Clean Air Act Final Interim Approval of Operating Permits Program; Commonwealth of Virginia

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5838-6]

Clean Air Act Final Interim Approval of Operating Permits

Program; Commonwealth of Virginia

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: The EPA is granting final interim approval, pursuant to Title

V of the Clean Air Act, of the Operating Permits Program which the

Commonwealth of Virginia submitted for the purpose of complying with

[[Page 31517]]

Federal requirements for an approvable State program to issue operating

permits to all major stationary sources, and to certain other sources.

EFFECTIVE DATE: July 10, 1997.

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

information used in developing the final interim approval are available

for inspection during normal business hours at the following location:

U.S. EPA Region III; Air, Radiation, & Toxics Division; 841 Chestnut

Building; Philadelphia, PA 19107.

FOR FURTHER INFORMATION CONTACT: Ray Chalmers, 3AT23; U.S. EPA Region

III; Air, Radiation, & Toxics Division; 841 Chestnut Building;

Philadelphia, PA 19107. Phone: (215) 566-2061.

SUPPLEMENTARY INFORMATION:

I. Background

States are directed by the 1990 Clean Air Act (``the Act''), 42

U.S.C. 7401, et seq. to develop and submit operating permits programs

to EPA by November 15, 1993. The requirements for approval of State

operating permits programs are found at sections 501 through 506 of the

Act, and at 40 CFR part 70. These requirements encompass section

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

section 112 standards. EPA is required to approve or disapprove each

program within 1 year after receiving the submittal. Where a program

substantially, but not fully, meets the requirements of 40 CFR part 70,

EPA may grant the program interim approval for a period of up to 2

years.

II. EPA Action and Implications

EPA proposed to grant approval of the Commonwealth of Virginia's 40

CFR part 70 operating permits program, and its program for receiving

delegation of 112 standards, in a Federal Register document published

on March 18, 1997. See 62 FR 12778. EPA hereby incorporates by

reference the discussion and rationale contained in the March 18, 1997

proposed interim approval notice. That notice may be consulted for a

detailed description of the Commonwealth's submittals and for an

explanation of why EPA believes interim approval is appropriate, and

why EPA is not able at this time to grant full approval to Virginia's

program. After consideration of public comments received on the

proposal, EPA is granting final interim approval to the Commonwealth's

operating permits program. The Commonwealth's approved program consists

of Title V operating permit and fee program regulations submitted on

September 10, 1996, operating permit regulations for acid rain sources

submitted on September 12, 1996, and the non-regulatory portions of

operating permit program submittals from the Commonwealth dated

November 12, 1993, January 14, 1994, January 9, 1995, May 17, 1995,

February 6, 1997, and February 27, 1997. In addition, the EPA is also

promulgating approval under section 112(l)(5) and 40 CFR 63.91 of the

Commonwealth's program for receiving delegation of section 112

standards that are unchanged from Federal standards as promulgated.

This program for delegations only applies to sources covered by the 40

CFR part 70 program.

The Commonwealth of Virginia's 40 CFR part 70 program approved in

this document applies to all 40 CFR part 70 sources (as defined in the

approved program) within the Commonwealth. This interim approval

extends until July 12, 1999. As described below, during this interim

approval period the Commonwealth of Virginia is protected from

sanctions, and EPA is not obligated to administer and enforce a Federal

operating permits program promulgated at 40 CFR part 71 in the

Commonwealth. Permits issued under a program with interim approval have

full standing with respect to 40 CFR 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.

On July 1, 1996, EPA promulgated regulations at 40 CFR Part 71

which govern EPA's implementation of a Federal operating permits

program. See 61 FR 34202. On July 31, 1996, EPA published a document at

61 FR 39877 listing states, including Virginia, whose 40 CFR part 70

operating permits programs had not been approved by EPA and where a 40

CFR part 71 Federal operating permits program was effective as of that

date. Today's action cancels the applicability of the 40 CFR part 71

Federal operating permits program in Virginia. Upon the effective date

of today's approval, the 40 CFR part 71 application deadline will be

superseded by Virginia's 40 CFR part 70 application deadlines.

III. Public Comments and EPA's Response

EPA received two comments, both from corporations, in response to

its proposal to grant interim approval to Virginia's Title V operating

permits program. One company supported the proposed interim approval.

