[Federal Register Volume 66, Number 203 (Friday, October 19, 2001)]
[Proposed Rules]
[Pages 53140-53147]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26407]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[CA 055-OPP; FRL-7086-7]


Clean Air Act Proposed Full Approval of Operating Permit Program; 
Bay Area Air Quality Management District, California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed Rule.

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SUMMARY: EPA is proposing to approve the operating permit program of 
the Bay Area Air Quality Management District (``Bay Area'' or 
``District''). The Bay

[[Page 53141]]

Area 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' jurisdictions. EPA granted interim 
approval to the Bay Area operating permit program on June 23, 1995 but 
listed certain deficiencies in the program preventing full approval. 
Bay Area has revised its program to correct the deficiencies of the 
interim approval and this action proposes full approval of those 
revisions. The District has also made other revisions to its program 
since interim approval was granted and EPA is also proposing to approve 
most of those revisions in this action.

DATES: Comments on this proposed rule must be received in writing by 
November 19, 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. 
Attention: David Wampler. You can inspect copies of the Bay Area's 
submittals, and other supporting documentation relevant to this action, 
during normal business hours at Air Division, EPA Region 9, 75 
Hawthorne Street, San Francisco, California, 94105.
    You may also see copies of the District's submitted operating 
permits program at the following locations:

California Air Resources Board, Stationary Source Division, Rule 
Evaluation Section, 1001 ``I'' Street, Sacramento, CA 95814.
The Bay Area Air Quality Management District, 939 Ellis Street, San 
Francisco, CA 94109-7799.

    An electronic copy of Bay Area's operating permit program 
(Regulation 2, Rule 6) rules may be available via the Internet at 
http://www.arb.ca.gov/drdb/ba/cur.htm. However, the version of District 
Regulation 2, Rule 6 at the above internet address may be different 
from the version submitted to EPA for approval. Readers are cautioned 
to verify that the adoption date of Regulation 2, Rule 6 listed is the 
same as the rule submitted to EPA for approval. The official submittal 
is available only at the three addresses listed above.

FOR FURTHER INFORMATION CONTACT: David Wampler, EPA Region IX, Permits 
Office (AIR-3), U.S. Environmental Protection Agency, Region IX, (415) 
744-1256 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 Being Addressed in this Document?
III. Impact of Today's Proposed Full Approval on the District's SIP-
Approved Federally-Enforceable State Operating Permits Program
IV. Are There Other Issues with the Program?
V. What Are the Program Changes That EPA Is Proposing to Approve?
VI. What Is Involved in this Proposed Action?
VII. Discussion on the Revision to the Definition of Potential to 
Emit
VIII. Public Comments

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. 
One goal 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 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.

II. What Is Being Addressed in This Document?

    Bay Area submitted, via the California Air Resources Board (CARB) 
its initial operating permits program to EPA on March 23, 1995. Because 
the Bay Area's operating permit program 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 of the program, and conditioned full approval on the District 
revising its program to correct the deficiencies. The interim approval 
notice published on June 23, 1995 [60 FR 32606], described the program 
deficiencies and revisions that had to be made in order for the Bay 
Area's program to receive full approval. Since that time, the Bay Area 
has revised, and the California Air Resources Board, on behalf of the 
Bay Area, has submitted a revision to the Bay Area's operating permit 
program; this revision was submitted May 30, 2001. This Federal 
Register notice describes the changes that have been made to the Bay 
Area operating permit program as submitted on May 30, 2001, and the 
basis for EPA proposing full approval of the program.

III. Impact of Today's Proposed Full Approval on the District's 
SIP-Approved Federally-Enforceable State Operating Permits Program

    Concurrent with our action on June 23, 1995 to grant final interim 
approval to the Bay Area's title V program, EPA granted, pursuant to 40 
CFR part 52, final approval to the District's Federally-Enforceable 
State Operating Permit Program (FESOP) which is contained in portions 
of Regulation 2, Rule 6, and the District's Manual of Procedures, 
Volume II, Part 3 (MOP) thereby incorporating the FESOP into the 
California SIP. In the process of correcting cited deficiencies in its 
operating permit program, the District also revised language in 
Regulation 2, Rule 6 related to its FESOP rule. Even though this 
proposed rulemaking action discusses the District's FESOP program, 
today's proposed approval is for part 70 purposes only. EPA is not 
proposing to approve, for SIP purposes under 40 CFR part 52, those 
portions of Regulation 2 Rule 6 that involve the FESOP program. We can 
only take action on the Regulation 2, Rule 6 for SIP purposes only 
after the State submits it to us.

