Approval and Promulgation of Small Business Assistance Program; Ohio

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[OH40-1-5784a; AD-FRL-5276-7]

Approval and Promulgation of Small Business Assistance Program;

Ohio

AGENCY: United States Environmental Protection Agency (USEPA).

ACTION: Final rule.

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SUMMARY: USEPA is approving the State Implementation Plan (SIP)

revision submitted by the State of Ohio for the purpose of establishing

a Small Business Assistance Program (SBAP). The implementation plan was

submitted by the State to satisfy the Federal mandate, found in section

507 of the Clean Air Act (CAA), to ensure that small businesses have

access to the technical assistance and regulatory information necessary

to comply with the CAA.

DATES: This action will be effective October 16, 1995 unless notice is

received by September 14, 1995, that someone wishes to submit adverse

or critical comments. If the effective date is delayed, timely notice

will be published in the Federal Register.

ADDRESSES: Written comments should be sent to: J. Elmer Bortzer, Chief,

Regulation Development Section, Regulation Development Branch (AR-18J),

United States Environmental Protection Agency, Region 5, 77 West

Jackson Boulevard, Chicago, Illinois 60604.

Copies of the State's submittal and USEPA's technical support

document are available for inspection during normal business hours at

the following location: Regulation Development Section, United States

Environmental Protection Agency, Region 5, 77 West Jackson Boulevard,

Chicago, Illinois 60604.

FOR FURTHER INFORMATION CONTACT: John Summerhays, Regulation

Development Branch, Regulation Development Section (AR-18J), United

States Environmental Protection Agency, Region 5, 77 West Jackson

Boulevard, Chicago, Illinois 60604, telephone (312) 886-6067.

SUPPLEMENTARY INFORMATION:

I. Background

Implementation of the provisions of the Clean Air Act (CAA), as

amended in 1990, will require regulation of many small businesses, both

to provide for attainment of the national ambient air quality standards

(NAAQS) in the areas in which they are located and to reduce the

emission of air toxics. Small businesses frequently lack the technical

expertise and financial resources necessary to evaluate such

regulations and to determine the appropriate mechanisms for compliance.

In anticipation of the impact of these requirements on small

businesses, the CAA requires that States adopt a Small Business

Assistance Program (SBAP) and submit this SBAP as a revision to the

Federally approved SIP. In addition, the CAA directs the USEPA to

oversee these small business assistance programs and report to Congress

on their implementation.

The requirements for establishing a SBAP are set out in section 507

of the CAA. In January 1992, USEPA issued Guidelines for the

Implementation of Section 507 of the 1990 Clean Air Act Amendments, in

order to delineate the Federal and State roles in meeting the new

statutory provisions and to provide further guidance to the States on

submitting acceptable SIP revisions. This guidance specifies that the

State submittal must provide for each of the

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following SBAP elements: (1) the establishment of a SBAP to provide

technical and compliance assistance to small businesses; (2) the

establishment of a State Small Business Ombudsman to represent the

interests of small businesses in the regulatory process; and (3) the

creation of a Compliance Advisory Panel (CAP) to determine and report

on the overall effectiveness of the SBAP.

Ohio's initial submittal addressing SBAP requirements was a

commitment and schedule submitted to USEPA on January 8, 1993. More

complete descriptions of the planned program were submitted on November

10, 1993, and May 17, 1994. USEPA expressed concern that Ohio was

including unacceptable provisions for confidentiality of emissions

data. After considerable discussion of this issue, USEPA issued revised

guidance on August 12, 1994, providing two new alternatives by which

sources would not be ``penalized'' (via added enforcement action or

adverse publicity) for seeking SBAP assistance and yet by which

appropriate enforcement under Sections 113 and 114 may properly

proceed. Ohio submitted a further refinement of its SBAP in accordance

with this policy on May 4, 1995. The following section evaluates

whether these submittals satisfy the requirements for SBAP programs.

