Approval and Promulgation of Air Quality Implementation Plans; Virginia; New Source Review in Nonattainment Areas

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 52

[VA 022-5040; FRL-6436-8]

Approval and Promulgation of Air Quality Implementation Plans;

Virginia; New Source Review in Nonattainment Areas

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: EPA is granting limited approval of a State Implementation

Plan (SIP) revision submitted by the Commonwealth of Virginia to revise

its new source review (NSR) regulations for nonattainment areas to

bring them into conformance with the Clean Air Act (CAA) Amendments

adopted in 1990, and to make other changes desired by the Commonwealth.

Virginia's NSR regulations for nonattainment areas require persons to

meet certain requirements before constructing a new major source or

major modification in a nonattainment area. The intended effect of this

action is to grant limited approval of Virginia's NSR regulation as a

SIP revision under the CAA.

[[Page 51048]]

EFFECTIVE DATE: This final rule is effective on Ocotber 21, 1999.

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,

1650 Arch Street, Philadelphia, Pennsylvania 19103; the Air and

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

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

of Environmental Quality, 629 East Main Street, Richmond, Virginia.

FOR FURTHER INFORMATION CONTACT: Donna Weiss, Environmental Engineer,

(215) 814-2198 or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION:

A. Background

On March 23, 1998 (63 FR 13811), EPA published a notice of proposed

rulemaking (NPR) for the Commonwealth of Virginia. The NPR proposed

limited approval of revisions to Virginia's NSR regulations (Section

120-08-03). No comments were received on the NPR.

B. Summary of the SIP Revision

Virginia submitted the formal SIP revision on November 9, 1992. The

significant changes to Section 120-08-03 are summarized below:

Section 120-08-03 A--Applicability (amended)--Virginia has modified

this subsection by including a provision to deter a company from

constructing or modifying a facility in increments to avoid permit

requirements.

Section 120-08-03 B--Definitions (amended)--Virginia has modified

many of the definitions found in this subsection. Key changes were made

to the following terms: ``Allowable Emissions'', ``Building, structure

facility or installation'', ``Federally enforceable'', ``Major

Modification'', ``Major Stationary Source'', ``Net emissions

increase'', ``Nonattainment pollutant'', ``Potential to Emit'',

``Reconstruction'', and ``Significant''.

Section 120-08-03 C--General (amended)--Virginia modified the

general subsection by adding a provision stating that it may combine in

one permit the requirements for emissions units subject to more than

one of Virginia's regulatory requirements applicable to permitting, and

that Virginia may also require a combined application for such

emissions units. The permitting requirements for which such combined

permits and applications may be required include those of Virginia's

NSR regulation for sources locating in nonattainment areas and those of

two other Virginia regulations, entitled, ``Permits--New and Modified

Sources,'' and ``Permits--Major Stationary Sources and Major

Modifications Locating in Prevention of Significant Deterioration

Areas.''

Section 120-08-03 D--Applications (amended)--Virginia modified the

applications subsection by revising its specification of the scope of

permit applications. Virginia also added provisions defining who must

sign permit applications and requiring the signer to certify that ``the

information submitted is, to the best of my knowledge and belief, true,

accurate, and complete.''

Section 120-08-03 F--Standards/Conditions for Granting Permits

(amended)--Virginia made several changes in the standards and

conditions subsection, which establishes the requirements which must be

met before a permit can be issued.

Section 120-08-03 G--Action on Permit application (amended)--

Virginia amended this subsection to specify that Virginia must notify

applicants in writing of deficiencies in their permit applications.

Virginia also deleted certain public participation provisions from this

section which it now includes in a separate section of the regulation;

and revised its description of permit processing steps by including in

the description a reference to public participation requirements found

elsewhere in the regulation.

Section 120-08-03 H--Public Participation (added)--Virginia added a

new subsection detailing public participation requirements. This

subsection requires the applicant to provide the public with notice of

its application for a permit and then, within 30 to 60 days, to provide

a public briefing. In addition, the subsection provides that Virginia

must provide a public comment period of at least 30 days, and hold a

public hearing, before it makes a decision on a permit application.