IV. Are There Other Issues With the Program?

    On May 22, 2000, EPA promulgated a rulemaking that extended the 
interim approval period of 86 operating permits

[[Page 53142]]

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.
    EPA received a comment letter from one organization on what they 
believe to be deficiencies with respect to Title V programs in 
California. 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. A NOD will not necessarily be limited 
to deficiencies identified by citizens and may include any deficiencies 
that we have identified through our program oversight.

V. What Are the Program Changes That EPA Is Proposing To Approve?

    As discussed in the June 23, 1995 [60 FR 32606] rulemaking, full 
approval of the Bay Area operating permit program was made contingent 
upon satisfaction of the following conditions:
    Issue (1): Bay Area was required to provide a demonstration that 
each activity on its insignificant activities list is truly 
insignificant and is not likely to be subject to an applicable 
requirement. Alternatively, the District may establish emissions level 
cut-offs, in which activities emitting below the cut-offs would qualify 
as insignificant. In the latter case, the District must demonstrate 
that the cut-off emissions levels are insignificant compared to the 
level of emissions from and type of units that are required to be 
permitted or subject to applicable requirements. In addition, Bay Area 
must revise Regulation 2, Rule 6 to state that activities needed to 
determine the applicability of, or impose applicable requirements on, 
the facility may not qualify as insignificant activities. 
(Secs. 70.5(c) and 70.4(b))
    Rule Change: Instead of demonstrating that each activity on the Bay 
Area's insignificant activity list is truly insignificant, the District 
corrected this deficiency by establishing significant source emissions 
cut-offs below which activities would be insignificant. To implement 
this correction, the District amended Regulation 2, Rule 6, section 239 
to define ``significant source'' as a source that has a potential to 
emit of more than 2 tons per year of any regulated air pollutant, or 
more than 400 lbs per year of any hazardous air pollutant. In addition, 
the application content section of rule 2-6-405 requires operating 
permit applications to identify and describe each permitted source at 
the facility and each source or other activity that is exempt from the 
requirements to obtain a permit or excluded from District rules or 
regulations under Regulation 2, Rule 1. Furthermore, all part 70 permit 
applications are required to contain a list of all applicable 
requirements that apply to each source (Rule 2-6-405.5). Finally, 
Section 2.1.2 of the Manual of Procedures (``MOP'') requires 
applications to include other information necessary to implement and 
enforce other applicable requirements or determine the applicability of 
any such requirement on any source (whether permitted, exempt, or 
excluded) or any other activity.
    Issue (2): Bay Area was required to include a term consistent with 
the Part 70 definition of ``applicable requirement,'' and use that term 
consistently in rules 2-6-409.1, 2-6-409.2 and throughout the 
regulation.
    Rule Change: The District corrected this deficiency by revising the 
definition of ``applicable requirement'' at 2-6-202 to include a 
reference to the federal definition of ``applicable requirement'' as 
defined in 40 CFR 70.2. They have also added the term to 2-6-409.1 and 
409.2.
    Issue (3): Bay Area rule 2-6-409 was required to be revised to 
ensure that permit terms and conditions assure compliance with all 
applicable requirements (Sec. 70.7(a)(1)(iv)) and that permits contain 
emission limitations and standards (Sec. 70.6(a)(1)) and compliance 
certification requirements (Sec. 70.6(c)(1)) that assure compliance 
with all applicable requirements. Prior to being revised, the rule only 
required the District's operating permits to include requirements for 
testing, monitoring, reporting, and recordkeeping sufficient to assure 
compliance with the terms and conditions of the permit and the 
applicable requirements themselves.
    Rule Changes: The District corrected this deficiency by revising 
the permit content section of Rule 2-6-409, to: (1) Require that all 
applicable requirements be included in the permit; and (2) add 
requirements to the compliance schedule section of permit content 
requirements (see 2-6-409.10.3). Furthermore, Rule 2-6-409.7 already 
required that the permit contain a statement that the owner or operator 
must comply with all permit conditions and limitations set forth in the 
permit. These additions will ensure that the permits contain all 
necessary requirements to assure compliance with applicable 
requirements.
    Issue (4): Bay Area was required to show that certifications signed 
by the responsible official affirmatively state that they are based on 
truth, accuracy, and completeness, and that the certifications be based 
on information and belief formed after reasonable inquiry. Bay Area 
needed to revise Rules 2-6-405.9, 2-6-502, and the MOP (Sections 4.5 
and 4.7), and any other certification provisions to ensure that both 
elements are explicitly required. (Sec. 70.5(d))
    Rule Change: The District corrected this deficiency by revising 
several parts of the rule. First, the District added the following to 
the permit content section at 409.20: ``A certification requirement for 
all documents submitted pursuant to a major facility review permit. For 
applications, compliance certifications, and reports, the certification 
shall state that based on information and belief formed after 
reasonable inquiry, the statements and information in the document are 
true, accurate, and complete. The certifications shall be signed by a 
responsible official for the facility.'' Second, the District revised 
the application content requirements at Rule 2-6-405.9 to state that 
applications must contain: ``A compliance certification by a 
responsible official of the facility that the application forms and all 
accompanying reports and other required compliance certifications are 
true, accurate, and complete based on information and belief formed 
after reasonable inquiry; and* * *.'' Third, the District revised the 
Monitoring and Records section at Rule 2-6-502 to state that: ``A 
responsible official shall certify that all such reports are true, 
accurate, and complete based on information and belief formed after 
reasonable inquiry.'' Finally, the MOP Sections 4.5 and 4.7, were 
revised to include these provisions and section 2-6-426 was added and 
requires compliance certifications consistent with Part 70. (See 
Sec. 70.5(d)).

