Clean Air Act Final Interim Approval of Operating Permits Program; State of Hawaii

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5112-3]

Clean Air Act Final Interim Approval of Operating Permits

Program; State of Hawaii

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final Interim Approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating

Permits Program submitted by the State of Hawaii for the purpose of

complying with Federal requirements for an approvable State program to

issue operating permits to all major stationary sources, and to certain

other sources.

EFFECTIVE DATE: December 1, 1994.

ADDRESSES: Copies of the State's submittal and other supporting

information used in developing the final rule are available for

inspection during normal business hours at the Region IX address.

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

2, US Environmental Protection Agency, Region IX, Air and Toxics

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

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

Title V of the Amendments to the Clean Air Act (the Act) and

implementing regulations at 40 Code of Federal Regulations (CFR) part

70 require that States develop and submit operating permits programs to

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

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

program review occurs pursuant to section 502 of the Act and the part

70 regulations, 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.

On July 26, 1994, EPA proposed to grant interim approval of the

operating permits program for Hawaii unless certain deficiencies were

corrected, in which case EPA would grant full approval. See 59 FR

37957. EPA did not receive public comments objecting to EPA's

determination that Hawaii's program substantially meets the requirement

of part 70 and therefore qualifies for interim approval under

Sec. 70.4(d). The program was not revised prior to this final

rulemaking (see the proposal for a full description of Hawaii's

program). Therefore, EPA is promulgating interim approval at this time.

EPA will fully approve Hawaii's program when Hawaii corrects the

deficiencies identified in this document. EPA received several comments

on the changes required for full approval, which are addressed in this

document and the Response to Comments document in the docket.

II. Final Action and Implications

A. Final Action and Changes From Proposal

Hawaii must revise the State's list of insignificant activities to

qualify for full approval. Specifically, Hawaii must eliminate

director's discretion or include approvable emission levels that would

limit this discretion. Hawaii must also delete several other activities

with unlimited or potentially large emissions or add emission levels

and/or other restrictions consistent with part 70. Hawaii must

eliminate the activities identified in the proposal or add restrictions

such as emission levels. EPA is also requiring the State to restrict or

eliminate an exemption for certain ground engines at airfields. The

acceptable emission levels or other restrictions are those stated in

the proposal except as discussed below.

Hawaii must also provide existing sources that become subject to

part 70 in the future the opportunity to qualify for the permit

application shield. This requirement is unchanged from the proposal. If

Hawaii corrects these two areas of the rule, EPA will grant full

approval. This document also discusses the status of permit

applications and permits that were completed prior to this approval.

B. Public Comments

The public comments on EPA's proposal focused on insignificant

activities. EPA received a number of comments from industry

representatives requesting that EPA approve provisions in Hawaii's rule

that allow the Director of Health broad discretion to create new

insignificant activities. These insignificant activities need not be

described on permit applications and are essentially exempt from part

70 permitting, although sources must include all information necessary

to determine and impose all applicable requirements. The director's

discretion to create permit exemptions is not limited to any activity

(such as a source category or equipment type) or emission levels. This

broad provision is not fully approvable because new permit exemptions

would be granted without prior EPA approval or State rulemaking to

revise the list of exemptions in the part 70 program. Part 70 requires

States to list these activities or emission levels in the program and

submit them to EPA for prior approval along with criteria for

determining these permit exemptions. The criteria are used by EPA to

evaluate the permit exemptions for specific activities and emission

levels. As EPA stated in the July 26 proposal, EPA cannot grant full

approval to Hawaii's program unless the State deletes the broad

director's discretion provision or, alternatively, includes specific

activities or emission levels and submits criteria that meet the

requirements of part 70.

EPA also received several comments regarding the changes proposed

by EPA that would render Hawaii's unacceptable permit exemptions

approvable. Part 70 allows EPA to approve specific emission levels for

permit exemptions (40 CFR 70.4(b)(2)). EPA proposed that emission units

emitting less than two tons per year of criteria pollutants would not

interfere with part 70 requirements, such as determining or imposing

applicable requirements or fees (Sec. 70.5(c)). EPA also proposed that

emission units emitting the lesser of 1000 pounds per year or twenty

five percent of the modification threshold for hazardous air pollutants

designated under section 112(b) of the Act and other title I toxics

(for example, pollutants subject to Prevention of Significant

Deterioration requirements under 40 CFR 52.21) would not interfere with

these part 70 requirements.

EPA received no comments objecting to EPA's proposed determination

that activities emitting less than EPA's proposed emission levels are

generally not subject to regulation and generally would not interfere

with determining and imposing applicable requirements and fees.