The other company, which treats contaminated soil using a thermal

desorption technology, argued that EPA should withdraw the proposed

interim approval of Virginia's Title V program because the company

believes Virginia had shown that it was unable or unwilling to

appropriately permit sources. The evidence the company cited was that

in 1993 Virginia had issued a construction permit to one of the

commenter's competitors (which treats contaminated soil using an

alternative bio-remediation process), and had not required the

competing company to install emission controls which the commenter

considered appropriate.

40 CFR part 70 establishes the criteria that EPA must use to

evaluate the approvability of a State's Title V program. EPA has

determined that Virginia's Title V program meets the requirements for

interim approval set forth at 40 CFR 70.4(d). 40 CFR part 70 also

requires that, upon interim approval of its Title V operating permit

program, Virginia will be obligated to implement and enforce the

program in accordance with the requirements of Title V and 40 CFR part

70 and all agreements between the Commonwealth and EPA concerning the

operation of the program. See 40 CFR 70.10(b). EPA will be reviewing

permits and permit revisions Virginia proposes to issue, pursuant to

its authority under 40 CFR 70.8, and will object to the issuance of any

proposed permit or permit revision that EPA determines does not assure

compliance with all applicable requirements or otherwise conform to the

requirements of Title V and 40 CFR part 70. If EPA should determine,

based on its review of the Commonwealth's proposed permits or permit

revisions, or on other relevant information, that Virginia is not

adequately administering and/or enforcing its Title V program, EPA

could act to: (1) Withdraw approval of the program or portions thereof;

(2) apply the sanctions set forth in section 179(b) of the Act; and/or

(3) administer and enforce the Federal program under Title V of the Act

and 40 CFR part 71. See 40 CFR 70.10(c)(1) (ii) and (iii).

Given that EPA has the authority to take appropriate action should

Virginia fail to adequately administer and enforce its operating

permits program, and that EPA has the authority to review and object to

the issuance of individual Title V operating permits proposed by

Virginia, EPA believes that it is appropriate to grant interim approval

to Virginia's program, based on the Agency's review of Virginia's

submitted program. Consequently, EPA disagrees with the commenter's

assertion that

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Virginia is not eligible for Title V program approval.

IV. Interim Approval Items

EPA cannot fully approve Virginia's Title V operating permits

program until Virginia corrects the six program deficiencies which EPA

discussed in detail in its notice proposing interim approval of

Virginia's program. The required corrections are summarized below:

A. Reduce the Level of CO Emissions Considered Insignificant

Virginia must change its designation of which emission units

emitting carbon monoxide (CO) are insignificant. Virginia defines any

emissions unit emitting less than 100 TPY of carbon CO as

insignificant, and EPA has determined that the 100 TPY emissions level

is unreasonably high. Virginia must significantly reduce this emissions

level to a level consistent with EPA policy and consistent with what

EPA has approved in other State programs. For further discussion of

this issue, see EPA's proposed interim approval notice at 62 FR 12782.

B. Require Sources to Include in Their Permit Applications Sufficient

Information Regarding Insignificant Emission Units To Enable Applicable

Requirements for Those Units To Be Identified

Virginia must, in accordance with 40 CFR 70.5(c), require sources

to include in their Title V permit applications all information for

insignificant emission units which is required to identify any

applicable requirements for those units. Virginia does currently

require sources to submit emissions information for insignificant

emission units, which can be used to identify many applicable

requirements for those units, but it fails to require sources to submit

any additional information which might be required. For further

discussion of this issue, see EPA's proposed interim approval notice at

62 FR 12782.

C. Require Applicable Requirements for Insignificant Emission Units To

Be Included in Permits

Virginia must require all applicable requirements to be included in

permits, with no exceptions for insignificant emissions units, in

accordance with 40 CFR 70.6. Virginia's regulations currently require

all applicable requirements for all emission units in the source to be

included in permits, except for applicable requirements for

insignificant emissions units. Virginia must delete the exception for

insignificant units. For further discussion of this issue, see EPA's

proposed interim approval notice at 62 FR 12782-12783.