II. Evaluation of State Submittals

A. Assistance to be Provided to Small Businesses

Six of the seven requirements set forth in section 507(a) specify

types of assistance that the State must provide to have an approvable

SBAP. (The seventh requirement of section 507(a), establishment of an

Ombudsman office, is discussed in the next section.) (1) The State must

establish adequate mechanisms for developing, collecting and

coordinating information concerning compliance methods and technologies

for small business stationary sources and programs to encourage lawful

cooperation among such sources and other persons to further compliance

with the Act; (2) The State must establish adequate mechanisms for

assisting small business stationary sources with pollution prevention

and accidental release detection and prevention, including providing

information concerning alternative technologies, process changes,

products and methods of operation that help reduce air pollution; (3)

The State must develop a compliance and technical assistance program

for small business stationary sources which assists small businesses in

determining applicable requirements and in receiving permits under the

Act in a timely and efficient manner; (4) The State must develop

adequate mechanisms to assure that small business stationary sources

receive notice of their rights under the Act in such manner and form as

to assure reasonably adequate time for such sources to evaluate

compliance methods and any relevant or applicable proposed or final

regulation or standards issued under the Act; (5) The State must

develop adequate mechanisms for informing small business stationary

sources of their obligations under the Act, including mechanisms for

referring such sources to qualified auditors or, at the option of the

State, for providing audits of the operations of such sources to

determine compliance with the Act; and (6) The State must develop

procedures for consideration of requests from a small business

stationary source for modification of (a) any work practice or

technological method of compliance, or (b) the schedule of milestones

for implementing such work practice or method of compliance preceding

any applicable compliance date, based on the technological and

financial capability of any such small business stationary source.

Ohio's submittals specify suitable mechanisms its SBAP will use to

be able to satisfy these requirements. Ohio is operating its SBAP as

part of the Division of Air Pollution Control of the Ohio Environmental

Protection Agency (OEPA). As a result, SBAP staff will have direct

access to the expertise of OEPA staff in order to provide small

businesses the information on compliance techniques, applicable

requirements, technical information on efficient and effective means of

achieving compliance, pollution prevention opportunities, and other

information small businesses need to achieve and maintain compliance.

The SBAP will also provide audits where appropriate.

B. Ombudsman.

Section 507(a)(3) requires the designation of a State office to

serve as the Ombudsman for small business stationary sources. Ohio has

established an Ombudsman's office at the Ohio Air Quality Development

Authority (OAQDA). The OAQDA is a financing agency for industries that

are trying to meet pollution control requirements. It was established

by the Ohio General Assembly in 1970 as an independent organization.

OAQDA's current work has given it expertise in complicated technical

issues. The OAQDA has hired personnel to develop and execute the

program and will implement the functions set forth in USEPA's guidance.

C. Compliance Advisory Panel.

Section 507(e) requires the State to establish a Compliance

Advisory Panel (CAP) that must include two members selected by the

Governor who are not owners or representatives of owners of small

businesses; four members selected by the State legislature who are

owners, or represent owners, of small businesses; and one member

selected by the head of the agency in charge of the Air Pollution

Permit Program. The State has committed to establish a CAP according to

the methods set forth in section 507(e) of the CAA.

In addition to establishing the minimum membership of the CAP the

CAA delineates four responsibilities of the Panel: (1) To render

advisory opinions concerning the effectiveness of the SBAP,

difficulties encountered and the degree and severity of enforcement

actions; (2) to periodically report to USEPA concerning the SBAP's

adherence to the principles of the Paperwork Reduction Act, the Equal

Access to Justice Act, and the Regulatory Flexibility Act 1; (3)

to review and assure that information for small business stationary

sources is easily understandable; and (4) to develop and disseminate

the reports and advisory opinions made through the SBAP. The State has

committed to meet these requirements by establishing the Panel and

assigning the Panel functions as set forth in section 507(e) of the

CAA.

