Clean Air Act Final Interim Approval of Operating Permits Programs in Washington

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5103-8]

Clean Air Act Final Interim Approval of Operating Permits

Programs in Washington

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: EPA is promulgating interim approval of the operating permits

program submitted by the State of Washington for the purpose of

complying with Federal requirements for an approvable State program to

issue operating permits to all major stationary sources and to certain

other sources. The Washington program includes submittals by the

Washington Department of Ecology (Ecology), the Washington Energy

Facility Site Evaluation Council (EFSEC), and seven local air

authorities: the Benton-Franklin Counties Clean Air Authority (BFCCAA),

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), the Southwest Air Pollution Control Authority

(SWAPCA), and the Yakima County Clean Air Authority (YCCAA).

EFFECTIVE DATE: December 9, 1994.

ADDRESSES: Copies of Washington's submittal and other supporting

information used in developing the final interim approval 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, U.S. Environmental

Protection Agency, 1200 Sixth Avenue, AT-082, Seattle, Washington

98101, (206) 553-4303

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

Introduction

Title V of the Clean Air Act Amendments of 1990 (sections 501-507

of the Clean Air Act (``the Act'')) and implementing regulations at 40

Code of Federal Regulations (CFR) part 70, require that States develop

and submit operating permits 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 the Part 70 regulations, 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, 1993 date, or by the end of an interim program, it must establish

and implement a Federal program.

On August 18, 1994, EPA proposed interim approval of the operating

permits program for Ecology, EFSEC, NWAPA, OAPCA, PSAPCA, SCAPCA, and

SWAPCA. The same Federal Register notice proposed disapproval of the

programs for BFCCAA and YCCAA and, in the alternative, interim approval

of these programs if certain regulatory changes were made before EPA

took final action on the proposal. See 59 FR 42552 (Aug. 18, 1994). EPA

received eleven public comments on the proposal. In this notice EPA is

taking final action on its proposal to promulgate interim approval of

the operating permits program for Ecology, EFSEC, and all seven local

air authorities in Washington (collectively, ``the local air

authorities'').

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

Both BFCCAA and YCCAA made the regulatory changes necessary to

receive interim approval. The board of directors of BFCCAA repealed

BFCCAA Reg. 1, Secs. 4.01, 4.02, 4.04, 4.05, 4.06, and 4.07 on August

18, 1994. The revised regulations were submitted to the Washington

State register and became effective on September 23, 1994. On September

14, 1994, the board of directors of YCCAA repealed YCCAA Reg. 1,

Secs. 6.02, 6.04, 6.05, 6.07, and 6.08; revised 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; Revised YCCAA Reg. 1, Sec. 12.02 so

that the identified provisions of Federal law are incorporated by

reference. The revised regulations were submitted to the Washington

State register and became effective on October 22, 1994. The revised

regulations for BFCCAA and YCCAA were submitted by the State of

Washington on September 29, 1994 as an amendment to the Washington

Title V program.

EPA received eleven public comments on the proposed interim

approval of the Washington program, including comments from the

Washington Department of Ecology and the Puyallup Tribe of Indians. No

commenters objected to approval of the Washington permit program,

although one commenter requested that the program not be approved

before November 15, 1994 because of the substantial time needed to

complete permit applications.

1. Insignificant Emissions Units

Most of the commenters stated that the insignificant emissions

units provisions of the State operating permit regulation (WAC 173-401-

200(16) and 173-401-530) should be granted full approval rather than

interim approval. These commenters disagreed with EPA's interpretation

that no unit for which there is an applicable requirement could be

defined as ``insignificant.'' They further stated that such an

interpretation would prevent Washington and most other States from

granting any relief for insignificant emission units, which they argue

is inconsistent with the intent of Part 70. The result would be that

all emissions, regardless of size and environmental impact, would be

subject to all Part 70 requirements, including periodic monitoring,

reporting, recordkeeping and compliance certification. Permit

applications would have to describe emissions from all units and

responsible officials would be required to conduct extensive due

diligence efforts in order to certify the compliance of emission units

that emit very small quantities of pollutants. Commenters emphasized

that this was an unreasonable regulatory burden that would result in

excessive paperwork and would likely decrease the ability of permitting

agencies to effectively enforce Title V permits because inspectors

would have to read through numerous pages of specifications and

requirements to determine which emission units actually have permit

conditions.

