Clean Air Act Proposed Full Approval of Operating Permit Program; South Coast Air Quality Management District, California

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

EPA is proposing to approve certain revisions of Rule 3000 (General), Rule 3002 (Requirements), Rule 3004 (Permit Types and Content), and Rule 3005 (Permit Revisions), which are part of the operating permit program of the South Coast Air Quality Management District (“South Coast” or “District”). The District operating permit program was submitted in response to the directive in the 1990 Clean Air Act (CAA) Amendments that permitting authorities develop, and submit to EPA, programs for issuing operating permits to all major stationary sources and to certain other sources within the permitting authorities' jurisdictions. EPA granted interim approval to the District operating permit program on August 29, 1996, but listed certain deficiencies in the program preventing full approval. The District has revised Rules 3000, 3002, 3004, and 3005 to correct the deficiencies of the interim approval and this action proposes full approval of those revisions. South Coast has made other changes to its part 70 program since EPA granted interim approval to the program. EPA is not taking action on these other changes at this time.

DATES:

Comments on this proposed rule must be received in writing by November 19, 2001.

ADDRESSES:

Written comments on this action should be addressed to Gerardo Rios, Chief, Permits Office, Air Division (AIR-3), EPA Region IX, 75 Hawthorne Street, San Francisco, California, 94105. You can inspect copies of the South Coast submittals, and other supporting documentation relevant to this action, during normal business hours at Air Division, EPA Region 9, 75 Hawthorne Street, San Francisco, California 94105. You may also see copies of the District's submitted operating permit program at the following locations:

California Air Resources Board, Stationary Source Division, Rule Evaluation Section, 1001 “I” Street, Sacramento, CA 95814.

The South Coast Air Quality Management District, 21865 E. Copley Drive, Diamond Bar, California 91765-4182.

An electronic copy of South Coast's operating permit program (Regulation XXX, rules 3000-3007, Title V Permits) may be available via the Internet at http://www.arb.ca.gov/drdb/sc/cur.htm. However, the versions of District rules 3000, 3002, 3004, and 3005 may be different from the versions submitted to EPA for approval. Readers are cautioned to verify that the adoption dates of rules 3000, 3002, 3004, and 3005 are the same dates as the rules submitted to EPA for approval. The official submittal is available only at the three addresses listed above.

FOR FURTHER INFORMATION CONTACT:

Mark Sims, EPA Region IX, Permits Office (AIR-3), U.S. Environmental Protection Agency, Region IX, (415) 744-1229 or sims.mark@epa.gov.

SUPPLEMENTARY INFORMATION:

This section provides additional information by addressing the following questions:

What is the operating permit program?

What is being addressed in this document?

Are there other issues with the program?

What are the program changes that EPA is approving?

What is involved in this proposed action?

What Is the Operating Permit Program?

Title V of the CAA Amendments of 1990 required all state and local permitting authorities to develop operating permit programs that met certain federal criteria. In implementing the operating permit programs, the permitting authorities require certain sources of air pollution to obtain permits that contain all applicable requirements under the CAA. A goal of the operating permit program is to improve compliance by issuing each source a permit that consolidates all of the applicable CAA requirements into a federally enforceable document. By consolidating all of the applicable requirements for a facility, the source, the public, and the permitting authorities can more easily determine what CAA requirements apply and how compliance with those requirements is determined.

Sources required to obtain an operating permit under this program include “major” sources of air pollution and certain other sources specified in the CAA or in EPA's implementing regulations. For example, all sources regulated under the acid rain program, regardless of size, must obtain permits. Examples of major sources include those that have the potential to emit 100 tons per year or more of volatile organic compounds, carbon monoxide, lead, sulfur dioxide, nitrogen oxides ( NO_X), or particulate matter (PM₁₀); those that emit 10 tons per year of any single hazardous air pollutant (specifically listed under the CAA); or those that emit 25 tons per year or more of a combination of hazardous air pollutants (HAPs). In areas that are not meeting the National Ambient Air Quality Standards for ozone, carbon monoxide, or particulate matter, major sources are defined by the gravity of the nonattainment classification. For example, in ozone nonattainment areas classified as “extreme,” major sources include those with the potential of emitting 10 tons per year or more of volatile organic compounds or nitrogen oxides. EPA has classified the South Coast Air Basin as an extreme nonattainment area for ozone and a serious nonattainment area for PM₁₀ (70 ton per year major source threshold). (See 40 CFR 81.305).