\1\ Section 507(e)(1)(B) requires the CAP to report on the

compliance of the SBAP with these three Federal statutes. However,

since State agencies are not required to comply with them, EPA

believes that the State SBAP must merely require the CAP to report

on whether the SBAP is adhering to the general principles of these

Federal statutes.

D. Eligibility

Section 507(c)(1) of the CAA defines the term ``small business

stationary source'' as a stationary source that:

1. Is owned or operated by a person who employs 100 or fewer

individuals;

2. Is a small business concern as defined in the Small Business

Act;

3. Is not a major stationary source;

4. Does not emit 50 tons per year (tpy) or more of any regulated

pollutant; and

5. Emits less than 75 tpy of all regulated pollutants.

Ohio defines the number of employees on a full-time equivalent

basis, which results in availability of small business assistance to

slightly more companies than would be the case with a definition on a

number of people employed basis.

[[Page 42044]]

USEPA permits States to grant SBAP eligibility to sources that do

not meet the criteria of sections 507(c)(1) (C), (D), and (E) of the

CAA but do not emit more than 100 tpy of all regulated pollutants. Ohio

has chosen to grant such eligibility if its resources are

underutilized.

USEPA also permits States to exclude from the small business

stationary source definition, after consultation with the USEPA and the

Small Business Administration Administrator and after providing notice

and opportunity for public comment, any category or subcategory of

sources that the State determines to have sufficient technical and

financial capabilities to meet the requirements of the CAA. Ohio's plan

contains provisions to exclude such sources.

E. Schedule

The State submitted a detailed schedule for implementation of its

SBAP, including milestones for adoption of legislation, adoption of SIP

elements, hiring of staff, and other actions necessary to initiate SBAP

operations. These dates have now passed, and Ohio has completed its

commitments sufficiently to begin providing assistance to small

businesses.

F. Confidentiality

An important issue for SBAPs in general, and Ohio's SBAP in

particular, is the extent to which the State may promise sources

seeking SBAP assistance that the information the State obtains will be

kept confidential. On the one hand, sources may choose not to seek the

benefits of SBAP assistance without being assured that they will not be

penalized for seeking that assistance, whether by becoming subject to

enforcement action that they would not otherwise have encountered or by

receiving adverse publicity for noncompliance. On the other hand,

Section 114 of the CAA specifically provides that emissions data shall

not be kept confidential, and a source must not be shielded from

enforcement action simply by having requested SBAP assistance.

A review by USEPA of earlier Ohio's SBAP submittals, documented in

a technical support document dated April 21, 1994, concluded that

Ohio's legislation and program description granted excessive

confidentiality, including confidentiality of emissions data, and

thereby contravened Section 114 of the CAA and USEPA's guidance on the

proper balance between confidentiality and enforcement. After further

consideration of the confidentiality issue, USEPA established a revised

policy on this issue by a memorandum dated August 12, 1994. The revised

policy provides two new options designed to balance the needs of

sources (which need to believe they will not be penalized for seeking

SBAP assistance) with the needs of USEPA's enforcement and compliance

assurance program. The first option under the revised policy, labeled

the ``correction period option,'' allows States in specified

circumstances to give small businesses up to 90 days to correct

violations discovered during SBAP assistance. The second option,

labeled the ``confidentiality option,'' allows States with separation

between their SBAP and their enforcement program to have the SBAP keep

the identity of noncomplying sources confidential, though the SBAP is

to provide statistical and other summary information to the enforcement

program, and the State is to retain the option of taking enforcement

action considering whether SBAP participation reflects good faith

effort to achieve compliance.

