Clean Air Act Proposed Approval, Operating Permits Program; State of Hawaii

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5020-9]

Clean Air Act Proposed Approval, Operating Permits Program; State

of Hawaii

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed approval.

-----------------------------------------------------------------------

SUMMARY: The EPA proposes to grant interim approval to the Operating

Permits Program submitted by the State of Hawaii. Alternatively, EPA

proposes to grant full approval if specified changes are made. Hawaii's

Operating Permit Program was submitted for the purpose of complying

with Federal requirements that mandate that States develop, and submit

to EPA, programs for issuing operating permits to all major stationary

sources and to certain other sources.

DATES: Comments on this proposed action must be received in writing by

August 25, 1994.

ADDRESSES: Comments should be addressed to the contact indicated in FOR

FURTHER INFORMATION CONTACT, attention Docket No. HI-94-OPS-P. Copies

of the State's submittal and other supporting information used in

developing the proposed full/interim approval are available for

inspection between 9 a.m. and 5 p.m. Monday through Friday at the

following location: EPA Region IX, 75 Hawthorne Street, San Francisco,

CA 94105. A courtesy copy of certain documents may be available for

inspection at: Clean Air Branch, Environmental Management Division,

State Department of Health, 919 Ala Moana Boulevard, Honolulu, Hawaii

96814, telephone (808) 586-4200.

FOR FURTHER INFORMATION CONTACT: Ed Pike (telephone 415/744-1248), A-5-

2, United States Environmental Protection Agency, Region IX, Air and

Toxics Division, 75 Hawthorne Street, San Francisco, CA 94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the Clean Air Act (``the Act'') as

amended (1990), EPA has promulgated rules that define the minimum

elements of an approvable State operating permits program and the

corresponding standards and procedures by which the EPA will approve,

oversee, and withdraw approval of State operating permits programs (57

FR 32250 (July 21, 1992)). These rules are codified at 40 Code of

Federal Regulations (CFR) part 70. Title V requires States to develop,

and submit to EPA, programs for issuing these operating permits to all

major stationary sources and to certain other sources.

The Act requires that States develop and submit these programs to

EPA by November 15, 1993, and that EPA act to approve or disapprove

each program within 1 year after receiving the submittal. EPA's program

review occurs pursuant to section 502 of the Act, and the part 70

regulation, which together outline criteria for approval or

disapproval. Where a program substantially, but not fully, meets the

requirements of part 70, EPA may grant the program interim approval for

a period of up to 2 years. If EPA has not fully approved a program by 2

years after the November 15, 1993 date, or by the end of an interim

program, it must establish and implement a Federal program.

II. Proposed Action and Implications

A. Analysis of State Submission

1. Support Materials

The Governor of Hawaii submitted an administratively complete part

70 permitting program on December 20, 1993 for the State of Hawaii with

a letter requesting EPA's approval. The program includes a legal

opinion from the Attorney General of Hawaii stating that the State of

Hawaii's Department of Health has adequate legal authority to carry out

the program. The program also contains a description of how the

Department of Health intends to implement the program consistent with

the requirements of the Clean Air Act Amendments of 1990 (42 U.S.C.

7401-7671q) and 40 CFR part 70. The program includes supporting

documentation such as evidence of the procedurally correct adoption of

the permitting rule, permit application forms, and a model permit. EPA

intends to develop an implementation agreement with Hawaii, although an

implementation agreement is not required for this proposed action.

2. Regulations and Program Implementation

Hawaii's part 70 permitting regulation is contained in title 11,

chapter 60.1 of the Hawaii Administrative Rules (HAR). Hawaii has

notified EPA in a letter dated June 13, 1994 that the part 70 program

includes the following: General Requirements--subchapter 1 (except

subsections 6, 8, 12, 13, 15, 16, and 17); Covered Sources--subchapter

5; Hazardous Air Pollutants--subchapter 9 (except sections 179 and 180

on ambient concentrations and NESHAP adoption by reference); and the

covered source fee requirements--subchapter 6, sections 111 through

116. EPA will accept public comment on all aspects of Hawaii's

submittal that are related to part 70 program requirements. Hawaii's

part 70 permitting rule meets the main requirements of part 70 as

described below:

a. Applicability (40 CFR 70.2 and 70.3). Sources required to obtain

a permit under Hawaii's program are defined as covered sources.

