[Federal Register Volume 66, Number 203 (Friday, October 19, 2001)]
[Proposed Rules]
[Pages 53151-53155]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26409]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[CA 050-OPP; FRL-7087-6]


Clean Air Act Full Approval of Operating Permit Program; San 
Joaquin Valley Unified Air Pollution Control District, California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: EPA is proposing to fully approve the operating permit program 
for the San Joaquin Valley Unified Air Pollution Control District 
(``San Joaquin'' or ``District''). The District's 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 
District's operating permit program on April 24, 1996. This action 
proposes approval of revisions to the District's permit program that 
were submitted to satisfy the conditions for full approval.

DATES: Comments on the program revisions discussed in this proposed 
action must be received in writing by November 19, 2001.

ADDRESSES: Written comments on this action should be addressed to 
Gerardo Rios, Air Division (AIR-3), EPA Region IX, 75 Hawthorne Street, 
San Francisco, California, 94105. You can inspect copies of the 
District's submittal, and other supporting documentation relevant to 
this action, during normal business hours at the EPA Region 9, 75 
Hawthorne Street, San Francisco, California, 94105.
    You may also see copies of the submitted Title V program at the 
following locations:

California Air Resources Board, Stationary Source Division, Rule 
Evaluation Section, 1001 ``I'' Street, Sacramento, CA 95814
The San Joaquin Valley Pollution Control District, 1990 E. Gettysburg 
Avenue, Fresno, CA 93726-0244

FOR FURTHER INFORMATION CONTACT: Ed Pike, EPA Region IX, Permits Office 
(AIR-3), U.S. Environmental Protection Agency, Region IX, (415) 744-
1211 or [email protected].

SUPPLEMENTARY INFORMATION: This section provides additional information 
on today's rulemaking:

What is the operating permit program?
What rules were submitted for full approval?
How do the program changes qualify for full approval?
Are there other issues with the program?

What Is the Operating Permit Program?

    The CAA Amendments of 1990 require 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 enforcement 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 (but are not 
limited to) those that have the potential to emit: (1) 50 tons per year 
or more of volatile organic compounds or nitrogen oxides 
(NOX) in a serious non-attainment; (2) 70 tons per year of 
particulate matter (PM10) in a PM10 non-
attainment area; (3) 10 tons per year of any single Hazardous Air 
Pollutant (as defined under section 112 of the CAA); or (4) 25 tons per 
year or more of a combination of Hazardous Air Pollutants (HAPs).

What Rules Were Submitted for Full Approval?

    Where an 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 
contingent on the State or local permitting agency revising its program 
to correct the deficiencies. Because the San Joaquin operating permit 
program substantially, but not fully, met the requirements of part 70, 
EPA granted interim approval to each program in a rulemaking published 
on April 24, 1996 [61 FR 18083]. The interim approval notice described 
the conditions that had to be met in order for the San Joaquin program 
to receive full approval.
    In response, San Joaquin adopted revisions to three permitting 
regulations on June 21, 2001. The first is District Rule 2520, 
Federally Mandated Operating Permits, which is the District's part 70 
permitting rule. The District also made revisions to the elements of 
District Rule 2201, New and Modified Source Review, that contain part 
70 requirements allowing a source to obtain a modification under Rule 
2201 that also satisfies part 70 requirements. District Rule 2020, 
Exemptions, was also revised. The California Air Resources Board, on 
behalf of the District submitted these revised regulations and other 
program revisions on July 3, 2001. This Federal Register notice 
describes the changes that have been made to the San Joaquin operating 
permit program since interim approval was granted and how the revised 
program meets the conditions for full approval.

[[Page 53152]]

How Do the Program Changes Qualify for Full Approval?

    EPA's April 24, 1996 rulemaking required that San Joaquin make a 
number of changes to the program to qualify for full approval. EPA is 
proposing to fully approve the revised program submitted to EPA on July 
3, 2001. This revised program contains the following changes to address 
the interim approval requirements (for more information, please see the 
Technical Support Document):

Issue #1

    In order for San Joaquin's program to receive full approval (and to 
avoid a disapproval upon the expiration of this interim approval), the 
California Legislature must revise the Health and Safety Code to 
eliminate the exemption of agricultural production sources from the 
requirement to obtain a permit. (See major source definition in 40 CFR 
70.2 and applicability under 40 CFR 70.3)

Rule or Program Change

    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.

