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###### Environmental Protection Agency

          - [FRL-7123-7]

# AGENCY:

Environmental Protection Agency (EPA).

# ACTION:

Notice of deficiency.

      ( print page 73)    

# SUMMARY:

Pursuant to its authority under section 502(i) of the Clean Air Act and the implementing regulations at 40 CFR 70.10(b)(1), EPA is publishing this notice of deficiency for the State of Washington's (Washington or State) Clean Air Act title V operating permits program, which is administered by two State agencies and seven local air pollution control authorities. The notice of deficiency is based upon EPA's finding that Washington's provisions for insignificant emissions units do not meet minimum Federal requirements for program approval. Publication of this notice is a prerequisite for withdrawal of Washington's title V program approval, but does not effect such withdrawal.

# EFFECTIVE DATE:

December 14, 2001. Because this Notice of Deficiency is an adjudication and not a final rule, the Administrative Procedure Act's 30-day deferral of the effective date of a rule does not apply.

# FOR FURTHER INFORMATION CONTACT:

Denise Baker, EPA, Region 10, Office of Air Quality (OAQ-107), 1200 6th Avenue, Seattle, WA 98101, (206) 553-8087.

## I. Description of Action

                        EPA is publishing a notice of deficiency for the Clean Air Act (CAA or Act) title V operating permits program for the State of Washington. This document is being published to satisfy 40 CFR 70.10(b)(1), which provides 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 its title V operating permits program. The deficiency that is the subject of this notice relates to Washington's requirements for insignificant emissions units (IEUs) and applies to all State and local permitting authorities that implement Washington's title V program.                    

### A. Approval of Washington's Title V Program

The CAA requires all State and local permitting authorities to develop operating permits programs that meet the requirements of title V of the Act, 42 U.S.C. 7661-7661f, and its implementing regulations, 40 CFR part 70. Washington's operating permits program was submitted in response to this directive. EPA granted interim approval to Washington's air operating permits program on November 9, 1994 (59 FR 55813). EPA repromulgated final interim approval of Washington's operating permits program on one issue, along with a notice of correction, on December 8, 1995 (60 FR 62992).

Washington's title V operating permits program is implemented by the Washington Department of Ecology (Ecology), the Washington Energy Facility Site Evaluation Commission (EFSEC), and seven local air pollution control authorities: the Benton County Clean Air Authority (BCCAA); the Northwest Air Pollution Authority (NWAPA); the Olympic Air Pollution Control Authority (OAPCA); the Puget Sound Clean Air Agency (PSCAA); the Spokane County Air Pollution Control Authority (SCAPCA); the Southwest Clean Air Agency (SWCAA); and the Yakima Regional Clean Air Authority (YRCAA). After these State and local agencies revised their operating permits programs to address the conditions of the interim approval, EPA promulgated final full approval of Washington's title V operating permits program on August 13, 2001 (66 FR 42439).

### B. Additional Public Comment Process on Title V Programs

                        On December 11, 2000 (65 FR 77376), EPA published a                         **Federal Register**                         notice notifying the public of the opportunity to submit comments identifying any programmatic or implementation deficiencies in State title V programs that had received interim or full approval. Pursuant to the settlement agreement discussed in that notice, EPA committed to respond to the merits of any such claims of deficiency on or before December 1, 2001, for those States, such as Washington, that had received interim approval. On March 12, 2001, EPA received comments from Smith & Lowney, PLLC, on behalf of pacific Air Improvement Resource, Waste Action Project, Washington Toxics Coalition, and the Washington Environmental Council (the commenters). The commenters identified numerous alleged deficiencies in the title V operating permits programs administered by all Washington permitting authorities.                    

After thoroughly reviewing all issues raised by the commenters, EPA identified one area where EPA believes that Washington's regulations do not meet the requirements of title V and part 70—Washington's exemption of “insignificant emission units” from certain permit content requirements. Accordingly, EPA is issuing this notice of deficiency. In a separate document, EPA has responded to the other issues raised by the commenters, which EPA does not believe constitute deficiencies in Washington's operating permits program at this time.

