[Federal Register Volume 67, Number 142 (Wednesday, July 24, 2002)]
[Proposed Rules]
[Pages 48426-48430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-18715]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 70 and 71

[CA080-OPPS; FRL-7250-6]


Proposed Partial Withdrawal of Approval of 34 Clean Air Act Title 
V Operating Permits Programs and Implementation of a Partial Part 71 
Federal Operating Permits Program in California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: Pursuant to our authority at 40 CFR 70.10(b)(2)(i), EPA is 
proposing to withdraw, in part, approval of the following 34 Clean Air 
Act title V Operating Permits Programs in the State of California: 
Amador County Air Pollution Control District (APCD), Bay Area Air 
Quality Management District (AQMD), Butte County AQMD, Calaveras County 
APCD, Colusa County APCD, El Dorado County APCD, Feather River AQMD, 
Glenn County APCD, Great Basin Unified APCD, Imperial County APCD, Kern 
County APCD, Lake County AQMD, Lassen County APCD, Mariposa County 
APCD, Mendocino County APCD, Modoc County APCD, Mojave Desert AQMD, 
Monterey Bay Unified APCD, North Coast Unified AQMD, Northern Sierra 
AQMD, Northern Sonoma County APCD, Placer County APCD, Sacramento Metro 
AQMD, San Diego County APCD, San Joaquin Valley Unified APCD, San Luis 
Obispo County APCD, Santa Barbara County APCD, Shasta County APCD, 
Siskiyou County APCD, South Coast AQMD, Tehama County APCD, Tuolumne 
County APCD, Ventura County APCD, and Yolo-Solano AQMD. Our proposed 
partial title V program

[[Page 48427]]

withdrawal is based upon EPA's finding that the State's agricultural 
permitting exemption at Health and Safety Code 42310(e) unduly 
restricts the 34 local districts' ability to adequately administer and 
enforce their title V programs, which have previously been granted full 
approval status. Therefore, EPA is proposing to withdraw approval of 
those portions of the 34 district title V programs that relate to 
sources that would be subject to title V but for the state agricultural 
exemption (``state-exempt major stationary agricultural sources''). EPA 
is also today proposing to implement a partial federal operating 
permits program under 40 CFR part 71 (``Part 71 program'') for state-
exempt major stationary agricultural sources.

DATES: Comments on this proposed action must be received in writing by 
September 3, 2002.

ADDRESSES: Written comments on this proposed action should be addressed 
to Gerardo Rios, Chief, Permits Office, Air Division (AIR-3), EPA 
Region IX, 75 Hawthorne Street, San Francisco, California, 94105.

FOR FURTHER INFORMATION CONTACT: Gerardo Rios, EPA Region IX, at (415) 
972-3974 or [email protected].

SUPPLEMENTARY INFORMATION: Throughout this document, ``we,'' ``us,'' or 
``our'' means EPA.

Table of Contents

I. Background
II. Description of Proposed Action
III. Effect of EPA's Rulemaking
IV. Request for Public Comment
V. Administrative Requirements

