[Federal Register Volume 70, Number 3 (Wednesday, January 5, 2005)]
[Notices]
[Pages 810-817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 05-178]



[[Page 810]]

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ENVIRONMENTAL PROTECTION AGENCY

[FRL-7857-5]


State Program Requirements; Approval of Revisions to the National 
Pollutant Discharge Elimination System (NPDES) Program; Louisiana

AGENCY: Environmental Protection Agency (EPA).

ACTION: Approval of revisions to the Louisiana Pollutant Discharge 
Elimination System program.

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SUMMARY: Pursuant to a request by the Environmental Protection Agency 
(EPA) and as required by 40 CFR 123.62, the State of Louisiana 
submitted a request for approval of revisions to the Louisiana 
Pollutant Discharge Elimination System (LPDES) program, which was 
originally approved on August 27, 1996. Through the submission of the 
revised program authorization documents, including a complete program 
description, a Memorandum of Agreement (MOA) with EPA Region 6, and an 
Attorney General's Statement, the Louisiana Department of Environmental 
Quality (LDEQ) seeks approval of the proposed revisions to the LPDES 
program. Today, EPA Region 6 is publishing notice of its approval of 
the revised LPDES program and is responding to comments received during 
the 30-day public notice period on the proposed revisions. EPA is 
approving the State's request based upon the requirements of 40 CFR 
part 123 after considering all comments received.
    Pursuant to an October 9, 2001, petition from numerous 
environmental groups in Louisiana requesting EPA withdraw LDEQ's 
authorization to administer the LPDES program along with EPA program 
reviews of the water permitting and enforcement programs, EPA 
delineated seven performance measures for LDEQ in a letter dated 
February 14, 2003, from Tracy Mehan, former EPA Assistant Administrator 
for Water, and John Peter Suarez, former EPA Assistant Administrator 
for Enforcement and Compliance Assurance, to former Governor M. J. 
Foster. Former Governor Foster replied in a letter dated March 27, 
2003, with the commitment of LDEQ and the State of Louisiana to 
complete the seven performance measures. With the submission of the 
revision to the LPDES program, LDEQ completed the last of the seven 
performance measures. Regional Administrator Richard Greene notified 
Governor Kathleen Blanco of the completion of the performance measures 
in a letter dated May 13, 2004. After evaluation of the comments and 
other information related to this Federal Register notice regarding the 
revision to the LPDES program authorization, EPA is denying the 
petition for EPA to withdraw LDEQ's authorization to administer the 
LPDES program.
    Section 402 of the Clean Water Act (CWA) created the National 
Pollutant Discharge Elimination System (NPDES) program under which EPA 
may issue permits for the point source discharge of pollutants to 
waters of the United States under conditions required by the Act. 
Section 402(b) requires EPA to authorize a state to administer an 
equivalent state program, upon the Governor's request, provided the 
state has appropriate legal authority and a program sufficient to meet 
the Act's requirements. The regulatory requirements for state program 
approval are set forth in 40 CFR part 123. Today, EPA is announcing its 
final approval action on the revisions to the LPDES program, the 
Regional Administrator has notified the State, has signed the revised 
MOA, and is publishing notice of the action in the Federal Register 
along with responses to comments received.

Comments, Discussion, and EPA Responses

    EPA received 12 comments on the revision to the LPDES program 
authorization documents. The comments received were from the Tulane 
Environmental Law Clinic representing the Louisiana Environmental 
Action Network, the Louisiana Audubon Council, the Gulf Restoration 
Network, the Association of Community Organizations for Reform Now, the 
Lake Pontchartrain Basin Foundation, CFACT, the Lake Maurepas Society, 
and the Concerned Citizens of Livingston Parish; American Electric 
Power; and The Dow Chemical Company. The comments and responses, in 
their entirety are listed below.
    Comment 1: LDEQ has no right to judicial review of Administrative 
Law Judge (ALJ) decisions and thus ALJs can force LDEQ to issue permits 
the agency believes are illegal.
    Discussion by Commenter: Louisiana law provides that in an 
adjudication by the Division of Administrative Law (DAL), the decision 
of the ALJ is final and ``the agency shall have no authority to 
override such a decision or order.'' In addition, La. R.S. 49:992(B)(3) 
states that ``no agency or official thereof, or other person acting on 
behalf of an agency or official thereof, shall be entitled to judicial 
review of a decision made pursuant to this chapter''. This provision 
impairs LDEQ's ability to carry out the LPDES program properly because 
it cannot appeal an adverse decision. Consequently, LDEQ may be 
required to issue a permit that violates the CWA. In short, this 
regulation limits the authority of LDEQ, as the agency primarily 
responsible for administering the federal CWA within the state, to 
ensure that all permits it issues comply with the law, and instead 
places that burden on the public, who must intervene to object to a 
wrongfully issued permit.
    Commenters assert that EPA's response is that La. R.S. 49:992(D)(2) 
allows LDEQ to be exempt from the DAL provisions ``if required by a 
federal mandate''. Accordingly, if EPA requires LDEQ to conduct or to 
render a final order in an adjudication proceeding as a condition of 
federal funding, LDEQ can conduct its adjudicatory hearings `in house' 
rather than under the DAL. The Program Description further states that 
``assuming [LDEQ] was to conduct adjudicatory hearings `in house', it 
maintains the authority to do so.'' In that case, the decision of the 
hearing officer would become final unless the Secretary grants 
administrative review, in which case he would make the final decision.
    Commenters believe that EPA's response does not clearly address the 
problem. To the best of our knowledge, EPA has not yet required ``as a 
condition of federal funding'' that LDEQ conduct in house adjudication 
proceedings. Until and unless EPA does so, La. R.S. 49:992(D)(2) will 
be inapplicable and thus irrelevant. Accordingly, to ensure that LDEQ 
has adequate authority to administer the NPDES program in Louisiana, 
EPA's approval must specifically provide that LDEQ conduct all 
adjudicatory hearings ``in house'' rather than under the DAL as a 
condition of federal funding.
    EPA Response: The commenters are correct in stating that La. R.S. 
49:992(B) precludes LDEQ from appealing an adverse decision in an 
adjudication by the DAL. However, EPA does not believe this restriction 
on the agency's power requires withdrawal of the State's authority to 
run the NPDES program. This issue arises only if a request for hearing 
is filed by the permit applicant within 30 days after he receives 
notice of LDEQ's issuance of the NPDES permit. If the hearing request 
is granted by the Secretary of LDEQ, an adjudicative hearing is held by 
an ALJ with DAL, an agency independent of LDEQ. The ALJ's decision 
concerning the permit appeal is final, and under State law, LDEQ cannot 
unilaterally revise an adverse decision or appeal it to State Court. 
Therefore, an ALJ could