Issue #2

    Revise the applicability language in Rule 2520 section 2.2 and the 
definitions of Major Air Toxics Source (Rule 2520 section 3.18) and 
Major Source (Rule 2520 section 3.19) to be consistent with the Act and 
Part 70 to cover sources that emit at major source thresholds. (See 40 
CFR 70.2, definition of ``Major Source'')
    Rule or Program Change: The District has amended the applicability 
language in Rule 2520 section 2.2, Rule 2520 section 3.18, and Rule 
2520 section 3.19 to include sources with actual emissions at or above 
the major source thresholds, rather than just sources with the 
potential to emit at the major source thresholds.

Issue #3

    Limit the exemption for non-major sources in Rule 2520 section 4.1 
so that it does not exempt non-major sources that EPA determines, upon 
promulgation of a section 111 or 112 standard, must obtain Title V 
permits. (See 40 CFR 70.3)
    Rule or Program Change: The District has amended the language in 
Rule 2520 section 4.1 to limit the exemption for non-major sources in 
Rule 2520 section 4.1 so that it does not exempt non-major sources that 
EPA determines, upon promulgation of a section 111 or 112 standard, 
must obtain Title V permits. Any source that falls into one or more of 
the source categories listed under section 4.1 cannot be exempted from 
the requirements to obtain a title V permit, even if it is not a major 
source.

Issue #4

    Revise Rule 2520 section 7.1.3.2 to eliminate the requirement that 
fugitive emission estimates need only be submitted in the application 
if the source is in a source category identified in the major source 
definition in 40 CFR 70.2. (See 40 CFR 70.5(c))
    Rule or Program Change: The District amended the language in Rule 
2520 Section 7.1.3.2 to eliminate the requirement that fugitive 
emissions estimates need only be submitted in the application if the 
source is in a source category identified in the major source 
definition in 40 CFR 70.2. The District

[[Page 53153]]

also added fugitive emissions to the list of emissions-related 
information that must be submitted with permit applications in section 
7.1.3.1.

Issue #5

    Revise Rule 2520 to provide that unless the District requests 
additional information or otherwise notifies the applicant of 
incompleteness within 60 days of receipt of an application, the 
application shall be deemed complete. (See 40 CFR 70.5(a)(2) and 
70.7(a)(4))
    Rule or Program Change: The District revised section 11.6.1 of 
District Rule 2520 to assure that ``Unless the APCO requests additional 
information or otherwise notifies the applicant of incompleteness 
within 60 days of receipt of an application, the application shall be 
deemed complete.''

Issue #6

    Revise Rule 2520 sections 11.1.4.2 and 11.3.1.1 and Rule 2201 
5.3.1.1.1 to include notice ``by any other means if necessary to assure 
adequate notice to the affected public.'' (See 40 CFR 70.7(h)(1))
    Rule or Program Change: The District revised the language in 
sections 11.1.4.2 and 11.3.1.1 of Rule 2520 and section 5.3.1.1.1 of 
Rule 2201 (which has been administratively renumbered as section 
5.9.1.1 of Rule 2201) to include notice by any other means if necessary 
to assure adequate notice to the affected public.

Issue #7

    Revise Rule 2520's permit issuance procedures to provide for 
notifying EPA and affected states in writing of any refusal to accept 
all recommendations for the proposed permit submitted by an affected 
state during the public/affected state review period. (See 40 CFR 
70.8(b)(2))
    Rule or Program Change: Language has been added to section 11.3.1.3 
of Rule 2520 requiring the District to notify EPA and affected states 
in writing of any refusal to accept all recommendations for the 
proposed permit that an affected state submitted during the public/
affected state review period.

Issue #8

    Either delete section 11.7.5 in Rule 2520 and section 5.3.1.8.5 in 
Rule 2201, which purport to limit the grounds upon which EPA may object 
to a permit to compliance with applicable requirements, or revise them 
to be fully consistent with 40 CFR 70.8 (c).
    Rule or Program Change: The District resolved this issue by 
revising section 11.7.5 of Rule 2520 and section 5.3.1.8.5 (which has 
been administratively renumbered as section 5.9.1.9.4) of Rule 2201 to 
be consistent with 40 CFR part 70 as follows: ``EPA objection shall be 
limited to compliance with applicable requirements and the requirements 
of 40 CFR part 70.''

Issue #9

    Revise Rule 2520 section 2.4 to clarify that the phrase in section 
2.4 that ``only the affected emissions units within the stationary 
source shall be subject to part 70 permitting requirements'' applies 
only to stationary sources that are also area sources. (See 40 CFR 
70.3(c))
    Rule or Program Change: Section 2.4 was revised to read ``For 
stationary sources, which are subject to Rule 2520 solely as a result 
of Section 2.4, only the emissions units within the stationary source 
that are subject to the section 111 or 112 standard or requirement 
shall be subject to the Part 70 permitting requirements.''