Hawaii's definition of covered source includes all major part 70

sources. The rule also includes non-major sources subject to a section

112 standard, other than sources subject solely to the section 112(r)

accidental release requirements, and any source subject to a section

111 standard of performance adopted by the State (HAR sections 1 and

82).

b. Permit content (40 CFR 70.6). Each covered source permit must

contain emission limitations and standards to ensure compliance with

all applicable requirements. Permits will also contain certain

operational flexibility requirements (HAR sections 90 and 96).

c. Public participation (40 CFR 70.7). The public will be provided

with notice of, and an opportunity to comment on, each draft covered

source permit, permit renewal, and significant modification (HAR

section 99).

d. Permit modifications (40 CFR 70.7). Sources may apply for

expedited permit changes for minor permit modifications. Significant

modifications must undergo all part 70 permit issuance procedures (HAR

sections 103 and 104).

e. EPA oversight (40 CFR 70.8). Each covered source permit,

renewal, and minor or significant modification is subject to EPA

oversight and veto (HAR section 95).

f. Enforcement authority (40 CFR 70.11). The Hawaii Revised

Statutes (HRS) directly provide for enforcement and penalties for civil

and criminal violations of permits and rules (HRS 342B part IV). The

regulation (HAR section 18) forbids variances from any federal

regulation or any covered source federally enforceable permit term or

condition.

g. Relationship to title I preconstruction requirements. Hawaii's

permitting program combines part 70 and Prevention of Significant

Deterioration (title I, part C of the Act) requirements. Upon part 70

program approval, preconstruction permits issued to new covered sources

will include all part 70 requirements and also Hawaii's Prevention of

Significant Deterioration requirements under 40 CFR 52.21. This part 70

approval does not address or modify EPA's current delegation of 40 CFR

52.21, Prevention of Significant Deterioration, to Hawaii under 40 CFR

52.632.

3. Permit Fee Demonstration

Hawaii's fee analysis demonstrates that the state will collect

sufficient revenue to implement the permitting program. Hawaii will

collect permit fees of $37 per ton of regulated air pollutant as

defined in section 114 from covered sources, which meets both the

Sec. 70.9 presumptive minimum and Hawaii's projected resource

requirements. State law establishes a dedicated account to ensure that

permit program fees are used to fund the permitting program (HRS

section 342B-32).

4. Provisions Implementing the Requirements of Other Titles of the Act

Hawaii has demonstrated in its title V program submittal adequate

legal authority to implement and enforce all section 112 requirements.

This legal authority is contained in Hawaii's enabling legislation (HRS

chapter 342B, including Sec. 12); the Attorney General's legal opinion

that chapter 342B authorizes Hawaii to carry out all section 112

activities; and regulatory provisions that incorporate all applicable

requirements into each covered source permit. EPA has determined that

this broad legal authority adequately assures compliance with all

section 112 requirements.

EPA is interpreting the above legal authority and Hawaii's rule to

mean that Hawaii can, and will, carry out all section 112 activities.