[[Page 811]]

order LDEQ to make revisions to a permit that LDEQ does not believe 
comport with the CWA.
    Although EPA does not believe this situation to be ideal, there are 
additional safeguards in place to insure final issuance of an NPDES 
permit that meets all the requirements of the CWA. First of all, 
pursuant to La. R.S. 30:2050.21, any ``aggrieved person'' may appeal a 
final permit action to State District Court. ``Aggrieved person'' is 
defined by La. R.S. 30:2004(17) as any ``natural or juridical person 
who has a real and actual interest that is or may be adversely affected 
by a final action under this Subtitle.'' Thus, even though LDEQ cannot 
appeal an adverse NPDES permit decision by an ALJ, members of the 
general public, so long as they meet the broad definition of 
``aggrieved person,'' may. The public's right to appeal is bolstered by 
the fact that any decision by an ALJ under these circumstances, that 
results in a major modification to an NPDES permit, requires LDEQ to 
prepare a new draft permit and notice it to the public for public 
comment. See Louisiana Administrative Code (LAC) 33:2903. Under LAC 
33:3123, after the close of the public comment period, LDEQ must notify 
each person who has submitted written comments or requested notice of 
the final permit decision, and such notice must include reference to 
the procedures for appealing the decision.
    Another safeguard to LDEQ's permit issuance process is EPA's 
oversight role. Under the MOA signed by LDEQ and EPA upon authorization 
of the LPDES program, if the terms of any permit, including any permit 
over which EPA has waived review, are affected in any way by 
administrative action, LDEQ must forward to EPA a copy of the 
administrative decision, along with a copy of the permit affected with 
any changes identified. EPA has the right to object to such a modified 
permit under Section 402(d)(2) of the CWA and 40 CFR 123.44. If EPA 
objects to such a permit and LDEQ fails to revise the permit to comply 
with EPA's objections, exclusive authority to issue the permit reverts 
to EPA pursuant to 40 CFR 123.44(h)(3).
    As a result of the additional safeguards in place, EPA believes 
LDEQ's inability to appeal an adverse permitting decision of an ALJ 
does not undercut LDEQ's ability to implement an adequate LPDES 
program. However, EPA is aware of the fact that Acts 739 and 1332 of 
the 1999 Regular Session of the Louisiana legislature, which created 
the DAL and which precluded any agency of the State from seeking 
judicial review of a decision of a DAL ALJ, have been ruled 
unconstitutional by the 19th Judicial District Court in Louisiana. 
(See, Judge Janice C. Clark's judgment in J. Robert Wooley, in his 
capacity as Commissioner of Insurance, State of Louisiana v. State Farm 
Fire and Casualty Insurance Company, et al., Suit No. 502,311 (19th 
J.D.C. 3/15/04). The District Court's ruling is currently on appeal to 
the Louisiana Supreme Court, which heard oral argument on September 7, 
2004, and has taken the matter under advisement. Should the Supreme 
Court's ruling on this matter indicate the need to revisit this issue, 
EPA will do so at that time.
    Comment 2: The public receives no notice of hearings and thus has 
no opportunity to intervene.
    Discussion by Commenter: An ``aggrieved person'' can request an 
adjudicatory hearing on a disputed issue of fact or law, which the 
Secretary may grant ``when equity and justice require''. An aggrieved 
person also has the right to intervene as a party in an adjudicatory 
hearing when the intervention ``is unlikely to unduly broaden the 
issues or to unduly impede the resolution of the matter under 
consideration.'' However, these provisions offer the public little 
protection because state law does not provide the public with any right 
to notification of a request for an adjudicatory hearing by permit 
applicants. Nor does state law provide the public with a right to 
notification of the results of such a hearing. Without notice, the 
public effectively never has an opportunity to intervene. Accordingly, 
to ensure adequate public participation in adjudicatory hearings, EPA's 
approval must be conditioned on LDEQ's agreement to provide a minimum 
of 30 days notice of adjudicatory hearings and settlements, including 
at a minimum, notice published in the public notices section of LDEQ's 
Web page (currently http://www.deq.state.la.us/news/PubNotice) and 
public notice list-serve.
    EPA Response: CWA Section 402(b) and 40 CFR part 123 establish the 
minimum requirements for public participation in approved State NPDES 
programs. In regard to permit issuance, States seeking NPDES 
authorization must have authority sufficient ``to insure that the 
public, and any other State the waters of which may be affected, 
receive notice of each application for a permit and to provide an 
opportunity for public hearing before a ruling on each such 
application.'' In regard to enforcement, 40 CFR 123.27(d) requires 
States to provide for public participation in the State enforcement 
process in one of two ways: (A) The State must allow intervention as of 
right in any civil or administrative action to obtain enforcement 
remedies by any citizen with an interest that is or may be adversely 
affected; or (B) The State must investigate and provide written 
responses to all citizen complaints, not oppose intervention by any 
citizen when permissive intervention may be authorized by statute, 
rule, or regulation, and publish notice of and provide at least 30 days 
for public comment on any proposed settlement of a State enforcement 
action. EPA believes LDEQ is in compliance with the federal 
requirements for public participation in both permitting and 
enforcement.
    Pursuant to LAC 33:IX.3113, LDEQ provides public notice of every 
draft permit prepared by the agency and of every notice of intent to 
deny a permit application. As required by both federal and State 
regulations, notice is provided by mailing a copy of the notice to 
persons on a mailing list that includes any person who requests in 
writing to be on the list and by publication of the notice in a daily 
or weekly newspaper within the area affected by the facility or 
activity. LDEQ also publishes notices of draft NPDES permits on its 
public Web site. The public notice on draft permits provides for a 
public comment period of at least 30 days, during which any interested 
person may submit written comments and/or request a public hearing. A 
public hearing is held anytime LDEQ finds, on the basis of requests, a 
significant degree of public interest in a draft permit, or at the 
agency's discretion whenever, for instance, a hearing might clarify one 
or more issues involved in the permit decision. LAC 33:IX.3115 & 3117.
    LDEQ chose to provide for public participation in enforcement 
matters in accordance with the second method allowed by 40 CFR 
123.27(d). The State investigates and provides written responses to 
citizen complaints, and does not oppose intervention by any citizen in 
adjudicatory hearings held at the request of the respondent regarding 
any disputed issue of material fact or law arising from a compliance 
order or penalty assessment. Such adjudicatory hearings are held by an 
ALJ with the DAL. LDEQ also publishes notice of each proposed 
settlement of a State enforcement action on its public Web site at 
least 45 days prior to final action on the proposed settlement, and, as 
a condition to settlement, requires respondents to publish notice of 
the proposed settlement in a newspaper of general circulation in the 
parish in which the violations occurred at least 45 days prior to final 
action.

