Approval and Promulgation of Air Quality Implementation Plans; Commonwealth of VirginiaPrevention of Significant Deterioration Program

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[VA025-5033; FRL-5977-9]

Approval and Promulgation of Air Quality Implementation Plans;

Commonwealth of Virginia--Prevention of Significant Deterioration

Program

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is approving a revision to the Commonwealth of Virginia's

State Implementation Plan (SIP) under which the Commonwealth will be

implementing the Prevention of Significant Deterioration of Air Quality

program (PSD program) pursuant to its own SIP regulations. The

Commonwealth had been implementing the PSD program under the terms of

an EPA delegation to the Commonwealth of the authority to implement the

Federal PSD regulations. Under the PSD program those constructing new

major sources of a criteria air pollutant in areas that are attainment

for the National Ambient Air Quality Standards (NAAQS) set for that

pollutant, or constructing major modifications to such sources in such

areas, must demonstrate that emissions from those sources will not

cause violations of the NAAQS, or significantly deteriorate air quality

beyond specified ambient increments, and that the emissions will be

controlled by Best Available Control Technology (BACT). Additional

provisions relevant to Class I areas may also apply.

EFFECTIVE DATE: This final rule is effective on April 22, 1998.

ADDRESSES: Copies of the documents relevant to this action are

available for public inspection during normal business hours at the Air

Protection Division, U.S. Environmental Protection Agency, Region III,

841 Chestnut Building, Philadelphia, Pennsylvania 19107; the Air and

Radiation Docket and Information Center, U.S. Environmental Protection

Agency, 401 M Street, SW., Washington, DC 20460; and the Virginia

Department of Environmental Quality, 629 East Main Street, Richmond,

Virginia, 23219.

FOR FURTHER INFORMATION CONTACT: Ray Chalmers, U.S. EPA Region III, Air

Protection Division, Permits & Technology Assessment Section (3AP11),

841 Chestnut Building, Philadelphia, PA. Phone: (215) 566-2061.

Internet: ``Chalmers.R[email protected]''.

SUPPLEMENTARY INFORMATION:

I. Background

In a series of submittals, the Virginia Department of Air Pollution

Control (DAPC), now known as the Department of Environmental Quality

(VDEQ), submitted the elements for a revision to its State

Implementation Plan (SIP) that would establish a program for the

prevention of significant deterioration of air quality (PSD) for the

review and permitting of new major sources and major modifications (the

PSD program). On January 24, 1996, EPA proposed to disapprove or, in

the alternative, to conditionally approve Virginia's PSD SIP revision.

(61 FR 1880). EPA proposed disapproval because, in the agency's view,

the Commonwealth's limitation of access to state judicial appeal (also

known as standing) of permitting actions was inconsistent with the

agency's interpretation that existing law and regulations require an

opportunity for state judicial review under approved PSD SIPs by permit

applicants and affected members of the public. In EPA's proposed rule,

comment was solicited on the agency's view that a limited judicial

review did not meet the minimum requirements for standing required for

PSD SIP programs under the Clean Air Act (CAA) and EPA`s implementing

regulations.

Alternatively, if the agency determined after reviewing public

comment that provisions for judicial standing were unnecessary, EPA

proposed to conditionally approve Virginia's PSD SIP. EPA determined

that Virginia was still required to amend the Commonwealth's PSD

regulations that existed at the time of the proposed rule to include

revised increments for particulate matter (PM) as promulgated by EPA on

June 3, 1993, and EPA's revised ``Guidelines for Air Quality Models'',

promulgated on July 20, 1993. More detailed information on EPA's

proposed rulemaking actions and an analysis of Virginia's PSD

regulations can be found in the proposed rule published on January 24,

1996 (61 FR 1880) and the Technical Support Document for the proposed

rule.

II. Analysis

Subsequent to the publication of EPA's proposed rule on Virginia's

PSD program, the deficiencies noted above were corrected. Regarding

judicial standing in Virginia, EPA published a December 5, 1994, final

rule in which EPA disapproved Virginia's Title V operating permits

program for, among other things, the failure to provide adequate

judicial standing. (59 FR 62324). Virginia appealed this decision

before the Fourth Circuit Court of Appeals, which affirmed EPA's

disapproval, 80 F.3d 869 (1996), and Virginia subsequently appealed its

case to the U.S. Supreme Court. On January 21, 1997, the Supreme Court

decided not to hear Virginia's case. In preparation for this

eventuality, Virginia had previously adopted revised and acceptable

judicial standing provisions, at sections 10.1-1318, 10.1-1457, and

62.1-44.29 of the Code of Virginia, but specified that the revised

provisions would become effective only if Virginia's suit against EPA

was unsuccessful. The Supreme Court's refusal to take Virginia's appeal

has caused Virginia's revised judicial standing provisions to become

effective, and Virginia's standing provisions are now fully acceptable.

