Clean Air Act Proposed Interim Approval of the Title V Operating Permit Programs for Nineteen California Air Pollution Control Districts

Federal RegisterDec 8, 1994

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5118-6]

Clean Air Act Proposed Interim Approval of the Title V Operating

Permit Programs for Nineteen California Air Pollution Control Districts

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes source-category-limited interim approval of

the Operating Permits Programs submitted by the California Air

Resources Board on behalf of Amador County Air Pollution Control

District (APCD), Butte County APCD, Calaveras County APCD, Colusa

County APCD, El Dorado County APCD, Feather River Air Quality

Management District (AQMD), Great Basin Unified APCD, Imperial County

APCD, Kern County APCD, Lassen County APCD, Mendocino County APCD,

Modoc County APCD, North Coast Unified AQMD, Northern Sierra AQMD,

Northern Sonoma County APCD, Placer County APCD, Siskiyou County APCD,

Tuolumne County APCD, and Yolo-Solano AQMD. These Programs were

submitted for the purpose of complying with Federal requirements in

title V of the Clean Air Act which mandates that States develop, and

submit to the EPA, programs for issuing operating permits to all major

stationary sources and to certain other sources.

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

January 9, 1995.

ADDRESSES: Comments on these programs should be addressed to Sara

Bartholowmew, Operating Permits Section, A-5-2, Air and Toxics

Division, U.S. EPA-Region IX, 75 Hawthorne Street, San Francisco,

California 94105.

Copies of the submissions and other supporting information used in

developing the proposed interim approvals of these programs including

the Technical Support Documents are available for inspection during

normal business hours at the following location: Operating Permits

Section, A-5-2, Air and Toxics Division, U.S. EPA-Region IX, 75

Hawthorne Street, San Francisco, California 94105.

FOR FURTHER INFORMATION CONTACT: For information, please contact: Sara

Bartholowmew, Operating Permits Section, A-5-2, Air and Toxics

Division, U.S. EPA-Region IX, 75 Hawthorne Street, San Francisco,

California 94105, (415) 744-1170.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

As required under title V of the Clean Air Act (``the Act'') as

amended (1990), the EPA has promulgated rules that define the minimum

elements of an approvable State operating permits program and the

corresponding standards and procedures by which the EPA will approve,

oversee, and withdraw approval of State operating permits programs (see

57 FR 32250 (July 21, 1992)). These rules are codified at 40 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

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

each program within one year after receiving the submittal. The 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, the EPA may grant the program interim approval

for a period of up to 2 years. If the EPA has not fully approved a

program by 2 years after the November 15, 1993 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 State Submission

The analysis contained in this document focuses on the major

elements of the Districts' title V operating permits program

submissions and on specific elements that must be corrected to meet the

minimum requirements of 40 CFR part 70. The nineteen District programs

are based on a model rule and program description developed by the

California Air Resources Board (CARB). As a result, the programs are

very similar. A detailed analysis of each program can be found in

Technical Support Document (TSDs) for each District. The full program

submittals, TSDs, and other relevant materials are available for public

review in the public docket for this proposal. The docket may be viewed

during regular business hours at the address listed above.

1. Title V Support Materials

In submitting each District's title V program, CARB requested

source category-limited interim approval for the program because

California statute (Health and Safety Code (H.S.C.) section 42310 (e))

currently exempts agricultural sources from all permitting requirements

including title V. Each District's submission contains a complete

program description, District implementing and supporting regulations,

application and reporting forms, and other supporting information. In

addition, CARB submitted for all Districts in the State a single

Attorney General's opinion, enabling legislation, and certain other

information regarding State law.

EPA has reviewed each District's program to assure that it contains

all the elements required by Sec. 70.4(b) (Elements of the initial

program submission). EPA has found each program complete pursuant to

Sec. 70.4(e)(1) in letters to CARB on January 13, 1994 (El Dorado and

Kern), January 28, 1994 (Tuolumne), February 4, 1994 (Butte, Great

Basin, Lassen, Mendocino, and Siskiyou), March 4, 1994 (Feather River,

Modoc, Northern Sonoma, and Placer), April 22, 1994 (Colusa and North

Coast), May 20, 1994 (Imperial), June 22, 1994 (Northern Sierra),

October 19, 1994 (Amador), October 26, 1994 (Yolo-Solano), and November

9, 1994 (Calaveras).

Prior to final action to approve these operating permit programs,

EPA intends to have in place an implementation agreement with each

District that will address data management, acid rain provisions,

procedures for delegation of hazardous air pollutant standards under

section 112(l) of the Act, and other elements regarding the

implementation of the District's title V program.

2. Title V Operating Permit Regulations and Program Implementation

This section discusses how the Districts' rules in general comply

with the requirements of part 70. In each case, the District's rules/

regulations are identical to or very similar to the CARB model;

therefore, the discussion below is applicable to all nineteen programs.

If a District's program differs substantially from the CARB model in a

way that is not fully approvable under part 70, it is noted in the

discussion on each District later in this document.

Applicability. All programs meet the source applicability

requirements of Secs. 70.2 (Definitions) and 70.3 (Applicability)

except that current California law exempts agricultural sources from

all permitting requirements including title V. This exemption must be

removed from State law in order for the District programs to receive

full approval. All programs opted to defer the permitting of minor

sources subject to New Source Performance Standards (NSPS) or National

Emission Standards for Hazardous Air Pollutants (NESHAP) as allowed

under Sec. 70.3 (b)(1).