EPA maintains, however, that Title V and the Part 70 rules preclude

the exemption of emission units as ``insignificant'' when such units

are subject to an applicable requirement. Section 504(a) of the Act

requires that ``each permit issued under this title shall include

enforceable emission limitations and standards, a schedule of

compliance, a requirement that the permittee submit to the permitting

authority, no less often than every 6 months, the results of any

required monitoring, and such other conditions as are necessary to

assure compliance with applicable requirements of the Act, including

the requirements of the applicable implementation plan.'' (emphasis

added). Section 70.6(a)(1) provides that each permit shall include

``emission limitations and standards, including those operational

requirements and limitations that assure compliance with all applicable

requirements at the time of permit issuance.'' Furthermore,

Sec. 70.6(c)(1) requires that each permit shall contain ``compliance,

certification, testing, monitoring, reporting, and recordkeeping

requirements sufficient to assure compliance with the terms and

conditions of the permit.'' The fact that an emission unit may emit

only small quantities of pollutants does not provide a basis to exempt

it from the fundamental statutory requirement that the permit

specifically include, and ensure compliance with, all applicable

requirements.

EPA understands the implementation concerns expressed by the

commenters but disagrees that the Part 70 permit requirements need be

unduly burdensome for these smaller emission units with only generally

applicable requirements. For example, the requirement to ``describe''

emissions of regulated pollutants in a permit application is not a

requirement to quantify those emissions. These smaller units can be

aggregated and described in very general terms (e.g. all valves and

flanges not otherwise specified). Furthermore, the requirement to

include in a permit compliance certification, test, monitoring,

reporting, and recordkeeping sufficient to assure compliance with the

terms and conditions of the permit does not impose the same level of

rigor with respect to small emission units that do not require

extensive testing or monitoring in order to determine compliance with

the applicable requirements.

Several commenters also stated it was unreasonable and

inappropriate to require Washington to change its provisions for

insignificant emission units at this time because this issue is part of

ongoing litigation over the part 70 rules and may be revised. EPA

acknowledges that it may be both burdensome and confusing if the Part

70 rules on insignificant emission units are changed and Ecology is

required to revise its rules twice, once to meet EPA's current

objection and later if part 70 is revised. EPA has no legal mechanism,

however, to either grant a longer interim approval period or to grant

full approval under the current part 70 rules based on a possibility

that the part 70 regulations may change as a result of notice and

comment rulemaking sometime in the future.

2. Definition of Title I Modification

In its August 18, 1994 Federal Register notice proposing interim

approval for the Washington program, EPA advised the State that it

would be required to revise its definition of the term ``title I

modification'' to obtain full EPA approval:

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[y] 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. (59 FR 42557).

On August 29, 1994, EPA proposed revisions to the interim approval

criteria in 40 CFR 70.4(d) to, among other things, allow State programs

with a more narrow definition of ``title I modification'' to receive

interim approval (59 FR 44572). The Agency also solicited public

comment on the proper interpretation of ``title I modifications'' (59

FR 44573). The Agency stated that if, after considering the public

comments, it continues to believe that the phrase ``title I

modifications'' should be interpreted as including minor NSR changes,

it would revise the interim approval criteria as needed to grant states

that adopted a narrower definition interim approval.

In response to EPA's proposed interim approval of the Washington

program, several commenters questioned whether the State's adoption of

a narrower ``title I modification'' definition justified anything other

than full approval. These commenters asserted that Washington's current

definition is the correct one under the existing regulations and the

Clean Air Act and that a broader interpretation including minor NSR

would be wholly unworkable.

One commenter, the National Environmental Development Association/

Clean Air Regulatory Project (NEDA/CARP), further contended that EPA

was using the August 29, 1994 proposed rule to effectively require

revision of a State operating permits program that was otherwise

consistent with current Part 70 and that such an approach was

unauthorized, not supported by the Clean Air Act or Part 70, and poor

public policy. NEDA/CARP also suggested that EPA's August 18, 1994

proposal to require Washington to adopt a broader interpretation of

``title I modification'' to obtain full approval indicated that the

Agency does not intend to consider public comment on the August 29,

1994 proposal that solicits comments on the proper interpretation of

``title I modifications.''

As noted in the August 18, 1994 Federal Register notice, proposing

interim approval of Washington's operating permit program, EPA intended

to finalize its revisions to the interim approval criteria under 40 CFR

70.4(d) before taking final action on part 70 programs submitted by the

States. However, that is no longer possible. Publication of the

proposed revisions was delayed until August 29, 1994, and EPA received

several requests to extend the public comment period.1 Given the

importance of the issues in that rulemaking to States, sources and the

public, but mindful of the need to take action quickly, EPA agreed to

extend the comment period until October 28, 1994 (see 59 FR 52122

(October 14, 1994)). Consequently, final action to revise the interim

approval criteria will not occur before the deadline for EPA action on

State programs, such as Washington's, that were submitted on or before

November 15, 1993.2

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\1\EPA originally established a 30-day public comment period for

the August 29, 1994 proposal. In response to several requests for

extension, however, EPA agreed to allow an additional thirty days

for public comments. See 59 FR 52122 (October 14, 1994).

\2\Section 502(d) requires, in relevant part, that ``[n]ot later

than 1 year after receiving a program, and after notice and

opportunity for public comment, the Administrator shall approve or

disapprove such program, in whole or in part.''

