335(h), 18 AAC 50.350(d)(3), and 18 AAC 50.350(e)(4), to 
allow for such trading. The revisions were effective June 14, 1998. EPA 
is satisfied that Alaska's action resolves this issue.

F. Inspection and Entry Requirements

    EPA, in its December 5, 1996, Federal Register, stated that ``Part 
70 requires each title V permit to contain a provision allowing the 
permitting authority or an authorized representative, upon presentation 
of credentials and other documents as may be required by law, to 
perform specified inspection and entry functions. See 40 CFR 
70.6(c)(2). As a condition of full approval, Alaska must demonstrate to 
EPA's satisfaction that its inspection and entry authority meets the 
requirements of 40 CFR 70.6(c)(2) and imposes no greater restrictions 
on the State's inspection authority than exist under federal law.'' 
Alaska, in its June 2, 1998, submittal, provided an opinion from its 
Attorney General's Office addressing inspection and entry requirements 
associated with Alaska's title V program. The opinion notes that ADEC's 
operating permit regulations, at AS 46.14.140(a)(4)(C), now require the 
inclusion of a standard permit condition addressing inspection and 
entry. The opinion states that ``[t]his standard provision, requiring 
the permittee to consent to entry and inspection for specified purposes 
will be contained in all operating permits.'' Based on this opinion, 
EPA concludes that consent to entry for the purposes specified in AS 
46.14.140(a)(4)(C) is effectively granted at any source possessing a 
title V permit issued by Alaska. In addition, Attorney General's 
opinion states that Alaska's inspection and entry authority is not more 
restrictive than that under federal law. Specifically, the Attorney 
General's Office opined that: (1) Under the Alaska program, operating 
permit holders have no ``reasonable expectation of privacy'' as to 
regulated subject matter and that warrantless search requirements are 
permissible; (2) if consent to entry and inspection is denied, a 
warrant can be easily obtained; and (3) Alaska's consent requirements 
``do not constrain traditional exceptions to warrant requirements, and 
these exceptions are recognized in Alaska.'' EPA is satisfied that 
Alaska's inspection and entry authority imposes no greater restrictions 
on the State's inspection authority than exist under federal law.

G. Progress Reports

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not require the submission of progress reports, 
consistent with the applicable schedule of compliance and 40 CFR 
70.5(c)(8), to be submitted in accordance with the period specified in 
an applicable requirement. See 40 CFR 70.6(c)(4). As a condition of 
full approval, Alaska must demonstrate to EPA's satisfaction that its 
program complies with the requirements of 40 CFR 70.6(c)(4).'' Alaska, 
in its June 2, 1998, submittal, provided documentation that it had 
revised its regulations at 18 AAC 50.335(i) and 18 AAC 50.350(k)(3) to 
require applicants to submit proposed permit terms that include more 
frequent progress reports, if required by the applicable requirement, 
and to require permits to contain a requirement for more frequent 
progress reports, if required by the applicable requirement. The 
revisions were effective June 14, 1998. EPA is satisfied that Alaska's 
action resolves this issue.

H. Compliance Certification

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not meet the requirements of part 70 that a 
permitting program contain requirements for compliance certification 
with terms and conditions contained in the permit, including emissions 
limitations, standards or work practices. See 40 CFR 70.6(c)(5). As a 
condition of full approval, Alaska must demonstrate to EPA's 
satisfaction that its program complies with the requirements of 40 CFR 
70.6(c)(5).'' Alaska, in its June 2, 1998, submittal, provided 
documentation that it had revised its regulations at 18 AAC 
50.335(q)(5), 18 AAC 50.350(j), and 18 AAC 50.350(m), to ensure that 
compliance certifications would be required for all permit terms and 
conditions. EPA's main concern, as identified in the September 1996 
Federal Register proposing final interim approval for Alaska's Air 
Operating Permits Program, had been inclusion of requirements to 
certify compliance with such terms as monitoring, recordkeeping, 
reporting and compliance plans. Alaska had already revised its 
regulations to mostly include these by the time the December 5, 1996, 
Federal Register had been published. The current revisions are mostly 
fine tuning, including compliance certification for insignificant 
sources, and accounting for provisions

[[Page 38943]]

established through administrative, minor, or major permit revisions. 
The revisions were effective June 14, 1998. EPA is satisfied that 
Alaska's action resolves this issue.