Therefore, Hawaii may remedy EPA's objection to director's discretion

and unlimited or large permit exemptions in the list of insignificant

activities by capping them with these proposed emission levels or lower

emission levels. EPA received comments that higher emission levels

should be approved. However, EPA did not receive any criteria for

approving higher emission levels or a request to approve a specific

alternative emission level. Therefore, EPA is not approving an

alternate emission level in this rulemaking. EPA may revisit the

approvability of higher levels if EPA receives new information

justifying increased emission levels.

One commenter suggested that Hawaii adopt a two ton per year limit

on permit exemptions for certain engines that could otherwise have

large emissions. EPA will fully approve this permit exemption if Hawaii

limits it to engines emitting less than two tons per year or limits it

based on the equipment size and operational limits stated in the

proposal, since EPA believes that both approaches would achieve

substantially the same result. EPA requested, but did not receive,

public comment containing information (such as emission levels or

potential applicable requirements) that could be used to determine

whether a permit exemption for ground support engines for aircraft

(Hawaii Administrative Rules section 11-60.1-82 (g)(11)) would be

appropriate. However, a prior EPA emissions study (EPA-450/4-81-026d)

shows that the emissions from engines used to provide auxiliary power

to aircraft could potentially be large. Therefore, Hawaii must delete

or cap this permit exemption unless EPA receives new information

justifying the exemption.

Permit exemptions approved for this program are based on State-

specific circumstances and analysis. These permit exemptions may not be

appropriate for other State or local programs due to variations in

local factors such as ambient air quality, State Implementation Plans,

source types, and emissions. In addition, this part 70 approval does

not create or expand exemptions for other permitting programs or

regulations.

EPA is also approving Hawaii's request for approval of its

provisions for implementing requirements under section 112(g) of the

Act for new and modified major sources of air toxics. One letter, which

was received after the deadline for receipt of public comments, stated

that EPA should deny this request because Hawaii may not have

sufficient administrative resources or procedures for implementing

these requirements. Hawaii's regulations and the Attorney General's

statement demonstrate that Hawaii has sufficient resources and

authority to implement all applicable requirements, including section

112(g), and EPA is approving Hawaii's request as proposed.

For more information on the public comments on the proposal, please

see the Response to Comments document in the docket.

C. Effect of Interim Approval

Hawaii's regulation provides for issuing permits that meet the

requirements of part 70 and, for subject sources, 40 CFR 52.21,

Prevention of Significant Deterioration. As noted in the proposal, this

action does not modify or address EPA's current PSD delegation to

Hawaii. Permits issued prior to the effective date of this approval are

not considered part 70 permits. These permits were not issued under an

approved program and the rule does not provide for several part 70

procedural requirements, such as the opportunity for EPA veto (HAR

section 11-60.1-95) and the opportunity for public petitions (HAR

section 11.60-100), until after the program is approved. Under State

law, part 70 permits issued after this approval must be subject to all

part 70 procedural requirements (see Attorney General's

statement).1

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\1\Hawaii's integrated program appropriately restricts minor

permit modifications and operational flexibility by incorporating

the title I modification gatekeeper imposed by part 70. Hawaii's

integrated rule requires a title I permit modification for all

modifications (HAR section 11-60.1-148) and does not allow any title

I modification to be processed through the part 70 minor

modification track. The rule also prohibits operational flexibility

for title I modifications by including the title I gatekeeper and

stating that sources cannot use operational flexibility to exceed

the emission limit in the integrated permit (HAR section 11-60.1-

96). EPA received no comments on Hawaii's use of title I

modification gatekeepers to ensure that changes undergo the proper

procedural requirements and is approving this portion of Hawaii's

program.

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This action does not terminate any permit application shield

previously granted by Hawaii that is consistent with Hawaii's program

and part 70, nor does it create a permit application shield for sources

that do not qualify. Part 70 and Hawaii's program provide a permit

application shield to sources that submit a timely and complete

application and include enough information to determine and impose all

applicable requirements (HAR sections 11-60.1-83 and 87). Applicants

must submit any additional required information to retain the

application shield (HAR section 11-60.1-87). The part 70 permit

application shield does not shield new or modified sources from any

requirement to obtain a preconstruction permit under title I of the

Act.

Requirements for approval specified in 40 CFR 70.4(b) encompass

section 112(l)(5) requirements for approval of a program for delegation

of section 112 standards as promulgated by EPA as they apply to part 70

sources. Section 112(l)(5) requires that the State'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 promulgating approval under section

112(l)(5) and 40 CFR 63.91 of the State's program for receiving

delegation of section 112 standards that are unchanged from Federal

standards as promulgated. Hawaii has informed EPA that the State

intends to obtain the regulatory authority necessary to accept

delegation of section 112 standards by incorporating section 112

standards by reference. This program for delegations applies to all

sources covered by the part 70 program, which includes non-major

sources subject to section 112 requirements.