Permit application. The programs substantially meet the application

deadlines and application content requirements of Sec. 70.5 (Permit

applications). Each program contains the application forms that the

District intends to use for initial permit, permit renewal, and permit

modification applications. In this action, the EPA is proposing to

approve the application forms as part of each District's program. All

rules require sources to list all emission units in sufficient detail

to establish applicable requirements and permit fees. EPA has

identified several interim approval issues regarding permit application

requirements that must be corrected for full approval. The interim

approval issues are discussed in detail later in this document. In the

TSD, EPA has also identified other recommended changes that are not

required for full approval but would improve, clarify, or strengthen

the Districts' part 70 programs.

Insignificant activities. Section 70.4(b)(2) requires States to

include in their part 70 programs any criteria used to determine

insignificant activities or emission levels for the purposes of

determining complete applications. Section 70.5(c) states that an

application for a part 70 permit may not omit information needed to

determine the applicability of, or to impose, any applicable

requirement, or to evaluate appropriate fee amounts. Section 70.5(c)

also states that 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. Under part 70, a State must request

and EPA must approve as part of that State's program any activity or

emission level that the State wishes to consider insignificant. Part

70, however, does not establish appropriate emission levels for

insignificant activities, relying instead on a case-by-case

determination of appropriate levels based on the particular

circumstances of the part 70 program under review.

Except for Mendocino County, each Districts provided its current

permit exemption list as its list of insignificant activities. Several

of these lists provide unbounded discretion to the APCO to determine

additional exemptions. Most programs either provided no criteria or

stated that their criteria for insignificance was the list of

activities in their current permit exemption list. Only in the Northern

Sonoma County APCD program provided detailed information on the

emission levels from the exempted activities. Because EPA was provided

no criteria or information on the level of emissions of activities on

most Districts' exemptions list and no demonstration that these

activities are unlikely to be subject to an applicable requirement, EPA

cannot propose full approval of these exemption lists as the basis for

determining insignificant activities.

Several programs (including Mendocino) stated that their criteria

for insignificant activities was the significance levels for their new

source review regulations. These signficance levels are the federal

major modification thresholds and are set at a substantial fraction of

the major source thresholds for all areas and would almost certainly

exclude units with applicable requirements. EPA, therefore, finds that

emission levels at the federal major modification thresholds are too

high to be considered insignificant.

For other State programs, EPA has proposed to accept, as sufficient

for full approval, emission levels for insignificant activities of 2

tons per year of regulated air pollutants and the lesser of 1000 pounds

per year, section 112(g) de minimis levels, or other title I

significant modification levels for HAPs and other toxics (40 CFR

52.21(b)(23)(i)). EPA believes that these levels are sufficiently below

applicability thresholds for most applicable requirements to assure

that no unit potentially subject to an applicable requirement is left

off a part 70 application and are consistent with current permitting

thresholds for the nineteen Districts under consideration here. EPA is

requesting comment on the appropriateness of these emission levels for

determining insignificant activities in these Districts. This request

for comment is not intended to restrict the ability of individual

Districts to propose and EPA to approve other emission levels if the

District demonstrates that such alternative emission levels are

insignificant compared to the level of emissions from and types of

units that are permitted or subject to applicable requirements.

Permit content. The rules substantially meet the permit content

requirements of Sec. 70.6 (Permit content) including assuring

compliance with all applicable requirements, monitoring and related

recordkeeping and reporting requirements, compliance requirements, and

emergency provisions. None of the programs opted to use general permits

or the permit shield.1 In addition, the programs substantially

meet the operational flexibility requirements of Sec. 70.4(b)(12). EPA

has identified several problems with the permit content and the

operational flexibility provisions that must be corrected for full

approval. The interim approval issues are discussed in detail later in

this document. In the TSD, EPA has also identified other recommended

changes that are not required for full approval but would improve,

clarify, or strengthen the Districts' part 70 programs.

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\1\The Placer County program description contains a discussion

of the District's intent to implement a permit shield. Placer's part

70 rule, however, does not provide for the permit shield in

Sec. 70.6(f) but rather contains conditions for the application

shield in Sec. 70.5(a)(2) and provisions for implementing

modifications prior to EPA review which do not meet the requirements

of Sec. 70.7 and Sec. 70.8. This is discussed further in the TSD and

in the discussion of the Placer program later in this notice.

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Permit issuance and modifications. All programs provide adequate

criteria and procedures for deeming applications complete as required

by Sec. 70.5(a)(2). Most programs provide deadlines and procedures

(including public participation and EPA/affected state review) for

acting on permits consistent with Sec. 70.7 (a) (Action on

applications) and (h) (Public participation) and Sec. 70.8 (Permit

review by EPA and affected States); the exceptions are noted in the

discussions of each District's program. All programs have permit

modification procedures that are, for the most part, consistent with

Sec. 70.7 (e) (Permit modifications). All programs contain procedures

that allow new emission units that do not trigger major source NSR, are

not acid rain units, and whose operations are not addressed or

prohibited by the existing part 70 permit to be handled ``off-permit.''

EPA has identified several problems with the permit issuance and

modification procedures that must be corrected for full approval. The

interim approval issues are discussed in detail later in this document.

In the TSD, EPA has also identified other recommended changes that are

not required for full approval but would improve, clarify, or

strengthen the Districts' part 70 programs.