What Is Being Addressed In This Document?

The California Air Resources Board submitted to EPA the District's title V program on December 27, 1993, except for the District permit application forms, which were submitted on March 6, 1995. On March 30, 1995, EPA deemed the District's operating permit program to be administratively complete. Because the District's operating permit program substantially, but not fully, met the criteria outlined in the implementing regulations codified at 40 Code of Federal Regulations (CFR) part 70, EPA granted interim approval of the program, and conditioned full approval on the District revising its program to correct the deficiencies. Thus, EPA granted interim approval to the District's program in a rulemaking published on August 29, 1996 (61 FR 45330). The interim approval notice described the program deficiencies and revisions that had to be made in order for the District program to receive full approval. Since that time, the District has revised and the California Air Resources Board, on behalf of the District, has submitted revisions to the District's operating permit program on August 2, 2001, and October 2, 2001. This Federal Register notice describes the changes that South Coast has made to its operating permit program to correct interim approval deficiencies, and the basis for EPA proposing full approval of these changes. EPA is not taking action on other rule changes made since interim approval.

Are There Other Issues With The Program?

On May 22, 2000, EPA promulgated a rulemaking that extended the interim approval period of 86 operating permits programs until December 1, 2001. (65 FR 32035) The action was subsequently challenged by the Sierra Club and the New York Public Interest Research Group (NYPIRG). In settling the litigation, EPA agreed to publish a document in the Federal Register that would alert the public that they may identify and bring to EPA's attention alleged programmatic and/or implementation deficiencies in Title V programs and that EPA would respond to their allegations within specified time periods if the comments were made within 90 days of publication of the Federal Register document.

EPA received a comment letter from one organization on what they believe to be deficiencies with respect to Title V programs in California. EPA takes no action on those comments in today's action and will respond to them by December 1, 2001. As stated in the Federal Register document published on December 11, 2000, (65 FR 77376) EPA will respond by December 1, 2001 to timely public comments on programs that have obtained interim approval; and EPA will respond by April 1, 2002 to timely comments on fully approved programs. We will publish a notice of deficiency (NOD) when we determine that a deficiency exists, or we will notify the commenter in writing to explain our reasons for not making a finding of deficiency. A NOD will not necessarily be limited to deficiencies identified by citizens and may include any deficiencies that we have identified through our program oversight.

What Are the Program Changes That EPA Is Approving?

As discussed in the August 29, 1996 (61 FR 45330) rulemaking, full approval of the South Coast operating permit program was made contingent upon satisfaction of the following conditions:

Issue (1): One of EPA's conditions for full title V program approval was the California Legislature's revision of the Health and Safety Code to eliminate the provision that exempts “any equipment used in agricultural operations in the growing of crops or the raising of fowl or animals” from the requirement to obtain a permit. See California Health and Safety Code section 42310(e). Even though the local Districts have, in many cases, removed the title V exemption for agricultural sources from their own rules, the Health and Safety Code has not been revised to eliminate this provision.

In evaluating the impact of the Health and Safety Code exemption, EPA believes there are a couple of key factors to consider. First, many post-harvest activities are not covered by the exemption and, thus, are still subject to title V permitting. For example, according to the California Air Resources Board (CARB), the Health and Safety Code exemption does not include activities such as milling and crushing, or canning or cotton ginning operations. Activities such as these are subject to review under the State's title V programs. See letter from Michael P. Kenny, Executive Officer, California Air Resources Board, to Jack Broadbent, Director, Air Division, U.S. EPA Region 9, dated September 19, 2001. In addition, since the granting of interim approval, the EPA has discovered that, in general, there is not a reliable or complete inventory of emissions associated with agricultural operations in California that are subject to the exemption. Although further research on this issue is needed, many sources with activities covered by the exemption may not have emission levels that would subject them to title V, and the State and/or individual Districts may be able to demonstrate that none of the sources that are exempt under the State law are subject to title V.

Based, in part, on these factors, EPA has tentatively concluded that requiring the immediate commencement of title V permitting of the limited types of agricultural activities presently subject to the exemption, without a better understanding of the sources and their emissions, would not be an appropriate utilization of limited local, state and federal resources. As a result, despite the State of California's failure to eliminate the agricultural permitting exemption, EPA is proposing to grant full approval to local Air District operating permit programs and allow a deferral of title V permitting of agricultural operations involved in the growing of crops or the raising of fowl or animals for a further brief period, not to exceed three years. During the deferral period, we expect to develop the program infrastructure and experience necessary for effective implementation of the title V permitting program to this limited category of sources.