[[Page 53143]]

    Issue (5): Bay Area was required to revise Regulation 2-6 to define 
and require notice to affected states. Alternatively, Bay Area could 
have made a commitment to: (1) Initiate rule revisions upon being 
notified by EPA of an application by an affected tribe for state 
status, and (2) provide affected state notice to tribes upon their 
filing for state status (i.e., prior to Bay Area's adopting affected 
state notice rules). (Secs. 70.2 and 70.8(b)
    Rule Change: The District corrected this deficiency by adding the 
term ``Affected State'' at Rule 2-6-242 to provide: ``A State whose air 
quality may be affected by a facility and that is contiguous to the 
State of California or a state that is within 50 miles of a permitted 
source within the District.'' In addition, the District added 
notification requirements for affected states consistent with 40 CFR 
70.8(b)(1) to Rule 2-6-412. The District also revised Rule 2-6-412.6, 
consistent with 40 CFR 70.8(b)(2), to require written notification to 
EPA and affected states of any refusal to accept all recommendations 
from an affected state received during the public comment period for a 
draft permit.
    Issue (6): The District was required to eliminate the phrase ``but 
not limited to'' from the definition of ``administrative permit 
amendment.'' (Sec. 70.7(d)(1)(iv))
    Rule Change: The District corrected this deficiency by revising the 
definition at 2-6-201 to eliminate the problematic phrase.
    Issue (7): The District was required to revise Rule 2-6-404.3 to 
limit the universe of significant permit modification applications due 
12 months after commencing operations to only those applications for 
revisions pursuant to section 112(g) and title I, parts C and D of the 
Act that are not prohibited by an existing operating permit. Except in 
the above circumstances, a source is not allowed to operate the 
proposed change until the permitting authority has revised the source's 
operating permit. (Sec. 70.5(a)(1)(ii)).
    Rule Change: Bay Area corrected this deficiency by revising Rule 2-
6-404.3 to be consistent with federal regulations at 40 CFR Part 70. 
The definition now reads: ``An application for a significant permit 
revision shall be submitted by the applicant prior to commencing an 
operation associated with a significant permit revision. Where an 
existing federally enforceable major facility review permit condition 
would prohibit such change in operation, the responsible official must 
request preconstruction review and obtain a major facility review 
permit revision before commencing the change.''
    Issue (8): Bay Area was required to eliminate the extended review 
period from the minor permit modification procedures at Rule 2-6-414.2 
because it is inconsistent with Rules 2-6-410.2 and 40 CFR 
70.7(e)(2)(iv).
    Rule Change: The District corrected this deficiency by revising 
Rule 2-6-414.2 to read: ``The APCO shall act on the proposed minor 
revision within 15 days after the end of EPA's 45-day review period or 
within 90 days of receipt of the permit application whichever is 
later.'' This is now consistent with part 70 and 2-6-410.2.
    Issue (9): The District was required to revise 2-6-412.1 to include 
notice ``by other means if necessary to assure adequate notice to the 
affected public.'' (Sec. 70.7(h)(1)) Rule Change: The District 
corrected this deficiency by adding the suggested language to Rule 2-6-
412.1.
    Issue (10): Bay Area was required to add a provision to the MOP 
(section 4.1) to state that only alternative emission control plans 
(AECPs) that have been approved into the SIP may be incorporated into 
the federally enforceable portion of the permit. (Sec. 70.6(a)(1)(iii))
    Rule Change: The District has not revised the MOP as specified in 
