Clean Air Act Proposed Interim Approval or Disapproval of Operating Permit Programs in the State of Washington

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[WA-TV-1, AD-FRL-5040-1]

Clean Air Act Proposed Interim Approval or Disapproval of

Operating Permit Programs in the State of Washington

AGENCY: U.S. Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: EPA proposes interim approval of the operating permit programs

submitted by the Washington Department of Ecology (Ecology), the

Washington Energy Facility Site Evaluation Council (EFSEC), the

Northwest Air Pollution Authority (NWAPA), the Olympic Air Pollution

Control Authority (OAPCA), the Puget Sound Air Pollution Control Agency

(PSAPCA), the Spokane County Air Pollution Control Authority (SCAPCA),

and the Southwest Air Pollution Control Authority (SWAPCA) for the

purpose of complying with Title V of the Federal Clean Air Act which

mandates that States develop and submit to EPA programs for issuing

operating permits to all major stationary sources and to certain other

sources.

EPA proposes two alternative actions on the operating permit

programs submitted by the Benton-Franklin Counties Clean Air Authority

(BFCCAA) and the Yakima County Clean Air Authority (YCCAA): disapproval

or, if these permitting authorities make certain specified changes to

their operating permit programs by the time EPA takes final action on

this proposed rulemaking, interim approval. In the event of

disapproval, Ecology's operating permit program will apply to sources

located in Benton and Franklin Counties and Yakima County,

respectively.

DATES: Comments on this proposed action must be received in writing by

September 19, 1994.

ADDRESSES: Comments should be sent to Elizabeth Waddell, U.S.

Environmental Protection Agency, Region 10, 1200 Sixth Avenue, AT-082,

Seattle, Washington 98101.

Copies of the State and local agencies' submittals and other

supporting information used in developing the proposed rule are

available for inspection during normal business hours at the following

location: U.S. Environmental Protection Agency, Region 10, 1200 Sixth

Avenue, Seattle, Washington.

FOR FURTHER INFORMATION CONTACT: Elizabeth Waddell, (206) 553-4303.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under Title V of the Clean Air Act (Act) as amended

(1990), EPA has promulgated rules which define the minimum elements of

an approvable State operating permit program and the corresponding

standards and procedures by which the EPA will approve, oversee, and

withdraw approval of State operating permit programs (see 57 FR 32250

(July 21, 1992)). These rules are codified at 40 Code of Federal

Regulations (CFR) Part 70. Title V requires States to develop and

submit to EPA programs for issuing these operating permits to all major

stationary sources and to certain other sources.

The Act requires that States develop and submit these programs to

EPA by November 15, 1993, and that EPA act to approve or disapprove

each program within one year after receiving the submittal. EPA's

program review occurs pursuant to section 502 of the Act and Part 70

which together outline criteria for approval or disapproval. Where a

program substantially, but not fully, meets the requirements of Part

70, EPA may grant the program interim approval for a period of up to

two years. If EPA has not fully approved a program by two years after

the November 15, 1994 date, or by the end of an interim program, it

must establish and implement a federal program.

II. Proposed Action and Implications

A. Analysis of Submission by State and Local Authorities

1. Support Materials

The program submittal by the State of Washington includes

submissions by Ecology, EFSEC and the seven local air pollution control

authorities (local air authorities). Collectively, these submissions

meet the requirements of 40 CFR Part 70, Sec. 70.4, for a complete

program submittal including a letter of submittal from the Washington

Governor's designee requesting program approval, complete program

descriptions, the legal opinions of the Attorney General and the

attorneys of the local air authorities, permit program documentation,

and fully adopted implementing regulations of Ecology, EFSEC and the

local air authorities. An implementation agreement is currently being

developed between Ecology, EFSEC, and the local air authorities

(collectively, the permitting authorities) and EPA.

2. Regulations and Program Implementation

a. Ecology. The statutes authorizing the Washington state operating

permit program are contained in chapter 70.94 of the Revised Code of

Washington (RCW), in particular RCW 70.94.161 (Operating Permits for

Air Contaminant Sources--Generally--Fees, report to legislature),

70.94.162 (Annual fees from operating permit program sources to cover

cost of program) and 70.94.422 (Department of health powers regarding

radionuclides--Energy facility site evaluation council authority over

permit program sources). RCW 70.94.161(2)(a) required Ecology to

promulgate rules for a state-wide operating permit program consistent

with Title V of the Clean Air Act. Chapter 173-401 of the Washington

Annotated Code (WAC) sets out the specific requirements of the state-

wide operating permit program. This rule, together with ch. 70.94 RCW,

and the other supporting statutes and regulations submitted by Ecology,

substantially meet the requirements of 40 CFR Part 70, Section 70.2 and

70.3 for applicability, Section 70.4, 70.5, and 70.6 for permit content

including operational flexibility, Section 70.7 for public

participation and minor permit modifications, Section 70.5 for criteria

which define insignificant activities, Section 70.11 for requirements

for enforcement authority, and Section 70.5 for complete application

forms.

b. EFSEC. RCW 70.94.422(2) gives EFSEC authority to issue operating

permits to and administer the operating permit program for large energy

facilities regulated under ch. 80.50 RCW, and does not require EFSEC to

apply to Ecology for delegation of the operating permit program. EFSEC

has adopted by reference all of ch. 173-401 WAC and the provisions of

ch. 173-400 WAC necessary to implement the operating permit program

(see WAC 463-39-005). In issuing Title V permits, EFSEC will contract

with Ecology or the local air authority with jurisdiction over the

geographic area where the EFSEC source is located to develop the air

operating permit which will be incorporated into the source's

``certification,'' the document containing all requirements with which

the EFSEC source must comply. EFSEC has used this approach in the past

for Prevention of Significant Deterioration and water quality

permitting issues.

c. Local Air Authorities. RCW 70.94.161(2)(b) authorizes local air

authorities to request delegation from Ecology to implement the

operating permit program for sources within their respective

jurisdictions. Each of Washington's seven local air authorities, which

together cover 22 of the 39 counties in the State, has requested and

received delegation from Ecology contingent on EPA approval of the

local air authority operating permit program. All Title V sources

within the jurisdiction of a delegated local air authority will be

subject to the operating permit program of such local air authority,

except for primary aluminum smelters, kraft pulping mills, sulfite

pulping mills, energy facilities under EFSEC's jurisdiction and sources

on the U.S. Department of Energy's Hanford Nuclear Reservation. These

sources, along with sources in the 17 counties not covered by local air

authorities, will be subject to Ecology's operating permit program,

with the exception of energy facilities that will be subject to EFSEC's

program.