EPA believes it is appropriate to defer permitting for this limited category of agricultural sources because the currently available techniques for determining emissions inventories and for monitoring emissions (e.g., from irrigation pumps and feeding operations) are problematic and will be dramatically enhanced by several efforts currently being undertaken with the cooperation and participation of the operators and agricultural organizations, as well as EPA, other federal agencies, and the State and local air pollution agencies. For example, the National Academy of Sciences is undertaking a study addressing emissions from animal feeding operations. Their report is due next year. In addition, EPA's Office of Air and Radiation is working with the U.S. Department of Agriculture to better address the impact of agricultural operations on air quality. We consider the effort to evaluate the existing science, improve on assessment tools, collect additional data, remove any remaining legal obstacles, and issue any necessary guidance within the three year deferral time frame to be ambitious. We welcome comments on other areas that might also warrant study, as well as ways that this work might be done more quickly.

During the interim deferral period, EPA will continue to work with the agricultural industry and our state and federal regulatory partners to pursue, wherever possible, voluntary emission reduction strategies. At the end of this period, EPA will, taking into consideration the results of these studies, make a determination as to how the title V operating permit program will be implemented for any potential major agricultural stationary sources.

Issue (2): The District was required to revise its insignificant activities permit exemption list or submit information or criteria justifying these exemptions. (40 CFR 70.5(c)).

Rule or Program Change: In 1998, the District revised its Technical Guidance Document by deleting the List of Insignificant Activities. The District now requires Title V permit applicants to list all equipment claimed as exempt from New Source Review permit requirements (per Rule 219). The District created Form 500-B, List of Exempt Equipment, for this purpose. EPA interprets this list of “exempt” equipment to apply only to New Source Review requirements. Any equipment exempt from permitting per Rule 219 is not exempt from the Title V permit program, is subject to all applicable requirements, and must be listed in the Title V permit along with all applicable requirements.

Issue (3): The District was required to revise its minor permit modification procedures to not allow significant permit modifications to be processed as minor permit modifications. (40 CFR 70.7(e)(2)(i)(3),(4), and (4)(A).)

Rule or Program Change: The District revised Rules 3000(b)(12) and 3005(c) to correct this deficiency. Rule 3005(c) now allows minor permit revision procedures to be used only for permit revisions described in Rule 3000(b)(12), and does not allow modifications which result in emission increases up to the higher “de minimis” emission thresholds contained in Rule 3000(b)(6) to be processed as minor permit revisions. The District made the following three revisions to correct the deficiencies specifically cited in the 1996 Federal Register document:

(1) The District added to Rule 3000(b)(12)—Minor Permit Revision—sections (viii) and (ix) that allow minor permit revisions for NSPS and NESHAP sources provided that the source “is not an installation of a new permit unit subject to an NSPS pursuant to 40 CFR part 60, or a NESHAP pursuant to 40 CFR part 61 or 63; and is not a modification or reconstruction of an existing permit unit, resulting in new or additional NSPS requirements pursuant to 40 CFR part 60, or new or additional NESHAP requirements pursuant to 40 CFR part 61 or 63;”

(2) The District revised Rule 3005(c) to refer to a minor permit revision definition consistent with 40 CFR part 70, and does not allow revisions that trigger other regulatory requirements such as New Source Review. In addition, Rule 3005(d), Group Processing Procedures for Multiple Minor Permit Revisions, only allows minor permit revisions if emissions from such changes are collectively below 5 tons per year of criteria pollutants; and

(3) District Rule 3000(b)(12)(vii) only allows minor permit revisions for any Title V permit revision that does not establish or change a permit condition that a facility has assumed to avoid an applicable requirement.

Issue (4): Initial implementation of the District program did not include all Title V sources and the District received source category limited interim approval. The District's regulation, however, included language that expanded the applicability of the program three years after the program effective date, and ensured that all Title V sources will be permitted within five years of full, partial, or interim approval by EPA of the District Title V program. Although EPA considered this “phase-in” to be an interim approval issue, no change to the regulation is required to resolve the issue.

Rule or Program Change: No rule revision was necessary to correct this deficiency, since the phase-in period ended in February 2000 and the issue is now moot. All known Title V sources have by this time submitted Title V permit applications as required by Rules 3001(b) and 3003(a)(3).

