[Federal Register Volume 66, Number 191 (Tuesday, October 2, 2001)]
[Proposed Rules]
[Pages 50136-50139]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-24596]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AZ042-OPP; FRL-7071-6]


Clean Air Act Proposed Full Approval of Operating Permit 
Programs; Arizona Department of Environmental Quality, Arizona

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to approve revisions to the Arizona 
Department of Environmental Quality (ADEQ or State) operating permit 
program. The ADEQ operating permit program was submitted in response to 
the directive in the 1990 Clean Air Act (CAA) Amendments that 
permitting authorities develop, and submit to EPA, programs for issuing 
operating permits to all major stationary sources and to certain other 
sources within the permitting authorities' jurisdiction. EPA granted 
interim approval to the ADEQ operating permit program on October 30, 
1996 (61 FR 55910). The ADEQ has revised its program to satisfy the 
conditions of the interim approval and this action proposes approval of 
those revisions and other revisions since interim approval was granted. 
EPA is proposing full approval of the operating permits program 
submitted by ADEQ based on the revisions submitted on August 11, 1998, 
May 9, 2001, and September 7, 2001.

DATES: Comments on the program revisions discussed in this proposed 
action must be received in writing by November 1, 2001.

ADDRESSES: Written comments on this action should be addressed to 
Gerardo Rios, Acting Chief, Permits Office, Air Division (AIR-3), EPA 
Region IX, 75 Hawthorne Street, San Francisco, California, 94105. You 
can inspect copies of ADEQ's submittal and other supporting 
documentation relevant to this action during normal business hours at 
the Air Division of EPA Region 9, 75 Hawthorne Street, San Francisco, 
California, 94105. You may also see copies of the submitted title V 
program at the following location: ADEQ Department of Environmental 
Quality, 3033 North central Avenue, Phoenix, Arizona 85012-2809.

FOR FURTHER INFORMATION CONTACT: Ginger Vagenas, EPA Region IX, Permits 
Office (AIR-3), U.S. Environmental Protection Agency, Region IX, (415) 
744-1252 or [email protected].

SUPPLEMENTARY INFORMATION: This section provides additional information 
by addressing the following questions:

I. What is the operating permit program?
II. What is EPA's proposed action?
III. What are the program changes that EPA is approving?
IV. What is the effect of this proposed action?
V. Are there other issues with the program?

I. What Is the Operating Permit Program?

    The CAA Amendments of 1990 required all state and local permitting 
authorities to develop operating permit programs that met certain 
federal criteria. In implementing the operating permit 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 permit program is to improve compliance by 
issuing each source a permit that consolidates all of the applicable 
CAA requirements into a federally enforceable document. By 
consolidating all of the applicable requirements for a facility, the 
source, the public, and the permitting authorities can more easily 
determine what CAA requirements apply and how compliance with those 
requirements is determined.
    Sources required to obtain an operating permit under this program 
include ``major'' sources of air pollution and certain other sources 
specified in the CAA or in EPA's implementing

[[Page 50137]]

regulations. For example, all sources regulated under the acid rain 
program, regardless of size, must obtain 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 ( NOX), or particulate matter 
(PM10); those that emit 10 tons per year 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 of emitting 
50 tons per year or more of volatile organic compounds or nitrogen 
oxides.

II. What Is EPA's Proposed Action?

    Because the operating permit program originally submitted by ADEQ 
substantially, but not fully, met the criteria outlined in the 
implementing regulations codified at 40 Code of Federal Regulations 
(CFR) part 70, EPA granted interim approval to the program in a 
rulemaking published on October 30, 1996 (61 FR 55910). The interim 
approval notice described the conditions that had to be met in order 
for the ADEQ program to receive full approval. Today's Federal Register 
notice describes the changes ADEQ has made to its operating permit 
program to correct conditions and obtain full approval.
    EPA is proposing full approval of the operating permits program 
submitted by ADEQ based on the revisions submitted on August 11, 1998, 
May 9, 2001, and September 7, 2001. These revisions satisfactorily 
address the program deficiencies identified in EPA's October 30, 1996 
rulemaking. See 61 FR 55910. EPA is also proposing to approve, as a 
title V operating permit program revision, additional changes to the 
rules that have been made since ADEQ was granted interim approval. The 
interim approval issues, ADEQ's corrections, and the additional changes 
are described below under the section entitled, ``What are the program 
changes that EPA is approving?'