I. General Permits

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska provisions for general permits fail to comply with the 
requirements of part 70 in one respect. The Alaska provisions do not 
require that applications for general permits which deviate from the 
requirements of 40 CFR 70.5 otherwise meet the requirements of title V. 
See 40 CFR 70.6(d)(2). As a condition of full approval, Alaska must 
demonstrate to EPA's satisfaction that applications for general permits 
meet the requirements of title V.'' Alaska, in its June 2, 1998, 
submittal, submitted documentation that it had revised its regulations 
at 18 AAC 50.380 (most importantly at 50.380(c) and (d)) to identify 
what information had to be in the applications for General Permits. The 
revisions were effective June 14, 1998. EPA is satisfied that Alaska's 
action resolves this action.

J. Affirmative Defense for Emergencies

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not comply with the requirement of part 70 with 
respect to the provisions for an affirmative defense to an action 
brought for noncompliance with a technology-based limitation in a title 
V permit. The Alaska regulations include a definition of `technology-
based standard' which is broader than allowed by part 70 and the Alaska 
program gives a permittee up to one week after the discovery of an 
exceedance to provide ADEC with written notice rather than within two 
working days as required by 40 CFR 70.6(g)(3)(iv). As a condition of 
full approval, Alaska must demonstrate to EPA's satisfaction that its 
emergency provisions are consistent with the requirements of 40 CFR 
70.6(g).'' Alaska, in its June 2, 1998, submittal, provided 
documentation that it had revised its regulations at 18 AAC 50.990(87) 
to revise its definition of ``technology-based standard'' to be 
consistent with part 70. Alaska also revised 18 AAC 50.235(a) to 
require written notice of an exceedance due to an unavoidable 
emergency, malfunction, or nonroutine repair, within two days, rather 
than within one week. The revisions were effective June 14, 1998. EPA 
is satisfied that Alaska's actions resolve these issues.

K. Off-Permit Provisions

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not comply with the part 70 `off-permit' provisions 
which require the permittee to keep a record at the facility describing 
each off-permit change and to provide `contemporaneous' notice of each 
off-permit change to EPA and the permitting authority. See 40 CFR 
70.4(b)(14). Although EPA has proposed to revise 40 CFR part 70 to 
eliminate the off-permit requirements, this proposed revision is not 
yet adopted. Should EPA revise part 70 as proposed, Alaska's rules will 
be consistent with part 70 in this respect and no revisions will be 
needed. However, if EPA does not revise part 70 as proposed, Alaska 
must ensure that its program requires notice and records for all off-
permit changes as a condition of full approval.'' EPA has not revised 
part 70 as proposed with respect to off-permit changes. Alaska, in its 
June 2, 1998, submittal, provided documentation that it had revised its 
regulations at 18 AAC 50.365(b) to show that the requirements of (b), 
including the recordkeeping and notification requirements, applied to 
all ``not insignificant'' sources. 18 AAC 50.365(b), as amended, is 
consistent with the language of 40 CFR 70.4(b)(14). The revisions were 
effective June 14, 1998. EPA is satisfied that Alaska's action resolves 
this issue.

L. Statement of Basis

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not require the permitting authority to provide and 
send to EPA, and to any other person who requests it, a statement that 
sets forth the legal and factual basis for the draft permit conditions 
(including references to the applicable statutory or regulatory 
provisions). See 40 CFR 70.7(a)(5). As a condition of full approval, 
Alaska must demonstrate to EPA's satisfaction that its program 
satisfies the requirements of 40 CFR 70.7(a)(5).'' This issue was 
inadvertently identified as an Interim Approval issue in the December 
5, 1996, Federal Register. Although identified in the September 1996 
proposed interim approval of the Alaska Air Operating Permits Program 
as an approval issue, Alaska revised its regulations at 18 AAC 
50.340(j) prior to EPA's final interim approval of the Alaska program. 
EPA is satisfied that section 340(j) adequately provides for the 
development of a Statement of Basis.