Each of the seven local air authorities has promulgated a rule

authorizing the assessment and collection of fees from permit program

sources as required by State law (see RCW 70.94.162(1)). With respect

to the other requirements of the operating permit program, the local

air authorities have taken one of four different approaches to program

implementation. SCAPCA has not promulgated any rules to implement Title

V, except for fee rules. Instead, SCAPCA will be implementing the

operating permit program by enforcing the State rule, ch. 173-401 WAC,

as authorized by State law (see RCW 70.94.161(2)(a)). SWAPCA has issued

a local rule which restates the State operating permit rule (see SWAPCA

Ch. 401). NWAPA, PSAPCA and OAPCA have each adopted rules requiring

operating permit program sources subject to their respective

jurisdictions to comply with the State operating permit program rule

(see NWAPA Sec. 326; PSAPCA Reg. I, Sec. 7.01, 7.03 and 7.05; OAPCA

Reg. 1, Sec. 6.01).

BFCCAA and YCCAA have each adopted a rule expressing the

authority's intent to implement the State air operating permit program

(BFCCAA Reg. 1, Sec. 4.01; YCCAA Reg. I, Sec. 6.01 and Sec. 12.01), and

have also adopted rules addressing which sources are subject to the

program; program delegation; permit application; permit content; permit

issuance, renewal, reopenings and revisions; public involvement; and

fee assessment (see BFCCAA Reg. 1, Sec. 4.02-4.08; YCCAA Reg. I, Sec.

6.02-6.09). These rules do not, however, cover many of the requirements

of Part 70. Although both BFCCAA and YCCAA apparently intended that the

State operating permit rule (ch. 173-401 WAC) would supplement and fill

in the gaps in their local regulations, there is a serious question

regarding whether this is the case.

There are many potential inconsistencies between the operating

permit regulations of BFCCAA and YCCAA and the operating permit rule of

the State. For example, the local regulations require that renewal

applications be submitted at least six months prior to the expiration

of the permit but do not place any outside limit on the submission of a

renewal application (see BFCCAA Reg. 1, Sec. 4.06(C); YCCAA Reg. I,

Sec. 6.06). State law, however, as required by Title V, provides that

in no event shall a renewal application be submitted more than 18

months before the expiration of the permit (see WAC 173-401-710(1)).

Because the local regulations were adopted after ch. 173-401 WAC, it is

questionable whether the provisions of the State operating permit rule

that are inconsistent with the operating permit rules of BFCCAA and

YCCAA could be enforced against a Title V source. This is especially

true for YCCAA because the YCCAA regulation that incorporates ch. 173-

401 WAC by reference states that State regulations are not adopted to

the extent they are inconsistent with any YCCAA regulations (see YCCAA

Reg. I, Sec. 12.01).

d. Tribal Lands. The Governor's letter to EPA states that Ecology,

EFSEC and the delegated local air authorities will serve as the

permitting authorities for sources over which they each, respectively,

have jurisdiction. Except with respect to certain sources located on

the Puyallup Reservation, there is no further discussion in the

submittals of Ecology, EFSEC or the local air authorities of any basis

for the assertion of jurisdiction by Washington permitting authorities

over sources on Tribal lands.

Opinion letters from the Washington Attorney General and PSAPCA's

attorney rely on the Washington Indian (Puyallup) Land Claims

Settlement, 25 USC sections 1773-1773j, and the Agreement between the

Puyallup Tribe of Indians, Local Governments in Pierce County, the

State of Washington, the United States of America, and certain private

property owners, dated August 27, 1988 (Settlement Agreement) to

support their assertion of jurisdiction over portions of the Puyallup

Reservation. The Settlement Agreement specifically gives federal, state

and local governments exclusive jurisdiction for the administration and

implementation of federal, state and local environmental laws on all

non-trust lands within the 1873 Survey Area and gives the federal

government and the Puyallup Tribe the same exclusive jurisdiction over

all trust and restricted lands within the 1873 Survey Area (as ``non-

trust lands,'' ``trust lands,'' ``restricted lands'' and ``1873 Survey

Area'' are defined in the Settlement Agreement). Based on the terms of

the Settlement Agreement, EPA is proposing to grant interim approval of

the operating permit programs of Ecology and PSAPCA for all non-trust

lands within the 1873 Survey Area of the Puyallup Reservation.

Because the Washington permitting authorities have not

demonstrated, consistent with applicable principles of Indian law and

federal Indian policies, legal authority to regulate other sources on

Tribal lands under the Clean Air Act, the proposed interim approval of

the Washington operating permit programs will not extend to any trust

or restricted lands within the Puyallup 1873 Survey Area or to lands

within the exterior boundaries of any other Indian Reservation.1

Title V sources located within the exterior boundaries of other Indian

Reservations in Washington will be subject to the federal operating

permit program, to be promulgated at 40 CFR Part 71, or subject to the

operating permit program of any Tribe approved after issuance of the

regulations under Section 301(d) of the Clean Air Act authorizing EPA

to treat Tribes in the same manner as States for appropriate Clean Air

Act provisions.2

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\1\This is not a determination that the Washington permitting

authorities could not possibly demonstrate jurisdiction over sources

within the exterior boundaries of Indian Reservations in Washington.