Issue (5): The District was required to amend Rule 3005(d), Group Processing Procedures for Multiple Minor Permit Revisions, to delete reference to Rule 3000(b)(6), the District's higher de minimis significant permit revision levels when instructing an applicant of its responsibilities.

Rule or Program Change: To correct this deficiency, the District revised Rule 3005(c)(1), Minor Permit Revisions Applicability, to delete the reference to the higher de minimis significant permit revision levels contained in Rule 3000(b)(6). Rule 3005(d)(1) now clearly states that group processing procedures for multiple minor permit revision applications are only valid for emissions collectively below 5 tons per year. Although still referencing Rule 3000(b)(6), Rule 3005(d)(2) now has no bearing on whether applications subject to group processing provisions qualify as minor permit revisions.

Issue (6): The District was required to amend Rule 3004(a)(4)(C) to conform with part 70 language. The rule required that the permit include periodic monitoring or recordkeeping representative of the source's compliance for the terms of the permit” rather than “with the terms of the permit.” 40 CFR 70.6(a)(3)(i)(B).

Rule or Program Change: To correct this deficiency, the District revised the language of Rule 3004(a)(4)(C) from “for the term of the permit” to “with the terms of the permit.”

Issue (7): The District was required to revise Rule 3004(a)(9) to specify that any trading of emission increases and decreases allowed without changes to the permit must meet the requirements of the part 70 program. 40 CFR 70.6(a)(10)(iii).

Rule or Program Change: To correct this deficiency, the District revised Rule 3004(a)(9)(C) to state that the terms and conditions of emission trades “must meet all applicable requirements and requirements of this regulation.”

Issue (8): The District was required to amend its operating permit program to provide that a source that is granted a general permit shall be subject to enforcement action for operating without a permit if the source is later determined not to qualify for the conditions and terms of the general permit, regardless of any applicable shield provisions. 40 CFR 70.6(d)(1).

Rule or Program Change: The District added Rule 3004(e)(8) to correct this deficiency. The rule states that if the equipment that has been approved for coverage under a general permit is later determined not to qualify for the conditions and terms of the general permit, the Title V facility shall be subject to enforcement action for operating without a Title V permit.

Issue (9): The District was required to amend Rule 3002(g)(1). The rule allows an emergency to constitute an affirmative defense if properly signed, contemporaneous operating logs or other credible evidence are kept at the facility, but the rule did not require the logs or other evidence to demonstrate that conditions set out in the rule were met by the facility. 40 CFR 70.6(g)(3).

Rule or Program Change: To correct this deficiency, the District revised Rule 3002(g)(1) to require that properly signed, contemporaneous operating logs or other credible evidence that demonstrates compliance with the rule are kept at the facility.

Issue (10): The District was required to modify the definition of “renewal” in Rule 3000(b)(22) to clarify that permits will be renewed at least every 5 years, regardless of whether renewal is necessary to incorporate new regulatory requirements.

Rule or Program Change: To correct this deficiency, the District revised Rule 3000(b)(22) to reference Rule 3004(f), Permit Expiration and Renewal, which specifies that except for solid waste incineration facilities, Title V permits expire 5 years from the date of issuance unless such permits have been renewed. Rule 3004(f) further states that Title V permits for solid waste incineration facilities subject to section 129(e) of the Clean Air Act expire 12 years after issuance, but must be reviewed every 5 years. See 40 CFR 70.4(b)(3)(iii) and (iv).

Issue (11): The District was required to revise Rule 3005(g)(1), changes that violate an express permit term or condition, to not allow changes that would violate compliance certification requirements instead of compliance plan requirements. Clean Air Act Section 502(b)(10).

Rule or Program Change: To correct this deficiency, the District revised Rule 3005(i)(1)(C)(i) from “compliance plan requirements” to “compliance certification requirements.” The rule now correctly states that changes that would violate compliance certification requirements are not allowed.

Issue (12): The District was required to revise Rule 3005(g) to specify that the District and the source must attach a copy of any notice of Clean Air Act Section 502(b)(10) changes to the permit. 40 CFR 70.4(b)(12).

Rule or Program Change: To correct this deficiency, the District added Rule 3005(i)(1)(D) which states that the District and the facility have attached the written notice to their copy of the relevant permit.

Issue (13): The District was required to add provisions to Rule 3005(i) to specify the following: (1) Any change allowed under this section must meet all applicable requirements and shall not violate existing permit terms; (2) the source must provide contemporaneous notice to the District and EPA; and (3) the source must keep a record of the change. 40 CFR 70.4(b)(14).