M. Administrative Amendments

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program, which allows alterations in the identification of 
equipment or components that have been replaced with equivalent 
equipment or components to be made by administrative amendment, does 
not comply with the part 70 provisions which authorize States to allow 
certain ministerial types of changes to title V permits to be made by 
administrative amendment. See 40 CFR 70.7(d). As a condition of full 
approval, Alaska must revise 18 AAC 50.370(a)(5)(D) to expand the 
prohibition to include modifications and reconstructions made pursuant 
to 40 CFR parts 60, 61, and 63, or to eliminate 18 AAC 50.370(a)(5) 
from the list of changes that may be made by administrative 
amendment.'' Alaska, in its June 2, 1998, submittal, provided 
documentation that it had revised its regulations at 18 AAC 
50.370(a)(5)(D) to prohibit administrative revisions for equipment 
which has been reconstructed or modified under 40 CFR parts 60, 61, and 
63. The revisions were effective June 14, 1998. EPA is satisfied that 
Alaska's action resolves this issue.

N. Minor Permit Modifications

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not comply with the part 70 provisions which 
require States to establish procedures for minor permit modifications 
which are substantially equivalent to those set forth in 40 CFR 
70.7(e), for several reasons. First, the Alaska program does not ensure 
that `every significant change in existing monitoring permit terms or 
conditions and every relaxation of reporting or recordkeeping permit 
terms shall be considered significant.' See 40 CFR 70.7(e)(4). Second, 
the Alaska program does not ensure that an application for a permit 
modification must include a description of the change, the emissions 
resulting from the change, and any new applicable requirements that 
will apply if the change occurs. 40 CFR 70.7(e)(2)(ii)(A). Finally, the 
Alaska program fails to include provisions which allow minor permit 
modification procedures to be used for permit modifications involving 
the use of economic incentives, marketable permits, emissions trading, 
and other similar approaches to the extent that such minor permit 
modification procedures are explicitly provided for in an applicable 
implementation plan or in applicable requirements promulgated by EPA. 
See 70.7(e)(2)(B). As a condition of full approval, Alaska must 
demonstrate

[[Page 38944]]

to EPA that its program includes the necessary provisions to meet the 
requirements of 40 CFR 70.7(e)(2)(B).'' Alaska, in its June 2, 1998, 
submittal, provided documentation that: (a) it revised its regulations 
at 18 AAC 50.375(a)(1)(D) to more closely track part 70 language in 
excluding from the minor permit revision process new terms or 
conditions which would involve significant changes to existing 
monitoring, reporting, or recordkeeping requirements in the permit, or 
relax an existing reporting or recordkeeping requirement; (b) it 
revised its regulations at 18 AAC 50.375(b) to clearly identify that 
the permittee, for minor permit modifications, would describe each 
change, the emissions resulting from the change, and any new 
requirements which would apply as a result;'' (c) the third issue was a 
moot issue because the Alaska program does not include economic 
incentives, marketable permits, or emissions trading. EPA in its 
September 1996 Federal Register proposing interim approval of the 
Alaska Air Operating Permits Program, indicated that there were 
instances where part 63 standards allowed for the minor modification 
permit procedures involving the use of economic incentives, marketable 
permits, emissions trading, and other similar approaches. However, on 
revisiting the issue, EPA was unable to locate any part 63 standards 
which include such a provision. The revisions were effective June 14, 
1998. EPA is satisfied that Alaska's actions resolve these issues.

O. Group Processing of Minor Permit Modifications

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not conform with the provisions of part 70 which 
allow a permitting authority to process as a group certain categories 
of applications for minor permit modifications at a single source in 
that the Alaska program does not contain any thresholds for determining 
whether minor permit modifications may be processed as a group. See 40 
CFR 70.7(e)(3). As a condition of full approval, Alaska must 
demonstrate that its group processing procedures are consistent with 
the requirements of 40 CFR 70.7(e)(3).'' Alaska, in its June 2, 1998, 
submittal, documented its removal of the group processing of minor 
permit modifications provision from its regulations at 18 AAC 
50.375(b)(5), (c), (d), and (e). Group processing of such modifications 
was optional under at 40 CFR 70.7(e)(3) so this is an acceptable 
resolution of this issue. These revisions were effective June 14, 1998.