However, no such showing has been made, except as discussed above

with respect to portions of the Puyallup Reservation.

\2\Tribes may also have inherent sovereign authority to regulate

air pollutants from sources on Tribal lands.

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e. Applicable Requirements. Part 70 requires that all federally-

enforceable applicable requirements be included in an operating permit

(see 40 CFR 70.4(3)(v) and 70.6(a)). RCW 70.94.161(10) could be read to

require that only the most stringent of any federal, state or local

requirement be included in the permit. According to the Attorney

General's opinion, however, this provision does not preclude Washington

permitting authorities from including all federally-enforceable

applicable requirements in the permit, and several other State

regulations in fact require the permitting authority to do so. The

Attorney General first points to RCW 70.94.161(2)(a), which requires

that the rules establishing the State's permitting program be

consistent with the Federal Clean Air Act. The Attorney General then

relies on WAC 173-401-600, which requires that the permit assure

compliance with all applicable requirements and that, where a federally

enforceable applicable requirement is less stringent than a State or

local requirement, both the federal requirement and the State or local

requirement be included in the permit. EPA notes, as well, that WAC

173-401-625(b) specifically requires any ``state-only'' terms and

conditions be designated as not being federally enforceable. In order

for a permit to assure compliance with a federally enforceable

applicable requirement which is less stringent than a ``state-only''

requirement, both requirements would have to be included in the permit.

Moreover, EPA notes that pursuant to WAC 173-401-640 a Title V source

would be shielded from enforcement of a federally-enforceable

applicable requirement only if the requirement is included in the

permit or is specifically determined not to be applicable. Based on the

opinion of the Attorney General and on the assurances of the Washington

permitting authorities that all federally-enforceable applicable

requirements will be included in Title V permits, EPA believes that RCW

70.94.161(10) does not preclude approval of the Washington submittal.

f. Compliance Orders. WAC 173-400-161 authorizes Washington

permitting authorities to issue regulatory orders requiring that

sources be brought into compliance in accordance with a compliance

schedule.3 It further provides that a source which has been issued

such a regulatory order shall be deemed to be in compliance with ``this

chapter'' if the source is in compliance with all of the requirements

of the regulatory order, including the compliance schedule. This

provision would pose a problem for Title V approval if a Washington

permitting authority would be precluded from assessing penalties

against a source with a Title V operating permit who had been issued

and was in compliance with such a regulatory order, but was not in

compliance with the underlying permit requirements. It would also be

problematic if a compliance schedule submitted by a source pursuant to

WAC 173-401-510(2)(h)(iii) became a regulatory order under WAC 173-400-

161 when it becomes a part of a Title V operating permit and thus

precluded the permitting authority from assessing penalties for the

source's noncompliance with the underlying permit requirements.

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\3\EFSEC has incorporated this provision by reference (see WAC

463-39-005). Several local air authorities have comparable

provisions (see OAPCA Reg. 1, Sec. 329; SCAPCA Reg. I, Art. VII;

SWAPCA 400-161). The same analysis of the State's authority to issue

compliance orders applies for EFSEC and these local air authorities.

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The Attorney General's opinion states that a regulatory order

issued under WAC 173-400-161 is a completely separate device from a

Title V operating permit issued under ch. 173-401 WAC, even though both

may contain compliance schedules. Moreover, the Attorney General's

letter points out that WAC 173-401-620(2) makes any noncompliance with

a Title V permit grounds for an enforcement action and that a permit

condition can be changed only through a permit modification, not a

regulatory order. Finally, the Attorney General states that even if a

compliance schedule is issued under WAC 173-400-161 to a Title V

source, compliance with such a schedule only constitutes compliance

with the requirements of ``this chapter,'' ch. 173-400 WAC, and not the

operating permit rule, ch. 173-401 WAC. Therefore, a source could still

be subject to an enforcement action for being in violation of the

permit but in compliance with the compliance schedule. Based on the

Attorney General's opinion, EPA believes that WAC 173-400-161 does not

bar approval of the Washington submittal. If, during program

implementation, Washington permitting authorities issue regulatory

orders containing compliance schedules to Title V sources without

collecting appropriate penalties, EPA will consider this grounds for

withdrawing approval of such permitting authority's program in

accordance with the provisions of 40 CFR 70.10(c).

g. Technical Assistance Visits. Washington has two statutes which

address violations observed during technical assistance visits, RCW

43.21A.087 and RCW 70.94.035. RCW 70.94.035, which was enacted in 1991

and specifically applies to the air program, prohibits enforcement

action ``unless and until the facility owner or operator has been

provided a reasonable time to correct the violation.'' According to the

Attorney General's opinion, this provision does not prevent a

permitting authority from commencing an enforcement action for a

violation observed during a technical assistance visit, but merely

requires the permitting authority to give the source a reasonable

opportunity to comply before deciding whether enforcement action is

appropriate. The Attorney General similarly interprets RCW 43.21A.087,

enacted in 1992, which allows the permitting authority to reinspect the

facility and take enforcement action ``[i]f the owner or operator of

the facility does not correct the violation.''4 The Attorney

General also states that because RCW 70.94.035 applies specifically to

the air program and specifically requires that the technical assistance

program be consistent with the Federal Clean Air Act, this provision

would prevail in the event of any conflict with RCW 43.21A.087, which

applies to technical assistance visits under all of Ecology's

environmental programs. EPA does not believe the plain language of RCW

43.21A.087 supports the Attorney General's opinion and that it could

prohibit enforcement action if a violation observed during a technical

assistance visit is promptly corrected. EPA does agree, however, that

RCW 70.94.035 would allow enforcement action in such a case provided

the enforcement action was commenced after the source had had an

opportunity to comply. EPA also believes that RCW 70.94.035, and not

RCW 43.21A.087, applies in the case of technical assistance visits

under the air program. EPA therefore believes that Washington's

technical assistance statutes, as interpreted by the Attorney General,

do not bar approval of Washington's operating permit program.