our final interim approval. However, the District has corrected this 
deficiency by stating in a letter dated July 7, 2000 that there are no 
general AECP provisions in District rules. The only specific AECP 
provisions in the District rules are contained in the District coating 
rules, all of which have been SIP approved. Therefore, it is not 
possible for non-SIP-approved AECP provisions to be incorporated into 
the federally enforceable portion of an operating permit. Further, the 
language in the MOP is not inconsistent with federal regulations at 
Part 70, which is silent on how the District must treat AECPs. EPA 
understands that the District will identify only SIP-approved AECP 
provisions, as federally enforceable in operating permits.
    Issue (11): Bay Area was required to add emissions trading 
provisions consistent with 40 CFR 70.6(a)(10), which requires that 
trading must be allowed where an applicable requirement provides for 
trading increases and decreases without a case-by-case approval.
    Rule Change: The District corrected this deficiency by revising 
Rule 2-6-306--``Emissions Trading'' to be consistent with 40 CFR Part 
70 as follows: ``The APCO shall allow emissions trading within a 
facility that has a major facility review permit in accordance with the 
procedures and restrictions set forth in Rule 2-6-418. This provision 
shall not apply to the phase II acid rain portion of any facility 
subject to this Rule.''
    Issue (12): Bay Area was required to add a requirement to 
Regulation 2-6 that any document required by an operating permit must 
be certified by a responsible official. (Sec. 70.6(c)(1))
    Rule Change: The District has added the required language at the 
end of Rule 2-6-409.20 which now states, ``[t]he certifications shall 
be signed by a responsible official for the facility.''
    Issue (13): Bay Area was required to revise Rule 2-6-224 and Rule 
2-6-409.10 to specify that all progress reports must include: (1) Dates 
when activities, milestones, or compliance required in the schedule of 
compliance were achieved; and (2) an explanation of why any dates in 
the schedule of compliance were not or will not be met and any 
preventive or corrective measures adopted. (Sec. 70.6(c)(4)(i and ii))
    Rule Change: Bay Area responded and revised Section 2-6-409.10 to 
include a requirement that compliance plans must include deadlines for 
achieving each item in the plan, and a requirement that progress 
reports must be submitted every 6 months. Also, Section 409.10.3 now 
includes the statement that, ``[p]rogress reports shall contain the 
dates by which each item in the plan was achieved, and an explanation 
of why any dates in the schedule of compliance were not or will not be 
met, and any preventative or corrective measure adopted.'' No changes 
have been made or are necessary to District Rule 2-6-224 because such 
changes would be redundant with the changes already made in 2-6-409.
    Issue (14): Bay Area was required to revise Section 4.5 of the MOP 
and add a provision to Rule 2-6-409 to require that compliance 
certifications be submitted more frequently than annually if specified 
in an underlying applicable requirement. (Sec. 70.6(c)(4))
    Rule Change: The District corrected this deficiency by adding new 
Section 2-6-409.17 that requires permits to include, ``a requirement 
for annual compliance certifications, unless compliance certifications 
are required more frequently than annually in an applicable requirement 
or by the APCO.''
    Issue (15): At the time of the interim approval, Bay Area indicated 
in its program description that it intended to process new units that 
do not affect any federally enforceable permit condition as ``off-
permit'' (see Section II, p. 21 and Staff Report, pp. 3-4). Bay Area 
was required to submit a letter revising its

[[Page 53144]]