Definition of title I modification. Part 70 prohibits changes that

are modifications under any provisions of title I of the Clean Air Act

(``title I modifications'') from being treated as minor permit

modifications, being made ``off-permit,'' or being made under an

operational flexibility provision. None of the Districts' programs

specifically define ``title I modification'' although it is clear from

the use of the term that the programs do not treat changes reviewed

under a minor source preconstruction review program (``minor NSR

changes'') as title I modifications. See, for example, the distinction

made between ``a modification under Title I of the CAA'' and ``any

provision of [the District NSR and PSD rules]'' in Amador's Rule 500,

sections V.I. and V.I.3.c. See also the discussion on operational

flexibility in each District's Program Description: ``Title I

modifications include a modification that is major under federal NSR *

* *, a modification that is major under PSD * * *.'' (Emphasis added).

The EPA is currently in the process of determining the proper

definition of title I modification. As further explained below, EPA has

solicited public comment on whether the phrase ``modification under any

provision of title I of the Act'' should be 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 and District preconstruction

review programs approved by EPA as part of the State Implementation

Plan under section 110(a)(2)(C) of the Clean Air Act.

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 treatment or definition of title I modifications to

receive interim approval (59 FR 44572). In that notice, EPA explained

its view that the better reading of title I modifications includes

minor NSR, and solicited public comment on the proper interpretation of

that term (59 FR 44573). EPA 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 allow

States/Districts with narrower definitions to be eligible for interim

approval.

The EPA hopes to finalize its rulemaking revising the interim

approval criteria under 40 CFR 70.4 (d) expeditiously.2 If EPA

establishes in its rulemaking that the definition of title I

modifications can be interpreted to exclude changes reviewed under

minor NSR programs, the Districts' treatment of title I modifications

would be fully consistent with part 70. Conversely, if EPA establishes

through the rulemaking that the definition must include changes

reviewed under minor NSR, the Districts' treatment of title I

modifications will become a basis for interim approval. If the

treatment becomes a basis for interim approval as a result of EPA's

rulemaking, each of the nineteen Districts would be required to revise

its treatment of title I modifications to conform to the requirements

of part 70.

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\2\Publication of the proposed interim approval criteria

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

several requests to extend the public comment period until November

27, 1994. 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)).

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Accordingly, today's proposed approval does not identify the

Districts' treatment of title I modification as necessary grounds for

interim approval. Again, although EPA has reasons for believing that

the better interpretation of title I modifications is the broader one,

EPA does not believe that it is appropriate to determine whether this

is a program deficiency until EPA completes its rulemaking on this

issue.

3. District Title V Compliance Provisions

California statute and District rules and regulations provide the

Districts with the enforcement authorities required by Sec. 70.11

(Requirements for enforcement authority). See the California Attorney

General's Opinion and the TSDs (especially Attachments A and F) for

further detail.

Variances. The Hearing Boards of all nineteen Districts have the

authority to issue variances from requirements imposed by State and

local law. See H.S.C. sections 42350 et seq. In the legal opinion

submitted with California operating permit programs, California's

Attorney General states that ``[t]he variance process is not part of

the Title V permitting process and does not affect federal enforcement

for violations of the requirements set forth in a Title V permit.''

(Emphasis in original.)

EPA regards State and District variance provisions as wholly

external to the programs submitted for approval under part 70 and

consequently is proposing to take no action on these provisions of

State and local law. EPA has no authority to approve provisions of

state and local law that are inconsistent with the Act. EPA does not

recognize the ability of a District to grant relief from the duty to

comply with a federally-enforceable part 70 permit, except where such

relief is granted through procedures allowed by part 70. A part 70

permit may be issued or revised, consistent with part 70 permitting

procedures, to incorporate those terms of a variance that are

consistent with applicable requirements. A part 70 permit may also

incorporate, via part 70 permit issuance or revision procedures, the

schedule of compliance set forth in a variance. However, EPA reserves

the right to pursue enforcement of applicable requirements

notwithstanding the existence of a compliance schedule in a permit to

operate. This is consistent with Sec. 70.5 (c)(8)(iii)(C), which states

that a schedule of compliance ``shall be supplemental to, and shall not

sanction noncompliance with, the applicable requirements on which it is

based.''

Prompt reporting of deviations. Section 70.6 (a)(3)(iii)(B) states

that permits must require prompt reporting of deviations from the

permit requirements and that the District shall define ``prompt'' in

relation to the degree and type of deviation likely to occur and the

applicable requirements. The Districts' rules do not define ``prompt''

and instead leave the determination of what constitutes ``prompt'' to

the discretion of the Air Pollution Control Officer. Although the

permit program regulations should define ``prompt'' for purposes of

administrative efficiency and clarity, it is acceptable to define the

term in each individual permit. The EPA believes that prompt means

reporting a deviation within two to ten days of the deviation. Two to

ten days is sufficient time in most cases to protect public health and

safety as well as to provide a forewarning of potential problems. For

sources with a low level of excess emissions, a longer time period may

be acceptable. However, prompt reporting must be more frequent than the

semiannual reporting requirement, since this is a separate reporting

obligation under Sec. 70.6 (a)(3)(iii)(A). Where ``prompt'' is defined

in the individual permit but not in the program regulations, the EPA

may veto permits that do not require sufficiently prompt reporting of

deviations.