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\4\Both statutes allow Ecology to commence immediate enforcement

action for any violation that places anyone in imminent danger of

death or substantial bodily harm or causes substantial property

damage.

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h. Variances. State law allows sources to petition the permitting

authority for a variance from requirements governing the quality,

nature, duration or extent of discharges of air contaminants (see RCW

70.94.181; WAC 173-400-180)). Each of the local air authorities has

also adopted a regulation authorizing variances under certain

circumstances (see BFCCAA Reg. 1, Sec. 3.01; NWAPA Sec. 350; PSAPCA

Reg. I, Sec. 4.01; OAPCA Reg. 1, Sec. 3.23; SCAPCA Reg. I, Art. III;

SWAPCA Reg. 401-180; YCCAA Reg. I, Sec. 7.01). State law also prohibits

any State or local air authority from incorporating a variance in a

permit unless the variance has been approved by EPA as part of the

State Implementation Plan or from issuing a variance that sets aside or

delays any requirements of the Federal Clean Air Act except with the

approval and written concurrence of the EPA (see RCW 70.94.181(8); WAC

173-400-180(3)). The program submittal is approvable based on these

limitations on the issuance of variances.5

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\5\Although the variance regulations of BFCCAA, NWAPA, SWAPCA

and YCCAA do not expressly state that EPA must approve any variance

to requirements of the Federal Clean Air Act or any variance

incorporated into an operating permit, the Attorney General's

opinion letter confirms that State law prohibits a local authority

from issuing such a variance.

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i. Additional Information. The full program submittal and the

Technical Support Document are available for review for more detailed

information about this proposed action.

3. Permit Fee Demonstration

a. EFSEC. RCW 80.50.071(1)(b) and (c) require that an applicant for

an EFSEC certification pay all ``reasonable costs actually and

necessarily incurred'' by EFSEC in processing applications and

inspecting and determining compliance. RCW 70.94.422(2) additionally

gives EFSEC the same authority as local air authorities to collect fees

from Title V sources subject to EFSEC's jurisdiction. As discussed

above, EFSEC will contract with Ecology or the relevant local air

authority to perform certain technical tasks, including developing the

Title V permit terms and monitoring compliance with those terms.

Ecology and any participating local air authority will then charge

EFSEC the same fees they would charge a source subject to their

jurisdiction for issuing a permit and monitoring compliance. EFSEC will

pass these fees onto the EFSEC source, along with its administrative

costs (staff costs) for the air operating permit program as

``reasonable costs actually and necessarily incurred'' by EFSEC in

processing applications and inspecting and determining compliance.

EFSEC estimates its air operating permit program administrative costs

to be approximately $1,121 per year per source. Based on this estimate,

EPA believes that the combined contract and administrative fees are

sufficient to meet the Act's requirements to cover the permit program

costs.

b. NWAPA and SWAPCA. NWAPA and SWAPCA have opted for fees below the

presumptive minimum ($30.18 a ton for FY95). NWAPA will collect the

equivalent of $19.29 per ton for the first year of the program.

Operating permit fees will be based on a two-tiered model in which 20%

of the total fees collected will be distributed equally between all the

affected sources and 80% will be distributed based on the quantity of

emissions emitted by each of the sources. In addition to the fees

assessed by NWAPA, each of the sources will also be responsible for a

portion of Ecology's oversight costs. EPA believes the combined State

and local air authority fees are sufficient to cover the permit program

costs based on NWAPA's detailed fee demonstration using a workload

analysis. NWAPA is a small agency in a relatively rural and low cost

area of the State. There are several sources in its jurisdiction that

emit very large tonnages but few sources overall. This high ratio of

tons of emissions to number of permits lowers the cost per ton of

implementing an operating permit program. NWAPA has committed in its

submittal to review its fee schedule annually and increase fees, as

needed, to reflect actual program implementation costs.

SWAPCA will collect the equivalent of $19.13 per ton for the first

year of the program. Operating permit fees will be based on a three-

tiered model with equal weight given to each part. The model divides

the fees collected into a flat fee for all affected sources, a fee

based on quantity of emissions, and a fee based on the complexity of

the permit. In addition to the fees assessed by the Authority, each of

the sources will also be responsible for a portion of Ecology's

oversight costs. EPA believes that the combined State and local air

authority fees are sufficient to cover permit program costs based on

SWAPCA's detailed fee demonstration using a workload analysis. As with

NWAPA, SWAPCA is a small agency in a relatively rural and low cost area

of the State with several sources in its jurisdiction that emit very

large quantities of emissions but few sources overall. Once again, this

high ratio of tons of emissions to number of permits lowers the cost

per ton of implementing an operating permit program. SWAPCA has

committed in its submittal to review its fee schedule annually and to

increase fees, as needed, to reflect actual program implementation

costs.

c. Ecology, BFCCAA, OAPCA, PSAPCA, SCAPCA and YCCAA. The fees to be

assessed by Ecology, BFCCAA, OAPCA, PSAPCA, SCAPCA, and YCCAA all

exceed the presumptive minimum. Fees range from $40 per ton to $64.72

per ton. In addition, each agency provided a detailed fee

demonstration. Together, all permitting authorities in Washington will

collect an estimated $4.6 million in the first year of program

implementation. Each permitting authority has committed in its

submittal to review its fee schedule annually and to increase fees, as

needed, to reflect actual program implementation costs.