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EPA believes it would be inappropriate to delay action on

Washington's program, perhaps for several months, until final action is

taken on the interim approval revisions. EPA also believes it would be

inappropriate to grant interim approval to Washington on this issue

before final action is taken to revise the current interim approval

criteria of 40 CFR 70.4(b) to provide a legal basis for such an interim

approval. Until the revision to the interim approval criteria is

promulgated, EPA's choices are to either fully approve or disapprove

the narrower ``title I modification'' definition in States such as

Washington. For the reasons set forth below, EPA believes that

disapproving such programs at this time solely because of this issue

would be inappropriate.

First, EPA has not yet conclusively determined that a narrower

definition of ``title I modifications'' is incorrect and thus a basis

for disapproval (or even interim approval). The Agency has received

numerous comments on this issue as a result of the August 29, 1994

Federal Register notice, and EPA cannot and will not make a final

decision on this issue until it has evaluated all of the comments.

Second, EPA believes that the Washington program should not be

disapproved because EPA itself has not yet been able to resolve this

issue through rulemaking. Moreover, disapproving programs from States

such as Washington that submitted their programs to EPA on or before

the November 15, 1993 statutory deadline could lead to the perverse

result that these States would receive disapprovals, while States which

were late in submitting programs could take advantage of revised

interim approval criteria if and when these criteria become final. In

effect, States would be severely penalized for having made timely

program submissions to EPA. Finally, disapproval of a State program for

a potential problem that primarily affects permit revision procedures

would delay the issuance of Part 70 permits, hampering State/Federal

efforts to improve environmental protection through the operating

permits system.

For the reasons mentioned above, EPA is approving the Washington

program's use of a narrower definition of ``title I modifications'' at

this time.3 However, should EPA in the interim approval criteria

rulemaking make a final determination that such a narrow definition of

``title I modification'' is incorrect and that a revision of the

interim approval criteria is warranted, the Agency will propose further

action on Washington's program so that the State's definition of

``title I modifications'' could become grounds for interim

approval.4 A State program like Washington's that receives full

approval of its narrower ``title I modification'' definition pending

completion of EPA's rulemaking must ultimately be placed on an equal

footing with States that receive interim approval in later months under

any revised interim approval criteria because of the same issue.

Converting the full approval on this issue to an interim approval after

EPA completes its rulemaking will avoid this inequity. EPA anticipates

that an action to convert the full approval on the ``title I

modification'' issue to an interim approval would be effected through

an additional rulemaking, so as to ensure that there is adequate notice

of the change in approval status.

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\3\For similar reasons, the EPA will not construe 40 CFR

70.7(e)(2)(i)(A)(3) to prohibit Washington from allowing minor NSR

changes to be processed as minor permit modifications. See 59 FR

44573-44574.

\4\State programs with a narrower ``title I modifications''

definition that are acted upon by EPA after an Agency decision that

such a narrower definition is inappropriate would be considered

deficient, but would be eligible for interim approval under revised

40 CFR 70.4(b).

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3. Section 112(g) Modifications

One commenter stated that EPA has proceeded in a confusing and

unauthorized fashion by proposing a construction ban on section 112(g)

modifications and that EPA should not delegate section 112(g) authority

until it completes its own rulemaking.

EPA did not propose a construction ban but simply noted the

provision of section 112(g)(2) of the Act which prohibits the

modification, construction, or reconstruction of a source after the

date of approval of a Title V program unless maximum achievable control

technology (MACT), determined on a case-by-case basis if necessary, is

met. Although section 112(g)(1) requires the Administrator to publish

guidance with respect to the implementation of section 112(g), the

plain meaning of section 112(g)(2) is that it takes effect on the

effective date of the Title V program in any State.

EPA has acknowledged that States may encounter difficulties

implementing section 112(g) prior to the promulgation of final EPA

regulations (see June 28, 1994 guidance memorandum entitled ``Guidance

for Implementation of Section 112(g)'' signed by John Seitz). EPA has

issued guidance, in the form of a proposed rule implementing 112(g),

which may be used to determine whether a physical or operational change

at a source is not a modification either because it is below de minimis

levels or because it has been offset by a decrease of more hazardous

emissions (see 59 FR 15004 (April 1, 1994)). EPA believes the proposed

rule provides sufficient guidance to permitting authorities and sources

until such time as EPA's section 112(g) rulemaking is finalized.

Although EPA does not have a program designed specifically to

implement section 112(g), Washington does have a preconstruction review

program that could serve as a procedural vehicle for rendering

federally enforceable a case-by-case MACT or offset determination.