III. What Are the Program Changes That EPA Is Approving?

A. Corrections to Interim Approval Issues

    In its October 30, 1996 rulemaking, EPA made full approval of 
ADEQ's operating permit programs contingent upon the correction of a 
number of interim approval issues. Each issue, along with the State's 
correction, is described below.
    1. Rule deficiency: AAC R18-2-101(61)(b) (part of the definition of 
``major source'') did not clearly require that fugitive emissions of 
HAPs be included when determining a source's potential to emit. In 
order to correct the deficiency, the definition needed to be revised so 
that it would be clear that fugitive emissions of HAPs must be 
considered in determining whether the source is major for purposes of 
both the 10 ton per year and 25 ton per year HAP major source 
thresholds. See 40 CFR 70.2.
    Rule change: The definition of major source has been revised to 
correct the deficiency. It now defines a major source under section 112 
of the CAA to include, ``for pollutants other than radionuclides, any 
stationary source that emits, or has the potential to emit, in the 
aggregate and including fugitive emissions, 10 tons per year or more of 
any hazardous air pollutant which has been listed pursuant to section 
112(b) of the CAA, 25 tons per year of any combination of such 
hazardous air pollutants * * *.'' (Emphasis added.)
    2. Rule deficiency: EPA found that ADEQ's regulations regarding the 
application content and permit issuance requirements for previously 
minor sources that were applying for title V status to be somewhat 
unclear. In order to correct this problem, EPA required that the State 
revise AAC R18 to clarify that, when an existing source obtains a 
significant permit revision to revise its permit from a Class II permit 
to a Class I permit, the entire permit, and not just the portion being 
revised, must be issued in accordance with part 70 permit application, 
content, and issuance requirements, including requirements for public, 
affected state, and EPA review. See 40 CFR 70.7.
    Rule changes: R18-2-320(E) and R18-2-304(E)(1) have been revised to 
address the interim approval issue. These provisions now clearly 
require that a previously minor source that is obtaining a title V 
permit must submit a full title V permit application and undergo full 
public, EPA and affected state review.
    3. Rule deficiency: Section 70.6(a)(8) requires that title V 
permits contain a provision that ``no permit revision shall be required 
under any approved economic incentives, marketable permits, emissions 
trading and other similar programs or processes for changes that are 
provided for in the permit.'' AAC R18-2-306(A)(10) included this exact 
provision but also included a sentence that negated this provision. EPA 
required that ADEQ either delete or revise the negating sentence to 
make the rule consistent with part 70.
    Rule change: The problematic sentence has been deleted from the 
State's rule.
    4. Rule deficiency: Section 70.4(b)(12) allows sources to make 
changes within a permitted facility without requiring a permit 
revision, if the changes are not modifications under any provision of 
title I of the Act and the changes do not exceed the emissions 
allowable under the permit. The State's rules provided for such permit 
conditions but did not restrict the allowable changes to those that are 
not modifications under title I of the Act and those that do not exceed 
the emissions allowable under the permit. ADEQ was required revise AAC 
R18-2-306(A)(14) to add these conditions.
    Rule change: AAC R18-2-306(A)(14) now includes the following 
language: ``Changes made under this paragraph (14) shall not include 
modification under any provision of Title I of the Act and may not 
exceed emissions allowable under the permit.''
    5. Rule deficiency: Pursuant to 70.6(g), operating permit programs 
may only provide for an affirmative defense to actions brought for 
noncompliance with technology-based emission limits when such 
noncompliance is due to an emergency situation. In its original title V 
program submittal, ADEQ included AAC R18-2-310, which established an 
affirmative defense that was broader than that allowed under part 70. 
ADEQ was required to modify its program to make it consistent with the 
section 70.6(g) provision for an emergency affirmative defense.
    Rule change: ADEQ has submitted a program revision that, when 
approved by EPA, will remove R18-2-310 from the State's title V 
program.
    6. Rule deficiency: In order to ensure that material permit 
conditions can be contained in permits issued by the county control 
officers as well as the Director of ADEQ, EPA required that ADEQ revise 
AAC R18-2-331(A)(1) to provide under the definition of ``material 
permit condition'' that ``the condition is in a permit or permit 
revision issued by the Director or the Control Officer * * *.''

[[Page 50138]]

    Rule change: The Rule has been modified as required.