Section 120-08-03 I--Compliance Determination verification by

Performance Testing (amended, formerly designated as Section 120-08-03

H, this section replaces the original Section 120-08-03 I, which was

deleted)--Virginia modified this subsection by specifying that source

owners are responsible for conducting tests if any such tests are

required.

Section 120-08-03 J--Application Review and Analysis (formerly

designated as Section 120-08-03 K, this section replaces the original

Section 120-08-03 J, which was deleted)--Virginia made no changes to

this subsection.

Section 120-08-03 K--Circumvention (formerly designated as Section

120-08-03 L)--Virginia made no changes to this subsection.

Section 120-08-03 L--Interstate Pollution Abatement (formerly

designated as Section 120-08-03 M)--Virginia made no changes to this

subsection.

Section 120-08-03 M--Offsets (amended, formerly designated as

Section 120-08-03 N)--Virginia allows the crediting of emission

reductions resulting from shutting down an existing source or

curtailing production or operating hours below baseline levels if the

shutdown or curtailment is in effect, if it occurred on or after

January 1, 1991, and if it is permanent, quantifiable, and federally

and state enforceable. Virginia requires that the increased emissions

of the air pollutant(s) from the new or modified source must be offset

by an equal or greater reduction in the actual emissions of such air

pollutant(s) from the same or other sources. Virginia allows reductions

to be credited only if they are not otherwise required by its

regulations. Virginia does allow incidental emission reductions to be

credited, provided they are not required by regulation and meet certain

other requirements. In this section Virginia also includes a special

provision allowing increases in emissions from rocket engine and motor

firing to be offset by alternative or innovative means.

Section 120-08-03 N--De minimis increases and stationary source

modification alternatives for ozone nonattainment areas classified as

serious or severe (added)--Virginia specifies in this new subsection

that VOC emissions increases resulting from modifications at sources in

serious or severe ozone nonattainment areas cannot be considered de

minimis unless the increase in net emissions does not exceed 25 TPY

when aggregated with all other net increases in emissions from the

source over any period of 5 consecutive calendar years which includes

the calendar year in which such increase occurred.

Section 120-08-03 Q--Reactivation and Permanent shutdown (added)

Virginia specifies in this new subsection that a source which is

reopened after having been determined to be shutdown must obtain a

permit. Virginia also sets forth criteria by which sources are formally

determined to be shutdown.

Section 120-08-03 R--Transfer of Permits (added)--Virginia

establishes in

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this new subsection provisions pertaining to transfer of permits.

Section 120-08-03 S--Permit Invalidation, Revocation, and

Enforcement (added)--Virginia sets forth in this new subsection the

conditions under which owners of sources subject to permitting

requirements may be subject to enforcement action and when permits may

be invalidated or revoked.

Section 120-08-03 T--Existence of Permit No Defense (added)--

Virginia specifies in this new subsection that the existence of a

permit under this section shall not constitute a defense to a violation

of the Virginia Air Pollution Control Law or these regulations and

shall not relieve any owner of the responsibility to comply with any

applicable regulations, laws, ordinances and orders of the governmental

entities having jurisdiction.

C. EPA's Evaluation of the SIP Revision

EPA has determined that the amendments to Virginia's NSR

regulations are consistent with the CAA and currently promulgated

federal NSR regulations with one exception. Virginia's NSR regulation

allows persons who intend to build or modify a major source in a

nonattainment area to take credit for emission reductions obtained from

shutdowns or curtailments of production or operating hours which took

place prior to the source's application for a new source review permit

(prior to shutdown or curtailment credits) even if EPA has not yet

approved an attainment plan for the nonattainment area. The shutdown

may not predate the design year of the required attainment plan.