I. Background

    Title V of the CAA Amendments of 1990 required all state permitting 
authorities to develop operating permits programs that met certain 
federal criteria codified at 40 Code of Federal Regulations (CFR) part 
70. Where a state operating permits program substantially, but not 
fully, meets the 40 CFR part 70 criteria, section 502(g) of the Act 
authorizes EPA to grant interim approval to the state program, and 
requires EPA to identify the changes that must be made before the 
program can receive full approval.
    In California, we granted interim approval to all 34 local 
operating permits programs initially submitted by the State. Our 
interim approvals, granted in 1994 and 1995, identified, among other 
things, the removal of the agricultural permitting exemption in 
California's Health and Safety Code (HSC) section 42310(e), as a change 
that had to occur before we could grant full approval. This section of 
California's HSC exempts from the requirement to obtain a permit ``any 
equipment used in agricultural operations in the growing of crops or 
the raising of fowl or animals.'' We stated in each of our interim 
approval rulemakings that the State's permitting exemption was a 
program deficiency and that the exemption needed to be eliminated in 
order for us to grant full approval to the 34 operating permits 
programs.
    On November 30, 2001, we promulgated final full approval of the 34 
districts' title V operating permits programs, despite the State of 
California's failure to eliminate the agricultural permitting 
exemption. See 66 FR 63503 (December 7, 2001).\1\ In granting full 
approval, we decided to defer title V permitting of state-exempted 
agricultural operations for a brief period, not to exceed three 
years.\2\
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    \1\Although there are 35 separate permitting authorities in 
California, one permitting authority, Antelope Valley APCD, was not 
included in our final action because it only recently obtained its 
authority to issue part 70 permits and is still under tis initial 
interim approval status granted on December 19, 2000 (65 FR 79314).
    \2\Our final rulemaking was challenged by several environmental 
and communiy groups alleging that the full approval was illegal 
based, in part, on the exemption of major agricultural sources from 
title V permitting. EPA entered into a settlement of this litigation 
which requires, in part, that the Agency propose the actions 
contained in today's notice.
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    Subsequent to EPA's final rulemaking approving the 34 title V 
programs, EPA made a formal determination that all 34 local permitting 
authorities in California that have fully approved title V operating 
permit programs are not adequately administering or enforcing their 
programs because state law at Health and Safety Code 42310(e) exempts 
from permitting, ``equipment used in agricultural operations in the 
growing of crops or the raising of fowl or animals.'' In other words, 
this exemption hinders the ability of the local districts to issue, 
administer or enforce title V permits for any major sources covered by 
the exemption.\3\ Title V of the Act does not allow any exemptions for 
major sources, and requires that all permitting authorities have the 
authority to ``issue permits and assure compliance by all sources 
required to have a permit under this subchapter with each applicable 
standard, regulation or requirement under this chapter.'' CAA 
502(b)(5)(A). These requirements are echoed in the operating permit 
program approval regulations promulgated at 40 CFR part 70. See 40 CFR 
70.4(b)(3)(i).
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    \3\We are not identifying every source covered by the California 
HSC exemption as a ``major source'' under title V. Rather, we are 
acknowledging that any stationary agricultural sources that are 
``major sources'' are covered by title V, even if they are exempt 
from permitting under the California HSC.
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    40 CFR 70.10(b) and 70.10(c) provide that EPA may withdraw a 40 CFR 
part 70 program approval, in whole or in part, whenever the permitting 
authority's legal authority does not meet the requirements of part 70 
and the permitting authority fails to take corrective action. 40 CFR 
70.10(b) sets forth the procedures for program withdrawal, and requires 
as a prerequisite to withdrawal that the permitting authority be 
notified of any finding of deficiency by the Administrator and that the 
notice be published in the Federal Register.
    40 CFR 70.10(b) also provides that EPA may promulgate and 
administer a federal program under title V of the Act in the event that 
a permitting authority is not adequately administering or enforcing a 
part 70 program, or portion thereof. This action must also be preceded 
by notification to the permitting authority of EPA's finding of 
inadequate program administration, and is contingent upon a failure of 
the permitting authority to take significant action within 90 days of 
such notification.
    Our determination regarding the inadequacy of the 34 districts' 
title V programs was published in a Notice of Deficiency (NOD). See 67 
FR 35990 (May 22, 2002). Publication of the NOD fulfilled our 
obligation under 40 CFR 70.10(b)(1), which provides that EPA shall 
publish in the Federal Register a notice of any determination that a 
title V permitting authority is not adequately administering or 
enforcing its title V operating permits program. Pursuant to 40 CFR 
70.10(b)(2), publication of the NOD commenced a 90-day period during 
which the State of California must take significant action to assure 
adequate administration and enforcement of the local districts' 
programs.\4\
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    \4\EPA has determined that ``significant action'' in this 
instance means the revision or removal of Health and Safety Code 
42310(e) so that local air pollution control districts have the 
required authority to issue title V permits to stationary 
agricultural sources that are major sources of air pollution.
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II. Description of Proposed Action

    We are proposing to withdraw, in part, approval of the 34 fully 
approved Clean Air Act title V Operating Permits Programs in the State 
of California. We are proposing to withdraw only the portions of the 
programs that relate to state-exempt major stationary agricultural 
sources; because they have the ability to adequately administer and 
enforce their part 70 programs for non-

[[Page 48428]]

exempt major stationary sources, each of the 34 local air districts 
will continue to administer their existing title V program for all 
other title V sources. In addition, we are proposing to implement a 
partial federal operating permits program under 40 CFR part 71 for 
state-exempt major stationary agricultural sources. EPA's action is 
necessary because the local districts cannot issue, administer or 
enforce operating permits for these sources, which are required to 
obtain permits under title V of the Act.
    Although the 90-day period for the State to take significant action 
in response to EPA's Notice of Deficiency does not expire until August 
19, 2002, we are today proposing to partially withdraw title V program 
approval and to implement a partial part 71 program for state-exempt 
major stationary sources in each of the 34 California districts where 
we are proposing partial program withdrawal. We are proposing these 
actions now in anticipation that the State of California will not 
effect the necessary change in state law prior to the end of the 90-day 
period on August 19. However, consistent with 40 CFR 70.10(b)(2), final 
action on this proposal will occur only after the 90 days for the State 
to take significant action has fully elapsed.