P. Significant Permit Modifications

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not address the part 70 requirement that a State 
provide for a review process that will assure completion of review of 
the majority of significant permit modifications within 9 months after 
receipt of a complete application. 40 CFR 70.7(e)(4)(ii). As a 
condition of full approval, Alaska must provide assurances that its 
program is designed and will be implemented so as to complete review on 
the majority of significant permit modifications within this 
timeframe.'' In the cover letter to the June 2, 1998, Michele Brown, 
Commissioner of the State of Alaska, Department of Environmental 
Conservation, committed to ``allocating sufficient resources in the Air 
Quality Maintenance Section to issue the majority of Significant Permit 
Revisions within 9 months of receiving complete applications.'' EPA is 
satisfied that this resolves the issue.

Q. Reopenings

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program provisions for reopenings fail to comply with part 70 in 
several respects. First, the Alaska program does not require reopening 
in the event that the effective date of a new applicable requirement is 
later than the permit expiration date and the permit has been 
administratively extended. See 40 CFR 70.7(f)(1)(i). Second, the Alaska 
program does not comply with part 70 in that the Alaska program merely 
authorizes ADEC to reopen a permit under specified circumstances, where 
as part 70 requires that a permit be reopened if ADEC or EPA determine 
such circumstances exist. See 40 CFR 70.7(f)(2)(iii). Third, the Alaska 
program also fails to contain required procedures in the event of a 
reopening for cause by EPA. See 40 CFR 70.7(g)(2) and (4). Finally, the 
Alaska program does not include provisions assuring that reopenings are 
made as expeditiously as practicable. See 40 CFR 70.7(f)(2). As a 
condition of full approval, Alaska must demonstrate to EPA's 
satisfaction that its provisions for reopenings comply with the 
requirements of 40 CFR 70.7(f) and (g).'' Alaska, in its June 2, 1998, 
submittal, provided documentation that: (1) It had revised its 
regulations at 18 AAC 50.341(a), (b), (f), and (g) to provide that 
Alaska would reopen permits within 18 months after the promulgation by 
EPA of a new requirement applicable to the facility; (2) it had revised 
its regulations at 18 AAC 50.341(a), (c), (f), and (g) to provide that 
Alaska would be required, rather than merely authorized, to reopen 
permits under specified circumstances; (3) it had revised its 
regulations at 18 AAC 50.341(a), (d), (e), (f), and (g) to specify 
procedures in the event of reopening for cause by EPA. To resolve the 
fourth part of this issue, Michele Brown, in the June 2, 1998, cover 
letter submitting the program revisions, committed ``to allocating 
sufficient resources in the Air Quality Maintenance Section to complete 
required permit re-openings for cause as expeditiously as 
practicable.'' The revisions were effective June 14, 1998. EPA is 
satisfied that Alaska's actions resolve these issues.

R. Public Petitions to EPA

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not prohibit issuance of a permit if EPA objects to 
the permit after EPA's 45-day review period (i.e., in response to a 
petition). As a condition of full approval, Alaska must demonstrate to 
EPA's satisfaction that Alaska's provisions regarding public petitions 
to EPA comply with the requirements of 40 CFR 70.8(d).'' Alaska, in its 
June 2, 1998, submittal, provided documentation that it had revised its 
regulations at 18 AAC 50.340(g)(2)(B) adding the appropriate 
prohibitory language. The revisions were effective June 14, 1998. EPA 
is satisfied that Alaska's action resolves this issue.

S. Public Participation

    EPA, in its December 5, 1996, Federal Register, stated that ``[t]he 
Alaska program does not conform to the part 70 requirement that the 
contents of a title V permit not be entitled to confidential treatment. 
See 40 CFR 70.4(b)(3)(viii). As a condition of full approval, Alaska 
must demonstrate to EPA's satisfaction that nothing in a title V permit 
will be entitled to confidential treatment.'' Alaska, in its June 2, 
1998, submittal, provided documentation that it had revised its 
regulations by adding 18 AAC 50.350(n) which prohibits the inclusion of 
``information that is protected as a trade secret under AS 45.50.910-
45.50.945.'' The revision was effective June 14, 1998. EPA is satisfied 
that Alaska's action resolves this issue.