### C. Exemption of IEUs From Permit Content Requirements

                        Part 70 authorizes EPA to approve as part of a State program a list of insignificant activities and emission levels (IEUs) which need not be included in the permit application, provided that an application may not omit information needed to determine the applicability of, or to impose, any applicable requirement, or to evaluate the fee amount required under the EPA-approved schedule.                         *See*40 CFR 70.5(c). Nothing in part 70, however, authorizes a State to exempt IEUs from the testing, monitoring, recordkeeping, reporting, or compliance certification requirements of 40 CFR 70.6.                    

                        Washington's regulations contain criteria for identifying IEUs.                         *See*                         WAC 173-401-200(16), -530, -532, and -533. Sources that are subject to a Federally-enforceable requirement other than a requirement of the State Implementation Plan that applies generally to all sources in Washington (a so-called “generally applicable requirement”) are not deemed “insignificant” under Washington's program even if they otherwise qualify under one of the five lists.                         *See*                         WAC 173-401-530(2)(a). Washington's regulations also expressly state that no permit application can omit information necessary to determine the applicability of, or to impose any applicable requirement.                         *See*                         WAC 173-401-510(1). In addition, WAC 173-401-530(1) and (2)(b) provide that designation of an emission unit as an IEU does not exempt the unit from any applicable requirements and that the permit must contain all applicable requirements that apply to IEUs. The Washington program, however, specifically exempts IEUs from testing, monitoring, recordkeeping, and reporting requirements except where such requirements are specifically imposed in the applicable requirement itself.                         *See*                         WAC 173-401-530(2)(c). The Washington program also exempts IEUs from compliance certification requirements.                         *See*                         WAC 173-401-530(2)(d).                    

                        Because EPA does not believe that part 70 exempts IEUs from the testing, monitoring, recordkeeping, reporting, and compliance certification requirements of 40 CFR 70.6, EPA initially determined that Ecology must revise its IEU regulations as a condition of full approval.                         *See*                         60 FR at 62993-62997 (final interim approval of Washington's operating permits program based on exemption of IEUs from certain permit content requirements); 60 FR 50166 (September 28, 1995) (proposed interim approval of                               ( print page 74)                            Washington's operating permits program on same basis). The Western States Petroleum Association (WSPA), together with several other companies and the Washington Department of Ecology, challenged EPA's determination that Ecology must revise its IEU regulations as a condition of full approval.                         *See*                         66 FR at 19. On June 17, 1996, the Ninth Circuit found in favor of the petitioners.                         *WSPA*                         v.                         *EPA*, 87 F.3d 280 (9th Cir. 1996). The Ninth Circuit did not opine on whether EPA's position was consistent with part 70. It did, however, find that EPA had acted inconsistently in its title V approvals, and had failed to explain the departure from precedent that the Court perceived in the Washington interim approval. The Court then remanded the matter to EPA, instructing EPA to give full approval to Washington's IEU regulations.                    

                        In light of the Court's order in the WSPA case, EPA determined that it must give full approval to Washington's IEU regulations. Therefore, on August 13, 2001, EPA published a                         **Federal Register**                         notice granting final full approval to Washington's title V program notwithstanding what EPA believed to be a deficiency in its IEU regulations. 66 FR 42439-42440 (August 13, 2001). Nonetheless, as EPA stated in its final full approval of Washington's program, EPA maintained its position that part 70 does not allow the exemption of IEUs subject to generally applicable requirements from the testing, monitoring, recordkeeping, reporting, and compliance certification requirements of 40 CFR 70.6 and intended to issue a notice of deficiency in another rulemaking action if the deficiencies in Washington's IEU regulations were not promptly addressed.                    

