76230 Federal Register / Vol. 65, No. 235 / Wednesday, December 6, 2000 / Notices

ENVIRONMENTAL PROTECTION

AGENCY

[AD–FRL–6912–5]

Notice of Deficiency for Clean Air Act

Operating Permits Program;

Commonwealth of Kentucky

AGENCY: Environmental Protection

Agency (EPA).

ACTION: Notice of deficiency.

SUMMARY: Pursuant to its authority at 40

CFR 70.4(i)(1) and 70.10(b)(1), EPA is

publishing this Notice of Deficiency for

the Commonwealth of Kentucky’s Clean

Air Act Title V Operating Permits

Program. The Notice of Deficiency is

based upon EPA’s finding that the

Commonwealth’s audit privilege and

immunity law, KRS 224.01–040, unduly

restricts Kentucky’s ability to

adequately administer and enforce the

criminal enforcement, civil penalty and

public access provisions of its Title V

program, which has previously been

granted interim approval status.

Therefore, Kentucky’s Title V program

no longer meets minimum federal

requirements for program approval.

Publication of this notice is a

prerequisite for withdrawal of

Kentucky’s Title V program approval,

but does not effect such a withdrawal.

Withdrawal of interim program

approval, if necessary, will be

accomplished through subsequent

rulemaking.

FOR FURTHER INFORMATION CONTACT: Kim

Pierce, Title V Program Manager, Air,

Pesticides & Toxics Management

Division, U.S. Environmental Protection

Agency Region 4, 61 Forsyth Street

S.W., Atlanta, Georgia 30303–8909,

(404) 562–9124.

SUPPLEMENTARY INFORMATION:

I. Description of Action

EPA is publishing a Notice of

Deficiency for the Clean Air Act (CAA

or Act) Title V program of the

Commonwealth of Kentucky, which was

granted interim approval on December

14, 1995. This document is being

published to satisfy 40 CFR 70.4(i)(1)

and 70.10(b)(1), which provide that EPA

shall publish in the Federal Register a

notice of any determination that a Title

V permitting authority is not adequately

administering or enforcing a 40 CFR

part 70 program. The deficiency being

noticed relates to Kentucky’s audit

privilege and immunity law, KRS

224.01–040, which places undue

restrictions on the Commonwealth’s

ability to adequately administer and

enforce its Title V program. Because of

restrictions contained within

Kentucky’s audit privilege and

immunity law, the Natural Resources

and Environmental Protection Cabinet

(Cabinet) may, in some circumstances,

be unable to: (1) Seek criminal

remedies, including fines, (2) recover

civil penalties for any violation, and (3)

make available to the public all

materials available to the

Commonwealth that are relevant to a

permit decision. Therefore, Kentucky’s

legal authority no longer meets the

requirements of the Title V program and

40 CFR part 70.

Title V of the Act provides for the

approval of state programs for the

issuance of operating permits that

incorporate the applicable requirements

of the Act. To receive Title V program

approval, a state permitting authority

must submit a program to EPA that

meets certain minimum criteria, and

EPA must disapprove a program that

fails, or withdraw an approved program

that subsequently fails, to meet these

criteria. These criteria include

requirements that the state permitting

authority have authority to ‘‘assure

compliance by all sources required to

have a permit under this subchapter

with each applicable standard,

regulation or requirement under this

chapter.’’ CAA 502(b)(5)(A). In addition,

the state permitting authority must have

authority ‘‘to recover civil penalties in

a maximum amount of not less than

$10,000 per day for each violation, and

provide appropriate criminal penalties.’’

CAA 502(b)(5)(E). The state permitting

authority must also have authority ‘‘to

make available to the public any permit

application, compliance plan, permit,

and monitoring or compliance report

under section 7661b(e) of this title,

subject to the provisions of section

7414(c) of this title.’’ CAA 502(b)(8).

These requirements are echoed in the

operating permit program approval

regulations promulgated at 40 CFR part

70. See 40 CFR 70.4(b)(3)(i),

70.4(b)(3)(viii), 70.8(h)(2), and 70.11(a)–

(b).