Ohio has adopted the ``confidentiality option.'' In its description

of its SBAP, by memorandum dated April 27, 1995, Ohio uses language

very similar to that given in USEPA's policy to describe how it will

handle information obtained as a result of SBAP assistance. Ohio's SBAP

``will keep confidential information regarding violations detected in

the program, including names and locations of businesses, [but] will

provide emissions data and general statistical information such as the

types of noncompliance being encountered.'' In addition, the State

reserves the right to conduct follow-up audits to assess program

effectiveness. At the same time, Ohio's SBAP description states that

``[Ohio's] enforcement program is not prohibited from taking action

against small businesses who are receiving SBAP assistance. However,

considering that [enforcement staff] are granted enforcement

discretion, the enforcement program may consider a company's good faith

efforts to achieve compliance by participating in the SBAP as a

mitigating factor in determining the appropriate enforcement response

or civil penalty.'' The description concludes that ``The SBAP will act

independently of [Ohio's] enforcement program'' but will work with the

enforcement program to seek consistency in the compliance advice given.

Thus, Ohio's provisions on confidentiality are fully consistent with

USEPA's revised policy.

III. Final Action

USEPA concludes that Ohio's SBAP submittals fully satisfy the

requirements of Section 507 of the CAA. Because USEPA considers the

action noncontroversial and routine, USEPA is taking final action to

approve these submittals without prior proposal. This action will

become effective on October 16, 1995, unless notice is received by

September 14, 1995 that someone wishes to submit adverse or critical

comments. If the effective date is delayed, timely notice will be

published in the Federal Register.

Nothing in this action should be construed as permitting, allowing

or establishing a precedent for any future request for revision to any

SIP. USEPA shall consider each request for revision to the SIP in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

This action has been classified as a Table 3 action for signature

by the Regional Administrator under the procedures published in the

Federal Register on January 19, 1989 (54 FR 2214-2225), as revised by a

July 10, 1995 memorandum from Mary Nichols, Assistant Administrator for

Air and Radiation. The Office of Management and Budget exempted this

regulatory action from Executive Order 12866 review.

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

must prepare a regulatory flexibility analysis assessing the impact of

any proposed or final rule on small entities. (5 U.S.C. 603 and 604.)

Alternatively, USEPA 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.

USEPA is approving a State program created for the purpose of

assisting small businesses in complying with existing statutory and

regulatory requirements. The program being approved does not impose any

new regulatory burden on small businesses; it is a program under which

small businesses may elect to take advantage of assistance provided by

the State. Therefore, because USEPA's approval of this program does not

impose any new regulatory requirements on small businesses, I certify

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

entities affected. In addition, the statutory and regulatory

requirements at issue in this action were in effect prior to January 1,

1996, and are thus not

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subject to the Unfunded Mandates Reform Act of 1995 (Unfunded Mandates

Act), signed into law on March 22, 1995.

Under section 307(b)(1) of the Clean Air Act, petitions for

judicial review of this action must be filed in the United States Court

of Appeals for the appropriate circuit by October 16, 1995. Filing a

petition for reconsideration by the Administrator of this final rule

does not affect the finality of this rule for the purposes of judicial

review nor does it extend the time within which a petition for judicial

review may be filed, and shall not postpone the effectiveness of such

rule or action. This action may not be challenged later in proceedings

to enforce its requirements (see section 307(b)(2)).

List of Subjects in 40 CFR Part 52

Environmental protection, Air pollution control, Small business

assistance program.

Dated: July 28, 1995.

William E. Muno,

Acting Regional Administrator.

Title 40 of the Code of Federal Regulations, chapter I, part 52, is

amended as follows:

PART 52--APPROVAL AND PROMULGATION OF IMPLEMENTATION PLANS

1. The authority citation for part 52 continues to read as follows:

Authority: 42 U.S.C. 7401-7671q.

Subpart KK--[Amended]

2. Section 52.1889 is added to read as follows:

Sec. 52.1889 Small business stationary source technical and

environmental compliance assistance program.

The Ohio program, submitted as a requested revision to the Ohio

State Implementation Plan on May 17, 1994, and May 4, 1995, satisfies

the requirements of section 507 of the Clean Air Act.

[FR Doc. 95-20019 Filed 8-14-95; 8:45 am]

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