Although the scope of Washington's program may not cover every

situation where a section 112(g) modification, construction, or

reconstruction may occur, it would cover most circumstances. In order

to provide a federally-recognized mechanism to implement section 112(g)

on an interim basis until final EPA regulations are promulgated, EPA

intends to propose approval of Washington's preconstruction review

program in a separate Federal Register notice. Final approval of

Washington's preconstruction review program, and not this final

approval of its Title V operating permit program, would represent EPA's

delegation of section 112(g) authority to the State.

4. Limitations on Potential To Emit

One commenter objected to EPA's requirement that OAPCA revise its

definition of ``potential to emit'' to include only those limitations

on a source's capacity to emit that are federally enforceable, arguing

that it requires local authorities to ignore their own and other State-

enforceable limitations.

The cited definition appears in OAPCA Reg. 1, Art. 6, which

addresses the operating permit program. As such, the definition of

potential to emit must be consistent with the Part 70 rules which

require, for the purposes of the Title V operating permit program, that

all limits on potential to emit be federally enforceable. EPA does not

place any restrictions on a local authority's use of non-Federally

enforceable emission limits on non-Title V sources or on establishing

additional, non-federally enforceable emission limits on Title V

sources. However, in order for such limitations to be recognized for

purposes of the Federal Clean Air Act, they must be enforceable by EPA

and by citizens under the Act.

5. Scope of the Program--Tribal Lands

EPA proposed to exclude from the Washington Title V program, Title

V sources located on any trust or restricted lands within the Puyallup

1873 Survey Area or any other lands within the exterior reservation

boundaries of a Federally-recognized Indian Tribe because Ecology did

not establish that it had jurisdiction over sources on these lands. EPA

proposed to apply the Ecology and PSAPCA Title V program to non-trust

lands within the 1873 Survey Area of the Puyallup Reservation because

Ecology and PSAPCA submitted legal analysis demonstrating their

authority to administer environmental laws on these lands. See 59 FR at

42554.

Ecology and PSAPCA presented legal analysis based on the Washington

Indian (Puyallup) Land Claims Settlement, which expressly allocates

jurisdiction according to a settlement agreement between the Tribe,

Federal, State and local governments and certain private property

owners. 25 U.S.C. 1773-1773j. The settlement agreement, in turn, gives

Federal, State and local governments exclusive jurisdiction for the

administration of environmental laws on all non-trust lands within the

1873 Survey Area and gives the Federal government and the Tribe

exclusive jurisdiction for the administration of environmental laws on

all trust and restricted lands within the Area.

The Puyallup Tribe of Indians commented that EPA correctly applied

the settlement agreement in its proposed determination not to approve

the application of Washington's Title V program to trust and restricted

lands within the 1873 Survey Area. The Tribe also commented that

Washington's request for authority over non-trust lands within the

Survey Area was consistent with the settlement agreement.

In today's action, EPA finalizes its proposed determination that

the Washington Title V program apply to Title V sources located on non-

trust lands within the Survey Area.

During the public comment period, Ecology commented ``that [it] has

requisite authority to enforce and run the Air Operating Permits

Program on tribal lands.'' Ecology's comments do not appear to

challenge EPA's proposed allocation of jurisdiction over the Puyallup

Reservation. Rather, Ecology appears to contend that EPA has erred in

proposing to exclude application of the State's Title V program to

Title V sources within the exterior reservation boundaries of all other

Federally-recognized Tribes located within the State.

In support of this contention, Ecology generally asserts that

Ecology has ``necessary jurisdiction to regulate Title V sources

throughout the state.'' Ecology also appears to be alleging that, at a

minimum, it has authority over non-Indian owned Title V sources on non-

Indian owned fee lands within reservations. Ecology states that the law

presumes it has authority over such sources and that the legal opinion

accompanying its Title V program submittal should be interpreted to

apply consistently at least to all fee lands within the exterior

boundaries of the State. Ecology comments that ``[c]ourts have only

found for tribal jurisdiction when the weight of tribal interests is

great enough'' and that ``[s]everal potential major sources owned by

non-[I]ndians with no tribal relationships can be found in the State on

fee lands within reservations.''

To obtain Title V program approval a State must demonstrate that it

has adequate authority to issue permits and assure compliance by all

sources required to have permits under Title V with each applicable

requirement under the Act. See Section 502(b)(5) of the Act; 40 CFR

70.4(b)(3)(i). The authority must include:

A legal opinion from the Attorney General from the State or the

attorney for those State, local, or interstate air pollution control

agencies that have independent counsel, stating that the laws of the

State, locality, or interstate compact provide adequate authority to

carry out all aspects of the program. This statement shall include

citations to the specific stat[ut]es, administrative regulations,

and, where appropriate, judicial decisions that demonstrate adequate

authority. 40 CFR 70.4(b)(3).

Thus, the Act requires States to support their Title V program

submittals with a specific showing of adequate legal authority over all

regulated sources, including sources located on lands within Indian

reservations.