III. What Other Changes Has Alaska Made to Its Program--Outside of 
Addressing the Interim Approval Issues?

    Subsequent to interim approval of Alaska's title V program, the 
State

[[Page 38945]]

legislature enacted Alaska Statute 09.25.450 (herein ``Audit Law''), 
which establishes a privilege for certain information contained in 
environmental audit reports conducted by facilities, and also 
establishes immunity from enforcement for certain violations that are 
voluntarily reported. Because some states have enacted audit laws that 
have significantly altered their enforcement authorities, EPA in 1997 
issued a guidance document entitled ``Statement of Principles, Effect 
of State Audit Immunity/Privilege Laws on Enforcement Authority for 
Federal Programs'' (February 14, 1997) (``Statement of Principles'') to 
guide the Agency's review of the impact of such laws for purposes of 
approval or authorization of federal programs. EPA evaluated Alaska's 
Audit Law with regard to the Statement of Principles to determine the 
extent to which the required title V enforcement authorities may be 
impacted.
    As a part of this examination, EPA requested that the State provide 
an opinion from its Attorney General's Office addressing the 
interrelationship of the Audit Law and the state's enforcement 
authorities required for approval under part 70. Alaska provided such 
an opinion, dated March 14, 2000, signed by Assistant Attorney General 
Christopher Kennedy (herein ``Kennedy Opinion'').\1\ This opinion 
supplements an April 28, 1997, opinion, signed by Attorney General 
Bruce Botelho, that addresses the Audit Law more generally. The latter 
opinion, though a useful interpretation of the Audit Law, was not 
drafted in response to an EPA request and does not explicitely address 
EPA program approval requirements. EPA is relying upon both of these 
opinions in issuing today's full approval action.
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    \1\ EPA accepted the New Hampshire Attorney General's opinion as 
ensuring that the staet met the minimum requirements necessary for 
approval of a Title V program. See 61 FR 51370 (Oct. 2, 1996).
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    EPA finds that the Audit Law, as interpreted by the two Attorney 
General opinions, does not affect Alaska's enforcement authorities such 
as to preclude the granting of full approval to the State's Title V 
program. The major points of EPA's reasoning in making this finding are 
summarized below.
    The Kennedy Opinion adopts an analysis similar to that used by the 
New Hampshire Attorney General's Office in interpreting that State's 
audit law as being consistent with the part 70 approval 
requirements.\2\ The Kennedy Opinion addresses each of the points 
raised in the New Hampshire opinion, and concludes that Alaska's Audit 
Law is similarly structured so as to not impede the exercise of state 
enforcement authorities necessary for approval under part 70.
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    \2\ EPA accepted the New Hampshire Attorney General's opinion as 
ensuring that the state met the minimum requirements necessary for 
approval of a Title V program. See, 61 FR 51370 (Oct. 2, 1996).
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    As EPA has noted in the context of its own self-disclosure policy 
(60 FR 66710, Dec. 22, 1995), the Agency is, as a matter of policy, 
opposed to the creation of a privilege for information related to 
violations of federal environmental laws. As a matter of state program 
approval, EPA's Statement of Principles addresses privileges created 
under state audit laws and notes that such laws must not impede a 
state's ability to obtain information needed to identify noncompliance 
and criminal conduct. Specifically, in the present context, a state 
must be able to gather information as required under part 70 and must 
preserve the right of the public to obtain information about 
noncompliance, report violations, and pursue enforcement under the 
Clean Air Act's citizen enforcement provisions. Finally, an audit law 
privilege may not apply in a criminal proceeding.
    With regard to the privilege provisions of the Audit Law, the 
Kennedy Opinion states that the Audit Law would not threaten the 
State's ability to discover title V permit violations. This is in part 
because, as required by part 70, Alaska's program requires reporting of 
title V permit violations. Thus, the Audit Law's privilege and immunity 
provisions, applying as they do only to ``voluntary'' assessments of 
compliance, do not extend to title V permit violations uncovered by 
compliance auditing that is mandated by the Clean Air Act and the Title 
V regulations. Moreover, the Audit Law privilege does not extend to 
information required to be collected, developed, maintained, or 
reported under an environmental law. AS 09.25.460(a)(1). The Audit Law 
privilege does not apply in criminal proceedings. AS 09.25.450(a).
    The Statement of Principles also addresses the possible effects of 
a state audit law upon a state's required authority to assess civil and 
criminal penalties. In short, where title V program approval is 
concerned, a state audit law must not impede the state's authority to 
recover civil penalties for significant economic benefit, repeat 
violations, violations of judicial and administrative orders, 
violations resulting in serious harm, or violations that may present 
imminent and substantial endangerment. The audit law also must not 
impede a state's authority to collect criminal fines and/or sanctions 
for knowing violations.
    The Kennedy Opinion explains that the Audit Law excludes from its 
coverage any violation that result in or poses an imminent and present 
threat of substantial injury to people, property, or the environment. 
AS 09.25.465(a)(2), 09.25.475(b). Moreover, as noted above, violations 
of a title V permit would generally not qualify for coverage under the 
Audit Law, to the extent they are discovered during the course of an 
audit mandated by the Clean Air Act or applicable regulations. The 
Kennedy Opinion notes that the Audit Law expressly excludes from 
coverage violations of administrative or court orders. AS 09.25.480(b).
    Regarding repeat violations and economic benefit, which are not 
explicitly addressed in the Kennedy Opinion, EPA notes that, for the 
former, the Audit Law's immunity provisions do not apply where there 
has been a pattern of same or similar violations by the facility or 
associated facilities within the 3 years preceding the violation for 
which the facility seeks coverage under the Audit Law. AS 
09.25.480(a)(1)(B). Regarding economic benefit, the Audit Law's 
immunity provisions do not apply where the facility has realized 
substantial economic savings as a result of its noncompliance. AS 
09.25.480(a)(3).
    EPA finds that the Alaska Audit Law, as interpreted by the two 
Attorney General opinions submitted by the State, is sufficiently 
limited in scope so as not to preclude full approval of the State's 
title V program. It is EPA's intent to observe how the Audit Law is 
implemented in practice and how it is interpreted in state courts and 
administrative venues. If the evidence suggests that any of the key 
findings made today are incorrect, EPA may in the future revisit the 
effect of the Audit Law on the adequacy of Alaska's title V program.