[[Page 812]]

    Although LDEQ does not provide specific notice to the public of the 
request for an adjudicatory hearing by the applicant in regard to 
permit issuance or by the respondent in regard to an enforcement 
action, neither the CWA nor implementing federal regulations require it 
to do so. However, it is easy enough for persons interested in a 
particular permit or enforcement matter (the existence of which is 
widely publicized by LDEQ) to find out if a hearing has been requested, 
granted or scheduled by contacting the Legal Affairs Division at LDEQ 
or the DAL.
    Comment 3: Timely permit issuance requires consistent additional 
funding.
    Discussion by Commenter: Allowing facilities to operate without a 
valid discharge permit is a violation of the CWA Section 301(a). Even 
so, Louisiana regulations currently authorize a facility that submits 
an application at least 180 days before the permit expires to continue 
operating until LDEQ can reissue the permit. The 2002 Audit revealed 
that ``these continuations may result in DEQ not reissuing permits for 
several years.'' As of January 2001, 54% of major water permits and 10% 
of minor water permits were expired.
    The Revised MOA requires that LDEQ reissue all expiring permits 
``as close as possible to their expiration dates,'' and that LDEQ may 
not modify any continued permit. However, the problem remains that many 
facilities are illegally discharging into the waters of Louisiana 
without a permit. These facilities may be subject to an enforcement 
action for these violations. Thus, both the regulated community and the 
public have an interest in ensuring that LDEQ issue permits before they 
expire.
    LDEQ revised its LPDES Permit Issuance Strategy (``Permit Issuance 
Strategy'') on April 30, 2003. It provided $1.49 million in federal 
grant money for the 2003 fiscal year to pay for EPA contract support to 
assist with permit issuance. According to the report, as of May 1, 
2003, 244 major facilities exist in Louisiana, and 95 of those permits 
are backlogged. The plan reports LDEQ will have no major permit backlog 
by the end of 2005. Of the 1637 minor facilities in Louisiana, 869 are 
operating under a current permit--332 are expired but continued, and 
446 have unknown status. LDEQ projects it will have a minor permit 
backlog of 9.5% by the end of 2005. EPA considers a level of less than 
10% expired permits to be indicative of a well-maintained program. 
Further, in a July 30, 2003, letter to Region 6, LDEQ reported that it 
had met or exceeded performance measures for permit issuance from 
January 1 through July 30 of 2003. This is excellent progress. However, 
LDEQ must reach a point where it can handle its permitting workload 
without relying on federal grants. Without a long-term budgetary 
solution, LDEQ will once again have a backlog.
    EPA's approval must therefore be conditioned on assurance of 
adequate funding of LPDES, for example, (1) a program of permit fees 
adequate to cover the program's administration or (2) the Governor's 
adherence to a specific and signed commitment to seek a specific 
minimum level of funding for LPDES that EPA concludes, based on 
analysis in the record, is adequate for a well-maintained program.
    EPA Response: LDEQ's LPDES program receives the bulk of it's 
funding (83%) from the States' Environmental Trust Fund. The 
Environmental Trust Fund receives it funding from permit fees and 
administrative penalties. Thirteen percent of funds that support the 
LPDES program are from the Federal 106 Grant Program. The commentor 
notes that LDEQ has made excellent progress for permit issuance from 
January 1 through July 30 of 2003, and further states that LDEQ must 
reach a point where it can handle its permitting workload without 
relying on federal grants. In the first quarter of calendar year 2003, 
EPA and LDEQ agreed that in order to document that the State had the 
capabilities to administer the LPDES program, that LDEQ would issue 35 
major and provide coverage for 300 minor individual permits for 
calendar year 2003. All work on the permits was to be completed by LDEQ 
staff. Contractor drafted permits were not included in the count. For 
calendar year 2003, LDEQ drafted and issued 36 major permits and 
provided coverage for 382 individual minor facilities. Coverage for 236 
of the minor permits were provided by individual permits and the 
remaining permits (186) were provided coverage under general permits. 
All of this was completed without contractor support.
    In calendar year 2004, LDEQ continues to make excellent progress in 
its permit issuance. As of August 2004, LDEQ has a major individual 
permit universe of 254 permits of which 84% are current and a minor 
permit universe of 6042 (individual and non-storm water general 
permits) of which 92% are current. LDEQ's overall backlog rate for 
individual majors, minors, and non-storm water general permits for 
August is 8%. Only one state in Region 6 has a better overall permit 
issuance rate. LDEQ has committed to issuing 60 individual major and 
300 individual minor permits for calendar year 2004. Of the 28 major 
permits and 303 minor permits issued so far in calendar year 2004, six 
major permits and 39 minor permits were written by a contractor.
    Comment 4: EPA must ensure that LDEQ regularly inspects permitted 
facilities.
    Discussion by Commenter: La. R.S. 30:2012 provides that ``[e]very 
permit shall as a matter of law be conditioned upon the right of the 
secretary or his representative to make an annual monitoring inspection 
and, when appropriate, an exigent inspection of the facility operating 
thereunder.'' However, the 2002 Audit found that LDEQ failed to inspect 
4 percent of permitted major facilities in fiscal year 2000 and 2001, 
as well as 31% of minor permitted facilities.
    Section 5.3 of the Program Description requires regional 
Surveillance Division personnel to conduct routine inspections of 
permitted major and minor discharges via unannounced visits in 
accordance with the NPDES Compliance Inspections Manual and LDEQ 
Standard Operating Procedure (SOP) 1108. It also lists six 
factors that determine the frequency of inspections. These factors are 
(a) facility compliance history; (b) facility location; (c) potential 
environmental impact; (d) operational practices being steady or 
seasonal; (e) grant or funding commitments made by LDEQ; and (f) any 
other relevant environmental, health, or enforcement factors. In 
addition, the Revised MOA requires the Louisiana Compliance Monitoring 
Strategy be submitted to EPA annually, and it will list major and minor 
permittees to be subject of state compliance inspections. This is a 
good improvement. However, inspections are essential to proper 
enforcement of the CWA, and thus EPA oversight is crucial to ensuring 
that LDEQ is conducting inspections properly and in a timely manner.
    EPA Response: EPA does not believe that the regulations define, 
with no flexibility, a precise number or type of inspections that must 
occur. Rather, the regulations in 40 CFR 123.26(e)(5) require States to 
show that they have ``procedures and ability'' to inspect all major 
dischargers and all Class I sludge management facilities, where 
applicable. Thus, the regulations require a showing of capacity and a 
commitment to a level-of-effort for inspections, reserving discretion 
to the two sovereign governments to decide what number of inspections 
to undertake, and the identity of the facilities to be inspected. These 
judgments are matters of enforcement discretion, and under this 
discretion, EPA and LDEQ have agreed, and