4. Provisions Implementing the Requirements of Other Titles of the Act

a. Authority and Commitments for Section 112 Implementation. The

Washington permitting authorities have indicated in their Title V

program submittals that they are constitutionally precluded from

implementing and enforcing future federally-promulgated applicable

requirements by reference, but must instead first adopt state

regulations in order to incorporate such requirements into permits and

enforce them. Ecology has demonstrated, however, that it has broad

legal authority to adopt regulations necessary to implement any and all

section 112 requirements (see RCW 70.94.141(1); 70.94.331(2)). The

local air authorities may include these requirements in their Title V

permits as soon as Ecology adopts such requirements (see RCW

70.94.161(2)(a)).\6\ EFSEC, which has the legal authority to adopt air

quality standards consistent with those established by Ecology and the

local air authorities (see RCW 70.94.422(2)), intends to incorporate by

reference the section 112 standards adopted by Ecology. In their

submittal, the Washington permitting authorities have committed to

adopting regulations necessary to implement the section 112

requirements in a timely manner.

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\6\A local authority may also promulgate its own requirements,

which may be not less stringent than those promulgated by Ecology

(see RCW 70.94.331(6); WAC 173-400-020(2)).

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EPA has determined that this broad statutory and regulatory

authority is adequate for the Washington permitting authorities to

implement all section 112 requirements provided they expeditiously

adopt appropriate implementing regulations as new federal regulations

are promulgated. EPA regards the commitments of the Washington

permitting authorities as an acknowledgement of their obligation to

adopt regulations necessary to issue permits that assure compliance

with section 112 applicable requirements. Should a Washington

permitting authority fail to adopt regulations necessary to maintain

adequate legal authority to issue timely permits, EPA will consider

this grounds for withdrawing approval of such permitting authority's

program in accordance with the provisions of 40 CFR 70.10(c). For

further discussion of this determination, please refer to the April 13,

1993 guidance memorandum entitled ``Title V Program Approval Criteria

for Section 112 Activities,'' signed by John Seitz.

b. Implementation of Section 112(g) Upon Program Approval. After

the effective date of the Washington operating permit programs, no new

major source or major modification to an existing major source may be

constructed unless it has been subject to a case-by-case determination

of maximum achievable control technology (MACT) or offsets by the

permitting authority under section 112(g) of the Federal Clean Air Act.

The results of such case-by-case determination of MACT or offsets must

be federally-enforceable by the time that construction begins on the

new source or modification. Unless and until the Washington permitting

authorities\7\ submit, and EPA approves, air toxics permitting

regulations, there will be no mechanism for making federally-

enforceable MACT or offset determinations, thereby effectively

prohibiting construction of new major sources and major modifications

to existing major sources as of the date EPA grants interim approval of

the Washington operating permit programs.

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\7\As stated above, as a matter of State law, once Ecology

adopts air toxics permitting regulations, the local air authorities

may either directly implement Ecology's regulations, may incorporate

Ecology's regulations by reference or may adopt their own, more

stringent regulations. The EFSEC must incorporate Ecology's

regulations by reference or adopt their own regulations.

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Because EPA has not yet promulgated regulations to implement

section 112(g) of the Act, EPA has determined it has authority to

approve many existing state air toxics permitting regulations under the

authority of Title V and sections 112(g) and 112(l) of the Act solely

for the purpose of implementing section 112(g) during the transition

period between Title V approval and adoption of State rules

implementing EPA's forthcoming section 112(g) regulations. Submission

by Washington and approval by EPA of Washington's existing state air

toxics permitting rules could provide Washington permitting authorities

with an interim mechanism for establishing federally-enforceable

restrictions for section 112(g) purposes. The scope of such an approval

of Washington's air toxic regulations would be narrowly limited to

section 112(g) and would not confer or imply approval for purposes of

any other provision under the Act. Furthermore, such approval would be

for an interim period only, until such time as the Washington

permitting authorities adopt regulations consistent with regulations

promulgated by EPA to implement section 112(g) of the Act. Accordingly,

if Washington submits its existing air toxics permitting rules and EPA

determines that such rules are approvable pending adoption of State

rules implementing EPA's forthcoming section 112(g) regulations, EPA

would limit the duration of such an approval to a reasonable time

following promulgation of section 112(g) regulations so that the

Washington permitting authorities act expeditiously to adopt

regulations consistent with the section 112(g) regulations.

c. Delegation of Section 112 Standards. As discussed above, State

law prohibits Washington permitting authorities from implementing and

enforcing federal standards until they are adopted as State or local

regulations. Therefore, the Washington permitting authorities can only

request, and EPA can only grant, delegation of section 112 standards

after the Washington permitting authorities adopt and submit their

regulations to EPA for approval under section 112(l) of the Act.

The Washington permitting authorities have adopted all of the

National Emission Standards for Hazardous Air Pollutants (NESHAP) in 40

CFR part 61 and have submitted a request for delegation of those

standards in accordance with section 112(l) of the Act. Since the

adopted regulations and the requests for delegation cover sources in

addition to those subject to Title V, EPA will be acting on these

request under separate rulemaking pursuant to the provisions of 40 CFR

part 63.

d. Commitments for Title IV Implementation. The Washington

permitting authorities have committed to adopting and submitting to EPA

by January 1, 1995, a program implementing Title IV of the Clean Air

Act. This commitment is supported by adequate legal authority (see RCW

70.94.161(2)(c)).

B. Options for Approval/Disapproval and Implications

1. Ecology, EFSEC, NWAPA, OAPCA, PSAPCA, SCAPCA, and SWAPCA

EPA is proposing to grant interim approval to the operating permit

programs submitted on November 1, 1993, by Ecology, EFSEC, NWAPA,

OAPCA, PSAPCA, SCAPCA, and SWAPCA.\8\ If and when this proposed action

becomes final, these permitting authorities must make the following

changes to receive full approval:\9\

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\8\The scope of this action does not include the issuance of

permits or the enforcement of standards for sewage sludge

incinerators under Section 405 of the Clean Water Act, 42 USC 1345.