This interim approval, which may not be renewed, extends until

December 1, 1996. During this interim approval period, the State is

protected from sanctions, and EPA is not obligated to promulgate,

administer and enforce a Federal operating permits program in the

State. Permits issued under a program with interim approval have full

standing with respect to part 70, and the 1-year time period for

submittal of permit applications by subject sources begins upon the

effective date of this interim approval, as does the 3-year time period

for processing the initial permit applications.

If the State fails to submit a complete corrective program for full

approval by June 3, 1996, EPA will start an 18-month clock for

mandatory sanctions. If the State then fails to submit a corrective

program that EPA finds complete before the expiration of that 18-month

period, EPA will be required to apply one of the sanctions in section

179(b) of the Act, which will remain in effect until EPA determines

that the State has corrected the deficiency by submitting a complete

corrective program.

If EPA disapproves the State complete corrective program, EPA will

be required to apply one of the section 179(b) sanctions on the date 18

months after the effective date of the disapproval, unless prior to

that date the State has submitted a revised program and EPA has

determined that it corrected the deficiencies that prompted the

disapproval. In addition, discretionary sanctions may be applied where

warranted any time after the expiration of an interim approval period

if the State has not timely submitted a complete corrective program or

EPA has disapproved its submitted corrective program.

The available sanctions include a prohibition on the approval by

the Secretary of Transportation of certain highway projects or the

awarding of certain federal highway funding, and a requirement that new

or modified stationary sources or emissions units for which a permit is

required under part D of title I of the Act achieve an emissions

reductions-to-increases ratio of at least 2-to-1. The latter sanction,

however, is available only in areas that are classified nonattainment.

Hawaii has no areas classified as nonattainment.

If EPA has not granted full approval to the State program by the

expiration of this interim approval and that expiration occurs after

November 15, 1995, EPA must promulgate, administer and enforce a

Federal permits program for the State upon interim approval expiration.

III. Administrative Requirements

A. Docket

Copies of the State's submittal and other information relied upon

for the final interim approval, including the Response to Comments

document and three public comments received and reviewed by EPA, are

contained in docket number HI-94-OPS maintained at the EPA Regional

Office. EPA also received two letters after the deadline for receipt of

public comments. EPA does not consider these letters official public

comments and has addressed these letters for informational purposes

only. The docket is an organized and complete file of all the

information submitted to, or otherwise considered by, EPA in the

development of this final rulemaking. The docket is available for

public inspection at the location listed under the ADDRESSES section of

this document.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

The EPA's actions under section 502 of the Act do not create any

new requirements, but simply address operating permits programs

submitted to satisfy the requirements of 40 CFR part 70. Because this

action does not impose any new requirements, it does not have a

significant impact on a substantial number of small entities.

D. Effective Date

Section 553 of the Administrative Procedures Act (5 U.S.C.A.,

chapter 5) requires that EPA allow at least 30 days from the

publication of a substantive rule before it becomes effective unless

EPA determines there is good cause for a shorter deadline. EPA has

determined that easing the administrative burden on the State and on

sources that will receive permits during this 30 day time period is

good cause for an earlier effective date. State law (HRS title 11,

section 342B-24) ties the initial permit issuance deadlines to the

adoption of local regulations rather than the effective date of EPA

approval, imposing strict permit issuance deadlines. In addition,

Hawaii relies on the rule EPA is approving to issue permits meeting the

requirements of part 70 and Prevention of Significant Deterioration

(PSD) requirements under title I of the Act. Because the permits issued

prior to the effective date of this approval cannot legally be issued

as part 70 permits, waiving the 30 day period will spare sources and

the State the burden of re-issuing as part 70 permits the permits

issued to PSD sources and other sources during this time. In addition,

this action does not impose substantive new requirements but merely

approves an existing state program. For instance, this action does not

affect the requirement that sources submit permit applications or pay

fees. Therefore, delaying the effective date of the approval would

impose an undue burden on Hawaii and sources and the effective date of

this rulemaking is December 1, 1994.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

Reporting and recordkeeping requirements.

Dated: November 10, 1994.

John Wise,

Acting Regional Administrator.

PART 70--[AMENDED]

Part 70, title 40 of the Code of Federal Regulations is amended as

follows:

1. The authority citation for part 70 continues to read as follows:

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

2. Appendix A to part 70 is amended by adding the entry for Hawaii

in alphabetical order to read as follows:

Appendix A to Part 70--Approval Status of State and Local Operating

Permits Programs

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Hawaii

(a) Department of Health; submitted on December 20, 1993; effective

on December 1, 1994; interim approval expires December 1, 1996.

(b) Reserved.

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[FR Doc. 94-29570 Filed 11-30-94; 8:45 am]

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