These activities include, but are not limited to, the following:

a. Section 112 Emission standards. The rule requires that covered

source permit terms and conditions ensure compliance with all section

112 standards, including existing and future standards promulgated

under sections 112 (d), (f), and (h) and the General Provisions (40 CFR

part 63, subpart A, and HAR section 81, definition of applicable

requirements, section 90).

b. Case-by-case MACT determinations. The rule requires sources to

comply with CAA sections 112(g) and 112(j) case-by-case Maximum

Achievable Control Technology (MACT) requirements and authorizes the

director to make such case-by-case determinations (HAR sections 174-

176).

c. Early reductions. The rule authorizes the director to establish

an alternate emission limit under the CAA section 112(i)(5) early

reductions program (40 CFR 63 subpart D) and requires compliance with

any alternate emission limit.

d. Accidental releases. The rule requires sources to prepare and

submit a risk management plan, and defines the submittal of a risk

management plan as an applicable requirement. Sources must address

their compliance with risk management plan requirements in biannual

certifications (HAR sections 81, 86, and 178).

Hawaii's program does not need to include title IV acid rain

requirements because the acid rain program applies only to the 48

contiguous United States.

B. Options for Approval/Disapproval and Implications

1. Full Approval

The EPA proposes to fully approve the operating permits program

submitted to EPA for the State of Hawaii on December 20, 1993 if

certain insignificant activities are removed or capped and the permit

application shield is expanded. EPA intends to consider at least all

changes submitted prior to September 15 in the final approval. EPA has

determined that the program is otherwise adequate to meet the minimum

elements of a State operating permits program as specified in 40 CFR

part 70.

EPA is proposing to approve the program if the State makes the

changes listed below. Please refer to the Technical Support Document,

which is included in the docket, for additional details.

a. Insignificant activities. The rule must not allow the director

to determine what activities are insignificant without EPA approval of

these activities or the criteria that delineate such activities (40 CFR

70.5(a)). Therefore, sub-section 82(f)(7) must be deleted or include

criteria, such as emission levels, for determining which activities are

insignificant. Section 70.5 requires that Hawaii submit a list of

insignificant activities with criteria demonstrating that the

activities listed are insignificant. The director's discretion clause

is bounded by the requirement that the source submit enough information

to determine and impose all applicable requirements. However, the rule

does not contain the required criteria, such as the type of equipment

or emission rate, for determining whether activities designated under

Sec. 82(f)(7) are insignificant (40 CFR 70.4(b)(2)).

EPA is proposing that an emissions cap of two tons per year would

constitute an approvable criterion for ensuring that any activities

designated under this clause would not hinder the State's ability to

make applicability determinations and impose all applicable

requirements and fees. Therefore, the director's discretion clause may

be approved if it includes criteria, such as an emissions cap, that

will ensure that any activities designated by the director are

insignificant. For toxic or hazardous air pollutants, the threshold

would be twenty-five percent of any title I modification threshold or

1000 pounds per year, whichever is less. Hawaii may also choose to

impose a more stringent cap.

EPA is proposing that restrictions on the following insignificant

activities are also necessary to qualify for full approval: paint spray

booths, water pump motors, and portable fuel burning equipment. EPA

believes that these activities could emit significant amounts of

emissions triggering applicable requirements and these activities must

contain an emissions cap.

EPA is seeking comments on whether Hawaii's permit program should

be fully approved if any of the changes to these specific activities on

Hawaii's list of insignificant activities are not made and which (if

any) should not preclude full approval of the program.

b. Permit application shield. The program must expand the permit

application shield to include existing sources that become subject to

the program due to rulemaking changes to qualify for full approval. For

example, a noncovered (non-part 70) source will be required to obtain a

covered (part 70) source permit if it becomes subject to an EPA MACT

standard under CAA section 112(d). Both part 70 and Hawaii's rule (40

CFR 70.7(b) and HAR section 82(a)) prohibit sources from operating

without a required operating permit. However, Hawaii's rule does not

include the part 70 provision that newly subject sources may

temporarily operate without a permit if they submit a timely and

complete application (40 CFR 70.7(b)).