[[Page 813]]

included commitments in the Annual Performance Partnership Grant 
Agreement, that LDEQ will inspect 90% of the Major, 92-500 Minor, and 
Significant Minor facilities annually. It was also agreed that the 
significant minor definition would be determined and agreed upon, by 
EPA and LDEQ, prior to the beginning of each inspection year. For the 
current inspection year, beginning 7/1/04, the significant minor 
universe has been determined to represent the Total Environmental 
Solutions, Incorporated (TESI) facilities included in the Consent 
Decree (approximately 172 facilities).
    There is not a specific targeting strategy utilized in selecting 
the facilities to be included in the 90%, because the number represents 
the majority of the facilities in the universe, and because LDEQ 
considers the 90% to be a hedge on perfection, due to the fact that the 
intent is to inspect 100%. Based on evaluation of data for the last 
inspection year, beginning 7/1/03 and ending 6/30/04, EPA determined 
that LDEQ conducted inspections at 98% of the Major and 92-500 Minor 
facilities. In the future, because of national priorities, the 
percentage may be reduced, and at that time, factors for selection will 
be considered, such as environmental harm, location, and compliance 
history. In addition to meeting and exceeding the commitments agreed in 
the Annual Performance Partnership Grant Agreement, LDEQ has also 
conducted inspections at nearly 3,000 facilities, covered by Minor or 
General Permits, during each of the last three inspection years. LDEQ 
plans to inspect all of the general permit sewage treatment plants 
every 3 years. Currently, there are more than 4000 of these facilities. 
LDEQ has also implemented a Regional Circuit Rider Approach, which 
results in the issuance of a Notice of Deficiency (NOD) accompanied by 
an Expedited Penalty Agreement of up to $3,000 for minor violations. 
Noncompliance with the NOD will result in a referral to Enforcement for 
further action.
    Although EPA believes that LDEQ is currently conducting inspections 
properly and in a timely manner, EPA, as part of its oversight role, 
will continue to monitor the state's inspection program through 
oversight audits and review of information submitted by LDEQ.
    Comment 5: Neither Region 6 nor LDEQ has established a timeframe 
for completing enforcement actions.
    Discussion by Commenter: The LPDES Program Description provides 
that the Surveillance Division is responsible for referring inspections 
or investigations that result in findings of areas of concern to the 
enforcement division within 30 working days. However, LDEQ has not 
established a mandated timeframe for completing enforcement actions, or 
for obtaining the information it needs to bring an enforcement action. 
This process alone can take weeks, months or years. Although every 
enforcement action presents its own facts and circumstances, LDEQ 
should establish a definitive timeframe for bringing enforcement 
actions. In the past, as many as 80% of water enforcement actions were 
entered over 150 days after the violation occurred.
    EPA's approval must therefore be conditioned on LDEQ's adherence to 
a written schedule (and reporting obligation) that will show by 2008 
that at least 80% of LDEQ's water enforcement actions are brought 
within (1) 60 days of an inspection uncovering violations and (2) 150 
days of a violation.
    EPA Response: Section I.C. of the MOA indicates that the state has 
primary responsibility for implementing the LPDES program in accordance 
with the MOA, specified sections of the CWA, applicable state legal 
authority, applicable requirements of 40 CFR, applicable federal 
regulations, the Multi-Media/Multi-year Enforcement Memorandum of 
Understanding and the annual Performance Partnership Grant. LDEQ has 
the primary responsibility to establish LPDES program priorities with 
consideration of EPA Region 6 and national NPDES goals, and objectives. 
The Enforcement Response Guide (ERG), included in the referenced 
Enforcement Actions SOP 1215, is consistent with the EPA ERG 
and provides a guide to be used for selecting the most appropriate 
response or set of responses to instances of noncompliance.
    The annual Performance Partnership Grant referenced in the MOA 
establishes timeframes for responses to specific activities/
commitments. This agreement requires that the state identify and 
initiate enforcement action for majors, 92-500 minors and significant 
minors with inspection deficiencies within 90 days of the date which 
enforcement receives the inspection report. It also specifies that LDEQ 
identify and initiate enforcement actions for identified violations for 
the same classes of facilities within 90 days of receipt of the 
Discharge Monitoring Report (DMR). Based on the facility reviews 
conducted during the most recent EPA site visit, and review of 
information received at EPA during the year, it has been determined 
that in the majority of the instances, where the inspection noted areas 
of concern, actions were issued within an average of 20 days. It was 
also noted that in many of the instances where a warning letter was 
issued as the initial action, there was a follow-up enforcement order 
issued within 60 days, escalating that initial action. Instances of 
significant non-compliance are addressed within the timeframes 
established in the oversight guidance. Isolated instances of non-
compliance may not merit a formal enforcement action when the violation 
occurs. However, when these isolated instances are combined with 
inspection violations or other instances of non-compliance, action may 
be warranted in accordance with the ERG. For example, an isolated 
violation, which occurs in January, may not merit a Formal Enforcement 
Action until detection of a subsequent violation and/or inspection 
deficiency, which perhaps occurs in May.
    Comment 6: LDEQ must collect the penalties it assesses.
    Discussion by Commenter: The 2002 audit revealed that LDEQ had not 
collected nearly $4.5 million, equaling 75% of the monetary penalties 
assessed in 1999, 2000, and 2001 fiscal years. SOP 1215 
provides that an enforcement action may be made executory ``if 
violations continue after issuance of a final enforcement action, or if 
a final penalty action is not paid.'' It further provides that ``the 
Legal Division has a goal that all enforcement cases should be brought 
to final resolution within 12 months of the Legal Division's acceptance 
of the case.'' However, neither the Revised MOA, the Program Documents, 
nor SOP 1215 provide assurances that LDEQ will pursue the 
penalties they have assessed, much less recover them. Proper 
inspection, timely enforcement and aggressive penalty collection 
motivate industry to comply with the CWA. If any of these elements are 
lacking, the deterrent effect of penalty assessment is lost.
    EPA's approval must therefore be conditioned on LDEQ's adherence to 
a written schedule (and reporting obligation) that will show by 2008 
that at least 80% of LDEQ's water penalty assessments are collected 
within 60 days of becoming final and collectable.
    EPA Response: LDEQ maintains that the data presented in the 2002 
legislative audit is not an accurate representation of the actual 
figures. The audit's figures include several categories of monies not 
actually owed to LDEQ. For instance, the difference between the cash 
component in finalized settlement agreements and the appealed penalty 
assessments, which are associated with