program description to indicate that it will not process new units as 
``off-permit'' or it could have revised its rule to include the part 70 
off-permit provisions as defined in federal regulations at 40 CFR 
70.4(b)(14) and 70.4(b)(15).
    Rule Change: Bay Area corrected this deficiency by providing a 
letter to Jack Broadbent, Director, Region IX, Air Division, dated May 
24, 2001, from the Bay Area APCO, Ellen Garvey that stated: ``The 
District has decided not to incorporate the `off-permit' provisions 
into its current program submittal.'' Therefore, no off-permit changes 
will be allowed under the Bay Area program.
    Issue (16): Bay Area was required to revise 2-6-222 defining 
``regulated air pollutant'' to be consistent with the Federal 
definition (Sec. 70.2) and include pollutants subject to any 
requirement established under section 112 of the Act, including 
sections 112(g), (j), and (r).
    Rule Change: The District corrected this deficiency by revising the 
definition of regulated air pollutant at Rule 2-6-222.5 to state, ``* * 
* any pollutant that is subject to any standard or requirement 
promulgated under Section 112 of the Clean Air Act, including sections 
112(g), (j) and (r).''
    Issue (17): One of EPA's conditions for full title V program 
approval was the California Legislature's revision of the Health and 
Safety Code to eliminate the provision that exempts ``any equipment 
used in agricultural operations in the growing of crops or the raising 
of fowl or animals'' from the requirement to obtain a permit. See 
California Health and Safety Code section 42310(e). Even though the 
local Districts have, in many cases, removed the title V exemption for 
agricultural sources from their own rules, the Health and Safety Code 
has not been revised to eliminate this provision.
    In evaluating the impact of the Health and Safety Code exemption, 
EPA believes there are a couple of key factors to consider. First, many 
post-harvest activities are not covered by the exemption and, thus, are 
still subject to title V permitting. For example, according to the 
California Air Resources Board (CARB), the Health and Safety Code 
exemption does not include activities such as milling and crushing, or 
canning or cotton ginning operations. Activities such as these are 
subject to review under the State's title V programs. See letter from 
Michael P. Kenny, Executive Officer, California Air Resources Board, to 
Jack Broadbent, Director, Air Division, U.S. EPA Region 9, dated 
September 19, 2001. In addition, since the granting of interim 
approval, the EPA has discovered that, in general, there is not a 
reliable or complete inventory of emissions associated with 
agricultural operations in California that are subject to the 
exemption. Although further research on this issue is needed, many 
sources with activities covered by the exemption may not have emission 
levels that would subject them to title V, and the State and/or 
individual Districts may be able to demonstrate that none of the 
sources that are exempt under the State law are subject to title V.
    Based, in part, on these factors, EPA has tentatively concluded 
that requiring the immediate commencement of title V permitting of the 
limited types of agricultural activities presently subject to the 
exemption, without a better understanding of the sources and their 
emissions, would not be an appropriate utilization of limited local, 
state and federal resources. As a result, despite the State of 
California's failure to eliminate the agricultural permitting 
exemption, EPA is proposing to grant full approval to local Air 
District operating permit programs and allow a deferral of title V 
permitting of agricultural operations involved in the growing of crops 
or the raising of fowl or animals for a further brief period, not to 
exceed three years. During the deferral period, we expect to develop 
the program infrastructure and experience necessary for effective 
implementation of the title V permitting program to this limited 
category of sources.
    EPA believes it is appropriate to defer permitting for this limited 
category of agricultural sources because the currently available 
techniques for determining emissions inventories and for monitoring 
emissions (e.g., from irrigation pumps and feeding operations) are 
problematic and will be dramatically enhanced by several efforts 
currently being undertaken with the cooperation and participation of 
the operators and agricultural organizations, as well as EPA, other 
federal agencies, and the State and local air pollution agencies. For 
example, the National Academy of Sciences is undertaking a study 
addressing emissions from animal feeding operations. Their report is 
due next year. In addition, EPA's Office of Air and Radiation is 
working with the U.S. Department of Agriculture to better address the 
impact of agricultural operations on air quality. We consider the 
effort to evaluate the existing science, improve on assessment tools, 
collect additional data, remove any remaining legal obstacles, and 
issue any necessary guidance within the three year deferral time frame 
to be ambitious. We welcome comments on other areas that might also 
warrant study, as well as ways that this work might be done more 
quickly.
    During the interim deferral period, EPA will continue to work with 
the agricultural industry and our state and federal regulatory partners 
to pursue, wherever possible, voluntary emission reduction strategies. 
At the end of this period, EPA will, taking into consideration the 
results of these studies, make a determination as to how the title V 
operating permit program will be implemented for any potential major 
agricultural stationary sources.
    Rule Change: In addition to the statutory exemption in the Health 
and Safety Code, Bay Area's regulations contained an exemption; 
however, the District has since revised its regulations to allow for 
permitting once state law provides for it. Specifically, Regulation 1, 
Section 110 and Regulation 2, Rule 1 were revised to allow for 
permitting pursuant to the California Health and Safety Code.