Delegation of sewage sludge incinerator permitting under the Clean

Water Act, if requested by the State, would be considered in a

separate administrative action (see 40 CFR Parts 122 and 501).

\9\All changes required for Ecology to receive full approval

must be made before EFSEC or any local air authority may receive

full approval. In addition, in order to receive full approval, EFSEC

and each local air authority must make such changes to their

regulations as are necessary under applicable State and local law to

incorporate into their respective regulations all required changes

to Ecology's operating permit program.

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a. Ecology. (1) Revise WAC 173-401-200(33), the definition of

``Title I modification,'' to include any modification permitted through

a minor source preconstruction permit. The EPA believes the phrase

``modification under an provision of title I of the Act'' in 40 CFR

70.7(e)(2)(i)(A)(5) is best interpreted to mean literally any change at

a source that would trigger permitting authority review under

regulations approved or promulgated under Title I of the Act. This

would include State preconstruction review programs approved by EPA as

part of the State Implementation Plan under section 110(a)(2)(C) of the

Clean Air Act and regulations addressing source changes that trigger

the application of NESHAP established pursuant to section 112 of the

Act prior to the 1990 amendments. The EPA intends to revise its

criteria for interim approval in 40 CFR 70.4(d) prior to taking final

action on this proposal to grant Washington interim approval so that

interim approval may be granted to State programs like Washington's

that currently allow a more narrow definition of Title I modification.

As noted, EPA believes the better interpretation of ``Title I

modifications'' would preclude granting full approval to the Washington

program. However, in the proposal to revise part 70, EPA will be taking

comment on whether the criteria in 40 CFR 70.7(e)(2)(i)(A), including

the phrase ``modification under any provision of title I,'' should be

interpreted in a manner that would allow changes reviewed under

programs approved pursuant to section 110(a)(2)(C) and changes that

trigger the application of NESHAP established pursuant to section 112

prior to the 1990 Amendments to be eligible for processing through

minor modification procedures. Should EPA adopt this alternative

interpretation, the definition of ``Title I modification'' in the

Washington program would then be fully consistent with Part 70.

(2) Revise RCW 70.94.430(1) to provide for maximum criminal

penalties of not less than $10,000 per day per violation, as required

by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap penalties

for criminal violations at $10,000. The civil penalty authority in RCW

70.94.431(1) already meets the requirements of 40 CFR 70.11(a)(3)(i)

for maximum civil penalties of not less than $10,000 per day per

violation.

(3) Revise RCW 70.94.430 to allow the imposition of criminal

penalties against any person who knowingly makes any false material

statement, representation or certification in any form, in any notice

or report required by a permit, as required by 40 CFR 70.11(a)(3)(iii).

This provision must include maximum penalties of not less than $10,000

per day per violation.

The Attorney General's opinion states that false reporting is a

criminal violation under Washington law because RCW 70.94.430(1) makes

it unlawful to knowingly violate any regulations adopted under ch.

70.94 RCW, and WAC 173-401-520 requires that all application forms,

reports and compliance certifications submitted pursuant to ch. 173-401

WAC contain a certification as to their truth, accuracy and

completeness. This authority, however, does not appear to be as broad

as that required by 40 CFR 70.11(a)(3)(iii). Knowing violation of the

certification requirement of WAC 173-401-520 would be only one criminal

violation even if the document which was falsely certified covered

several false material statements. Under 40 CFR 70.11(a)(3)(iii), each

false material statement must be subject to a criminal penalty.

Moreover, accepting the State's interpretation would render the

specific requirement of 40 CFR 70.11(a)(3)(iii) entirely superfluous.

Because Part 70 otherwise requires States to have the provisions on

which the Attorney General relies (see 40 CFR 70.5(d) and

70.11(a)(3)(ii)), no State would have to make any additional showing of

the authority required by 40 CFR 70.11(a)(3)(iii) under the State's

interpretation.

(4) Revise RCW 70.94.430 to allow the imposition of criminal

penalties against any person who knowingly renders inaccurate any

required monitoring device or method, as required by 40 CFR

70.11(a)(3)(iii). This provision must include maximum penalties of not

less than $10,000 per day per violation.

As authority for this requirement, the Attorney General's opinion

states that a knowing violation of WAC 173-400-040(7), which prohibits

the use of any means which conceals or masks an emission of an air

contaminant, would subject the offender to criminal penalties under RCW

70.94.430(1). Again, however, this authority does not appear to be as

broad as that required by 40 CFR 70.11(a)(3)(iii). WAC 173-400-040(7)

only prohibits tampering that conceals air emissions; it would not

prohibit tampering with equipment that monitors secondary parameters,

such as fuel content or production rate.

(5) Delete WAC 173-401-735(3) entirely or revise it so that it

refers to RCW 34.05.570(4)(b), rather than RCW 7.16.360. Part 70

requires that State law provide a cause of action in State court for

the permitting authority's failure to take final action on a permit

within the specified time period (see 40 CFR 70.4(b)(3)(xi)). WAC 173-

401-735(3) authorizes a person to seek a writ of mandamus in such a

case ``[a]s provided in chapter 7.16 RCW.'' Chapter 7.16 RCW, however,

authorizes the issuance of a writ of mandamus only if there is no other

remedy available (see RCW 7.16.360). RCW 34.05.570(4)(b) provides an

express cause of action for an agency's failure to take a required

action. Therefore, WAC 173-401-735(3) must be revised to delete the

reference to ch. 7.16 RCW as the basis for the cause of action.