[[Page 814]]

the settlements, are not owed to LDEQ. Penalty assessments under appeal 
are not considered final enforcement actions and thus are not owed to 
LDEQ, until the appeal process has been completed. LDEQ maintains that 
removing monies not actually owed to LDEQ from the ``uncollected 
penalties'' calculation would significantly lower the uncollected 
amount for all media.
    Regardless of what the actual figures are, LDEQ has committed to 
aggressively pursue collection of all penalty dollars, including, if 
necessary, going to court to obtain judgment for those penalties that 
remain unpaid after a reasonable period of time. As a result, EPA does 
not believe it is necessary to require LDEQ's adherence to the written 
schedule suggested by the commenter. However, as a part of its 
statutorily mandated oversight of the LPDES program, EPA will continue 
to monitor LDEQ's enforcement program, including its assessment and 
collection of penalties, for consistency with the CWA and other 
applicable federal regulations, guidance and policies.
    Comment 7: LDEQ must provide accurate and accessible information on 
compliance status.
    Discussion by Commenter: For several years, LDEQ has failed to keep 
sufficient records as to self-monitoring reports, has maintained 
inaccurate compliance status information, and has lost or misfiled 
important documents. In addition, in its 2003 mid-year review of LDEQ, 
the EPA noted that ``the Electronic Document Management System (EDMS) 
remains problematic for public retrieval and review of LPDES permits 
and supporting materials. The database contains voluminous amounts of 
information and the poor indexing of materials and files containing 
misfiled information makes the system difficult for the public to 
use.'' During the review, EPA noted that ``the EDMS was too cumbersome 
to complete the file review because documents were not correctly 
indexed.''
    Revised MOA IV.B.1 requires LDEQ to conduct ``timely and 
substantive reviews and keep complete records of all written materials 
relating to the compliance status of LPDES permittees.'' Required 
records include Compliance Schedule Reports, DMRs, Compliance 
Inspection Reports, and any other report required by the permit. 
Revised MOA IV.B.1.a further requires LDEQ to operate a system to 
determine if the self-monitoring reports are submitted, submitted 
reports are timely, complete and accurate, and that permit conditions 
are met.
    In order to meet these requirements, LDEQ has prepared SOP 
1453 governing the Permit Compliance System (PCS), which is a 
national database of NPDES information. The goals of this system are to 
ensure the accuracy, timeliness and completeness of all submissions. 
Improved accuracy, timeliness and completeness of submissions are 
vitally important. However, LDEQ must also ensure that the public is 
able to access this information. Importantly, LDEQ has committed to 
enter data which it deems appropriate, and that the decision will be 
made without public input. Therefore, citizens may be deprived of 
important data regarding the compliance of industrial and municipal 
facilities.
    To improve public access, LDEQ should promptly allow online access 
to information. EPA's approval must therefore be conditioned on (1) 
LDEQ's immediate inclusion of full copies of current and future DMRs 
and other records of compliance in its electronic, searchable 
(currently ``EDMS'') records management system, (2) LDEQ's inclusion of 
WENDB data elements; (3) LDEQ's adherence to a schedule for providing 
online public access to CWA compliance records by August 2005.
    EPA Response: During the most recent Enforcement Program Review 
which was conducted June 2004, EPA staff noted significant improvements 
in the process for utilizing the EDMS at LDEQ. It appears that the 
continuous analysis and revisions being made to the system have been 
beneficial. LDEQ has enhanced the indexing system which provides more 
descriptive information for the documents in the system. While 
attempting to locate documents in the system, it was noted that 
documents included an additional description, which was helpful in the 
identification process. The percent of documents located during this 
review was found to have improved by 46% for minor facilities and 38% 
for major facilities from the March 2003 review. There were no 
documents found to be imaged under the incorrect identification number 
for the files included in the search. Because of the fact that DMRs are 
produced on a type of paper that does not scan well, those documents 
are maintained as paper records in files onsite. These documents were 
readily available and were found to be filed under the correct record 
numbers. The program documents require only that the state maintain 
adequate public files for each permittee at the central office and must 
be accessible to EPA and the public. Instructions for the various 
request options for access to public records are available on the LDEQ 
Web page ([email protected]).
    Under the Program MOA, LDEQ is committed to enter all permit 
related and enforcement WENDB data into the National PCS for all Major, 
92-500 Minor and Significant Minor facilities. Significant Minors are 
identified as those minor facilities mutually agreed upon by both EPA 
and LDEQ and identified in the Annual State Program Performance 
Partnership Grant.
    Comment 8: LDEQ must provide public notice for all permit 
applications it receives.
    Discussion by Commenter: LDEQ should issue public notices for all 
permit applications it receives, not just for major facilities and 
general permits. This enables citizens to be informed of all the 
sources of pollution in their area and gives them an opportunity to 
provide input during the permitting process.
    EPA Response: LDEQ meets or exceeds EPA's public participation 
requirements in its permitting program. LDEQ must demonstrate to EPA 
that it can carry out the NPDES program and that state requirements are 
at least as stringent as the federal requirements. LAC 33:IX.2415.C.2 
was patterned after the federal regulations. Federal regulations 
require that draft major permits undergo public noticing in a newspaper 
and go through a comment period. Louisiana regulations are further 
interpreted to extend this requirement to include minor permits, making 
Louisiana regulations more stringent than the federal requirements. In 
addition, the Program Description and LDEQ SOPs include requirements 
for issuing public notice in a newspaper for both major and minor 
individual draft permits.
    Comment 9: EPA must take prompt action if LDEQ fails to abide by 
the Revised MOA or the Program Description.
    Discussion by Commenter: We acknowledge that LDEQ has made 
significant improvements in its administration of the LPDES. We also 
believe that LDEQ's current Secretary and Deputy Secretary have 
demonstrated a sincere desire to run a professional, well-maintained 
program. Nonetheless, each of the problems discussed above has existed 
since 1996, when EPA first authorized Louisiana to administer the LPDES 
program. The citizens of Louisiana are therefore being asked to wait 
for LDEQ to catch up, while facilities continue to operate with expired 
permits, to violate their effluent limits, and to illegally impair the 
waters of the State of Louisiana. Given the pervasive nature of these 
problems and the significant efforts required to remedy them, the EPA 
should exercise