D. Correctly Define Which Emergency or Standby Compressors, Pumps, and/

or Generators Are Insignificant

Virginia must clarify its provision designating emergency or

standby compressors, pumps, and/or generators as insignificant

emissions units, and must reduce the horsepower size cut-off levels for

such units sufficiently to exclude any unit which would be likely to

trigger an applicable requirement or to emit air pollutants in major

amounts, in accordance with 40 CFR 70.5(c). For further discussion of

this issue, see EPA's proposed interim approval notice at 62 FR 12783.

E. Prohibit ``Off Permit'' Changes Pertaining to Requirements of the

Acid Rain Provisions of Title IV of the CAA

Virginia must modify its Title V provisions pertaining to ``off

permit'' changes (changes not addressed or prohibited by the permit) to

exclude from eligibility changes involving the requirements of the acid

rain provisions of Title IV of the Act, in accordance with 40 CFR

70.4(b)(15). For further discussion of this issue, see EPA's proposed

interim approval notice at 62 FR 12783.

F. Correct Affirmative Defense Provisions

Virginia must allow the legal defense of malfunction only for those

malfunctions which are timely reported to the Commonwealth, in

accordance with the requirements at 40 CFR 70.6(g). Virginia's current

affirmative defense provision is inadequate in that it allows the

defense of malfunction for malfunctions not timely reported to the

Commonwealth if those malfunctions lasted less than one hour. For

further discussion of this issue, see EPA's proposed interim approval

notice at 62 FR 12783-12784.

V. Sanctions Lifted

In the notice proposing interim approval of the Virginia Title V

operating permits program EPA made an interim final determination that

the Commonwealth had corrected the deficiencies prompting the original

disapproval of the Virginia Title V operating permits program. The

interim final determination stayed and deferred the implementation of

sanctions unless and until either the proposed interim approval was

finalized or withdrawn.

EPA sought comments on this interim final determination as well as

on EPA's proposed approval of the Commonwealth's submittal. EPA

received no comments on its interim final determination. In this notice

EPA is granting final interim approval to Virginia's Title V submittal.

EPA is making a final determination that the Commonwealth has corrected

the deficiencies prompting the original disapproval of the Virginia

Title V operating permits program. EPA was required to apply the first

sanction on July 5, 1996, and the second sanction on January 5, 1997,

unless by those dates EPA had determined that Virginia had corrected

each of the deficiencies that prompted EPA's original disapproval. EPA

interprets the CAA to require the Administrator to select by rulemaking

which sanction to apply first, before mandatory sanctions may actually

be imposed. These sanctions have not been applied in Virginia because

EPA has not yet published such a rule covering deficiencies under Title

V.

Section 502(g) provides that for the period of any interim

approval, the sanctions provisions of section 502(d)(2) of the Act

shall be suspended. See also, Update to Sanctions Policy for State

Title V Operating Permits Programs, John S. Seitz, Director Office of

Air Quality Planning and Standards (March 28, 1995). Therefore, EPA has

determined that sanctions applicable to the Commonwealth as a result of

EPA's December 5, 1994 disapproval of Virginia's Title V operating

permits program are lifted.

VI. Federal Oversight and Potential Sanctions

If the Commonwealth of Virginia fails to submit a complete

corrective program for full approval by January 11, 1999, EPA will

start an 18-month clock for mandatory sanctions. If the Commonwealth

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 Commonwealth has

corrected the deficiency by submitting a complete corrective program.

Moreover, if the Administrator finds a lack of good faith on the part

of the Commonwealth, both sanctions under section 179(b) will apply

after the expiration of the 18-month period until the Administrator

determined that the Commonwealth had come into compliance. In any case,

if, six months after application of the first sanction, the

Commonwealth still has not submitted a corrective program that EPA has

found complete, a second sanction will be required.

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If EPA disapproves the Commonwealth's 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 Commonwealth has submitted a revised program and

EPA has determined that it corrected the deficiencies that prompted the

disapproval. Moreover, if the Administrator finds a lack of good faith

on the part of the Commonwealth, both sanctions under section 179(b)

shall apply after the expiration of the 18-month period until the

Administrator determines that the Commonwealth has come into

compliance. In all cases, if, six months after EPA applies the first

sanction, the Commonwealth has not submitted a revised program that EPA

has determined corrects the deficiencies, a second sanction is

required.