4. Permit Fee Demonstration

Section 502 (b)(3) of the Act and Sec. 70.9 (a) require that each

permitting authority collect fees sufficient to cover all reasonable

direct and indirect costs required to develop and administer its title

V operating permits program. Each part 70 program submittal must

contain either a detailed demonstration of fee adequacy or a

demonstration that aggregate fees collected from title V sources meet

or exceed $25 per ton of emissions per year (adjusted from 1989 by the

Consumer Price Index (CPI)). The $25 per ton amount is presumed, for

program approval, to be sufficient to cover all reasonable program

costs and is thus referred to as the ``presumptive minimum,''

(Sec. 70.9 (b)(2)(i)). All nineteen Districts have opted to make a

presumptive minimum fee demonstration.

Currently, the nineteen Districts charge fees for permitting based

on some combination of equipment type and/or size, number of emission

units, permitting action, and actual cost of services. All Districts

have adopted supplemental fee rules or revised existing fee rules to

assure that title V sources (either individually or in the aggregate)

will pay fees that will remain at or above the CPI-adjusted presumptive

minimum. Most of these fees are at $29.26 per ton. All nineteen

Districts demonstrated in their program descriptions that the

presumptive minimum fees are adequate to cover the direct and indirect

costs of their part 70 programs.

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

a. Section 112-hazardous air pollutants. The Districts have

demonstrated in their part 70 program submissions adequate legal

authority to implement and enforce all section 112 requirements through

the part 70 permit. This legal authority is contained in the State of

California enabling legislation and in regulatory provisions in each

District's rule defining ``applicable requirements'' and mandating that

all applicable requirements must be incorporated into permits. The EPA

has determined that this legal authority is sufficient to allow the

Districts to issue permits that assure compliance with all section 112

requirements. For further discussion on the District's legal authority,

please refer to the TSDs accompanying this action and the April 13,

1993 guidance memorandum entitled, ``Title V Program Approval Criteria

for Section 112 Activities,'' signed by John Seitz, Director, Office of

Air Quality Planning and Standards, USEPA.

b. Title IV-acid rain. No Districts in California have Phase I acid

rain sources and only two of the nineteen Districts whose part 70

programs are being considered in this document have identified Phase II

sources. These two Districts are North Coast Unified AQMD and Imperial

County APCD. Neither of these two Districts has submitted complete acid

rain programs nor has committed to adopt such programs by January 1,

1995. The adoption of complete acid rain programs is an interim

approval issue for both of these two Districts. Many of the other

Districts have provided commitments to expeditiously adopt the

appropriate regulatory authority necessary to issue a timely title IV

permit to any new or existing source in the District that becomes

subject to, or wants to opt into, the acid rain program. For Districts

that have not made this commitment and do not have any identified Phase

II sources, the EPA will require this commitment as part of the

District-EPA implementation agreement.

B. Proposal for and Implications of Interim Approval

Because the programs substantially meet the requirements of part

70, the EPA is proposing to grant source-category limited interim

approval to the operating permits programs submitted by the California

Air Resources Board on behalf of Amador County APCD (received: December

27, 1993, August 5 and September 20, 1994), Butte County APCD

(received: November 16, 1993), Calaveras County APCD (received: October

31, 1994), Colusa County APCD (received: February 24, 1994), El Dorado

County APCD (received: November 16, 1993), Feather River AQMD

(received: December 27, 1993), Great Basin Unified APCD (received:

January 12, 1994), Imperial County APCD (received: January 12 and March

24, 1994), Kern County APCD (received: November 16, 1993), Lassen

County APCD (received: January 12, 1994), Mendocino County APCD

(received: December 27, 1993), Modoc County APCD (received: December

27, 1993), North Coast Unified AQMD (received: February 24, 1994),

Northern Sierra AQMD (received: June 3, 1994), Northern Sonoma County

APCD (received: January 12, 1994), Placer County APCD (received:

December 27, 1993), Siskiyou County APCD (received: December 6, 1993),

Tuolumne County APCD (received: November 16, 1993), and Yolo-Solano

AQMD (received: June 6 and October 14, 1994).

If EPA were to finalize these proposed interim approvals, they

would extend for two years following the effective date of the final

interim approvals and could not be renewed. During the interim approval

period, each District would be protected from sanctions, and EPA would

not be obligated to promulgate, administer and enforce a Federal

permits program for the District. Permits issued under a program with

interim approval have full standing with respect to part 70, and the 1-

year time period for submittal of permit applications by subject

sources begins upon the effective date of the interim approval, as does

the 3-year time period for processing the initial permit applications.

Following final interim approval, if the District fails to submit a

complete corrective program for full approval by the date six months

before expiration of the interim approval, EPA will start an 18-month

clock for mandatory sanctions. If the District then fails to submit a

corrective program that EPA finds complete before the expiration of

that 18-month period, EPA will be required to apply one of the

sanctions in section 179(b) of the Act,3 which would then remain

in effect until EPA determines that the District has corrected the

deficiency by submitting a complete corrective program. Moreover, if

the Administrator found a lack of good faith on the part of a District

with a non-attainment area, both sanctions under section 179(b) would

apply after the expiration of the 18-month period until the

Administrator determines that the District has come into compliance.

For Districts with non-attainment areas, a second sanction would be

imposed if, six months after application of the first sanction, the

District still has not submitted a corrective program that EPA has

found complete.

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\3\There are two sanctions available under sections 502

(d)(2)(B) and 179 (b) of the Act. The first is a prohibition on

highway funding and approvals and the second one is an increase in

the emissions offset ratio for new or modified sources. The latter

sanction is available only in areas designated non-attainment for

one or more criteria pollutant.

