[Federal Register Volume 66, Number 203 (Friday, October 19, 2001)]
[Proposed Rules]
[Pages 53178-53182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-26416]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[CA 047-OPP; FRL-7087-4]


Clean Air Act Proposed Full Approval of Operating Permit Program; 
Monterey Bay Unified Air Pollution Control District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes to fully approve the operating permits 
program submitted by the Monterey Bay Unified Air Pollution Control 
District (MBUAPCD) based on the revisions submitted on May 9, 2001, 
which satisfactorily address the program deficiencies identified in 
EPA's October 6, 1995 Interim Approval Rulemaking. In addition, EPA is 
proposing to approve, as a Title V operating permit program revision, 
changes to District Rule 218, Title V: Federal Operating Permits, 
adopted by MBUAPCD on February 21, 1996 and March 26, 1997. The MBUAPCD 
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 
MBUAPCD's operating permit program on October 6, 1995. MBUAPCD revised 
its program to satisfy the conditions of the interim approval and this 
action approves those revisions.

DATES: Written comments on today's proposal must be received 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. You 
can inspect copies of the MBUAPCD submittal, and other supporting 
documentation relevant to this action, during normal business hours at 
EPA Region 9, Air Division, 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
Monterey Bay Unified Air Pollution Control District, 24580 Silver Cloud 
Court, Monterey CA 93940

    A courtesy copy of MBUAPCD's title V rule, Rule 218, may be 
available via the Internet at http://www.arb.ca.gov/drdb/mbu/cur.htm. 
However, the version of District Rule 218 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 the rule 
listed is the same as the rule submitted to EPA for approval (April 18, 
2001). The official submittal is available only at the three addresses 
listed above.

FOR FURTHER INFORMATION CONTACT: Roger Kohn, EPA Region IX, at (415) 
744-1238 or [email protected].

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

What is the operating permit program?
What is being addressed in this document?
Are there other issues with the program?
What are the program changes that EPA is proposing to approve?
What is involved in this proposed action?

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 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 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.

What Is Being Addressed in This Document?

    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 revising its program to correct

[[Page 53179]]

the deficiencies. Because the MBUAPCD operating permit program 
substantially, but not fully, met the requirements of part 70, EPA 
granted interim approval to the program in a rulemaking published on 
October 6, 1995 (60 FR 52332). The interim approval notice described 
the conditions that had to be met in order for the MBUAPCD program to 
receive full approval. Since that time, MBUAPCD has submitted one 
revision of its interimly approved operating permit program, on May 9, 
2001. This Federal Register document describes the changes that have 
been made to the MBUAPCD operating permit program since interim 
approval was granted.
    To solicit citizens comments on the operating permit programs, on 
December 11, 2000, EPA published a document to announce a 90-day 
comment period for members of the public to identify deficiencies they 
perceive exist in State and local agency operating permits programs 
(see 65 FR 77376). The deficiencies the public claims exist could be 
either deficiencies in the substance of the approved program or 
deficiencies in how a permitting authority is implementing its program. 
Where EPA agrees that there is deficiency, it will publish a notice of 
deficiency on or before December 1, 2001, and establish a time frame 
for the permitting authority to take action to correct the deficiency.

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 document 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 document.
    EPA received a comment letter from one person on what he believes 
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 document 
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.

