[Federal Register Volume 67, Number 1 (Wednesday, January 2, 2002)]
[Notices]
[Pages 72-74]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-32103]


[FRL-7123-7]


Notice of Deficiency for Clean Air Operating Permits Program in 
Washington

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of deficiency.

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[[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

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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.
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    \1\ EPA is developing an Order of Sanctions rule to determine 
which sanction applies at the end of this 18 month period.
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    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.
[FR Doc. 01-32103 Filed 12-31-01; 8:45 am]
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