EPA concludes that Ecology has not adequately demonstrated

authority to regulate Title V sources owned by Tribal members or

located on their territory or trust lands. Ecology's inability to reach

into Indian country and apply environmental regulation to Tribal

members, their territory or trust lands is not a new issue. Ecology

previously asserted regulatory jurisdiction over Tribal lands in a

submittal to EPA under the Resource Conservation and Recovery Act

program. EPA declined to apply the program to waste-related activities

on Tribal lands and its decision was upheld on judicial review. See

Washington Department of Ecology v. EPA, 752 F.2d 1465 (9th Cir. 1985).

The court's conclusion was informed by ``well-settled principles of

Indian law'' including the principle that ``States are generally

precluded from exercising jurisdiction over Indians in Indian country

unless Congress has clearly expressed an intention to permit it.''

Washington Department of Ecology, 752 F.2d at 1469-1479 (citations

omitted); see also United States v. Mazurie, 419 U.S. 544, 556 (1975)

(the inherent sovereign authority of Indian Tribes extends ``over both

their members and their territory''); Montana v. United States, 450

U.S. 544, 556-557 (1981) (Tribes generally have extensive authority to

regulate activities on lands that are held by the United States in

trust for the Tribe).

Washington has also asserted jurisdiction over underground

injection activities on Indian lands under the Safe Drinking Water Act,

claiming its laws are applicable throughout the borders of the State.

EPA concluded that Washington could not regulate these activities on

Indian lands because it had failed to demonstrate that its authority to

regulate was not preempted by Federal law, and that the State

regulation would not infringe on Tribal self-government. 53 FR 43080-

43081-43082 (Oct. 25, 1988); see White Mountain Apache Tribe v.

Bracker, 448 U.S. 136 (1980); California v. Cabazon Band of Mission

Indians, 408 U.S. 202 (1987).

Ecology contends that EPA should nevertheless presume that Ecology

at least has authority over non-Indian owned Title V sources on fee

lands within the exterior boundaries of Federally-recognized Indian

reservations. EPA concludes that Ecology has also failed to adequately

demonstrate authority over Title V sources located on fee lands within

reservations.

EPA's regulations require specific evidence of legal authority.

Adequate authority is especially necessary in these circumstances

where, as set out below, Supreme Court case law recognizes inherent

sovereign Tribal authority to regulate activities on fee lands where

the conduct may have a serious and substantial impact on Tribal health

or welfare, air pollution activities generally pose serious health

risks, EPA has proposed to interpret the Tribal authority provisions of

the Act as granting Tribes authority over air pollution activities on

fee lands within reservations, and Federal Indian law and policies

direct EPA to treat Tribes as sovereigns and to consider Tribal

interests in taking Federal actions that affect Tribes.

The Supreme Court has indicated that a Tribe ``may * * * retain

inherent power to exercise civil authority over the conduct of non-

Indians on fee lands within its reservation when that conduct threatens

or has some direct effect on the * * * health or welfare of the

tribe.'' Montana, 450 U.S. at 566. A Tribe's inherent authority must be

determined on a case-by-case basis, considering whether the conduct

being regulated has a direct effect on the health or welfare of the

Tribe substantial enough to support the Tribe's jurisdiction over non-

Indians. See Brendale v. Confederated Tribes and Bands of the Yakima

Indian Nation, 492 U.S. 408 (1989).

The case law addressing a Tribe's authority over non-members on

non-Indian owned fee lands within the exterior boundaries of a

reservation must be viewed in light of the concerns presented by air

pollution activities and, importantly, the 1990 Amendments to the Act.

In 1990, Congress broadly addressed Tribal authority under the Act,

adding sections 110(o) and 301(d) to the Act.\5\ Section 301(d)(2) of

the Act authorizes EPA to issue regulations specifying those provisions

of the Act for which it is appropriate ``to treat Indian Tribes as

States.'' Further, it addresses the potential jurisdictional scope of

Tribal programs under the Act, authorizing EPA to treat Tribes in the

same manner as States for ``the management and protection of air

resources within the exterior boundaries of the reservation or other

areas within the tribe's jurisdiction.'' Section 301(d)(2)(B) of the

Act. In addition, section 110(o) provides that Tribal implementation

plans under the Act ``shall become applicable to all areas * * *

located within the exterior boundaries of the reservation,

notwithstanding the issuance of any patent and including rights-of-way

running through the reservation.''

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\5\In the 1977 Amendments to the Act, Congress gave Tribes

authority to redesignate ``[l]ands within the exterior boundaries of

reservations'' for purposes of the Prevention of Significant

Deterioration of Air Quality program. Section 164(c) of the Act.