In addition, discretionary sanctions may be applied where warranted

any time after the expiration of an interim approval period if the

Commonwealth has not timely submitted a complete corrective program or

EPA has disapproved its submitted corrective program. Moreover, if EPA

has not granted full approval to the Commonwealth's program by the

expiration of this interim approval, EPA must administer and enforce

the Federal permits program for the Commonwealth, under 40 CFR part 71,

upon expiration of interim approval.

VII. Administrative Requirements

A. Official File

Copies of the Commonwealth's submittal and other information relied

upon for the final interim approval, including public comments on the

proposal, are contained in the official file maintained at the EPA

Regional Office. The file is an organized and complete file of all the

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

development of this final interim approval. The official file is

available for public inspection at the location listed under the

ADDRESSES section of this document.

B. Executive Order 12866

Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA

must determine whether its regulatory actions are ``significant'' and

therefore subject to Office of Management and Budget (OMB) review and

the requirements of the Executive Order. The Order defines a

significant regulatory action ``as one that is likely to result in a

rule that may: (1) Have an annual effect on the economy of $100 million

or more or adversely affect in a material way the economy, a sector of

the economy, productivity, competition, jobs, the environment, public

health or safety, or state, local, or tribal governments or

communities; (2) create a serious inconsistency or otherwise interfere

with an action taken or planned by another agency; (3) materially alter

the budgetary impact of entitlements, grants, user fees, or loan

programs or the rights and obligations of recipients thereof; or (4)

raise novel legal or policy issues arising out of legal mandates, the

President's priorities, or the principles set forth in the Executive

Order. The Office of Management and Budget has exempted this action

from Executive Order 12866 review.

C. Regulatory Flexibility

The Regulatory Flexibility Act (RFA) generally requires an agency

to conduct a regulatory flexibility analysis of any rule subject to

notice and comment rulemaking requirements unless the agency certifies

that the rule will not have a significant economic impact on a

substantial number of small entities. Small entities include small

businesses, small not-for-profit enterprises, and small environmental

jurisdictions. This final rule will not have a significant impact on a

substantial number of small entities because 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. Therefore, I certify that this action

will not have a significant economic impact on a substantial number of

small entities.

D. Unfunded Mandates

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposed or

final rule that includes a Federal mandate that may result in estimated

costs to State, local, or tribal governments in the aggregate; or to

private sector, of $100 million or more. Under Section 205, EPA must

select the most cost-effective and least burdensome alternative that

achieves the objectives of the rule and is consistent with statutory

requirements. Section 203 requires EPA to establish a plan for

informing and advising any small governments that may be significantly

or uniquely impacted by the rule.

EPA has determined that this interim approval action does not

include a Federal mandate that may result in estimated costs of $100

million or more to either State, local, or tribal governments in the

aggregate, or to the private sector. This Federal action approves pre-

existing requirements under State or local law, and imposes no new

requirements. Accordingly, no additional costs to State, local, or

tribal governments, or to the private sector, result from this action.

E. Submission to Congress and the General Accounting Office

Under 5 U.S.C. 801(a)(1)(A) of the Administrative Procedure Act, as

added by the Small Business Regulatory Enforcement Fairness Act of

1996, EPA submitted a report containing this rule approving interim

final approval of Virginia's Title V program and other required

information to the U.S. Senate, the U.S. House of Representatives and

the Comptroller General of the General Accounting Office prior to

publication of the rule in today's Federal Register. This rule is not a

``major rule'' as defined by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

and Reporting and recordkeeping requirements.

Dated: May 29, 1997.

W. Michael McCabe,

Regional Administrator, Region III.

Part 70, Title 40, Chapter I of the Code of Federal Regulations is

amended as follows:

PART 70--[AMENDED]

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 revising paragraph (a) in

the entry for Virginia to read as follows:

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

Permits Programs

* * * * *

Virginia

(a) The Commonwealth of Virginia's Title V operating permit and

fee program regulations submitted on September 10, 1996, the acid

rain operating permit regulations submitted on September 12, 1996,

and the non-regulatory operating permit program provisions submitted

on November 12, 1993, January 14, 1994, January 9, 1995, May 17,

1995, February 6, 1997, and February 27, 1997; interim

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approval effective on July 10, 1997; interim approval expires July

12, 1999.

* * * * *

[FR Doc. 97-15090 Filed 6-9-97; 8:45 am]

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