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If, following final interim approval, EPA disapproves the

District's complete corrective program, EPA will be required to apply

one of the section 179 (b) sanctions on the date 18 months after the

effective date of the disapproval, unless prior to that date the

District has submitted a revised program and EPA has determined that it

corrected the deficiencies that prompted the disapproval. Moreover, if

the Administrator finds a lack of good faith on the part of a District

with a non-attainment area, both sanctions under section 179(b) would

apply after the expiration of the 18-month period until the

Administrator determines that the District has come into compliance.

For Districts with non-attainment areas, a second sanction would be

imposed if, six months after application of the first sanction, the

District still has not submitted a revised program that EPA has

determined corrects the deficiencies.

In addition, discretionary sanctions may be applied when warranted

any time after the end of an interim approval period if a District has

not timely submitted a complete corrective program or EPA has

disapproved a submitted corrective program. Moreover, if EPA has not

granted full approval to a District program by the expiration of an

interim approval and that expiration occurs after November 15, 1995,

EPA must promulgate, administer and enforce a Federal permits program

for that District upon interim approval expiration.

C. District Interim Approval Issues Common to All Nineteen Districts

In order to receive full approval for its part 70 program and rule,

each District must make the following changes:

(1) Provide a demonstration that activities that are exempt from

part 70 permitting are truly insignificant and are not likely to be

subject to an applicable requirement. Alternatively, the District may

restrict the exemptions (including any director's discretion

provisions) to activities that are not likely to be subject to an

applicable requirement and emit less than District-established emission

levels. The District should establish separate emission levels for HAPs

and for other regulated pollutants and demonstrate that these emission

levels are insignificant compared to the level of emissions from and

type of units that are required to be permitted or subject to

applicable requirements. This is a condition for full approval for all

Districts except for Mendocino County AQMD and Northern Sonoma County

APCD.

(2) Revise the exemption list to remove the general exemption for

agricultural production sources or to restrict the exemptions to non-

title V sources. Insignificant activities at agricultural production

sources may still be listed. This is a condition for full approval for

all District programs except for Great Basin Unified APCD and Lassen

County APCD which do not have general exemptions for agricultural

operations in their exemption lists and for Mendocino County which did

not provide a list of exempted activities.

(3) Revise the rule's application content requirements so that any

compliance schedule required by the rule for a source not in compliance

must resemble and be at least as stringent as that contained in any

judicial consent decree, administrative order, or schedule approved by

the hearing board to which the source is subject as required by

Sec. 70.5 (c)(4)(iii)(C) rather than simply a schedule of compliance

approved by the District's hearing board.

(4) Revise the rule's application content requirements to clarify

that all reports and other documents submitted in the permit

application must be certified by the responsible official as required

by Sec. 70.5 (d) and to provide the full text of the responsible

official's certification in Sec. 70.5 (d). This is an interim approval

issue for all Districts except Yolo-Solano AQMD whose rule already

requires this.

(5) Provide in the rule a permit application deadline for sources

that become subject to the District's part 70 rule after the rule's

effectiveness date for reasons other than commencing operation. This

deadline cannot be any later than 12 months after the source becomes

subject to the rule as required by Sec. 70.5 (a)(1). This is a

condition for full approval for all District programs except for

Northern Sierra AQMD and Yolo-Solano AQMD whose rules already contain

this deadline.

(6) Revise the rule's permit issuance procedures to provide for

notifying the EPA and affected States in writing of any refusal by the

District to accept all recommendations for the proposed permit that the

Affected State submitted during the public/Affected State review period

as required by Sec. 70.8 (b)(2).

(7) Incorporate in the rule provisions citing the right of the

public to petition EPA under Sec. 70.8 (d) after the expiration of the

EPA's 45-day review period and prohibiting the District from issuing a

permit, if it has not already done so, until the EPA's objections in

response to the petition are resolved as required by Sec. 70.8 (d).

(8) Revise the rule to provide for public notice of permitting

actions by other means if necessary to assure adequate notice to the

affected public as required by Sec. 70.7 (h)(1).

(9) Revise the rule's permit content requirements to clarify that

all reports and other documents required by the permit must be

certified by a responsible official as required by Sec. 70.6 (c)(1) and

to provide the full text of the responsible official's certification in

Sec. 70.5 (d).

(10) Revise the rule's permit content requirements to require that

any compliance schedule for a source not in compliance must resemble

and be at least as stringent as that contained in any judicial consent

decree, administrative order, or schedule approved by the hearing board

to which the source is subject as required by Secs. 70.6 (c)(3) and

70.5 (c)(8)(iii)(C). This is an interim approval issue for all

Districts except Yolo-Solano AQMD whose rule already provides for this.

(11) Revise the rule's permit content requirements to require the

submission of compliance certifications more frequently than annually

if a more frequent period is specified in the applicable requirement or

by the District as required by Sec. 70.6 (c)(5)(i). This is an interim

approval issue for all Districts except Yolo-Solano AQMD whose rule

already provides for this.

D. Basis for Source Category-Limited Interim Approval

California state law currently exempts agricultural production

sources from permit requirements (H.S.C. Sec. 42310 (e)); therefore,

the EPA is proposing to grant source category-limited interim approval

to the operating permits program of these nineteen Districts. At this

time, none of the Districts has identified any agricultural production

sources as potential title V sources. In order for these programs to

receive full approval (and to avoid a disapproval upon the expiration

of this interim approval), the California Legislature must revise the

Health and Safety Code to eliminate the exemption of agricultural

production sources from the requirement to obtain a permit.