EPA interprets section 502(b)(5)(E) of

the CAA to mean that to have adequate

criminal enforcement authority,

criminal fines must be recoverable

against any person: (1) Who knowingly

violates any applicable Title V

requirement, any Title V permit

condition, or any Title V fee or filing

requirement; (2) against any person who

knowingly makes any false material

statement, representation, or

certification in any Title V form, notice,

or report required by a Title V permit;

and (3) who knowingly renders

inaccurate any required Title V

monitoring device or method. 40 CFR

70.11(a)(3)(ii) and (iii). The Kentucky

audit privilege and immunity law

provides that an environmental audit

report shall be privileged and shall not

be admissible as evidence in any legal

action in any civil, criminal, or

administrative proceeding. KRS 224.01–

040(3). To meet the requirements of an

approvable part 70 program and the

requirements of 40 CFR 70.11(a)(3)(ii)

and (iii), Kentucky law must allow

Cabinet officials an unfettered right to

access evidence in criminal proceedings

and to use evidence of criminal conduct

contained in an audit to assess criminal

fines and remedies. In addition,

requirements contained in the Kentucky

audit privilege and immunity law such

as the private hearing prior to the use of

an audit report and the need to establish

probable cause with an independent

source may significantly impede

criminal investigations and

prosecutions and further render

Kentucky’s criminal enforcement

authority inadequate (letter dated

January 12, 1998 from John H.

Hankinson, Jr., Regional Administrator,

EPA Region 4 to James E. Bickford,

Secretary, Natural Resources and

Environmental Protection Cabinet,

Commonwealth of Kentucky). Because

of these provisions in KRS 224.01–040,

Kentucky no longer meets the

requirements for Title V program

approval. To have an approvable Title V

program, any Kentucky audit privilege

and immunity law must make the

privilege outlined in the current law

inapplicable to criminal proceedings

and also must provide unfettered access

to information in criminal proceedings.

EPA also interprets section

502(b)(5)(E) of the CAA to mean that to

have adequate civil penalty authority,

Kentucky must retain full authority to

assess civil penalties for any violation,

including violations of (1) Any

applicable requirement; (2) any permit

condition; (3) any fee or filing

requirement; (4) any duty to allow or

carry out inspection, entry, or

monitoring activities; and (5) any

regulation or orders issued by the

Commonwealth. 40 CFR 70.11(a)(3)(i).

Kentucky’s audit privilege and

immunity law provides immunity from

all civil penalties if certain conditions

are met. However, to meet the

requirements of an approvable part 70

program and the requirements of 40 CFR

70.11(a)(3)(i), Kentucky must retain the

ability to collect penalties based on

economic gain from noncompliance

when it is significant (letter dated July

12, 1996 from John H. Hankinson, Jr.,

Regional Administrator, EPA Region 4

to James E. Bickford, Secretary, Natural

Resources and Environmental

Federal Register / Vol. 65, No. 235 / Wednesday, December 6, 2000 / Notices 76231

Protection Cabinet, Commonwealth of

Kentucky). The concept of economic

benefit relates to any economic gain a

violator may have realized as a result of

noncompliance regardless of when these

gains occur. Although correspondence

from Kentucky to EPA addresses the

benefit that might accrue after discovery

and disclosure (letter dated February 12,

1997 from James E. Bickford, Secretary,

Natural Resources and Environmental

Protection Cabinet, Commonwealth of

Kentucky to John H. Hankinson, Jr.,

Regional Administrator, EPA Region 4),

the relevant time frame for determining

economic benefit is the entire period of

noncompliance including prior to

discovery and disclosure (e.g., facility

operates for two years without installing

required air emissions control

equipment). Because KRS 224.01–040

precludes the Cabinet from recouping

economic benefit when the conditions

of KRS 224.01–040 are met, Kentucky

lacks the legal authority to recover a

penalty for ‘‘every violation’’ and

therefore no longer meets the

requirements for Title V program

approval. In subsequent correspondence

between Kentucky and EPA, including a

letter dated March 27, 1997 from Glenda

J. Curry, General Counsel, Natural

Resources and Environmental

Protection Cabinet, Commonwealth of

Kentucky to John H. Hankinson, Jr.,

Regional Administrator, EPA Region 4;

and a letter dated January 12, 1998 from

John H. Hankinson, Jr., Regional

Administrator, EPA Region 4 to James E.

Bickford, Secretary, Natural Resources

and Environmental Protection Cabinet,

Commonwealth of Kentucky, these

issues were discussed and EPA urged

Kentucky to remedy them. To date,

Kentucky has not effected these

changes. To have an approvable Title V

program, any Kentucky audit privilege

and immunity law must restore full civil

penalty authority to the Title V program

by allowing for the collection of civil

penalties where violations result in

significant economic benefit to the

violator as a consequence of its

noncompliance with Title V.