[[Page 815]]

strong oversight over LPDES until LDEQ has demonstrated that it has the 
regulatory and legal structure and funding necessary to administer the 
program in full compliance with the CWA and has established a track 
record of running a well-maintained program.
    EPA Response: It is the intent of EPA to take prompt action if LDEQ 
does not meet its commitments in the MOA. EPA will continue its 
oversight and review of the LDEQ water permitting and enforcement 
programs at the mid-year and end-of-year reviews of the Performance 
Partnership Grant program. Twice each year, EPA reviews the commitments 
made by LDEQ and the progress on those commitments in the water 
permitting and enforcement programs. If EPA determines that adequate 
progress is not being made in the water program, in line with the LDEQ 
program commitments and the MOA, EPA will work with LDEQ on appropriate 
actions to correct noted deficiencies.
    Comment 10: III.D. Permit Reissuance: This section contains 
language that reads ``in no event will permits that have been 
administratively continued beyond their expiration date be modified.'' 
American Electric Power (AEP) requests that EPA clarify that this 
language is only applicable to ``major modifications'', and is not 
applicable to ``minor modifications'' as defined in 40 CFR 124.5 and 
122.63 (specifically applicable to NPDES permits).
    Discussion by Commenter: AEP contends that in some cases the state 
may not process a permit application within the prescribed processing 
period (minimum of 180 days prior to the expiration date of the 
permit). AEP believes the permittee (applicant) should be allowed to 
have minor modifications accommodated by the permitting authority 
without having to re-apply and/or re-initiate the public participation 
process via re-noticing of the application. As such, AEP recommends 
that the draft language be modified to ``in no event will permits that 
have been administratively continued beyond their expiration date be 
allowed to incorporate major modifications without formal modification 
of the application and re-initiation of the public participation 
process. Upon consent of the permittee, the Director may allow minor 
modifications to these permits.''
    EPA Response: 40 CFR 122.46 and LAC 33:IX. 2365 state that the 
effective term of a permit shall not exceed five years and shall not be 
extended by modification beyond the five year period. LAC 33:IX. 2321, 
and 40 CFR 122.6 list two causes to administratively extend a permit 
beyond its expiration date, (1) the permittee has submitted a timely 
and complete application prior to the expiration date of the permit and 
(2) through no fault of the permittee the permitting authority has not 
reissued the permit. Permits continued in this manner remain fully 
effective and enforceable. To modify a permit that has been 
administratively continued would, in affect, be extending the permit 
beyond the specified period.
    Comment 11: It should be made clear that information appropriately 
declared ``proprietary'' by the permittee cannot be released to the 
public.
    Discussion by Commenter: Section II.A.5 reads as follows: LDEQ will 
remain in compliance with federal right to know statutes and Louisiana 
public records law, while protecting sensitive information. Material 
containing security procedures, criminal intelligence information 
pertaining to terrorist-related activity, or threat or vulnerability 
assessments created, collected, or obtained in the prevention of 
terrorist-related activity, including but not limited to physical 
security information, proprietary information, operational plans, and 
the analysis of such information, or internal security information is 
not required to be disclosed under an exemption in the Louisiana Public 
Records Law (La. R.S. 44:3.1)
    Although the exempted material is not regarded as public record, 
there is no prohibition from releasing the material. LDEQ will consider 
the merits of each request on a case-by-case basis while striving to 
achieve balance between the public's right to know, security issues, 
and applicable federal and state statutes.
    The next to the last paragraph of this section as referenced above, 
describes several types of information that might be collected by the 
agency but are not required to be disclosed. The listing of information 
includes ``proprietary information''. The next paragraph states that 
though the above mentioned material is not regarded as public record, 
it can be released at the discretion of the LDEQ.
    EPA Response: The commenter is correct that information properly 
claimed as proprietary by the permittee will not be released to the 
public, provided the Secretary of LDEQ makes the determination that 
confidentiality is necessary to ``[p]rotect trade secrets, proprietary 
secrets and information, and commercial or financial information.'' La. 
R.S. 30:2030. However, La. R.S. 30:2074(D)(7) and LAC 33:IX.2323 
specify that no claim of confidentiality will be accepted for certain 
categories of information associated with LPDES permit applicants or 
permittees, including all information required by the permit 
application, the permit itself, and any effluent or discharge data.
    Comment 12: There should be no reason, other than those currently 
in the regulations, to limit the ability to modify a permit that is 
legally active. This restriction on the permitting agency (LDEQ) is 
beyond the authority given the EPA in either statute or promulgated 
regulations. It can only result in hardship on the permit holder with 
no environmental benefit.
    Discussion by Commenter: Section III.D. reads as follows: All 
expiring permits shall be reissued as close as possible to their 
expiration dates. In no event will permits which have been 
administratively continued beyond an expiration date be modified. The 
LDEQ may use the flexibility allowed in EPA's Permitting for 
Environmental Results Initiative (August 15, 2003) to account for and 
to prioritize these facilities that remain in the backlog. LDEQ plans 
to utilize the approved Permit Issuance Strategy as its guide for 
permit issuance, and will update/revise the strategy yearly to reflect 
ongoing permit issuance goals.
    This section prohibits modification of a permit that has been 
administratively continued beyond its expiration date. It has been our 
experience that permits may be administratively extended for some time. 
Awaiting the often lengthy time necessary for a complete re-issuance of 
an expired permit but continued permit when a modification is needed 
could result in substantial conflict with business timing or our 
ability to continue compliant operations under changing conditions. The 
relevant section of Louisiana Title 33 Section 309 reads: C. If the 
applicant submits a timely and complete application pursuant to LAC 
33:IX.309.A, and the department, through no fault of the applicant, 
fails to act on the application on or before the expiration date of the 
existing permit, the permittee shall continue to operate the facility 
under the terms and conditions of the expired permit which shall remain 
in effect until final action on the application is taken by the 
department. If the application is denied or the terms of the new permit 
contested, the expired permit shall remain in effect until the appeal 
process has been completed and a final decision rendered unless the 
secretary finds that an emergency exists which requires that immediate 
action be taken and in such case any appeal or request for review shall 
not suspend the implementation of the action ordered.