III. Effect of EPA's Rulemaking

    Our proposal, if finalized, would result in EPA administering and 
enforcing a part 71 federal operating permit program for state-exempt 
major stationary agricultural sources within the jurisdiction of the 34 
California air districts listed at the beginning of this proposal. 
Pursuant to 40 CFR 71.5(a)(1)(i), major stationary sources which do not 
have an existing operating permit issued by a State (or local 
permitting authority) under an approved part 70 program, and which are 
applying for a part 71 permit for the first time, must submit an 
application within 12 months after becoming subject to the permit 
program or on or before such earlier date as the permitting authority 
may establish. Section 71.5(a)(1)(i) further provides that sources 
required to submit permit applications earlier than 12 months after 
becoming subject to part 71 shall be notified of the earlier submittal 
date at least 6 months in advance of the date.
    In the event we finalize this rule as proposed and implement a part 
71 program for state-exempt major stationary agricultural sources, we 
are proposing to establish the following permit application deadlines: 
(1) state-exempt agricultural stationary sources that are major 
sources, as defined in 40 CFR 71.2, due to emissions from diesel-
powered engines\5\ must submit part 71 permit applications to the EPA 
Region IX Permits Office no later than 6 months after the effective 
date of the partial part 71 program or May 1, 2003, whichever is later; 
and (2) any remaining state-exempt major stationary agricultural 
sources must submit part 71 permit applications to the EPA Region IX 
Permits Office no later than August 1, 2003, or 6 months after the 
effective date of the partial part 71 program, whichever is later.
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    \5\Emissions from stationary diesel-powered engines are 
considered when determining a source's applicability to title V 
permitting requirements. Emissions from motorized vehicles and from 
diesel-powered engines (or other types of engines) that meet the 40 
CFR 89.2 definition of ``nonroad engine'' are not counted in title V 
applicability determinations.
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IV. Request for Public Comment

    We are soliciting public comment on all aspects of this proposal. 
Written comments will be considered before taking final action. To 
comment on today's proposal, you should submit comments by mail (in 
triplicate if possible) as described in the ADDRESSES section listed in 
the front of this document. We will consider any written comments 
received by September 3, 2002. We are establishing a longer comment 
period than the 30 days required under the Administrative Procedure Act 
(APA) so that the public comment period on today's proposal extends 
beyond the end of the 90-day period for the State to take significant 
action. This time frame will provide the public with an opportunity, in 
commenting on today's proposal, to also fully consider and address any 
action taken by the State during the 90-day period.

V. Administrative Requirements

A. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866, Regulatory Planning and Review.

B. Executive Order 13211

    This proposed rule is not subject to Executive Order 13211, 
``Actions Concerning Regulations That Significantly Affect Energy 
Supply, Distribution, or Use'' (66 FR 28355 (May 22, 2001)) because it 
is not a significant regulatory action under Executive Order 12866.

C. Executive Order 13045

    Executive Order 13045, entitled Protection of Children from 
Environmental Health Risks and Safety Risks (62 FR 19885, April 23, 
1997), applies to any rule that: (1) is determined to be ``economically 
significant'' as defined under Executive Order 12866, and (2) concerns 
an environmental health or safety risk that EPA has reason to believe 
may have a disproportionate effect on children. If the regulatory 
action meets both criteria, the Agency must evaluate the environmental 
health or safety effects of the planned rule on children, and explain 
why the planned regulation is preferable to other potentially effective 
and reasonably feasible alternatives considered by the Agency.
    This proposed rule is not subject to Executive Order 13045 because 
it does not involve decisions intended to mitigate environmental health 
or safety risks.