Virginia's revised standing law now provides judicial standing to any

person who ``meets the standard for judicial review of a case or

controversy pursuant to Article III of the United States

Constitution.'' It further provides that ``a person shall be deemed to

meet such standard if: (i) Such person has suffered an actual or

imminent injury which is an invasion of a legally protected interest

and which is concrete and particularized; (ii) such injury is fairly

traceable to the decision of the Board and not the result of the

independent action of some third party not before the court; and (iii)

such injury will likely be redressed by a favorable decision by the

court.'' This new standard is consistent with the standard for Article

III standing articulated by the Supreme Court in Lujan v. Defenders of

Wildlife, 112 S. Ct. 2130 (1992). Consequently, EPA has determined that

Virginia's standing provisions meet the requirements of the CAA and 40

CFR 51.166.

On February 6, 1997 Virginia submitted to EPA an Attorney General's

Opinion affirming that the revised standing law would go into effect on

[[Page 13796]]

February 15, 1997. This action on the part of the Commonwealth corrects

any deficiency in standing that might have been determined by EPA as a

result of reviewing public comment on this issue. The Commonwealth also

submitted revised regulations on March 20, 1997 that corrected the

deficiencies identified with the proposed conditional approval. Since

the deficiencies identified in EPA's proposed rule no longer exist, EPA

is taking action to fully approve Virginia's PSD program as a SIP

revision.

After making its original PSD submittal to EPA on December 17,

1992, in 1995 Virginia adopted legislation that provides, subject to

certain conditions, for an environmental assessment (audit)

``privilege'' for voluntary compliance evaluations performed by a

regulated entity. The legislation further addresses the relative burden

of proof for parties either asserting the privilege or seeking

disclosure of documents for which the privilege is claimed. Virginia's

legislation also provides, subject to certain conditions, for a penalty

waiver for violations of environmental laws when a regulated entity

discovers such violations pursuant to a voluntary compliance evaluation

and voluntarily discloses such violations to the Commonwealth and takes

prompt and appropriate measures to remedy the violations. Virginia's

Voluntary Environmental Assessment Privilege law, Va. Code Sec. 10.1-

1198, provides a privilege that protects from disclosure documents and

information about the content of those documents that are the product

of a voluntary environmental assessment. The privilege does not extend

to documents or information that are: (1) Generated or developed before

the commencement of a voluntary environmental assessment; (2) that are

prepared independently of the assessment process; (3) that demonstrate

a clear, imminent and substantial danger to the public health or

environment; or (4) that are required by law.

On December 29, 1997, the Office of the Attorney General provided a

legal opinion that states, with regard to the Privilege law, that the

Commonwealth is ``required by Federal law to have full authority to

enforce'' the PSD program, ``both civilly and criminally,'' therefore,

``all aspects of Virginia's environmental laws and regulations that are

necessary to implement and enforce its PSD program in a manner that is

no less stringent than its Federal counterpart are necessarily

``required by law.'' Thus, ``[r]egarding Sec. 10.1-1198, documents or

information needed for civil or criminal enforcement under the PSD

program could not be privileged * * *''

Virginia's Immunity law, Va. Code Sec. 10.1-1199, provides that

``[t]o the extent consistent with requirements imposed by Federal

law,'' any person making a voluntary disclosure of information to a

state agency regarding a violation of an environmental statute,

regulation, permit, or administrative order is granted immunity from

administrative or civil penalty. The Attorney General's December 29,

1997 opinion states that the quoted language renders this statute

inapplicable to PSD enforcement.

Thus, EPA has determined that Virginia's Privilege and Immunity

legislation will not preclude the Commonwealth from enforcing its PSD

program consistent with the CAA's requirements.

III. Response to Comments

EPA received comments supporting EPA's proposed disapproval of the

Commonwealth's PSD SIP from environmental, public interest, and legal

action organizations, and from private citizens. Each of these groups

and citizens stressed that EPA should not approve Virginia's PSD SIP

because Virginia had not provided all interested and qualified parties

with the legal standing to challenge PSD permitting actions in State

courts or through administrative appeal. EPA also received adverse

comment related to the proposed disapproval from the Commonwealth of

Virginia and several groups representing business and industrial

sources. The latter alternatively indicated their support of the

proposed conditional approval.