B. Other Changes

    The rules the State has submitted for EPA approval incorporate 
changes other than those necessary to correct interim approval 
deficiencies. In this action, EPA is also proposing to approve those 
additional program changes made by ADEQ since the interim approval was 
granted. We have evaluated the additional changes and, with one 
exception that is described in detail below, find that they are 
consistent with part 70. We are including the additional changes in our 
proposed approval.
    Paragraph (c) of ADEQ's definition of major source (R18-2-101(64)) 
lists source categories that must count fugitives. Subparagraph xxvii 
has been modified to read: ``All other stationary source categories 
regulated by a standard promulgated as of August 7, 1980 under section 
111 or 112 of the Act, but only with respect to those air pollutants 
that have been regulated for that category.'' Emphasis added. The 
addition of this 1980 cutoff date restricts the types of sources that 
are required to count fugitives towards the major source threshold. 
This is inconsistent with part 70 and is not currently approvable. EPA 
has, however, proposed a revision to the major source definition that 
will incorporate the 1980 cutoff date. We are therefore proposing to 
approve the State's definition of major source provided that EPA 
finalizes revisions to the part 70 program that will make the change 
approvable. Alternatively, if EPA does not finalize the changes to part 
70 described above, ADEQ's major source definition will conflict with 
the operative version of part 70 and we will be unable to approve it. 
The remedy to one of ADEQ's interim approval issues resides within that 
same definition, so if we are barred from approving ADEQ's new major 
source definition because of the 1980 date, we will be unable to grant 
full approval to ADEQ's title V program. As a result, ADEQ would lose 
its authority to implement its title V operating permits program on 
December 1, 2001, and part 71 would be in effect.
    ADEQ made a number of additional changes to the rules that 
implement their part 70 program, many of which were non-substantive 
(e.g., recodifications) or irrelevant (e.g., changes to requirements 
applying to non-title V sources). A general description of the more 
substantive changes follows. For more detail on the all of the changes, 
refer to the technical support document.
    Several provisions implementing the compliance assurance monitoring 
requirements of 40 CFR part 64 have been added to ADEQ's rules. 
Additional changes were made to expand application processing 
requirements and permit content provisions to cover voluntarily 
accepted emission limitations. The rules have also been modified to 
specify that noncompliance with any federally enforceable requirement 
is a violation of the Clean Air Act and to designate terms and 
conditions that are voluntarily entered into as federally enforceable.

IV. What Is the Effect of This Proposed Action?

    ADEQ has adopted and submitted rule changes and requested program 
revisions that address the issues identified in EPA's interim approval 
and are described above. The rules proposed for approval today listed 
in Table 1.

                                            Table 1.--Submitted Rules
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              Rule No.                             Rule title                   Effective          Submitted
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R18-2-101(61).......................  Definitions--definition of ``Major               6/4/98            8/11/98
                                       source'' only.
R18-2-304...........................  Permit application processing                  12/20/99             5/9/01
                                       procedures.
R18-2-306...........................  Permit contents.....................             6/4/98            8/11/98
R18-2-320...........................  Significant Permit Revisions........           12/20/99             5/9/01
R18-2-331...........................  Material Permit Conditions..........             6/4/98            8/11/98
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    In addition to proposing to approve the rules listed in Table 1, 
EPA is also proposing to approve the removal of R18-2-310, Excess 
Emissions, from the State's title V program.
    As noted above, ADEQ has adopted and submitted the required changes 
and has fulfilled the conditions of the interim approval granted on 
October 30, 1996 (61 FR 55910). EPA is therefore proposing full 
approval of the ADEQ operating permit program, contingent on EPA 
finalizing its proposed change to the part 70 definition of major 
source.

V. Are There Other Issues With This Program?

    On May 22, 2000, EPA promulgated a rulemaking that extended the 
interim approval period of 86 operating permits programs until December 
1, 2001. (65 FR 32035) The action was subsequently challenged by the 
Sierra Club and the New York Public Interest Research Group (NYPIRG). 
In settling the litigation, EPA agreed to publish a notice in the 
Federal Register that would alert the public that they may identify and 
bring to EPA's attention alleged programmatic and/or implementation 
deficiencies in title V programs and that EPA would respond to their 
allegations within specified time periods if the comments were made 
within 90 days of publication of the Federal Register notice.
    One citizen's group commented on what it believes to be 
deficiencies with respect to ADEQ's title V program. EPA takes no 
action on those comments in today's action and will respond to them by 
December 1, 2001. As stated in the Federal Register notice published on 
December 11, 2000, (65 FR 77376) EPA will respond by December 1, 2001 
to timely public comments on programs that have obtained interim 
approval, and EPA will respond by April 1, 2002 to timely comments on 
fully approved programs. We will publish a notice of deficiency (NOD) 
when we determine that a deficiency exists, or we will notify the 
commenter in writing to explain our reasons for not making a finding of 
deficiency. An NOD will not necessarily be limited to deficiencies 
identified by citizens and may include any deficiencies that we have 
identified through our program oversight.

Request for Public Comments

    EPA requests comments on the program revisions discussed in this 
proposed action. Copies of the ADEQ submittals and other supporting 
documentation used in developing the proposed full approval are 
contained in docket files maintained at the EPA Region 9 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 proposed full approval. The primary purposes of the docket are: 
(1) To allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process, and (2) to serve as the

[[Page 50139]]

record in case of judicial review. EPA will consider any comments 
received in writing by November 1, 2001.

Administrative Requirements

    Under Executive Order 12866, ``Regulatory Planning and Review'' (58 
FR 51735, October 4, 1993), this proposed action 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 proposed 
rule 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 proposes to approve 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). The rule merely proposes 
to approve 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 proposed rule 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 significantly 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.

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: September 17, 2001.
Jane Diamond,
Acting Regional Administrator, Region IX.
[FR Doc. 01-24596 Filed 10-1-01; 8:45 am]
BILLING CODE 6560-50-P