III. Individual District Interim Approval Issues

A. Amador County APCD

In addition to the interim approval issues noted above for all

Districts, the Amador District must make the following changes to its

part 70 rule, Rule 500--Procedures for Issuing Permits to Operate for

Sources Subject to Title V of the Federal Clean Air Act Amendments of

1990, amended July 5, 1994, in order to receive full approval:

(1) Revise all deadlines for final permit action in Rule 500

V.C.4 (except for C.1. and C.5.) to be no later than the

appropriate number of months after the complete application is

received, rather than after the application is deemed to be complete,

as required by Secs. 70.4 (b)(11)(iii) and 70.7 (a)(2).

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\4\ The EPA has cited specific sections of District rules and

regulations to illustrate appropriate places for making the

revisions/changes necessary for full approval. The District may,

however, revise other sections of their rules to satisfy the interim

approval issue.

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(2) Revise the definition of ``potential to emit'' in Rule 500

II.AA. to clarify that only federally-enforceable limitations may be

considered in determining a source's potential to emit.

(3) Revise Rule 500 V.I.2 and 3 to require notification by the

source of operational flexibility changes to both the EPA and the

District as required by Sec. 70.4 (b)(12).

(4) Revise the definition of ``affected state'' in Rule 500 II.C.

to allow for the treatment of Tribal Authorities as affected states if

the Authority request such treatment under the Tribal Air Regulations.

B. Butte County APCD

In addition to the interim approval issues noted above for all

Districts, the Butte District must make the following changes to its

part 70 rule, Rule 1101--Federal Operating Permits, adopted November 9,

1993, in order to receive full approval:

(1) Revise Rule 1101 V.C.6. to take final action on early reduction

applications within nine months of receipt of the complete application

rather than within nine months of the date the application was deemed

complete as required by Sec. 70.4 (b)(11)(iii).

(2) Revise Rule 1101 IV.B.4. to incorporate the compliance

provisions of Sec. 70.7 (e)(2)(v). Rule 1101 IV.B.4. allows the air

pollution control officer (APCO) to approve minor permit modifications

when the proposed permit revision is sent to EPA for review. While this

is allowed under Sec. 70.7 (e)(2)(v), Rule 1101 does not state, as does

Sec. 70.7 (e)(2)(v), that until the District takes final action to

issue or deny the requested permit modification or determines that it

is a significant modification, the source must comply with both the

applicable requirements governing the change and the proposed permit

terms and conditions, but the source need not comply with the existing

permit terms and conditions being modified. Rule 1101 should also be

revised to state that if the source fails to comply with the permit

terms and conditions in the requested modification, the existing permit

terms and conditions being modified may be enforced against it.

(3) Revise Rule 1101 IV.B.3. to limit the discretion of the APCO to

authorize sources to commence operations of significant permit

modifications prior to final permit action to when the changes meet the

criteria of Sec. 70.5 (a)(1)(ii). Rule 1101 IV.B.3. allows the APCO to

authorize sources to commence operations of significant permit

modifications when the proposed permit revision is publicly noticed but

prior to final permit action. Part 70 prohibits sources from making

significant permit modification changes prior to final permit issuance

unless the changes are subject to preconstruction review under section

112 (g) of the Act or preconstruction review programs approved into the

SIP pursuant to part C or D of title I of the Act, and the changes are

not otherwise prohibited by the source's existing part 70 permit. See

Sec. 70.5 (a)(1)(ii). The authority in Rule 1101 IV.B.3. is

discretionary with the APCO, and the EPA expects that the APCO will

exercise that authority during the interim approval period only where

the changes meet the criteria of Sec. 70.5 (a)(1)(ii).

C. Calaveras County APCD

The Calaveras District has no additional interim approval issues.

Calaveras' part 70 rule is Regulation X--Additional Procedures for

Issuing Permits to Operate for Sources Subject to Title V of the

Federal Clean Air Act Amendments of 1990, adopted August 29, 1994.

D. Colusa County APCD

In addition to the interim approval issues noted above for all

Districts, the Colusa District must make the following changes to its

part 70 rule, Rule 3.17--Permits to Operate for Sources Subject to

Title V of the Federal Clean Air Act Amendments of 1990, adopted

January 11, 1994, in order to receive full approval:

(1) Revise Rule 3.17 d.2.D. to incorporate the compliance

provisions of Sec. 70.7(e)(2)(v). Rule 3.17 d.2.D. allows the APCO to

approve minor permit modifications when the proposed permit revision is

sent to EPA for review. While this is allowed under Sec. 70.7(e)(2)(v),

Rule 3.17 does not state, as does Sec. 70.7(e)(2)(v), that until the

District takes final action to issue or deny the requested permit

modification or determines that it is a significant modification, the

source must comply with both the applicable requirements governing the

change and the proposed permit terms and conditions, but the source

need not comply with the existing permit terms and conditions being

modified. Rule 3.17 should also be revised to state that if the source

fails to comply with the permit terms and conditions in the requested

modification, the existing permit terms and conditions being modified

may be enforced against it.

(2) Revise Rule 3.17 d.2.C. to limit the discretion of the APCO to

authorize sources to commence operations of significant permit

modifications prior to final permit action to when the changes meet the

criteria of Sec. 70.5(a)(1)(ii). Rule 3.17 d.2.C. allows the APCO to

authorize sources to commence operations of significant permit

modifications when the proposed permit revision is publicly noticed but

prior to final permit action. Part 70 prohibits sources from making

significant permit modification changes prior to final permit issuance

unless the changes are subject to preconstruction review under section

112(g) of the Act or preconstruction review programs approved into the

SIP pursuant to part C or D of title I of the Act and the changes are

not otherwise prohibited by the source's existing part 70 permit. See

Sec. 70.5(a)(1)(ii). The authority in Rule 3.17 d.2.C. is discretionary

with the APCO, and the EPA expects that the APCO will exercise that

authority during the interim approval period only where the changes

meet the criteria of Sec. 70.5(a)(1)(ii).