Although EPA solicited comment on whether or not legal standing

should be grounds for disapproving Virginia's PSD program, Virginia's

adoption of revised standing provisions, as noted above, eliminates the

need to consider this issue prior to taking a final rulemaking action

on the PSD SIP. Therefore, EPA is not commenting or otherwise

announcing a decision on this matter at this time.

One environmental group commented in favor of EPA's disapproval of

the Commonwealth's PSD SIP because it believed that the Commonwealth's

Air Board was ``* * * unprepared to assume responsibility for

implementation of the state's PSD program in the absence of a large EPA

presence * * *'' 40 CFR part 51 and section 110 of the Clean Air Act

establish criteria by which EPA is to evaluate and approve a State

Implementation Plan. EPA has determined that the Commonwealth has met

the requirements of section 110 and 40 CFR part 51 and has the

resources and necessary authority to carry out a PSD program. In fact,

the Commonwealth has been implementing the Federal PSD program since

1981 under an EPA delegation of authority. Should EPA identify

deficiencies in the Commonwealth's PSD program whereby the Commonwealth

can no longer demonstrate that its program meets the criteria

established under section 110 of the Clean Air Act and the regulations

in part 51, EPA has the authority to withdraw its approval.

In addition, while EPA is approving the Commonwealth's PSD SIP, EPA

recognizes that it has a responsibility to insure that all States

properly implement their preconstruction permitting programs. EPA's

approval of the Commonwealth's PSD program does not divest the Agency

of the duty to continue appropriate oversight to insure that PSD

determinations made by Virginia are consistent with the requirements of

the CAA, EPA regulations, and the SIP. EPA's authority to oversee PSD

program implementation is set forth in sections 113, 167, and 505(b) of

the Act. For example, section 167 provides that EPA shall issue

administrative orders, initiate civil actions, or take whatever other

enforcement action may be necessary to prevent construction of a major

stationary source that does not ``conform to the requirements of'' the

PSD program. Similarly, section 113(a)(5) provides for administrative

orders and civil actions whenever EPA finds that a State ``is not

acting in compliance with'' any requirement or prohibition of the Act

regarding construction of new or modified sources. Likewise, section

113(a)(1) provides for a range of enforcement remedies whenever EPA

finds that a person is in violation of an applicable implementation

plan.

Enactment of Title V of the CAA and the EPA objection opportunity

provided therein has added new tools for addressing deficient new

source review decisions by states. Section 505(b) requires EPA to

object to the issuance of a permit issued pursuant to Title V whenever

the Administrator finds during the applicable review period, either on

her own initiative or in response to a citizen petition, that the

permit is ``not in compliance with the requirements of an applicable

requirement of this Act, including the requirements of an applicable

implementation plan.''

Regardless of whether EPA addresses deficient permits using

objection authorities or enforcement authorities or

[[Page 13797]]

both, EPA cannot intervene unless the state decision fails to comply

with applicable requirements. Thus, EPA may not intrude upon the

significant discretion granted to states under new source review

programs, and will not ``second guess'' state decisions. Rather, in

determining whether a Title V permit incorporating PSD provisions calls

for EPA objection under section 505(b) or use of enforcement

authorities under sections 113 and 167, EPA will consider whether the

applicable substantive and procedural requirements for public review

and development of supporting documentation were followed. In

particular, EPA will review the process followed by the permitting

authority in determining best available control technology, assessing

air quality impacts, meeting Class I area requirements, and other PSD

requirements, to ensure that the required SIP procedures (including

public participation and Federal Land Manager consultation

opportunities) were met. EPA will also review whether any determination

by the permitting authority was made on reasonable grounds properly

supported on the record, described in enforceable terms, and consistent

with all applicable requirements. Finally, EPA will review whether the

terms of the PSD permit were properly incorporated into the operating

permit.

IV. Today's Action

EPA is approving a SIP revision submitted by the Commonwealth of

Virginia establishing a preconstruction permitting program for the

prevention of significant deterioration as required by section 110 of

the Clean Air Act. EPA is amending 40 CFR 52.2420 to incorporate this

revision into Virginia's SIP. At the same time, EPA is withdrawing from

Virginia's SIP the Federal PSD requirements which EPA incorporated into

Virginia's SIP on August 7, 1980, and is withdrawing the Commonwealth's

authority to implement these Federal PSD program requirements, an

authority which EPA delegated to the Commonwealth on June 3, 1981.