Although EPA's existing regulations do not allow for this, EPA proposed

revisions to its NSR and PSD regulations on July 23, 1996, which

proposes an option which is consistent with Virginia's revised

regulation. Based on this fact, as well as the fact that the revisions

strengthen Virginia's SIP, EPA is granting limited approval of these

regulatory revisions. EPA has provided a more detailed analysis on this

issue in the March 23, 1998 NPR referenced above.

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 Law does not

extend to documents or information (1) that are 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 January 12, 1997, the Commonwealth of Virginia Office of the

Attorney General provided a legal opinion that states that the

Privilege law, Va. Code Sec. 10.1-1198, precludes granting a privilege

to documents and information ``required by law,'' including documents

and information ``required by federal law to maintain program

delegation, authorization or approval,'' since Virginia must ``enforce

federally authorized environmental programs in a manner that is no less

stringent than their federal counterparts * * *.'' The opinion

concludes that ``[r]egarding Sec. 10.1-1198, therefore, documents or

other information needed for civil or criminal enforcement under one of

these programs could not be privileged because such documents and

information are essential to pursuing enforcement in a manner required

by federal law to maintain program delegation, authorization or

approval.'' 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 January 12,

1997 opinion states that the quoted language renders this statute

inapplicable to enforcement of any federally authorized programs, since

``no immunity could be afforded from administrative, civil, or criminal

penalties because granting such immunity would not be consistent with

federal law, which is one of the criteria for immunity.''

Therefore, EPA has determined that Virginia's Privilege and

Immunity statutes will not preclude the Commonwealth from enforcing its

NSR program consistent with the federal requirements. In any event,

because EPA has also determined that a state audit privilege and

immunity law can affect only state enforcement and cannot have any

impact on federal enforcement authorities, EPA may at any time invoke

its authority under the Clean Air Act, including, for example, sections

113, 167, 205, 211 or 213, to enforce the requirements or prohibitions

of the state plan, independently of any state enforcement effort. In

addition, citizen enforcement under section 304 of the Clean Air Act is

likewise unaffected by this, or any, state audit privilege or immunity

law.

Other specific requirements of Virginia's revisions and the

rationale for EPA's proposed action are explained in the NPR and will

not be restated here. No public comments were received on the NPR.

II. Final Action

EPA is granting limited approval of amendments to 120-08-03.

``Permits--major stationary sources and major modifications locating in

nonattainment areas' submitted by the Commonwealth of Virginia on

November 9, 1992.

III. Administrative Requirements

A. Executive Orders 12866

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

regulatory action from review under E.O. 12866, entitled ``Regulatory

Planning and Review.''

B. Executive Order 12875

Under E.O. 12875, EPA may not issue a regulation that is not

required by statute and that creates a mandate upon a state, local, or

tribal government, unless the Federal government provides the funds

necessary to pay the direct compliance costs incurred by those

governments. If EPA complies by consulting, E.O. requires EPA to

provide to the Office of Management and Budget a description of the

extent of EPA's prior consultation with representatives of affected

state, local, and tribal governments, the nature of their concerns,

copies of written communications from the governments, and a statement

supporting the need to issue the regulation. In addition, E.O. 12875

requires EPA to develop an effective process permitting elected

officials and other representatives of

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state, local, and tribal governments ``to provide meaningful and timely

input in the development of regulatory proposals containing significant

unfunded mandates.'' Today's rule does not create a mandate on state,

local or tribal governments. The rule does not impose any enforceable

duties on these entities. Accordingly, the requirements of section 1(a)

of E.O. 12875 do not apply to this rule.

C. Executive Order 13045

E.O. 13045, entitled ``Protection of Children from Environmental

Health Risks and Safety Risks'' (62 FR 19885, April 23, 1997), applies

to any rule that the EPA determines (1) is ``economically

significant,'' as defined under E.O. 12866, and (2) the environmental

health or safety risk addressed by the rule has a disproportionate

effect on children. If the regulatory action meets both criteria, the

Agency must evaluate the environmental health or safety effects of the

planned rule on children and explain why the planned regulation is

preferable to other potentially effective and reasonably feasible

alternatives considered by the Agency. This final rule is not subject

to E.O. 13045 because it is not an economically significant regulatory

action as defined by E.O. 12866, and it does not address an

environmental health or safety risk that would have a disproportionate

effect on children.