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

A. Changes Required to Receive Full Program Approval

B. Other Changes

A. Changes Required To Receive Full Program Approval

    As stipulated in the October 6, 1995 rulemaking, full approval of 
the MBUAPCD operating permit program was made contingent upon 
correction of deficiencies identified by EPA. MBUAPCD corrected all of 
these deficiencies in the revised title V program submitted to EPA on 
May 9, 2001. The corrections consist of the addition of new rule 
language, the deletion of problematic old rule language, or in one 
case, a commitment in the May 9, 2001 submittal to revise Rule 218 upon 
being notified by EPA of an application by an affected tribe for state 
status. The deficiencies identified by EPA when interim approval of the 
MBUAPCD title V program was granted, as well as the corrections made by 
MBUAPCD to address these deficiencies, are summarized below. The 
Technical Support Document (TSD) in the Docket for this rulemaking 
contains the full text of EPA's description of each deficiency in the 
1995 rulemaking, as well as complete descriptions of how MBUAPCD 
corrected the deficiencies, including the revised rule language.
    (1) Acid rain sources and solid waste incineration units are 
required to obtain a permit pursuant to section 129(e) of the Act and 
may not be exempted from the requirement to obtain a title V permit, in 
accordance with 40 CFR 70.3(b).
    MBUAPCD revised Rule 218 so that it no longer exempts these types 
of sources from the requirement to obtain a title V permit. Under the 
revised rule, these sources must obtain title V permits even if they 
otherwise qualify for one of the exemptions listed in Rule 218.
    (2) Revise the definition of ``Administrative Permit Amendments.'' 
40 CFR 70.7(d)(1)(iii) and 40 CFR 70.7(e)(4)).
    MBUAPCD revised this definition, which now states that an 
administrative amendment ``requires more frequent monitoring or 
reporting requirements for the stationary source. * * *'' This 
definition distinguishes administrative amendments from permit 
modifications that increase monitoring or reporting requirements, which 
must be processed as significant permit modifications.
    (3) Revise the definition of ``Federally Enforceable Requirement'' 
to be consistent with 40 CFR 70.2.
    MBUAPCD revised this definition so that instead of referring to 
``District prohibitory rules that are in the State Implementation Plan 
(SIP),'' it now refers to ``any standard or other requirement provided 
for in the State Implementation Plan (SIP) approved or promulgated by 
USEPA.''
    (4) Revise of the definition of ``Minor Permit Modification'' to 
require that a minor permit modification may not establish or change a 
permit condition used to avoid a federally enforceable requirement to 
which the source would otherwise be subject, in accordance with 40 CFR 
70.7(e)(2)(i)(A)(4).
    MBUAPCD revised this definition so that a permit modification that 
would ``establish or change any permit condition used to avoid a 
federally enforceable requirement to which the source would otherwise 
be subject'' cannot be processed as a minor permit modification.
    (5) Require the compliance certification within the permit 
application to indicate the source's compliance status with any 
applicable enhanced monitoring and compliance certification 
requirements of the Act, in accordance with 40 CFR 70.5(c)(9)(iv).
    MBUAPCD revised the permit application section of Rule 218 to 
require that permit applications include ``a description of the 
compliance status of each emissions unit within the stationary source 
with respect to federally enforceable requirements including any 
applicable enhanced monitoring and compliance certification 
requirements of the Act.''
    (6) Revise the application compliance certification requirement to 
be consistent with 40 CFR 70.5(c)(8)(iii)(C).
    MBUAPCD has modified Rule 218 by incorporating the exact language 
of 40 CFR 70.5(c)(8)(iii)(C).
    (7) Provide a demonstration that activities that are exempt from 
title V permitting are truly insignificant and are not likely to be 
subject to an applicable requirement. Alternatively, Rule 218 may 
restrict the exemptions to activities that are not likely to be subject

[[Page 53180]]