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EPA has proposed to interpret these and other provisions of the Act

as granting Tribes--approved by EPA to administer Clean Air Act

programs in the same manner as States--authority over all air resources

within the exterior boundaries of a reservation for such programs. EPA

has explained that ``[t]his grant of authority by Congress would enable

such Tribes to address conduct on all lands, including non-Indian owned

fee lands, within the exterior boundaries of a reservation.'' 59 FR

43956, 43958-43960 (Aug. 25, 1994) (legal rationale).

Further, EPA observed that even without this proposed grant of

authority, Indian Tribes would very likely have inherent authority over

all activities within reservation boundaries, including non-Indian

owned activities on fee lands, that are subject to regulation under the

Act. The high mobility of air pollutants, resulting area-wide effects

and the seriousness of such impacts would all tend to support such

inherent Tribal authority. See 59 FR 43958, n. 5; see also 56 FR 64876

at 64877-64879 (Dec. 12, 1991). In fact, Congress relied on the serious

harm posed by air pollution in adopting the Act. Congress found that

``the growth in the amount and complexity of air pollution * * * has

resulted in mounting dangers to the public health and welfare,

including injury to agricultural crops and livestock, damage to and

deterioration of property and hazards to air and ground

transportation.'' Section 101(a)(2) of the Act; see also, e.g., H.R.

Rep. No. 490, 101st Cong. 2d Sess. (1990); S.Rep. No. 228, 101st Cong.,

1st Sess. (1989).

Ecology advances various reasons why it makes ``practical sense''

for EPA to allow Ecology to regulate all Title V sources throughout the

State, including those within reservation boundaries. For example,

Ecology contends that:

(1) Ecology is more protective of air quality than minimum Federal

standards require and therefore regulation by EPA or the Tribe in lieu

of the State would represent backsliding to minimum Federal standards

and may give reservation residents inequitable protection;

(2) The nature of air pollution transport and impacts renders it

undesirable to have different regulatory bodies within the State and

within reservations;

(3) Non-Indian populations will be impacted because of the

proximity of trust and fee lands as well as the proximity of

reservation lands and non-reservation populations; and

(4) The State is well-situated to regulate all Title V sources,

having extensive experience with air quality protection and a

comprehensive, effective program.

These arguments do not provide adequate evidence to conclude that

Washington's program should apply to Title V sources within the

exterior reservation boundaries of Federally-recognized Indian Tribes

or, in particular, non-Indian activities on fee lands. As indicated

previously, the legal test for determining whether a Tribe has inherent

sovereign authority over non-Indian activities centers on the conduct

at issue. That the State may effectively regulate the conduct in lieu

of a Tribe does not defeat Tribal sovereign interests. Otherwise,

inherent Tribal sovereignty would be determined not by the Tribal

interests at stake but by a State's willingness to infringe upon Tribal

domain.

Nor does the fact that Ecology has adopted requirements more

stringent than the federal minimum support Ecology's claim of

authority. Ecology's policy choices about the nature and desirability

of State-wide air quality management cannot displace any inherent

authority Tribes may have or any authority that Congress may have

granted to Tribes under the Clean Air Act. Tribes may very well have

inherent sovereign authority over air pollution activities on fee lands

and may exercise that authority to regulate more stringently than

Federal law requires. In addition, the adoption of sections 301(d) and

110(o) of the Act evince Congressional intent to allow Tribes to

implement Clean Air Act programs in the same manner as States. Congress

gave EPA the responsibility of identifying the programs under the Act

for which such treatment is appropriate. EPA's proposed Clean Air Act

Tribal authority rule provides that Tribes, like States, will retain

authority under the Act to impose requirements that are more stringent

than Federal standards. 59 FR 43967.

At the same time, Congress and EPA recognize that it may take time

for Tribes to develop the air quality management expertise that States

have amassed for 20 years. Nevertheless, Tribes must demonstrate

adequate capability before EPA will authorize them to implement a Clean

Air Act program. In reviewing tribal programs, EPA was directed by

Congress to assure that the Tribe is ``capable * * * of carrying out

the functions to be exercised in a manner consistent with the terms and

purposes of [the Act] and all applicable regulations.'' Section

301(d)(2)(C) of the Act. Further, EPA will fill gaps in air quality

protection in the interim period before tribal Clean Air Act programs

are approved, as necessary to ensure that reservation air quality is

adequately protected. 59 FR at 43960-43961.

Ecology also relies on the legal opinion submitted with its Title V

program stating that it applies consistently at least to all fee lands

within the State. The opinion relied on by Ecology, however, does not

specifically address or analyze the legal basis for application of the

Title V program to sources on fee lands within the exterior reservation

boundaries of Federally-recognized Tribes. Ecology submitted a

specific, sound legal analysis to support its authority over the non-

trust lands within the Puyallup 1873 Survey Area. Ecology now requests,

without specific legal analysis, that EPA give Ecology authority over

all Title V sources on all other Federally-recognized Indian

reservations.