IV. Final Action

    EPA is granting full approval of the State of Alaska's operating 
permits program. This approval does not extend to ``Indian Country,'' 
as defined in 18 U.S.C. 1151. See 64 FR 8247, 8250-8251 (February 19, 
1999); 59 FR 55815-55818; 59 FR 42552, 42554 (August 18, 1994).

V. What Happens if EPA Gets Comments on This Federal Register?

    EPA has reviewed the State of Alaska's submittal and has determined 
that its operating permits program now qualifies for full approval. 
Accordingly, EPA is taking final action to fully

[[Page 38946]]

approve Alaska's air operating permits program.
    EPA is publishing this rule without prior proposal because the 
Agency views this as a noncontroversial action and anticipates no 
adverse comments. However, in the proposed rules section of this 
Federal Register publication, EPA is publishing a separate document 
that will serve as the proposal to grant full approval of the title V 
operating permits program submitted by the State of Alaska should 
adverse comments be filed. This rule will be effective September 24, 
2001 without further notice unless the Agency receives adverse comments 
by August 27, 2001.
    If EPA receives such comments, then EPA will publish a notice 
withdrawing this final rule and informing the public that this rule 
will not take effect. All public comments received will then be 
addressed in a subsequent final rule based on the proposed rule. EPA 
will not institute a second comment period. Parties interested in 
commenting should do so at this time. If no such comments are received, 
the public is advised that this rule will be effective on September 24, 
2001 and no further action will be taken on the proposed rule.