to an applicable requirement and emit less than District-established 
emission levels (40 CFR 70.5(c) and 40 CFR 70.4(b)(2)).
    MBUAPCD added a new definition of ``insignificant activity'' to 
Rule 218 that establishes emission levels that are used to determine 
whether or not an activity qualifies as insignificant. The emission 
levels are two tons per year of any criteria pollutant, and the lesser 
of 1,000 pounds per year, the section 112(g) de minimis levels, or 
other Title I significant modification levels for Hazardous Air 
Pollutants and other toxics as identified in 40 CFR 52.21(b)(23)(i). 
EPA and the District agree that an activity that is subject to a 
source-specific applicable requirement does not qualify as 
insignificant, even if its emissions are less than the District-
established emission levels.
    (8) Revise Rule 218 to provide that the APCO shall also give public 
notice ``by other means if necessary to assure adequate notice to the 
affected public,'' in accordance with 40 CFR 70.7(h)(1).
    MBUAPCD revised Rule 218, which now states that the ``notification 
shall be published in at least one newspaper of general circulation 
within the District and by other means if necessary to assure adequate 
notice to the affected public. * * *''
    (9) Revise Rule 218 to include the contents of the public notice as 
specified by 40 CFR 70.7(h)(2).
    MBUAPCD revised Rule 218 to explicitly require that the information 
required by 40 CFR 70.7(h)(2) be included in each public notice of the 
District's intent to issue, significantly modify, or renew a permit. 
This section of part 70 requires that public notices identify specific 
information, including the affected facility, the name and address of 
the permittee, the activities involved in the permitting action, and 
name, address, and telephone number of a person whom citizens may 
contact for additional information.
    (10) Revise Rule 218 to provide that the District shall keep a 
record of the commenters and of the issues raised during the public 
participation process so that the Administrator may fulfill her 
obligation to determine whether a citizen petition may be granted (40 
CFR 70.7(h)(5)).
    MBUAPCD added new language to Rule 218 that states that the ``APCO 
shall keep a record of the commenters and of the issues raised during 
the public participation process so that the Administrator of the USEPA 
may fulfill their obligation to determine whether a citizen petition 
may be granted.''
    (11) Revise Rule 218 to provide EPA with an additional 45 days to 
review a permit that the District proposes to issue that has been 
revised as a result of comments received from the public during 
concurrent public and EPA review of the proposed permit (40 CFR 
70.8(a)(1)).
    MBUAPCD added new language to Rule 218 that states that ``If the 
permit is revised due to comments received from the public, the revised 
permit will be forwarded to USEPA for an additional 45-day review 
period.''
    (12) Revise Rule 218 to define and provide for giving notice to 
affected states per 40 CFR 70.2 and 70.8(b). Alternatively, MBUAPCD may 
make 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 Monterey's adopting affected state notice 
rules).
    MBUAPCD addressed this deficiency by making a formal commitment in 
its May 9, 2001 submittal of its title V program to EPA to revise Rule 
218 upon notification by EPA of an affected state within 50 miles of 
the District.
    (13) Revise Rule 218 to require that permits shall be reopened 
under specific circumstances as required by 40 CFR 70.7(f).
    MBUAPCD revised Rule 218 to require that permits be reopened under 
specific circumstances described in the Rule, which are based on the 
requirements in 40 CFR 70.7(f).
    (14) Revise Rule 218 to provide, consistent with 40 CFR 
70.7(e)(2)(iv), that the District shall take action on a minor permit 
modification application within 90 days of receipt of the application 
or 15 days after the end of the 45-day EPA review period, whichever is 
later.
    MBUAPCD revised Rule 218 to incorporate these time frames.
    (15) Revise Rule 218 to specify the possible actions that may be 
taken on a minor permit modification application (40 CFR 
70.7(e)(2)(iv)).
    MBUAPCD added new language to Rule 218 that describes four possible 
actions that may be taken on a minor permit modification. The possible 
actions include issuing the permit modification, denying the 
application, determining that the application must be processed 
according to significant modification procedures, or revising the draft 
permit modification and submitting it to EPA as a proposed permit 
modification.
    (16) The California Legislature must revise state law to eliminate 
the exemption of agricultural production sources from the requirement 
to obtain a title V permit.
    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

[[Page 53181]]

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.

B. Other Changes

    MBUAPCD adopted revisions to District Rule 218, Title V: Federal 
Operating Permits, on February 21, 1996, March 26, 1997, and April 18, 
2001. These revisions are unrelated to the rule revisions made to 
address interim approval deficiencies, which are described in section A 
above. With two exceptions, EPA is proposing to approve the rule 
changes made by MBUAPCD in 1996, 1997, and 2001. The changes that we 
are proposing to approve are summarized below. EPA is not taking action 
at this time on MBUAPCD's revision of the definition of ``major 
source'' in Rule 218 and the effective date of revised Rule 218. The 
reader should refer to the TSD for additional information on the nature 
of the rule changes EPA is proposing to approve and the basis for EPA's 
proposed approval, as well as EPA's reasons for not taking action on 
the definition of ``major source'' and the effective date change. EPA 
is proposing to approve the following changes to Rule 218:
     Replace the term ``reactive organic compounds'' with 
``volatile organic compounds'' (Sections 2.2.4 and 4.3.4) and refer to 
District Rule 101.
     Delete the definitions for ``halogenated hydrocarbons'' 
and ``reactive organic compound''.
     Add a permit shield provision. (Section 4.4)

What Is Involved in This Proposed Action?

    The EPA proposes full approval of the operating permits program 
submitted by MBUAPCD based on the revisions submitted on May 9, 2001, 
which satisfactorily address the program deficiencies identified in 
EPA's October 6, 1995 Interim Approval Rulemaking. See 60 FR 52332.

Request for Public Comment

    EPA requests comments on the program revisions discussed in this 
proposed action. Copies of the MBUAPCD 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

[[Page 53182]]

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. 01-26416 Filed 10-18-01; 8:45 am]
BILLING CODE 6560-50-P