EPA is guided by Federal and Agency Tribal policy in making

decisions affecting Tribes. Washington Department of Ecology, 752 F.2d

at 1471 & n. 5. As outlined below, these policies direct EPA to treat

Tribes as sovereign governments not as subdivisions of States.

On January 24, 1983, the President issued a Federal Indian Policy

stressing two related themes: (1) That the Federal government will

pursue the principle of Indian ``self-government'' and (2) that it will

work directly with Tribal governments on a ``government-to-government''

basis. An April 29, 1994 Presidential Memorandum reiterated that the

rights of sovereign Tribal governments must be fully respected. 59 FR

22951 (May 4, 1994). EPA's Tribal policies commit to certain

principles, including the following:

EPA recognizes Tribal Governments as sovereign entities with

primary authority and responsibility for the reservation populace.

Accordingly, EPA will work directly with Tribal Governments as the

independent authority for reservation affairs, and not as the

political subdivisions of States or other governmental units.

* * * * *

In keeping with the principal of Indian self-government, the

Agency will view Tribal Governments as the appropriate non-Federal

parties for making decisions and carrying out program

responsibilities affecting Indian reservations, their environments,

and the health and welfare of the reservation populace. Just as

EPA's deliberations and activities have traditionally involved

interests and/or participation of State Governments, EPA will look

directly to Tribal Governments to play this lead role for matters

affecting reservation environments.

November 8, 1984 ``EPA Policy for the Administration of

Environmental Programs on Indian Reservations''; Policy Reaffirmed by

Administrator Carol M. Browner in a Memorandum issued on March 14,

1994.

The United States also has a unique fiduciary relationship with

Tribes, and EPA must consider Tribal interests in its actions. Nance v.

EPA, 645 F.2d 701, 710 (9th Cir. 1981), cert. denied, Crow Tribe of

Indians v. EPA, 454 U.S. 1081 (1981). Taken together, Federal law and

policy counsel that it would be inappropriate for EPA to approve a

State program covering activities within reservation boundaries without

an adequately demonstrated legal basis.

For the foregoing reasons, EPA concludes that, except for the non-

trust lands identified within the 1873 Survey Area of the Puyallup

reservation, Ecology has not adequately demonstrated that it has

authority over Title V sources located on lands within the exterior

reservation boundaries of Federally-recognized Tribes. In sum, Ecology

relies on a general legal opinion and associated assertion that its

authority should apply throughout the State, an undocumented claim that

several potential major sources owned by non-Indians with no ``tribal

relationships'' can be found in the State on fee lands within

reservations, and several practical reasons why EPA should allow

Washington's Title V program to regulate Title V sources within

reservations and at least on fee lands within reservations. Title V

plainly requires a specific demonstration of authority over regulated

sources. Based on the Clean Air Act and Federal Indian law and

policies, EPA concludes that Ecology has not adequately supported the

application of its Title V program to reservations generally or to fee

lands within reservation boundaries.

6. Criminal Authorities

Ecology has also commented that the State currently has sufficient

legal authority to recover criminal fines for false material statements

and tampering with monitoring devices, as required by 40 CFR

70.11(a)(3)(iii). EPA disagrees. Ecology has submitted no additional

authority to support this assertion. Instead, Ecology relies on the

June 7, 1994, opinion of the Washington Attorney General, which EPA

reviewed and considered before proposing interim approval of the

Washington operating permits program in part because Washington law did

not contain these necessary criminal authorities. As previously stated,

EPA does not believe that the authorities discussed in the Attorney

General's opinion are as broad as the authorities required by 40 CFR

70.11(a)(3)(iii) [see 59 FR 42552 (August 18, 1994)]. Therefore, EPA

maintains its position that in order to receive full approval, Ecology

must revise RCW 70.94.430 to incorporate the criminal authorities

required by 40 CFR 70.11(a)(3)(iii).

B. Options for Approval/Disapproval

EPA is promulgating interim approval of the operating permits

programs submitted by Ecology, EFSEC and the local air authorities on

November 1, 1993.\6\ In order to receive full approval, the Washington

permitting authorities must make the following changes:\7\

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\6\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).

\7\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 permits program.

---------------------------------------------------------------------------

Ecology

(1) 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).

(2) 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.

(3) 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.

(4) 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.

(5) 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.'').

EFSEC

No additional changes are necessary for the EFSEC operating permits

program to receive full approval other than those that may be necessary

under applicable State and local law to incorporate into EFSEC's

regulations all changes to the State operating permits program required

for full approval.

BFCCAA

No additional changes are necessary for the BFCCAA operating

permits 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 permits program

required for full approval.

NWAPA

(1) Revise NWAPA Section 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).

(2) Revise NWAPA Section 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).

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

per day per violation.

(3) Revise NWAPA Section 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). This provision must include maximum penalties of not

less than $10,000 per day per violation.