VI. What Is Involved in This Proposed Action?

    The Bay Area has corrected the deficiencies cited in the interim 
approval on June 23, 1995 [60 FR 32606]. Thus, EPA is proposing full 
approval of the Bay Area operating permit program. In addition, Bay 
Area has made other changes to its operating permit program since we 
granted interim approval. These changes were not required by EPA to 
correct interim approval deficiencies cited in our June 23, 1995 
Federal Register. EPA has reviewed the additional changes and proposes 
to approve most of the changes. Table 1a and 1b, respectively, list 
which rule and MOP subsections we are proposing to approve.
    EPA is not acting on some changes that the District made to its 
rules; these changes were not required to correct interim approval 
issues and may not be approvable. See Table 2 below for a list of the 
rule (and MOP) sections of Bay Area's program on which EPA is not 
taking action. Please refer to the TSD for additional information on 
the basis for our decision to either approve or not act on those other 
changes. If a section is not listed in any of the tables below, it 
means that there has been no change to that section since interim 
approval.

[[Page 53145]]



   Table 1a.--Approvable Rule Subsections That Have Been Changed Since
                            Interim Approval
------------------------------------------------------------------------
                                                               Adoption
              Approvable rule section and name                   date
------------------------------------------------------------------------
2-6-101, Description.......................................       5/2/01
2-6-114, Exemption, Non-Road Engines.......................     10/20/99
2-6-201, Administrative Permit Amendment...................     10/20/99
2-6-202, Applicable Requirements...........................       5/2/01
2-6-204, Designated Facility...............................     10/20/99
2-6-206, Facility..........................................       5/2/01
2-6-207, Federally Enforceable.............................       5/2/01
2-6-211, Independent Power-Production Facility.............       5/2/01
2-6-212, Major Facility....................................     10/20/99
2-6-215, Minor Permit Revision.............................     10/20/99
2-6-217, Phase II Acid Rain Facility.......................       5/2/01
2-6-218, Potential to Emit (see discussion below and in the     10/20/99
 TSD)......................................................
2-6-219, Preconstruction Permit or Review..................     10/20/99
2-6-222, Regulated Air Pollutant...........................       5/2/01
2-6-226, Significant Permit Revision.......................     10/20/99
2-6-229, Subject Solid Waste Incinerator Facility..........      10/2099
2-6-230, Synthetic Minor Facility..........................     10/20/99
2-6-231, Synthetic Minor Operating Permit..................     10/20/99
2-6-232, Synthetic Minor Operating Permit Revision.........     10/20/99
2-6-233, Permit Shield.....................................       5/2/01
2-6-235, Actual Emissions..................................       5/2/01
2-6-236, Modified Source or Facility.......................       5/2/01
2-6-237, Potential to Emit Demonstration...................     10/20/99
2-6-238, Process Statement.................................     10/20/99
2-6-239, Significant Source................................     10/20/99
2-6-240, State Implementation Plan.........................     10/20/99
2-6-241, 12-month Period...................................     10/20/99
2-6-242, Affected State....................................       5/2/01
2-6-243, Final Action......................................       5/2/01
2-6-244, CFR...............................................       5/2/01
2-6-303, Major Facility Review Requirement for Subject          10/20/99
 Solid Waste Incinerator Facilities........................
2-6-304 and 2-6-302: Major Facility Review Requirements for     10/20/99
 Designated Facilities: and Major Facility Review for Phase
 II Acid Rain Facilities:..................................
2-6-306, Emissions Trading.................................       5/2/01
2-6-307, Non-compliance, Major Facility Review.............     10/20/99
2-6-310, Synthetic Minor Operating Permit Requirement......     10/20/99
2-6-311, Non-compliance, Synthetic Minor Facilities........       5/2/01
2-6-312, Major Facility Review, Smaller Facilities.........       5/2/01
2-6-314, Revocation........................................       5/2/01
2-6-401, Facilities Affected (Deleted 10/20/99)............     10/20/99
2-6-403, Application for Major Facility Review Permit,            2/1/95
 Permit Renewal, or Permit Revision........................
2-6-404, Timely Application for Major Facility Review           10/20/99
 Permit....................................................
2-6-405, Complete Application for a Major Facility Review         5/2/01
 Permit....................................................
2-6-406, Application for Minor Permit Revision.............     10/20/99
2-6-407, Application Shield................................     10/20/99
2-6-408, Completeness Determination........................     10/20/99
2-6-409, Permit Content....................................       5/2/01
2-6-410, Final Action for Initial Permit Issuance, Five-        10/20/99
 Year Renewal, Reopenings, and Revisions...................
2-6-411, Reports to EPA and Public Petitions for Major            5/2/01
 Facility Review Permits...................................
2-6-412, Public Participation, Major Facility Review Permit       5/2/01
 Issuance..................................................
2-6-413, Administrative Permit Amendment Procedures........     10/20/99
2-6-414.2 and 414.3, Minor Permit Revision Procedures.            5/2/01
 (Note: EPA is not acting on subsection 414.1. See table 2,
 below)....................................................
2-6-416, Term for Major Facility Review....................       5/2/01
2-6-418, Emissions Trading Procedures......................       5/2/01
2-6-420, Application for a Synthetic Minor Operating Permit       5/2/01
2-6-421, Timely Application for a Synthetic Minor Operating       5/2/01
 Permit....................................................
2-6-422, Complete Application for a Synthetic Minor             10/20/99
 Operating Permit..........................................
2-6-423, District Procedures for Synthetic Minor Operating        5/2/01
 Permits...................................................
2-6-424, Applicability.....................................     10/20/99
2-6-425, Facility List.....................................     10/20/99
2-6-426, Compliance Certification Procedures...............       5/2/01
2-6-502, Monitoring Reports, Major Facility Review Permit..       5/2/01
2-6-503, Monitoring........................................       5/2/01
------------------------------------------------------------------------