D. Executive Order 13084

Under E.O. 13084, EPA may not issue a regulation that is not

required by statute, that significantly affects or uniquely affects the

communities of Indian tribal governments, and that imposes substantial

direct compliance costs on those communities, unless the Federal

government provides the funds necessary to pay the direct compliance

costs incurred by the tribal governments. If EPA complies by

consulting, Executive Order 13084 requires EPA to provide to the Office

of Management and Budget, in a separately identified section of the

preamble to the rule, a description of the extent of EPA's prior

consultation with representatives of affected tribal governments, a

summary of the nature of their concerns, and a statement supporting the

need to issue the regulation. In addition, Executive Order 13084

requires EPA to develop an effective process permitting elected and

other representatives of Indian tribal governments ``to provide

meaningful and timely input in the development of regulatory policies

on matters that significantly or uniquely affect their communities.''

Today's rule does not significantly or uniquely affect the communities

of Indian tribal governments. This action does not involve or impose

any requirements that affect Indian Tribes. Accordingly, the

requirements of section 3(b) of E.O. 13084 do not apply to this rule.

E. Regulatory Flexibility Act

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 governmental

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

substantial number of small entities because SIP approvals under

sections 110 and 301, and subchapter I, part D of the CAA 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, I certify 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 Clean Air Act,

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).

F. 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

annual 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 promulgated does not include a Federal mandate that

may result in estimated annual 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.

G. Submission to Congress and the Comptroller General

The Congressional Review Act, 5 U.S.C. 801 et seq., as added by the

Small Business Regulatory Enforcement Fairness Act of 1996, generally

provides that before a rule may take effect, the agency promulgating

the rule must submit a rule report, which includes a copy of the rule,

to each House of the Congress and to the Comptroller General of the

United States. EPA will submit 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 United States prior

to publication of the rule in the Federal Register. This rule is not a

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

H. Petitions for Judicial Review

Under section 307(b)(1) of the CAA, petitions for judicial review

of this action granting limited approval of Virginia's NSR regulations

must be filed in the United States Court of Appeals for the appropriate

circuit by November 22, 1999. 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, Hydrocarbons,

Incorporation by reference, Nitrogen dioxide, Ozone, Reporting and

recordkeeping requirements.

Dated: September 3, 1999.

W. Michael McCabe,

Regional Administrator, Region III.

40 CFR part 52 is amended as follows:

PART 52--[AMENDED]

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

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

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Subpart VV--Virginia

2. Section 52.2420 is amended by adding paragraph (c)(129) to read

as follows:

Sec. 52.2420 Identification of plan.

* * * * *

(c) * * *

(129 ) Revisions to the Virginia Regulations pertaining to permit

requirements for new and modified stationary sources locating in

nonattainment areas mandated under Title I, Sections 171-173 and 182 of

the Clean Air Act submitted on November 9, 1992, by the Commonwealth of

Virginia:

(i) Incorporation by reference.

(A) Letter of November 9, 1992, from the Commonwealth of Virginia,

Department of Air Pollution Control transmitting revisions to the

Virginia Regulations pertaining to permit requirements for new and

modified stationary sources locating in nonattainment areas.

(B) Commonwealth of Virginia State Air Pollution Control Board

Regulations for the Control and Abatement of Air Pollution, Permits for

Stationary Sources, Section 120-08-03. ``Permits--Major Stationary

Sources and Major Modifications Locating in Nonattainment Areas''.

(Effective January 1, 1993).

(ii) Additional materials--The remainder of the November 2, 1992

submittal pertaining to Regulation 120-08-03.

[FR Doc. 99-24454 Filed 9-20-99; 8:45 am]

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