Issue #10

    Revise Rule 2520 section 8.1 to provide that each model general 
permit and model general permit template will be subject to public, 
affected state, and EPA review consistent with initial issuance at 
least once every 5 years. (See 40 CFR 70.4(b)(3)(iii) and 70.7(c)(1))
    Rule or Program Change: Section 8.1 of Rule 2520 was revised to 
provide that each model general permit and model general permit 
template will be subject to public, affected state, and EPA review 
consistent with initial issuance at least once every 5 years.

Issue #11:

    Revise Rule 2520 Section 8.1 to provide that any permit for a solid 
waste incinerator unit that has a permit term of more than 5 years 
shall be subject to review, including public notice and comment, at 
least once every 5 years. (See 40 CFR 70.4(b)(3)(iii) and (iv) and 
70.7(c))
    Rule or Program Change: Section 8.1 of Rule 2520 was revised to 
provide that any permit for a solid waste incinerator unit that has a 
permit term of more than 5 years shall be subject to review, including 
public notice and comment, at least once every 5 years.

Issue #12

    Revise Rule 2520 section 13.2.3 to state that the permit shield 
will only apply to requirements addressed in the permit. Section 504(f) 
of the Act and 40 CFR Sec. 70.6(f) are both clear that the permit 
shield only extends to requirements that are addressed in the permit. 
EPA will not consider a source to be shielded for failure to comply 
with an applicable requirement if that applicable requirement is 
addressed only in the written reviews (such as a permit evaluation) 
supporting permit issuance and not in the permit.
    Rule or Program Change: Rule 2520 section 13.2.3 was revised to 
read, ``The permit shield applies only to requirements that are either 
identified and included by the District in the permit, or are 
requirements that the District, in acting on the application, 
determines in writing are not applicable to the source. In cases where 
the District determines that a requirement is not applicable to the 
source and provides a permit shield, the permit shall include the 
determination or a concise summary of the determination.''

Issue #13

    Revise Rule 2520 section 9.12 to require that the permit contain 
terms and conditions for the trading of emissions increases and 
decreases to the extent that any applicable requirement provides for 
such trading without case by case approval. The District may limit 
transfers of emission reduction credits in accordance with District 
Rules 2201 and 2301. (See 40 CFR 70.6(a)(10))
    Rule or Program Change: The language in section 9.11 (the 
corresponding section after a numbering correction) of Rule 2520 was 
revised to require that the permit contain terms and conditions for the 
trading of emissions increases and decreases to the extent that any 
applicable requirement provides for such trading without case by case 
approval.

Issue #14

    Revise Rule 2520 section 9.0 (permit content) to include the 40 CFR 
Sec. 70.6(c)(3) requirement for schedules of compliance for applicable 
requirements for which the source is in compliance or that will become 
effective during the permit term.
    Rule or Program Change: A new section (Section 9.14) was added to 
Rule 2520. This section includes the 40 CFR Sec. 70.6(c)(3) requirement 
for schedules of compliance for applicable requirements for which the 
source is in compliance or that will become effective during the permit 
term.

Issue #15

    Revise Rule 2520 to treat changes made under the Prevention of 
Significant Deterioration (PSD) provisions of the Act in the same 
manner as ``Title I modifications'' as that term is defined in Rule 
2520 and Rule 2201. (See 40 CFR 70.7 and 70.4(b)(12))
    Rule or Program Change: Sections 3.20.4.1, 3.20.5, 6.4.1.3, and 
6.4.4.5 of

[[Page 53154]]

Rule 2520 were revised to treat changes made under the Prevention of 
Significant Deterioration (PSD) provisions of the Act in the same 
manner as ``Title I modifications'' as that term is defined in Rule 
2520 and Rule 2201.

Issue #16

    Revise Rule 2520 to state that notwithstanding permit shield 
provisions, if a source that is operating under a general permit or 
general permit template is later determined not to qualify for the 
terms and conditions of that general permit or template, then the 
source is subject to enforcement action for operation without a part 70 
permit. (See 40 CFR 70.6(d))
    Rule or Program Change: Section 13.2.4 was added to Rule 2520 to 
state that ``Notwithstanding these permit shield provisions, if a 
source that is operating under a general permit or general permit 
template is later determined not to qualify for the terms and 
conditions of that general permit or template, then the source is 
subject to enforcement action for operation without a part 70 permit.''
    Summary: As noted earlier, EPA is proposing to fully approve San 
Joaquin's revised operating permit program based on the revisions 
submitted to EPA on July 3, 2001.

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 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 person 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.

Request for Public Comment

    EPA requests comments on the program revisions discussed in this 
proposed action. Copies of the District's 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.

[[Page 53155]]

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. 01-26409 Filed 10-18-01; 8:45 am]
BILLING CODE 6560-50-P