[[Page 53146]]


 Table 1b.--Approvable Manual Of Procedures (MOP) Subsections that Have
                   Been Changed Since Interim Approval
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
        Approvable Manual of Procedures Section Number and Title
                      Adoption Date was May 2, 2001
1. Introduction (every paragraph except the second)
2. Applications:
    2.1  Major Facility Review Permits
    2.2  Synthetic Minor Operating Permits
    2.3  Potential to Emit Demonstrations
3. Fees
4. Permit Content:
    4.1  Applicable Requirements
    4.2  Permit Duration
    4.3  Terms and Conditions for Reasonably Anticipated Operating
     Scenarios
    4.4  Terms and Conditions for Emissions Trading
    4.5  Compliance
    4.6  Monitoring Requirements
    4.7  Recordkeeping and Reporting Requirements
    4.8  Emergency Provisions
    4.9  Acid Rain Provisions
    4.10  Severability Clause
    4.11  Standard Conditions to Implement EPA Title V Regulations and
     40 CFR 70
    4.12  Requirement to Pay Fees
    4.13  Provisions Regarding the Federal Enforceability of Conditions
    4.14  Inspection and Entry Requirements
    4.15  Requirements for Compliance Certification
    4.16  Permit Shield
5. Trade Secret and Availability of Information
6. Public Participation & EPA Review:
    6.1  Major Facility Review Permits
    6.2  Synthetic Minor Operating Permits
    6.3  Appeals and Objections
7. District Permitting Procedures:
    7.1  Major Facility Review Permits (all paragraphs except the three
     paragraphs that precede the last paragraph in the section)
    7.2  Synthetic Minor Operating Permits
8. Title IV: Applicability
------------------------------------------------------------------------


  Table 2.--List of Rule and MOP Sections That EPA Is Not Acting on as
                    Part of Today's Proposed Approval
------------------------------------------------------------------------
                                                               Adoption
               Rule or MOP section and title                     date
------------------------------------------------------------------------
2-6-113, Exemption, Registered Portable Engines............     10/20/99
2-6-234, Program Effective Date............................     10/20/99
2-6-313, Denial, Failure to Comply.........................       5/2/01
2-6-414.1, Minor Permit Revision Procedures................       5/2/01
MOP--Section 1--Introduction Only the second paragraph            5/2/01
 regarding the Program Effective Date......................
MOP--Section 7.1--Major Facility Review Permits. Only the         5/2/01
 three paragraphs that precede the last paragraph in
 section 7.1...............................................
------------------------------------------------------------------------

VII. Discussion on the Revision to the Definition of Potential To 
Emit

    Although not required to make the change for full approval, the 
District has revised its definition of ``Potential to Emit'' (2-6-218) 
(``PTE'') and the discussion of it in the MOP (page 3-2). The revised 
language no longer requires that permit limits be only ``federally 
enforceable.'' The definition now allows a permit limitation or the 
effect it would have on emissions, to be ``enforceable by the District 
or EPA.'' Although Bay Area's definition is different from the current 
definition in 40 CFR 70.2, litigation has occurred since we granted 
interim approval to Bay Area's rule that has affected EPA's 
consideration of this issue. In Clean Air Implementation Project v. 
EPA, No. 96-1224 (D.C. Cir. June 28, 1996), the court remanded and 
vacated the requirement for federal enforceability for potential to 
emit limits under part 70. Therefore, even though part 70 has not been 
revised it should be read to mean, ``federally enforceable or legally 
and practicably enforceable by a state or local air pollution control 
agency.'' \1\
---------------------------------------------------------------------------