E. El Dorado County APCD

In addition to the interim approval issues noted above for all

Districts, the El Dorado District must make the following changes to

its part 70 rule, Rule 522--Title V--Federal Operating Permit Program,

adopted November 2, 1993, in order to receive full approval:

(1) Revise Rule 522 to restrict the use of minor permit

modification procedures to be consistent with Sec. 70.7(e)(2)(i)(B).

Rule 522 by default allows minor permit modification procedures to be

used for those permit modifications that involve the use of economic

incentives, marketable permits, emissions trading, and other similar

approaches. Section 70.7(e)(2)(i)(B) constrains the use of the minor

permit modification procedures for these approaches only when minor

permit modification procedures are explicitly provided for in the

applicable implementation plan or in the applicable requirements

promulgated by the EPA.\5\

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\5\For most District programs addressed in this notice, EPA

considers this revision to be a recommended change because most

Districts do not and likely will not have economic incentives,

marketable permits, emission trading, and other similar approaches

as part of their applicable implementation plans. However, the El

Dorado, Feather River, Placer, and Yolo-Solano Districts are part of

the Sacramento ozone nonattainment area for which EPA will be

issuing a federal implementation plan (FIP) in early 1995. This FIP

may contain such approaches and programs. Because of the probability

that these areas will shortly have such programs as elements of

their application implementation plans, the EPA has raised this

issue from a recommended change to an interim approval issue for

these four Districts.

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(2) Revise Rule 522's permit content requirements to provide that

every permit contain a provision stating that no permit revision shall

be required, under any approved economic incentives, marketable

permits, emissions trading, and other similar programs or processes for

changes that are provided for in the permit as required by

Sec. 70.6(a)(8). See footnote 5.

F. Feather River AQMD

In addition to the interim approval issues noted above for all

Districts, the Feather River must make the following changes to its

part 70 rule, Rule 10.3--Federal Operating Permits, adopted November

11, 1993, in order to receive full approval:

(1) Revise Rule 10.3 to restrict the use of minor permit

modification procedures to be consistent with Sec. 70.7(e)(2)(i)(B).

Rule 10.3 by default allows minor permit modification procedures to be

used for those permit modifications that involve the use of economic

incentives, marketable permits, emissions trading, and other similar

approaches. Section 70.7(e)(2)(i)(B) constrains the use of the minor

permit modification procedures for these approaches only when minor

permit modification procedures are explicitly provided for in the

applicable implementation plan or in the applicable requirements

promulgated by the EPA. See footnote 5.

(2) Revise Rule 10.3's permit content requirements to provide that

every permit contain a provision stating that no permit revision shall

be required, under any approved economic incentives, marketable

permits, emissions trading, and other similar programs or processes for

changes that are provided for in the permit as required by

Sec. 70.6(a)(8). See footnote 6.

(3) Revise Rule 10.3 D.2.c. to limit the discretion of the APCO to

authorize sources to commence operations of significant permit

modifications prior to final permit action to when the such changes

meet the criteria of Sec. 70.5(a)(1)(ii). Rule 10.3 D.2.c. allows the

APCO to authorize sources to commence operations of significant permit

modifications when the proposed permit revision is publicly noticed but

prior to final permit action. Part 70 prohibits sources from making

significant permit modification changes prior to final permit issuance

unless the changes are subject to preconstruction review under section

112(g) of the Act or preconstruction review programs approved into the

SIP pursuant to part C or D of title I of the Act and the changes are

not otherwise prohibited by the source's existing part 70 permit. See

Sec. 70.5(a)(1)(ii). The authority in Rule 10.3 D.2.c. is discretionary

with the APCO, and the EPA expects that the APCO will exercise that

authority during the interim approval period only where the change

meets the criteria of Sec. 70.5(a)(1)(ii).

G. Great Basin Unified APCD

In addition to the interim approval issues noted above for all

Districts, the Great Basin District must make the following changes to

its part 70 rule, Rule 217--Additional Procedures for Issuing Permits

to Operate for Sources Subject to Title V of the Federal Clean Air Act

Amendments of 1990, adopted September 15, 1993, in order to receive

full approval:

(1) Revise Rule 217 IV.B.1.b. to delete the phrase ``or is

discovered to be subject.'' Rule 217 IV.B.1.b. establishes a deadline

for applications from sources which are ``discovered to be subject to

Rule 217 after the date the rule becomes effective.'' It is a source's

obligation to determine if it is or is not subject to title V and Rule

217. A source that is subject but fails to apply for a permit in the

appropriate timeframes is in violation of its Clean Air Act section

502(a) obligation to apply for a part 70 permit and is subject to

appropriate enforcement action. Discovery of a source that should have

applied for a part 70 permit at an earlier date should not

automatically provide that source twelve additional months to apply for

a permit. The period for permit application should be decided in the

context of the enforcement action against the source for failing to

apply for and/or have a valid part 70 permit.

(2) Revise all deadlines for final permit action in Rule 217 V.C.

(except for C.1. and C.5.) to be no later than the appropriate number

of months after the complete application is received, rather than after

the application is deemed complete, as required by Secs. 70.4

(b)(11)(iii) and 70.7 (a)(2).