D. Executive Order 13132

    Executive Order 13132, entitled Federalism (64 FR 43255, August 10, 
1999) revokes and replaces Executive Orders 12612, Federalism and 
12875, Enhancing the Intergovernmental Partnership. Executive Order 
13132 requires EPA to develop an accountable process to ensure 
``meaningful and timely input by State and local officials in the 
development of regulatory policies that have federalism implications.'' 
``Policies that have federalism implications'' is defined in the 
Executive Order to include regulations that 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.'' Under 
Executive Order 13132, EPA may not issue a regulation that has 
federalism implications, that imposes substantial direct compliance 
costs, and that is not required by statute, unless the Federal 
government provides the funds necessary to pay the direct compliance 
costs incurred by State and local governments, or EPA consults with 
State and local officials early in the process of developing the 
proposed regulation. EPA also may not issue a regulation that has 
federalism implications and that preempts State law unless the Agency 
consults with State and local officials early in the process of 
developing the proposed regulation.
    This rule 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, because it 
does not alter the relationship or the

[[Page 48429]]

distribution of power and responsibilities established in the Clean Air 
Act. Thus, the requirements of section 6 of the Executive Order do not 
apply to this proposed rule.

E. Executive Order 13175

    Executive Order 13175, entitled ``Consultation and Coordination 
with Indian Tribal Governments'' (65 FR 67249, November 6, 2000), 
requires EPA to develop an accountable process to ensure ``meaningful 
and timely input by tribal officials in the development of regulatory 
policies that have tribal implications.'' ``Policies that have tribal 
implications'' is defined in the Executive Order to include regulations 
that have ``substantial direct effects on one or more Indian tribes, on 
the relationship between the Federal government and the Indian tribes, 
or on the distribution of power and responsibilities between the 
Federal government and Indian tribes.''
    This rule does not have tribal implications. It will not have 
substantial direct effects on tribal governments, 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 in Executive Order 13175. 
Thus, Executive Order 13175 does not apply to this proposed rule. In 
the spirit of Executive Order 13175, and consistent with EPA policy to 
promote communications between EPA and tribal governments, EPA 
specifically solicits additional comment on this proposed rule from 
tribal officials.

F. Regulatory Flexibility Act

    The Regulatory Flexibility Act generally requires an agency to 
conduct a regulatory flexibility analysis of any rule subject to notice 
and comment rulemaking requirements unless the agency certifies that 
the rule will not have a significant economic impact on a substantial 
number of small entities. Small entities include small businesses, 
small not-for-profit enterprises, and small governmental jurisdictions. 
This rule will not have a significant impact on a substantial number of 
small entities. In developing the original part 70 regulations and the 
proposed revisions to part 70, the Agency determined that they would 
not have a significant economic impact on a substantial number of small 
entities. See 57 FR 32250, 32294 (July 21, 1992), and 60 FR 45530, 
45563 (August 31, 1995). Similarly, the same conclusion was reached in 
an initial regulatory flexibility analysis performed in support of the 
1996 part 71 rulemaking. See 61 FR 34202, 34227 (July 1, 1996); see 
also 64 FR 8262 (February 19, 1999). Only a small subset of sources 
subject to the part 71 rule would be affected by today's action. The 
prior screening analyses for the part 70 and part 71 rules were done on 
a nationwide basis without regard to whether sources were located 
within California and are, therefore, applicable to sources in 
California. Accordingly, EPA believes that the screening analyses are 
valid for purposes of today's action. And since the screening analyses 
for the prior rules found that the part 70 and 71 rules as a whole 
would not have a significant impact on a substantial number of small 
entities, today's action, which would affect a much smaller number of 
entities than affected by the earlier rules, also will not have a 
significant impact on a substantial number of small entities.
    EPA believes that few if any small businesses involved in the 
production of crops or animals in California would be subject to part 
71 as a result of this rule. First, EPA notes that the Small Business 
Administration, pursuant to its authority under 15 U.S.C. 632(a) and 
634(b)(6), has established thresholds for various business sectors to 
be used in the determination of whether a business is ``small.'' See, 
13 CFR part 121. For most businesses involved in the production of 
crops or animals (those that would most likely be subject to part 71 
because of this rule), the SBA has set the ``small business'' threshold 
as $750,000 in annual receipts. (The threshold for cattle feedlots is 
$1.5 million; the threshold for chicken egg production is $9 million.) 
See 13 CFR 121.201; see also, 13 CFR 121.104. Businesses that have 
annual receipts in excess of that threshold are not ``small 
businesses.'' Second, EPA's rule would require only major sources of 
air pollution to obtain a part 71 operating permit. For instance, in 
the San Joaquin Valley, the threshold for major sources of oxides of 
nitrogen or volatile organic compounds is 25 tons per year; the 
threshold for major sources of particulate matter is 70 tons per year. 
Most other air districts in California have higher thresholds and 
consequently fewer sources in those districts would be subject to part 
71. Furthermore, EPA does not include a source's fugitive emissions of 
criteria pollutants in determining whether part 71 applies to it. In 
addition, for sources that might have the potential to emit above the 
major source threshold, but have actual emissions below the threshold, 
the Agency has issued several policy memoranda explaining mechanisms 
for these sources to become ``synthetic minors.'' These sources are 
recognized as not emitting pollutants in major quantities and may avoid 
the requirement to obtain a part 71 permit. Moreover, to the extent 
there is any impact, it will not be significant because part 71 imposes 
few if any additional substantive requirements. EPA intends to provide 
assistance to all sources that would become subject to part 71 as a 
result of this rulemaking.
    Consequently, I hereby certify that this action will not have a 
significant economic impact on a substantial number of small entities.

G. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to State, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the proposed action does not include a 
Federal mandate that may result in estimated costs of $100 million or 
more to either State, local, or tribal governments in the aggregate, or 
to the private sector.

H. National Technology Transfer and Advancement Act

    Section 12 of the National Technology Transfer and Advancement Act 
(NTTAA) of 1995 requires Federal agencies to evaluate existing 
technical standards when developing a new regulation. To comply with 
NTTAA, EPA must consider and use ``voluntary consensus standards'' 
(VCS) if available and applicable when developing programs and policies 
unless doing so would be inconsistent with applicable law or otherwise 
impractical.
    EPA believes that VCS are inapplicable to today's proposed action 
because it does not require the public to perform activities conducive 
to the use of VCS.

I. Paperwork Reduction Act

    The OMB has approved the information collection requirements 
contained in this action under the

[[Page 48430]]

provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et. seq. and 
has assigned OMB control number 2060-0336. The information is planned 
to be collected to enable EPA to carry out its obligations under the 
Act to determine which sources are subject to the Federal Operating 
Permits Program and what requirements should be included in permits for 
sources subject to the program. Responses to the collection of 
information will be mandatory under Sec. 71.5(a) which requires owners 
or operators of sources subject to the program to submit a timely and 
complete permit application and under Secs. 71.6 (a) and (c) which 
require that permits include requirements related to recordkeeping and 
reporting. As provided in 42 U.S.C. 7661b(e), sources may assert a 
business confidentiality claim for the information collected under 
section 114(c) of the Act.
    In the Information Collection Request (ICR) document for the July 
1996 final part 71 rule (ICR Number 1713.02), EPA estimated that 1,980 
sources in 8 states would potentially be subject to part 71. EPA also 
estimated that the annual burden per source would be 329 hours, and the 
annual burden to the Federal government is 243 hours per source. EPA 
believes that these burden estimates are significantly higher than the 
burdens associated with the rule proposed today. First, EPA estimates 
that the number of agricultural sources in California will be 
significantly less than the number on which the July 1996 estimates 
were based. In addition, State and local laws have traditionally 
exempted agricultural sources from many air pollution regulations. 
Therefore, agricultural sources will have fewer applicable requirements 
than the average part 71 source; accordingly, the burdens associated 
with permit applications and recordkeeping and reporting requirements 
should be minimal and far less than those for the typical part 71 
source. Today's action would impose no burden on State or local 
governments and no burden on Tribal agencies. Burden means the total 
time, effort, or financial resources expended by persons to generate, 
maintain, retain, or disclose or provide information to or for a 
Federal agency. This includes the time needed to review instructions; 
develop, acquire, install, and utilize technology and systems for the 
purposes of collecting, validating, and verifying information; 
processing and maintaining information, and disclosing and providing 
information; adjust the existing ways to comply with any previously 
applicable instructions and requirements; train personnel to be able to 
respond to a collection of information; search data sources; complete 
and review the collection of information; and transmit or otherwise 
disclose the information. 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. The OMB 
control numbers for EPA's regulations are listed in 40 CFR part 9 and 
48 CFR chapter 15.

List of Subjects 40 CFR Part 70

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Intergovernmental relations, Reporting and 
recordkeeping requirements.

40 CFR Part 71

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Reporting and recordkeeping requirements.

    Dated: July 17, 2002.
Keith Takata,
Acting Regional Administrator, Region 9.
[FR Doc. 02-18715 Filed 7-23-02; 8:45 am]
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