[[Page 816]]

Permits continued under this Section remain fully effective and 
enforceable.
    EPA Response: 40 CFR 122.46 and LAC 33:IX. 2365 state that the 
effective term of a permit shall not exceed five years and shall not be 
extended by modification beyond the five year period. LAC 33:IX. 2321, 
and 40 CFR 122.6 list two causes to administratively extend a permit 
beyond its expiration date, (1) the permittee has submitted a timely 
and complete application prior to the expiration date of the permit and 
(2) through no fault of the permittee the permitting authority has not 
reissued the permit. Permits continued in this manner remain fully 
effective and enforceable. To modify a permit that has been 
administratively continued would, in affect, be extending the permit 
beyond the specified period.

Petition To Withdraw LPDES Program

    On October 9, 2001, a petition for withdrawal of the CWA NPDES 
program authorization for the State of Louisiana was filed by the 
Tulane Environmental Law Clinic on behalf of the Louisiana 
Environmental Action Network, Louisiana Audubon Council, Gulf Coast 
Restoration Network, Association of Community Organizations for Reform 
Now, Lake Pontchartrain Basin Foundation, CFACT, Lake Maurepas Society, 
Concerned Citizens of Livingston Parish, St. John Citizens for 
Environmental Justice, Louisiana Communities United and Concerned 
Citizens of Iberville Parish. Supplements to the October 9, 2001, 
petition were filed on December 19, 2001, February 22, 2002, and 
September 17, 2002.
    The petition, as supplemented (``the Petition''), alleges that the 
State of Louisiana is not administering the LPDES program in accordance 
with the CWA, 40 CFR part 123 or the MOA signed by EPA and LDEQ upon 
program authorization. Specifically, the Petition alleges:
    (1) Deficiencies in the States's permitting program, including 
insufficient statutes and regulations to ensure meaningful public 
participation, lax procedures for identifying point sources and a large 
backlog of expired permits;
    (2) Deficiencies in the State's compliance monitoring system, 
including insufficient record keeping regarding self-monitoring 
reports, inaccurate and inaccessible information on compliance status, 
inadequate compliance inspections and inadequate guidance to the 
regulated community;
    (3) Deficiencies in the State's enforcement program, including 
failure to timely identify NPDES violations, failure to bring 
enforcement actions sufficient to deter future violations, failure to 
issue timely enforcement actions, failure to assess and collect 
penalties, improper use of beneficial environmental projects (BEPs) and 
failure to comply with the requirements for public participation in the 
enforcement process;
    (4) Deficiencies in the State's records management; and
    (5) Deficiencies in the State's legal authority, including an 
inability to appeal permits altered by the administrative review 
process and a failure to promulgate new authorities necessary to comply 
with the requirements of NPDES authorization.
    Based on these allegations, the Petition requests that EPA initiate 
formal proceedings to withdraw the LPDES program under Section 
402(c)(3) of the CWA and 40 CFR 123.64(b), including a public hearing 
as provided for under those sections.
    In response to the Petition and in accordance with 40 CFR 
123.64(b), EPA staff conducted an informal investigation of the 
allegations in the Petition to determine whether cause exists to 
commence withdrawal proceedings. EPA's informal investigation included 
on-site reviews of LPDES files, interviews with LDEQ management and 
staff, and an evaluation by EPA staff of information and data 
concerning program implementation provided in writing to EPA by LDEQ. 
The data collected as a result of the informal investigation 
supplemented the large body of information already in EPA's possession 
as a result of EPA's ongoing statutory oversight responsibilities with 
respect to the LPDES program. Simultaneous with EPA's informal 
investigation under 40 CFR 123.64(b), former Governor M.J. Foster, Jr. 
convened a special Governor's Task Force to review the administration 
of the LPDES program, also in response to citizens' concerns.
    Both the multi-stakeholder Task Force created by Governor Foster, 
and EPA, through performance of its general oversight duties and 
through its informal investigation, found weaknesses in LDEQ's 
operation of the LPDES program. The Governor's Task Force shared its 
findings in recommendations to the Governor for improvements in the 
State program. EPA worked directly with LDEQ in the development of a 
list of seven performance measures aimed at addressing both EPA's and 
the citizens' concerns. These seven performance measures, which were 
forwarded to Governor Foster in a February 14, 2003, letter from EPA 
Assistant Administrators for the Office of Water and the Office of 
Enforcement and Compliance Assurance, identified specific actions to be 
performed by LDEQ within specified time frames in the areas of NPDES 
permitting and enforcement. The actions included drafting and issuing a 
specified number of permits, improving public access to LDEQ files, 
clarifying certain requirements under LDEQ's Penalty rule and its BEP 
rule, clarifying and implementing procedures in regard to LDEQ's 
unilateral enforcement actions, revising all LPDES program 
authorization documents and providing a legal opinion from LDEQ counsel 