VI. What Administrative Requirements Apply to This Action?

    Under Executive Order 12866, ``Regulatory Planning and Review'' (58 
FR 51735, October 4, 1993), this final approval is not a ``significant 
regulatory action'' and therefore is not subject to review by the 
Office of Management and Budget. Under the Regulatory Flexibility Act 
(5 U.S.C. 601 et seq.) the Administrator certifies that this final 
approval will not have a significant economic impact on a substantial 
number of small entities because it merely approves state law as 
meeting federal requirements and imposes no additional requirements 
beyond those imposed by state law. This rule does not contain any 
unfunded mandates and does not significantly or uniquely affect small 
governments, as described in the Unfunded Mandates Reform Act of 1995 
(Public Law 104-4) because it approves pre-existing requirements under 
state law and does not impose any additional enforceable duties beyond 
that required by state law. This rule also does not have tribal 
implications because it will not have a substantial direct effect on 
one or more Indian tribes, on the relationship between the Federal 
Government and Indian tribes, or on the distribution of power and 
responsibilities between the Federal Government and Indian tribes, as 
specified by Executive Order 13175, ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 9, 2000). This 
rule also does not have Federalism implications because it will not 
have substantial direct effects on the States, on the relationship 
between the national government and the States, or on the distribution 
of power and responsibilities among the various levels of government, 
as specified in Executive Order 13132, ``Federalism'' (64 FR 43255, 
August 10, 1999). This rule merely approves existing requirements under 
state law, and does not alter the relationship or the distribution of 
power and responsibilities between the State and the Federal government 
established in the Clean Air Act. This final approval also is not 
subject to Executive Order 13045, ``Protection of Children from 
Environmental Health Risks and Safety Risks'' (62 FR 19885, April 23, 
1997) or Executive Order 13211, ``Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use'' (66 FR 28355 
(May 22, 2001), because it is not a significant regulatory action under 
Executive Order 12866. This action will not impose any collection of 
information subject to the provisions of the Paperwork Reduction Act, 
44 U.S.C. 3501 et seq., other than those previously approved and 
assigned OMB control number 2060-0243. For additional information 
concerning these requirements, see 40 CFR part 70. An agency may not 
conduct or sponsor, and a person is not required to respond to, a 
collection of information unless it displays a currently valid OMB 
control number.
    In reviewing State operating permit programs submitted pursuant to 
title V of the Clean Air Act, EPA will approve State programs provided 
that they meet the requirements of the Clean Air Act and EPA's 
regulations codified at 40 CFR part 70. In this context, in the absence 
of a prior existing requirement for the State to use voluntary 
consensus standards (VCS), EPA has no authority to disapprove a State 
operating permit program for failure to use VCS. It would thus be 
inconsistent with applicable law for EPA, when it reviews an operating 
permit program, to use VCS in place of a State program that otherwise 
satisfies the provisions of the Clean Air Act. Thus, the requirements 
of section 12(d) of the National Technology Transfer and Advancement 
Act of 1995 (15 U.S.C. 272 note) do not apply.
    As this is not a ``major'' rule as defined by 5 U.S.C. 804(2), EPA 
will not 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 
this rule in the Federal Register, as specified in the Congressional 
Review Act, 5 U.S.C. 801 et seq.
    Under section 307(b)(1) of the Clean Air Act, petitions for 
judicial review of this action must be filed in the United States Court 
of Appeals for the appropriate circuit by September 24, 2001. Filing a 
petition for reconsideration by the Administrator of this final rule 
does not affect the finality of this rule for the purposes of judicial 
review nor does it extend the time within which a petition for judicial 
review may be filed, and shall not postpone the effectiveness of such 
rule or action. This action may not be challenged later in proceedings 
to enforce its requirements. See CAA section 307(b)(2).

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.

    Dated: July 3, 2001.
Charles Findley,
Acting Regional Administrator, Region 10.


    40 CFR 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. In appendix A to part 70, the entry for Alaska in alphabetical 
order is amended by revising paragraph (a) to read as follows:

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

* * * * *

Alaska

    (a) Alaska Department of Environmental Conservation: submitted 
on May 31, 1995, as supplemented by submittals on August 16, 1995, 
February 6, 1995, February 27, 1996, July 5, 1996, August 2, 1996, 
and October 17, 1996; interim approval effective on December 5, 
1996; revisions submitted on June 2, 1998; full approval effective 
on September 24, 2001.
* * * * *

[FR Doc. 01-18405 Filed 7-25-01; 8:45 am]
BILLING CODE 6560-50-P