Clean Air Act Proposed Approval of Amendment to Title V Operating Permits Program; Pima County Department of Environmental Quality, Arizona

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5806-2]

Clean Air Act Proposed Approval of Amendment to Title V Operating

Permits Program; Pima County Department of Environmental Quality,

Arizona

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes approval of the revision to the Operating

Permits Program submitted by the Arizona Department of Environmental

Quality (``ADEQ'') on behalf of the Pima County Department of

Environmental Quality (``Pima'' or ``County'') for the purpose of

complying with section 502(b)(3) of the Clean Air Act (``the Act''),

which requires that each permitting authority collect fees sufficient

to cover all reasonable direct and indirect costs required to develop

and administer its title V operating permits program.

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

May 5, 1997.

ADDRESSES: Comments must be submitted to Ginger Vagenas at EPA, AIR-3,

75 Hawthorne Street, San Francisco, CA 94105. Copies of Pima's

submittal and other supporting information used in developing this

proposed approval are available for inspection (AZ-Pima-97-1-OPS)

during normal business hours at the following location: U.S.

Environmental Protection Agency, Region 9; 75 Hawthorne Street; San

Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Ginger Vagenas (telephone 415-744-

1252), Mail Code AIR-3, U.S. Environmental Protection Agency, 75

Hawthorne Street, San Francisco, CA 94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

As required under title V of the Clean Air 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 (see 57 FR 32250

(July 21, 1992)). These rules are codified at 40 CFR Part 70. Title V

requires states to develop and submit to EPA, by November 15, 1993,

programs for issuing these operating permits to all major stationary

sources and to certain other sources. The EPA's program review occurs

pursuant to section 502 of the Act, which outlines criteria for

approval or disapproval.

On November 15, 1993, Pima's title V program was submitted. EPA

proposed interim approval of the program on July 13, 1995 (60 FR

36083). The fee provisions of the program were found to be fully

approvable. On November 14, 1995, in response to changes in state law,

Pima amended its fee provisions under Chapter 12, Article VI of Title

17 of the Pima County Air Quality Control Code. Those changes were

submitted to EPA on January 14, 1997, after it promulgated final

interim approval of Pima's title V program (61 FR 55910, October 30,

1996).

II. Proposed Action

EPA is proposing to approve the submitted amendments to the fee

provisions of Pima's title V operating permits program. A description

of the submitted materials and an analysis of the amendments are

included below.

A. Submitted Materials

Pima's title V program amendment was submitted by the Arizona DEQ

on January 14, 1997. The submittal includes the revised fee regulations

(Chapter 12, Article VI of Title 17 of the Pima County Air Quality

Control Code as amended on November 14, 1995), a technical support

document, and a legal opinion by the County Attorney. Additional

materials, including proof of adoption and a commitment to provide

periodic updates to EPA regarding the status of the fee program, were

submitted on February 26, 1997.

B. Legal Opinion

Section 502(b)(3) of the Act requires that each permitting

authority collect fees sufficient to cover all reasonable direct and

indirect costs required to develop and administer its title V operating

permits program. Pima's submittal includes an opinion from the County

Attorney regarding the adequacy of the laws of the State of Arizona and

Pima's amended title V program. The County Attorney states:

[I]t is my opinion that the laws of the state of Arizona provide

adequate authority to carry out all aspects of the amended program

submitted by the Pima County Air Quality Control District to the

EPA. * * *

[T]he Arizona Revised Statutes and Pima County Code, Title 17,

ensure that permit fees assessed as part of the Title V (Class 1)

permit program will cover all reasonable direct and indirect costs

required to develop, administer, and enforce Pima County's Title V

Permit Program.

C. Permit Fee Demonstration

Each title V program submittal must contain either a detailed

demonstration of fee adequacy or a demonstration that aggregate fees

collected from title V sources meet or exceed $25 per ton of emissions

per year (adjusted from 1989 by the Consumer Price Index (CPI)). Pima

has submitted a detailed fee analysis that demonstrates the fees it

will collect under the amended rules are adequate to cover program

costs.

Title V emission fees. Pima's fee provisions require that the owner

or operator of each source required to obtain a title V permit shall

pay an annual emissions fee equal to $28.15 per year per ton of actual

emissions of all regulated air pollutants, or a specified minimum,

whichever is greater. See 17.12.510.C. and 17.12.510.C.5. Beginning in

1994, the emissions fee rate is adjusted to reflect the increase, if

any, in the Consumer Price Index. See 17.12.510.C.4.

Emission fees are used by Pima to cover the costs of the Title V

related activities not covered by title V permit fees. These activities

are inspection services and associated direct and indirect costs. Pima

estimates the annual cost of these activities to be $68,640. Based upon

known sources and emissions reported by the sources, and using the

emission fee ($28.15 per ton, indexed to the CPI beginning in 1994) and

the fee schedule, the County estimates its annual revenue from

emissions fees will be $70,100.

Permit fees. Pima's fee provisions require that applicants for

permits to construct and operate that are subject to title V must pay

the total actual cost of reviewing and acting upon applications for

permits and permit revisions. See 17.12.510.G. and 17.12.510.I. These

fees are used to cover the cost of issuing permits. Pima estimated the

permitting related average hourly billing costs for permitting of title

V facilities, including salary, fringe benefits, direct non-salary

[[Page 16125]]

costs and indirect costs including cost estimates of various types of

permit related activities. The estimated hourly cost is $53.60.

Because state law caps hourly fees at $53.00, Pima's hourly charges

are capped at $53.00. See 17.12.510.M. Although this cap is 60 cents

per hour less than the District's estimated hourly costs for permit

processing, EPA finds this provision to be fully approvable. Given the

inherent uncertainty in the cost estimates, EPA believes that the

difference is insignificant and unlikely to cause a shortfall in

revenues. Further, Pima is tracking its program costs and revenues and

has committed to provide EPA with periodic updates that will

demonstrate whether fee revenues are meeting the costs of the program.

If EPA finds that the County is not collecting fees sufficient to fund

the title V program, it will require a program revision.

In addition to imposing a cap on hourly fees, state law also limits

the maximum chargeable fee for issuing and revising permits. State law

and Pima regulations cap Title V permit issuance fees at $30,000. See

17.12.510.G. Pima estimates processing costs for permit issuance at

$21,484. Fees for processing permit revisions are capped at $25,000 for

significant revisions and $10,000 for minor permit revisions. See

17.12.510.I. Because the workload associated with these classes of

permit revisions is likely to vary a great deal, Pima did not attempt

to estimate the cost of these actions. The County believes that costs

for permit revisions will be less than the maximum allowable fees. (See

letter to Dave Howekamp, EPA, from David Esposito, Pima County, dated

February 17, 1997.) EPA will periodically review the County program to

ensure adequate fees are collected.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

approval. Copies of Pima's submittal and other information relied upon

for the proposed interim approval are contained in a docket (AZ-Pima-

97-1-OPS) maintained at the EPA Regional Office. 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

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 May 5, 1997.

B. 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.

C. 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

the 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.

The EPA has determined that the approval action promulgated today

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 federal requirements. Accordingly, no additional costs

to state, local, or tribal governments, or to the private sector,

result from this action.

D. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

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.

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

Dated: March 23, 1997.

Felicia Marcus,

Regional Administrator.

[FR Doc. 97-8691 Filed 4-3-97; 8:45 am]

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