                        Since issuance of the Court's order in WSPA case, EPA has carefully reviewed the IEU provisions of those eight title V programs identified by the Court as inconsistent with EPA's decision on Washington's regulations. EPA has determined that three of the title V programs identified by the WSPA Court (Massachusetts; North Dakota; Knox County, Tennessee) are in fact consistent with EPA's position that insignificant sources subject to applicable requirements may not be exempt from permit content requirements.                         *See*61 FR 39338 (July 29, 1996). North Carolina, Florida, and Jefferson County, Kentucky have made revisions to their IEU provisions. EPA has approved the changes made by North Carolina and Florida. 65 FR 38744, 38745 (June 22, 2000) (Forsyth County, North Carolina); 66 FR 45941 (August 31, 2001) (all other North Carolina permitting authorities); 66 FR 49837 (October 1, 2001) (Florida). EPA has not yet taken action on the changes made by Jefferson County, Kentucky. EPA has notified Ohio and Hawaii that their provisions for IEUs do not conform to the requirements of part 70 and must be revised. If Ohio and Hawaii do not revise their provisions for IEUs to conform to part 70, EPA intends to issue notices of deficiencies to these permitting authorities in accordance with the time frames set forth in the December 11, 2000                         **Federal Register**                         notice soliciting comments on title V program deficiencies.                         *See*65 FR 77376. Having addressed the inconsistencies identified by the Ninth Circuit when it ordered EPA to approve Washington's IEU provisions, EPA is now notifying Washington that it must bring its IEU provisions into alignment with the requirements of part 70 and other State and local title V programs or face withdrawal of its title V operating permits program.                    

Because WAC 173-401-530(2)(c) and (d), the regulations that exempt IEUs from certain permit content requirements, apply throughout the State of Washington, this notice of deficiency applies to all State and local agencies that implement Washington's operating permits program. As discussed above, those agencies include Ecology, EFSEC, BCCAA, NWAPA, OAPCA, PSCAA, SCAPCA, SWACAA, and YRCAA.

### D. Effect of Notice of Deficiency

                        Part 70 provides that EPA may withdraw a part 70 program approval, in whole or in part, whenever the approved program no longer complies with the requirements of part 70 and the permitting authority fails to take corrective action. 40 CFR 70.10(c)(1). This section goes on to list a number of potential bases for program withdrawal, including the case where the permitting authority's legal authority no longer meets the requirements of part 70. 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 the permitting authority has not taken “significant action to assure adequate administration and enforcement of the program” within 90 days after publication of a notice of deficiency, EPA may withdraw the State program, apply any of the sanctions specified in section 179(b) of the Act, or promulgate, administer, and enforce a Federal title V program. 40 CFR 70.10(b)(2). Section 70.10(b)(3) provides that if a State has not corrected the deficiency within 18 months of the finding of deficiency, EPA will apply the sanctions under section 179(b) of the Act, in accordance with section 179(a) of the Act. Upon EPA action, the sanctions will go into effect unless the State has corrected the deficiencies identified in this document within 18 months after signature of this document.[1]                                                  In addition, section 70.10(b)(4) provides that, if the State has not corrected the deficiency within 18 months after the date of notice of deficiency, EPA must promulgate, administer, and enforce a whole or partial program within 2 years of the date of the finding.                    

This document is not a proposal to withdraw Washington's title V program. Consistent with 40 CFR 70.10(b)(2), EPA will wait at least 90 days, at which point it will determine whether Washington has taken significant action to correct the deficiency.

## II. Administrative Requirements

Under section 307(b)(1) of the Clean Air Act, petitions for judicial review of today's action may be filed in the United States Court of Appeals for the appropriate circuit within 60 days of January 2, 2002.

# List of Subjects in 40 CFR Part 70

        - Environmental protection
        - Administrative practice and procedure
        - Air pollution control
        - Incorporation by reference
        - Intergovernmental relations
        - Operating permits
        - Reporting and recordkeeping requirements

Dated: December 14, 2001.

L. John Iani,

Regional Administrator, Region 10.

# Footnotes

1.                                 EPA is developing an Order of Sanctions rule to determine which sanction applies at the end of this 18 month period.                        
        Back to Citation      

[FR Doc. 01-32103 Filed 12-31-01; 8:45 am]

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