    \1\ See also, National Mining Association (NMA) v. EPA, 59 f.3d 
1351 (D.C. Cir. July 21, 1995) (Title III) and Chemical 
Manufacturing Ass'n (CMA) v. EPA, No. 89-1514 (D.C. Cir. Sept. 15, 
1995) (Title I).
---------------------------------------------------------------------------

    EPA proposes to approve this revision because the Bay Area rule is 
consistent with the current meaning of potential to emit as described 
above in the court's interpretation. EPA has issued several guidance 
memoranda that discuss how the court rulings affect the definition of 
potential to emit under CAA Sec. 112, New Source Review (NSR) and 
Prevention of Significant Deterioration (PSD) programs, and title V.\2\ 
In particular, the

[[Page 53147]]

memoranda reiterate the Agency's earlier requirements for practicable 
enforceability for purposes of effectively limiting a source's 
potential to emit.\3\ For example, practicable enforceability for a 
source-specific permit means that the permit's provisions must, at a 
minimum: (1) Be technically accurate and identify which portions of the 
source are subject to the limitation; (2) specify the time period for 
the limitation (hourly, daily, monthly, and annual limits such as 
rolling annual limits); (3) be independently enforceable and describe 
the method to determine compliance including appropriate monitoring, 
recordkeeping and reporting; (4) be permanent; and (5) include a legal 
obligation to comply with the limit.
---------------------------------------------------------------------------

    \2\ See, e.g., January 22, 1996, memorandum entitled, ``Release 
of Interim Policy on Federal Enforceability of Limitations on 
Potential to Emit'' from John Seitz, Director, OAQPS and Robert I. 
Van Heuvelen, Director, Office of Regulatory Enforcement to EPA 
Regional Offices; January 31, 1996 paper to the Members of the 
Subcommittee on Permit, New Source Review and Toxics Integration 
from Steve Herman, OECA, and Mary Nichols, Assistant Administrator 
of Air and Radiation; and the August 27, 1996 Memorandum entitled, 
``Extension of January 25, 1995 Potential to Emit Transition 
Policy'' from John Seitz, Director, OAQPS and Robert Van Heuvelen, 
Director, Office of Regulatory Enforcement.
    \3\ See, e.g., June 13, 1989 Memorandum entitled, ``Guidance on 
Limiting Potential to Emit in New Source Permitting, from Terrell F. 
Hunt, Associate Enforcement Counsel, OECA, and John Seitz, Director, 
OAQPS, to EPA Regional Offices.'' This guidance is still the most 
comprehensive statement from EPA on this subject. Further guidance 
was provided on January 25, 1995 in a memorandum entitled ``Options 
for Limiting the Potential to Emit (PTE) of a Stationary Source 
Under Section 112 and Title V of the Clean Air Act (Act),'' from 
John Seitz, Director, OAQPS and Robert I. Van Heuvelen, Director, 
ORE to Regional Air Directors. Also please refer to the EPA Region 7 
database at http://www.epa.gov/region07/programs/artd/air/policy/policy.htm for more information.
---------------------------------------------------------------------------

    EPA will rely on Bay Area implementing this new definition in a 
manner that is consistent with the court's decisions and EPA policies. 
In addition, EPA wants to be certain that absent federal and citizen's 
enforceability, Bay Area's enforcement program still provides 
sufficient incentive for sources to comply with permit limits. This 
proposal provides notice to Bay Area about our expectations for 
ensuring the permit limits they impose are enforceable as a practical 
matter (i.e., practicably enforceable) and that its enforcement program 
will still provide sufficient compliance incentive. In the future, if 
Bay Area does not implement the new definition consistent with our 
guidance, and/or has not established a sufficient compliance incentive 
absent Federal and citizen's enforceability, EPA could find that the 
District has failed to administer or enforce its program and may take 
action to notify the District of such a finding as authorized by 
Sec. 70.10(b)(1).

VIII. Public Comments

    EPA requests comments on the program revisions discussed in this 
proposed action. Copies of the Bay Area submittal 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 record in case of judicial review. EPA 
will consider any comments received in writing by November 19, 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: October 11, 2001.
Laura Yoshii,
Acting Regional Administrator, Region IX.
[FR Doc. 01-26407 Filed 10-18-01; 8:45 am]
BILLING CODE 6560-50-P