(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).

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).

(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). This provision must include maximum penalties of not

less than $10,000 per day per violation.

(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). This provision must include maximum penalties of not

less than $10,000 per day per violation.

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).

(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). This provision must include maximum penalties of not

less than $10,000 per day per violation.

(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). This provision must include maximum penalties of not

less than $10,000 per day per violation.

(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)).

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.''

(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).

(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). This provision must include maximum penalties of not

less than $10,000 per day per violation.

(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). This provision must include maximum penalties of not

less than $10,000 per day per violation.

SWAPCA

No changes in the SWAPCA operating permits 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 permits program.

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)).

This interim approval, which may not be renewed, extends until

November 9, 1996. During this interim approval period, the State is

protected from sanctions and EPA is not obligated to promulgate a

Federal permits program in the State. Permits issued during the interim

approval period of Washington's operating permits program have full

standing with respect to Part 70. In addition, the 180 day time period

under State law for submittal of permit applications by subject sources

and the three-year time period for processing initial permit

applications begin upon interim approval.

If the State fails to submit a complete corrective program for full

approval by May 9, 1996, EPA will start an 18-month clock for mandatory

sanctions. If the State fails to submit a corrective program that EPA

finds complete before the expiration of that 18-month period, EPA must

apply sanctions. If EPA disapproves a State's corrective program, and

the State has not submitted a subsequent corrective program that EPA

determines corrects the deficiencies of the disapproved program within

18 months after the disapproval, then EPA must apply sanctions. In both

cases, if the State has not corrected the deficiency within six months

after EPA applies the first sanction, a second sanction is required. In

addition, discretionary sanctions may be applied where warranted any

time after the end of the interim approval period if the State has

failed to submit a complete corrective program or after EPA disapproves

a submitted corrective program. If the EPA has not granted full

approval to the State program by November 9, 1996, EPA must promulgate,

administer, and enforce a Federal permits program for Washington upon

expiration of the interim approval.

III. Administrative Requirements

A. Docket

Copies of the State's submittal and other information relied upon

for the final interim approval, including public comments on the

proposal received and reviewed by EPA, are maintained in the docket at

the EPA Regional Office. The docket is an organized and complete file

of information submitted to, or otherwise considered by, EPA in the

development of this final interim approval. The docket is available for

public inspection at the location listed under the ADDRESSES section of

this document.

B. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

C. Regulatory Flexibility Act

EPA's actions under section 502 of the Act do not create any new

requirements, but simply address operating permits programs submitted

to satisfy the requirements of 40 CFR part 70. Because this action does

not impose any new requirements, it does not have a significant impact

on a substantial number of small entities.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

Reporting and recordkeeping requirements.

Dated: October 28, 1994.

Chuck Clark,

Regional Administrator.

Part 70, chapter I, title 40 of the Code of Federal Regulations is

amended as follows:

PART 70--[AMENDED]

1. The authority citation for part 70 continues to read as follows:

Authority: 42 U.S.C. 7401, et seq.

2. Part 70 is amended by adding a new appendix A as follows:

Appendix A to Part 70--Approval Status of State and Local Operating

Permits Programs

This appendix provides information on the approval status of

State and Local operating Permit Programs.

Washington.

(a) Department of Ecology (Ecology): submitted on November 1,

1993; effective on December 9, 1994; interim approval expires

November 9, 1996.

(b) Energy Facility Site Evaluation Council (EFSEC): submitted

on November 1, 1993; effective on December 9, 1994; interim approval

expires November 9, 1996.

(c) Benton-Franklin Counties Clean Air Authority (BFCCAA):

submitted on November 1, 1993 and amended on September 29, 1994;

effective on December 9, 1994; interim approval expires November 9,

1996.

(d) Northwest Air Pollution Authority (NWAPA): submitted on

November 1, 1993; effective on December 9, 1994; interim approval

expires November 9, 1996.

(e) Olympic Air Pollution Control Authority (OAPCA): submitted

on November 1, 1993; effective on December 9, 1994; interim approval

expires November 9, 1996.

(f) Puget Sound Air Pollution Control Agency (PSAPCA): submitted

on November 1, 1993; effective on December 9, 1994; interim approval

expires November 9, 1996.

(g) Southwest Air Pollution Control Authority (SWAPCA):

submitted on November 1, 1993; effective on December 9, 1994;

interim approval expires November 9, 1996.

(h) Spokane County Air Pollution Control Authority (SCAPCA):

submitted on November 1, 1993; effective on December 9, 1994;

interim approval expires November 9, 1996.

(i) Yakima County Clean Air Authority (YCCAA): submitted on

November 1, 1993 and amended on September 29, 1994; effective on

December 9, 1994; interim approval expires November 9, 1996.

[FR Doc. 94-27683 Filed 11-8-94; 8:45 am]

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