2. Interim Approval

The EPA is proposing to grant interim approval to the operating

permits program under Sec. 70.4(d) if the changes required for full

approval as described above are not made prior to final promulgation of

this rulemaking. EPA can grant interim approval because Hawaii's permit

program substantially meets the approval process, and requirements of

part 70 as discussed in section II(A) of this notice. The problems

noted above will not prevent Hawaii from issuing permits that are

consistent with part 70 on an interim basis. Interim approval, which

may not be renewed, would extend for a period of two years. During the

interim approval period, the State is protected from sanctions for

failure to have a program, and EPA is not obligated to promulgate a

Federal permits program in the State. Permits issued under a program

with interim approval have full standing with respect to part 70, and

the three year time period for processing the initial permit

applications begins upon interim approval. Permits issued by Hawaii

prior to EPA's full or interim approval of the program are not

considered part 70 permits until reissued under a program that has been

approved at the time the permit is reissued.

3. Program for Straight Delegation of Section 112 Standards

The requirements for part 70 approval, specified in 40 CFR 70.4(b),

encompass the section 112(l)(5) approval requirements for a program for

delegation of section 112 standards as promulgated by EPA. Section

112(l)(5) requires that Hawaii's program contain adequate authorities,

adequate resources for implementation, and an expeditious compliance

schedule, which are also requirements under part 70. Therefore, the EPA

is also proposing to grant approval under section 112(l)(5) and 40 CFR

63.91 of Hawaii's program for receiving delegation of section 112

standards that are unchanged from Federal standards as promulgated. EPA

proposes to grant 112(l) approval whether Hawaii is granted full or

interim approval because the program contains sufficient authority to

implement and enforce delegated section 112 standards. This delegation

applies to both major and non-major part 70 sources subject to section

112 standards because Hawaii's permitting program applies to all

sources subject to section 112 standards.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

full/interim approval, particularly the changes necessary for full

approval. Copies of the State's submittal and other information relied

upon for the proposed alternatives of full approval and interim

approval are contained in a docket maintained at the EPA Regional

Office. A courtesy copy of certain technical documentation may also be

available for inspection from the State of Hawaii. 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/

interim approval. The principal 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. The EPA will

consider any comments received by August 25, 1994.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. section 600 et.

seq., EPA must prepare a regulatory flexibility analysis assessing the

impact of any proposed or final rule on small entities. 5 U.S.C.

sections 603 and 604. Alternatively, EPA may certify that the rule will

not have a significant impact on a substantial number of small

entities. Small entities include small businesses, small not-for-profit

enterprises, and government entities with jurisdiction over populations

of less than 50,000.

Operating permits program approvals under section 502 of the Act,

including interim approvals under section 502(g) of the Act, do not

create any new requirements, but simply approve requirements that the

State is already imposing. Therefore, because the federal operating

permits program approval does not impose any new requirements, I

certify that it does not have a significant impact on any small

entities affected. Moreover, due to the nature of the federal-state

relationship under the Act, preparation of a regulatory flexibility

analysis would constitute federal inquiry into the economic

reasonableness of state action. The Act forbids EPA to base its actions

concerning operating permits programs on such grounds. Union Electric

Co. v. U.S. E.P.A., 427 U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. section

7410(a)(2).

If the program is granted an interim approval which is subsequently

converted to a disapproval, it will not affect any existing state

requirements applicable to small entities. Federal disapproval of the

State submittal does not affect its state-enforceability. Moreover,

EPA's disapproval of the submittal would not impose a new federal

requirement. Therefore, EPA certifies that such a disapproval action

would not have a significant impact on a substantial number of small

entities because it does not remove existing state requirements nor

does it substitute a new federal requirement.

Authority: 42 U.S.C. 7401, et seq.

List of Subjects in 40 CFR Part 70

Environmental Protection Agency, Administrative practices and

procedures, Air pollution control, Environmental protection, Hawaii,

Intergovernmental relations, Operating permits, and Reporting and

recordkeeping requirements.

Dated: July 11, 1994.

Felicia Marcus,

Regional Administrator.

[FR Doc. 94-18187 Filed 7-25-94; 8:45 am]

BILLING CODE 6560-50-P