and the Louisiana Attorney General's Office regarding the State's 
ability to enforce penalties against municipalities. Further discussion 
of the Performance Measures and the various changes made to the LPDES 
program can be found in EPA's Federal Register notice of the revised 
LPDES program authorization documents, 69 FR 50199, August 13, 2004.
    By letter dated May 12, 2004, EPA Regional Administrator Richard 
Greene informed the Governor of Louisiana that LDEQ had successfully 
completed all seven performance measures. EPA is greatly encouraged by 
the timely completion of these performance measures and by the State of 
Louisiana's renewed commitment to making its NPDES program as strong 
and effective as any in the Country. In June, 2004, EPA staff performed 
a follow-up review of LDEQ's administration of the LPDES program in 
order to assess LDEQ's implementation of the processes and procedures 
outlined in the revised LPDES program authorization documents. As a 
result of that review, EPA staff determined that LDEQ was implementing 
the changes agreed to as a result of the performance measures and that 
the agency's administration of the LPDES program showed marked 
improvement.
    EPA has concluded our informal investigation of the allegations in 
the Petition and determined that cause does not exist to initiate 
program withdrawal proceedings. The criteria for responding to 
citizens' petitions for withdrawal of state NPDES programs are set out 
in 40 CFR 123.63. These criteria relate generally to the State's legal 
authorities, program administration and enforcement activities (see 40 
CFR 123.63(a)(1)-(3)), as well as other components. Those criteria are 
general in nature and vest EPA with discretion in deciding whether 
cause exists to commence proceedings to withdraw a state's NPDES 
authority. For example, 40 CFR 123.63(a)(3) states that the

[[Page 817]]

Administrator may withdraw program approval when the state's 
enforcement program fails to comply with the requirements of 40 CFR 
part 123, including (i) failure to act on permit or other program 
violations, (ii) failure to seek and collect adequate penalties, and 
(iii) failure to inspect and monitor regulated facilities. However, 
Federal regulations do not specify with any precision the number of 
times a state must, for instance, fail to act on permit or other 
program violations before NPDES authority should be withdrawn. Rather, 
the CWA and the regulations vest EPA with substantial discretion to 
determine whether a State is failing to meet minimum federal 
requirements. The structure of the CWA provides for primary NPDES 
authority to rest with the states, and Congress intended for EPA to 
exercise its oversight capacity in furtherance of appropriate State 
regulations of point source discharges under Section 402(b). With no 
bright line separating an insufficient program from a sufficient one, 
EPA must use its discretion to determine if the particular actions or 
inactions of an NPDES authorized state fall within a range of what EPA 
considers acceptable under the CWA and 40 CFR part 123.
    In certain areas identified in the Petition, EPA concluded that 
improvements were warranted in the State's administration of the 
program. These areas related primarily to recordkeeping, data 
management and compliance and enforcement. The State has made 
substantial improvements in these areas. EPA is continuing to work with 
Louisiana, as EPA works with all State NPDES permitting authorities, to 
achieve ever greater levels of environmental protection. However, as 
the program now stands, EPA has concluded that the LPDES program is 
within the range of NPDES program practices required under the CWA and 
40 CFR part 123, so that withdrawal proceedings are not an appropriate 
response.\1\
---------------------------------------------------------------------------

    \1\ EPA's record for this decision contains a ``Crosswalk'' 
between the specific allegations in the Petition and EPA's findings 
in regard to each allegation. To receive a copy of this Crosswalk, 
please contact Cathy Gilmore at (214) 665-6766 or Renea Ryland at 
(214) 665-2130.
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    Thus, EPA has determined that cause does not exist to commence 
formal withdrawal proceedings under 40 CFR 123.64(b). EPA will continue 
to monitor the State's program, both through routine oversight 
procedures, as well as through special national initiatives such as the 
Permitting for Environmental Results (PER) program. If any additional 
concerns are noted in the State's LPDES program as a result of this 
oversight, they will be addressed at that time.

FOR FURTHER INFORMATION CONTACT: Ms. Diane Smith, EPA Region 6, 1445 
Ross Avenue, Dallas, Texas 75202, Telephone: (214) 665-7191, or via e-
mail to the following address: [email protected].

Conclusion

    After evaluation of the comments and other information related to 
this Federal Register notice regarding the revision to the LPDES 
program authorization, I hereby provide public notice of the approval 
for the State of Louisiana to administer, in accordance with 40 CFR 
part 123, the LPDES program and denial of the petition for EPA to 
withdraw LDEQ's authorization to administer the LPDES program.

    Dated: December 28, 2004.
Richard E. Greene,
Regional Administrator, EPA Region 6.
[FR Doc. 05-178 Filed 1-4-05; 8:45 am]
BILLING CODE 6560-50-P