(6) Revise WAC 173-401-530(2) to define an emissions unit as

insignificant only if it is subject to no federally enforceable

applicable requirement and delete the last sentence in WAC 173-401-

200(16) (``These units and activities are exempt from permit program

requirements except as provided in WAC 173-401-530.''). Under 40 CFR

70.5(c), EPA may approve as part of a State program a list of

insignificant activities and emissions levels which need not be

included in permit applications. However, no activity for which there

is an applicable requirement may be defined as insignificant. The

Washington State Implementation Plan includes several ``generally''

applicable requirements (e.g. a 20% opacity limit for all emission

units) that apply to any and all emission points and are ``applicable

requirements'' under the part 70 rules. Together, WAC 173-401-530(2)

and the last sentence of WAC 173-401-200(16) relieve sources from the

requirement of demonstrating and certifying compliance with these

``generally'' applicable requirements for emission units that are

subject to no other applicable requirement and meet the other criteria

for insignificance (e.g. size, production rate, emission level). WAC

173-401-530(1) clarifies that these insignificant activities must still

comply with all requirements. WAC 173-401-530(2)(b) requires that all

such generally applicable requirements to which the source is subject

be listed in the application and the permit. The program, taken as a

whole, substantially fulfills the requirement under 40 CFR 70.6(a)(1)

that a permit include emission limitations and standards that assure

compliance with all applicable requirements.

b. NWAPA.

(1) Revise NWAPA Sec. 132.1 to provide for maximum criminal

penalties of not less than $10,000 per day per violation, as required

by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap penalties

for criminal violations at $10,000.

(2) Revise NWAPA Sec. 132 to allow the imposition of criminal

penalties against any person who knowingly makes any false material

statement, representation or certification in any form, in any notice

or report required by a permit, as required by 40 CFR 70.11(a)(3)(iii).

See discussion above in paragraph (3) of Ecology's interim approval

issues.

(3) Revise NWAPA Sec. 132 to allow the imposition of criminal

penalties against any person who knowingly renders inaccurate any

required monitoring device or method, as required by 40 CFR

70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's

interim approval issues.

(4) Revise NWAPA Sec. 133.1 to provide for maximum civil penalties

of not less than $10,000 per day per violation in the case of

violations of multiple standards by a specific emissions unit, as

required by 40 CFR 70.11(a)(3). Existing language appears to cap

penalties for violations of multiple standards by a specific emissions

unit at $10,000.

c. PSAPCA.

(1) Revise PSAPCA Reg. I, Sec. 3.13(a) to provide for maximum

criminal penalties of not less than $10,000 per day per violation, as

required by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap

penalties for criminal violations at $10,000.

(2) Revise PSAPCA Reg. I, Sec. 3.13 to allow the imposition of

criminal penalties against any person who knowingly makes any false

material statement, representation or certification in any form, in any

notice or report required by a permit, as required by 40 CFR

70.11(a)(3)(iii). See discussion above in paragraph (3) of Ecology's

interim approval issues.

(3) Revise PSAPCA Reg. I, Sec. 3.13 to allow the imposition of

criminal penalties against any person who knowingly renders inaccurate

any required monitoring device or method, as required by 40 CFR

70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's

interim approval issues.

d. OAPCA.

(1) Revise OAPCA Reg. 1, Sec. 3.27(b)(1) to provide for maximum

criminal penalties of not less than $10,000 per day per violation, as

required by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap

penalties for criminal violations at $10,000.

(2) Revise OAPCA Reg. 1, Sec. 3.27(b) to allow the imposition of

criminal penalties against any person who knowingly makes any false

material statement, representation or certification in any form, in any

notice or report required by a permit, as required by 40 CFR

70.11(a)(3)(iii). See discussion above in paragraph (3) of Ecology's

interim approval issues.

(3) Revise OAPCA Reg. 1, Sec. 3.27(b) to allow the imposition of

criminal penalties against any person who knowingly renders inaccurate

any required monitoring device or method, as required by 40 CFR

70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's

interim approval issues.

(4) Revise the definition of ``potential to emit'' in OAPCA Reg. 1,

Sec. 6.00 to provide that any physical or operational limitation on the

capacity of a source to emit a pollutant shall be treated as part of

its design only if the limitation is federally enforceable (see 40 CFR

70.2 (definition of potential to emit)). OAPCA regulations currently

define ``potential to emit'' to include any such limitation that is

enforceable by OAPCA.

e. SCAPCA.

(1) Revise SCAPCA Reg. I, Sec. 2.04(B) to eliminate the limitation

on the control officer's authority to request criminal penalties to

cases in which a violator has failed to correct the violation after a

``reasonable and/or required period of time.'' Sections 70.11(a)(3)

(ii) and (iii) require that States have authority to impose a criminal

penalty for each day of violation. A requirement that a violator can be

subject to criminal penalties only if the violator fails to correct the

violation after an opportunity to comply is inconsistent with the

requirements of part 70.

(2) Revise SCAPCA Reg. I, Sec. 2.11(A)(1) to provide for maximum

criminal penalties of not less than $10,000 per day per violation, as

required by 40 CFR 70.11(a)(3)(ii). Under existing language, it is not

clear that criminal penalties may be assessed for each day on which a

violation occurs.

(3) Revise SCAPCA Reg. I, Sec. 2.11(A) to allow the imposition of

criminal penalties against any person who knowingly makes any false

material statement, representation or certification in any form, in any

notice or report required by a permit, as required by 40 CFR

70.11(a)(3)(iii). See discussion above in paragraph (3) of Ecology's

interim approval issues.

(4) Revise SCAPCA Reg. I, Sec. 2.11(A) to allow the imposition of

criminal penalties against any person who knowingly renders inaccurate

any required monitoring device or method, as required by 40 CFR

70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's

interim approval issues.

f. SWAPCA. No changes in the SWAPCA operating permit program are

necessary to receive full approval other than those that may be

necessary under applicable State and local law to incorporate into

SWAPCA's regulations all required changes to Ecology's operating permit

program.