EPA interprets section 502(b)(8) of the

CAA to mean that to have adequate

public access authority, Kentucky must

assure that the public have access to

certain information, including copies of

the permit draft, the application, all

relevant supporting materials, including

those set forth in 40 CFR 70.4(b)(3)(viii),

and all other materials available to the

permitting authority that are relevant to

the permit decision. Kentucky’s audit

privilege and immunity law provides

that documents, communications, data,

reports, or other information required to

be collected, developed, maintained,

reported, or made available to a

regulatory agency pursuant to this law

or any other Federal, state or local law

shall not be privileged. KRS 224.01–

040(6). This language potentially limits

public access to information and

renders Kentucky’s legal authority to

ensure public access to certain

information inadequate. Therefore

Kentucky no longer meets the

requirements for Title V program

approval. To meet the requirements of

an approvable part 70 program and the

requirements of 40 CFR 70.4(b)(3)(viii)

and 40 CFR 70.8(h)(2), any Kentucky

audit privilege and immunity law must

provide that documents,

communications, data, reports, or other

information required to be collected,

developed, maintained, reported, or

made available to a regulatory agency or

any other person shall not be privileged.

This issue was discussed in a letter,

dated January 12, 1998 from John H.

Hankinson, Jr., Regional Administrator,

EPA Region 4 to James E. Bickford,

Secretary, Natural Resources and

Environmental Protection Cabinet,

Commonwealth of Kentucky, and EPA

urged Kentucky in that letter to correct

it. To date, Kentucky has not effected

these changes. To have an approvable

Title V program any Kentucky audit

privilege and immunity law must

provide the public with access to

information available to the

Commonwealth that is relevant to a

Title V permit decision.

40 CFR 70.4(k), 70.10(b) and 70.10(c)

provide that EPA may withdraw a 40

CFR part 70 program approval, in whole

or in part, whenever the permitting

authority’s legal authority no longer

meets the requirements of Part 70 and

the permitting authority fails to take

corrective action. 40 CFR 70.10(b) sets

forth the procedures for program

withdrawal, and requires as a

prerequisite to withdrawal that the

permitting authority be notified of any

finding of deficiency by the

Administrator and that the document be

published in the Federal Register.

Today’s document satisfies this

requirement and constitutes a finding of

program deficiency. If Kentucky has not

taken significant action to assure

adequate administration and

enforcement of the program within 90

days after publication of this notice of

deficiency, and has not corrected the

above-identified deficiencies by June 2,

2001, then EPA will take action to

withdraw Kentucky’s Title V program

approval, and may apply any of the

sanctions specified in section 179(b) of

the Act. 40 CFR 70.4(k) and 70.10(b)(2)–

(4).

This notice of deficiency is not itself

a proposal to withdraw Kentucky’s Title

V program approval. Consistent with 40

CFR 70.10(b)(2), EPA will wait 90 days

to determine whether the

Commonwealth has taken significant

action to correct the above-identified

deficiencies. Consistent with 40 CFR

70.4(i)(1) and 70.10(b)(4), EPA will wait

until June 2, 2001 to determine whether

Kentucky has corrected the deficiencies.

Any proposal to withdraw approval of

Kentucky’s Title V program will occur

after June 2, 2001.

II. Administrative Requirements

As noted above, publication of this

Notice of Deficiency does not effect a

withdrawal of the Commonwealth of

Kentucky’s Title V program. Program

withdrawal, if necessary, will be

accomplished through a subsequent

notice-and-comment rulemaking. This

action does not: (1) Impose any

enforceable duty or contain any

unfunded mandate as described in the

Unfunded Mandates Reform Act of 1995

(Public Law 104–4); (2) require prior

consultation with State, local, and tribal

government officials as specified by

Executive Order 12875 (58 FR 58093,

October 28, 1993) or Executive Order

13084 (63 FR 27655, May 10, 1998); or

(3) involve special consideration of

environmental justice related issues as

required by Executive Order 12898 (59

FR 7629, February 16, 1994). The Office

of Management and Budget has

exempted this action from review under

Executive Order 12866 (58 FR 51735,

October 4, 1993). Because this action is

not subject to notice-and-comment

requirements under the Administrative

Procedure Act or any other statute, it is

not subject to the regulatory flexibility

provisions of the Regulatory Flexibility

Act (5 U.S.C. 601 et seq.).

Furthermore, this action does not

contain any information collections

subject to Office of Management and

Budget approval under the Paperwork

Reduction Act (44 U.S.C. 3501 et seq.).

And because this action is a Notice of

Deficiency and does not constitute a

rule, Executive Order 13045: Protection

of Children from Environmental Health

Risks and Safety Risks does not apply.

For the same reason, Executive Order

13132: Federalism and section 112(d) of

the National Technology Transfer

Advancement Act of 1995 do not apply.

Dated: November 29, 2000.

A. Stanley Meiburg,

Acting Regional Administrator, Region 4.

[FR Doc. 00–31051 Filed 12–05–00; 8:45 am]

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