Accordingly, after the effective date of this final rule the

Commonwealth will issue PSD permits under the authority of its SIP-

approved program. The PSD permits which the Commonwealth issued prior

to this rule under its delegated authority to implement the Federal PSD

requirements continue in effect.

Nothing in this action should be construed as permitting or

allowing or establishing a precedent for any future request for

revision to any state implementation plan. Each request for revision to

the state implementation plan shall be considered separately in light

of specific technical, economic, and environmental factors and in

relation to relevant statutory and regulatory requirements.

V. Administrative Requirements

A. Executive Order 12866

The Office of Management and Budget (OMB) has exempted this

regulatory action from E.O. 12866 review.

B. Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. 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.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. SIP approvals under section 110 and subchapter I, part D of the

Clean Air Act do not create any new requirements but simply approve

requirements that the State is already imposing. Therefore, because the

Federal SIP approval does not impose any new requirements, EPA

certifies 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 CAA, preparation of a flexibility analysis would

constitute Federal inquiry into the economic reasonableness of state

action. The Clean Air Act forbids EPA to base its actions concerning

SIPs on such grounds. Union Electric Co. v. U.S. EPA, 427 U.S. 246,

255-66 (1976); 42 U.S.C. 7410(a)(2).

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

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 the approval action being promulgated 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.

D. Submission to Congress and the General Accounting Office

Under section 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, EPA submitted a report

containing this rule 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).

E. Petitions for Judicial Review

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

judicial review of this action approving the Commonwealth of Virginias

PSD SIP must be filed in the United States Court of Appeals for the

appropriate circuit by May 22, 1998. Filing a petition for

reconsideration by the Administrator of this final rule approving the

Commonwealth of Virginia's PSD SIP 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

approving the Commonwealth of Virginia's PSD SIP 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, Carbon monoxide,

Incorporation by reference, Intergovernmental relations, Nitrogen

dioxide, Ozone, Particulate matter, Sulfur oxides.

Dated: February 27, 1998.

Thomas C. Voltaggio,

Acting Regional Administrator, Region III.

Chapter I, title 40, of the Code of Federal Regulations is amended

as follows:

[[Page 13798]]

PART 52--[AMENDED]

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

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

Subpart VV--Virginia

2. Section 52.2420 is amended by adding paragraph (c)(123) to read

as follows:

Sec. 52.2420 Identification of plan.

* * * * *

(c) * * *

(123) Revisions to the Virginia Regulations for the Prevention of

Significant Deterioration submitted on March 20, 1997 by the Department

of Environmental Quality:

(i) Incorporation by reference.

(A) Letter of March 20, 1997 from the Department of Environmental

Quality transmitting a SIP revision for regulations for the Prevention

Significant Deterioration.

(B) Letter of February 18, 1993 from the Department of Air

Pollution Control transmitting a SIP revision for regulations defining

the prevention of significant deterioration areas.

(C) Letter of January 13, 1998 from the Depart of Environmental

Quality transmitting a SIP revisions to the Virginia Administrative

Code numbering system.

(D) The following provisions of the Virginia Regulations for the

Control and Abatement of Air Pollution:

(1) Regulations for Permits for Major Stationary Sources and Major

Modifications Locating in Prevention of Significant Deterioration

Areas, 9 VAC 5-80-1700 through 9 VAC 5-80-1970, published in the

Virginia Register of Regulations on November 25, 1996, effective

January 1, 1997.

(2) Appendix L to VR 120-01, renumbered as 9 VAC 5-20-205,

Prevention of Significant Deterioration Areas, published in the

Virginia Register of Regulations on December 2, 1991, effective January

1, 1992.

(ii) Additional material.

(A) Remainder of March 20, 1997 State submittal.

3. Section 52.2451 is revised to read as follows:

Sec. 52.2451 Significant deterioration of air quality.

(a) The requirements of sections 160 through 165 of the Clean Air

Act are met since the plan includes approvable procedures for the

Prevention of Significant Air Quality Deterioration.

(b) Regulations for preventing significant deterioration of air

quality. The provisions of Sec. 52.21(b) through (w) are hereby removed

from the applicable state plan for the Commonwealth of Virginia.

[FR Doc. 98-7305 Filed 3-20-98; 8:45 am]

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