2. BFCCAA and YCCAA

a. Required changes for interim approval. As discussed above, there

is a serious question regarding whether BFCCAA and YCCAA have

effectively incorporated by reference the State operating permit rule

and, if so, whether the provisions of the State operating permit rule

that are inconsistent with the operating permit rules of BFCCAA and

YCCAA could be enforced against a Title V source. On that basis, EPA

proposes disapproval of the operating permit programs submitted by

BFCCAA and YCCAA. Both of these authorities have advised EPA, however,

that they intend to make all changes necessary to receive interim

approval by October 1994. Based on this assurance, EPA is proposing in

the alternative to grant interim approval of the operating permit

programs submitted by BFCCAA and YCCAA provided that they make the

following changes by the time of final action on this rulemaking:

BFCCAA. (1) Repeal BFCCAA Reg. 1, Sec. 4.01, or revise it to

incorporate by reference the State operating permit regulation, ch.

173-401 WAC, adopted on October 4, 1993, as amended to incorporate any

changes made by Ecology at the time BFCCAA so amends BFCCAA Reg. 1,

Sec. 4.01.

(2) Repeal BFCCAA Reg. 1, Sec. 4.02, 4.04, 4.05, 4.06 and 4.07.

YCCAA. (1) Repeal YCCAA Reg. 1, Sec. 6.02, 6.04, 6.05, 6.06, 6.07

and 6.08.

(2) Revise YCCAA Reg. 1, Sec. 12.01 to provide that the identified

provisions of the Washington State Administrative Code are incorporated

by reference unless the YCCAA regulation is more stringent than the

State regulation.

(3) Revise YCCAA Reg. 1, Sec. 12.02 so that the identified

provisions of federal law are incorporated by reference regardless of

whether the federal regulations are inconsistent with YCCAA

regulations. Part 70 requires that all ``applicable requirements'' be

included in the permit (see 40 CFR 70.6(a)(1)). The term ``applicable

requirement'' is defined to include any standard or other requirement

under Sections 111 and 112 of the Act (see 40 CFR 70.2). YCCAA Reg. 1,

Sec. 12.02, however, would preclude YCCAA from including a Section 111

or 112 standard in an operating permit if the YCCAA had a regulation

that was less stringent than the federal standard. Therefore, YCCAA

does not have the authority to include all ``applicable requirements''

in a permit as required by part 70.

If BFCCAA or YCCAA fails to make these required changes by the time

EPA takes final action on this proposed rulemaking, EPA will disapprove

the operating permit program of such local air authority in the final

action. In the event of such a disapproval, Washington's Attorney

General has opined that Ecology's operating permit program would apply

as a matter of State law to sources located in the counties under the

jurisdiction of the local air authority. On that basis, EPA intends to

grant Ecology interim approval to administer the operating permit

program in the event of a disapproval of either local air authority

operating permit program within the jurisdiction of such local

authority. Therefore, no sanctions will result from a disapproval of

the operating permit program of either local air authority because all

sources in the State of Washington required to have an operating permit

under part 70 will be subject to either the State or a local operating

permit program that will have received interim approval.

b. Required changes for full approval. EPA will grant BFCCAA and

YCCAA interim approval of their operating permit programs provided they

make the changes required in paragraph (a) above. If they receive

interim approval, these local air authorities must make the following

additional changes to receive full approval:10

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\1\0All changes required for Ecology to receive full approval

must be made before BFCCAA or YCCAA may receive full approval. In

addition, in order to receive full approval, BFCCAA and YCCAA must

make such changes to their regulations as are necessary under

applicable State and local law to incorporate into their respective

regulations all required changes to Ecology's operating permit

program.

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BFCCAA. No additional changes are necessary for the BFCCAA

operating permit program to receive full approval other than those that

may be necessary under applicable State and local law to incorporate

into BFCCAA's regulations all changes to the State operating permit

program required for full approval.

YCCAA. Revise YCCAA Reg. I, Sec. 2.01, to delete the requirement

that violations be ``knowing.'' Part 70 prohibits a permitting

authority from including a mental state as an element of proof for

civil violations (see 40 CFR 70.11(a)(i)).

3. Effect of Interim Approval

Interim approval of these operating permit programs, which may not

be renewed, extends for a period of up to two years.

During the interim approval period, the State is protected from

sanctions for failure to have a program and EPA is not obligated to

promulgate a federal permits program in the State. Permits issued under

a program with interim approval have full standing with respect to part

70. In addition, the one-year deadline for submittal of permit

applications by subject sources and the three-year time period for

processing the initial permit applications begin upon interim approval.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

interim approval. Copies of the submittals of the State and local air

authorities and other information relied upon for the proposed interim

approval are contained in a docket maintained at the EPA Regional

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 rulemaking. The principal 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 by September 19, 1994.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

Under the Regulatory Flexibility Act, 5 U.S.C. sections 600 et

seq., EPA must prepare a regulatory flexibility analysis

assessing the impact of any proposed or final rule on small

entities. 5 U.S.C. 603 and 604. Alternatively, EPA may certify that the

rule will not have a significant impact on a substantial number of

small entities. Small entities include small businesses, small not-for-

profit enterprises, and government entities with jurisdiction over

populations of less than 50,000.

Operating permit program approvals under section 502 of the Act do

not create any new requirements, but simply approve requirements that

the State is already imposing. Therefore, because the federal operating

permit program 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 Act, preparation of a regulatory flexibility analysis would

constitute federal inquiry into the economic reasonableness of State

action. The Act forbids EPA to base its actions concerning operating

permit programs on such grounds. Union Electric Co. v. U.S. E.P.A., 427

U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. 7410(a)(2).

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Environmental protection, Intergovernmental

relations, Operating permits, and Reporting and recordkeeping

requirements.

Authority: 42 U.S.C. sections 7401-76719.

Dated: July 18, 1994.

Chuck Clarke,

Regional Administrator.

[FR Doc. 94-19774 Filed 8-17-94; 8:45 am]

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