Rule or Program Change: To correct this deficiency, the District revised Rule 3005(k), Prohibition on Changes Not Specifically Allowed by Permit, and Rule 3005(i), Operational Flexibility. Rule 3005(i)(1)(C)(i) requires a change to meet all regulatory requirements; Rule 3005(i)(1)(A) requires contemporaneous notice; and Rule 3005(i)(1)(D) requires recordkeeping in that the written notice must be attached to the relevant permit. Rule 3005(i)(1) prohibits the violation of express permit terms as required under 40 CFR 70.4(b)(14).

Issue (14): The District was required to either submit to EPA an approvable version of Rule 430, Breakdown Provisions, for inclusion into the State Implementation Plan, or revise Rule 3002(g), Emergency Provisions, by deleting the reference to Rule 430 as a requirement a source must meet to avail itself of an affirmative defense. 40 CFR 70.6(g).

Rule or Program Change: On October 2, 2001, the California Air Resources Board on behalf of the District requested to EPA that Rule 3002(g)(6), the reference to Rule 430, be withdrawn from the original Title V program and from the August 2, 2001, submittal. By removing Rule 3002(g)(6) from the federal Title V program, the District corrected this program deficiency.

What Is Involved in This Proposed Action?

South Coast has corrected the deficiencies cited in the interim approval on August 29, 1996 (61 FR 45330), and EPA proposes full approval the South Coast operating permit program. EPA is only taking action to approve program changes made by South Coast to correct interim approval deficiencies. EPA is not taking action on other program changes made since interim approval was granted, but will evaluate these additional changes and take appropriate action at a later date.

Request for Public Comment

EPA requests comments on the program revisions discussed in this proposed action. Copies of the South Coast submittals and other supporting documentation used in developing the proposed full approval are contained in docket files maintained at the EPA Region IX 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 full approval. The primary 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. EPA will consider any comments received in writing by November 19, 2001.

Administrative Requirements

Under Executive Order 12866, “Regulatory Planning and Review” (58 FR 51735, October 4, 1993), this proposed action is not a “significant regulatory action” and therefore is not subject to review by the Office of Management and Budget. Under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.) the Administrator certifies that this proposed rule will not have a significant economic impact on a substantial number of small entities because it merely approves State law as meeting federal requirements and imposes no additional requirements beyond those imposed by State law. This rule does not contain any unfunded mandates and does not significantly or uniquely affect small governments, as described in the Unfunded Mandates Reform Act of 1995 (Public Law 104-4), because it proposes to approve pre-existing requirements under State law and does not impose any additional enforceable duties beyond that required by State law. This rule also does not have tribal implications because it will not have a substantial direct effect on one or more Indian tribes, on the relationship between the Federal Government and Indian tribes, or on the distribution of power and responsibilities between the Federal Government and Indian tribes, as specified by Executive Order 13175, “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000). This rule also does not have Federalism implications because it will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132, “Federalism” (64 FR 43255, August 10, 1999). The rule merely proposes to approve existing requirements under State law, and does not alter the relationship or the distribution of power and responsibilities between the State and the Federal Government established in the Clean Air Act. This proposed rule also is not subject to Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997) or Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355 on May 22, 2001), because it is not a significantly regulatory action under Executive Order 12866. This action will not impose any collection of information subject to provisions of the Paperwork Reduction Act, 44 U.S.C. 3501 et seq., other than those previously approved and assigned OMB control number 2060-0243. For additional information concerning these requirements, see 40 CFR part 70. An agency may not conduct or sponsor, and a person is not required to respond to, a collection of information unless it displays a currently valid OMB control number.

In reviewing State operating permit programs submitted pursuant to Title V of the Clean Air Act, EPA will approve State programs provided that they meet the requirements of the Clean Air Act and EPA's regulations codified at 40 CFR part 70. In this context, in the absence of a prior existing requirement for the State to use voluntary consensus standards (VCS), EPA has no authority to disapprove a State operating permit program for failure to use VCS. It would thus be inconsistent with applicable law for EPA, when it reviews an operating permit program, to use VCS in place of a State program that otherwise satisfies the provisions of the Clean Air Act. Thus, the requirements of section 12(d) of the National Technology Transfer and Advancement Act of 1995 (15 U.S.C. 272 note) do not apply.

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