(3) Revise Rule 217 V.I.2 and V.I.3.e. to require notification by

the source of operational flexibility changes to both the EPA and the

District as required by Sec. 70.4 (b)(12).

H. Imperial County APCD

In addition to the interim approval issues noted above for all

Districts, the Imperial District must make the following changes to its

title V program and rule, Rule 900--Procedures for Issuing Permits to

Operate for Sources Subject to Title V of the Federal Clean Air Act

Amendments of 1990, adopted December 14, 1993, in order to receive full

approval:

(1) Revise Rule 900 E.3.f. to take final action on early reduction

applications within nine months of receipt of the complete application

rather than the date the application was deemed complete as required by

Sec. 70.4 (b)(11)(iii).

(2) Submit a complete Acid Rain Program consistent with 40 CFR part

72 and title IV of the Act.

(3) Revise Rule 900 E.9.b. and c. to require notification by the

source of operational flexibility changes to both the EPA and the

District as required by Sec. 70.4 (b)(11)(iii).

I. Kern County APCD

The Kern District has no additional interim approval issues. Kern's

part 70 rule is Rule 201.1--Permits to Operate for Sources Subject to

Title V of the Federal Clean Air Act Amendments of 1990, adopted

November 1, 1993.

J. Lassen County APCD

In addition to the interim approval issues noted above for all

Districts, the Lassen District must make the following changes to its

part 70 rule, Regulation VII--Permits to Operate for Sources Subject to

Title V of the Federal Clean Air Act Amendments of 1990, adopted

December 21, 1993, in order to receive full approval:

(1) Revise all deadlines for final permit action in Rule 7:5 c.

(except for c.1. and c.5.) to be no later than the appropriate number

of months after the complete application is received, rather than after

the application is deemed complete as required, by Secs. 70.4

(b)(11)(iii) and 70.7 (a)(2).

(2) Revise Rule 7:5 b.4. to clarify that the APCO's approval of a

minor permit modification prior to EPA's review is not a final permit

action. Rule 7:5 b.4. allows the APCO to approve minor permit

modifications changes prior to EPA's review; however,

Sec. 70.7(e)(2)(iv) precludes the District from issuing a final permit

modification until after EPA's review period or until EPA has notified

the District that EPA will not object, although the District may

approve the permit modification prior to that time.

(3) Revise Rule 7.5 b.4. to incorporate the compliance provisions

of Sec. 70.7 (e)(2)(v). Rule 7:5 b.4. allows the APCO to approve minor

permit modifications prior to the EPA's review. While this is allowed

under Sec. 70.7 (e)(2)(v), Regulation VII does not state, as does

Sec. 70.7 (e)(2)(v), that until the District takes final action to

issue or deny the requested permit modification or determines that it

is a significant modification, the source must comply with both the

applicable requirements governing the change and the proposed permit

terms and conditions, but the source need not comply with the existing

permit terms and conditions being modified. Regulation VII should also

be revised to state that if the source fails to comply with the permit

terms and conditions in the requested modification, the existing permit

terms and conditions being modified may be enforced against it.

(4) Revise Rule 7:5 b.3. to limit the discretion of the APCO to

authorize sources to commence operations of significant permit

modifications prior to final permit action to when the changes meet the

criteria of Sec. 70.5 (a)(1)(ii). Rule 7:5 b.3. allows the APCO to

approve significant permit modifications and the source to commence

operations of those modifications prior to the EPA's review and final

permit action. Part 70 prohibits sources from making significant permit

modification changes prior to final permit issuance unless the changes

are subject to preconstruction review under section 112 (g) of the Act

or preconstruction review programs approved into the SIP pursuant to

part C or D of title I of the Act and the changes are not otherwise

prohibited by the source's existing part 70 permit. See Sec. 70.5

(a)(1)(ii). The authority in Rule 7:5 b.3. is discretionary with the

APCO, and the EPA expects that the APCO will exercise that authority

during the interim approval period only where the changes meet the

criteria of Sec. 70.5 (a)(1)(ii).

(5) Revise Rule 7:6 i.2. and 3. to require notification by the

source of operational flexibility changes to both the EPA and the

District as required by Sec. 70.4 (b)(11)(iii).

K. Mendocino County APCD

In addition to the interim approval issues noted above for all

Districts, the Mendocino District must make the following changes to

its part 70 program and rule, Regulation 5--Procedures for Issuing

Permits to Operate for Sources Subject to Title V of the Federal Clean

Air Act Amendments of 1990, adopted September 14, 1993, in order to

receive full approval:

(1) Revise all deadlines for final permit action in Regulation 5,

Rule 5.520 (except for (a) and (e)) to be no later than the appropriate

number of months after the complete application is received, rather

than after the application is deemed complete, as required by

Secs. 70.4 (b)(11)(iii) and 70.7 (a)(2).

(2) Revise Regulation 5, Rule 5.580 (b) and (c) to require

notification by the source of operational flexibility changes to both

the EPA and the District as required by Sec. 70.4 (b)(11)(iii).

(3) Restrict insignificant activities to those that are not likely

to be subject to an applicable requirement and emit less than District-

established emission levels. The District should establish separate

emission levels for HAPs and for other regulated pollutants and

demonstrate that these emission levels are insignificant compared to

the level of emissions from and type of units that are required to be

permitted or subject to applicable requirements.

L. Modoc County APCD

In addition to the interim approval issues noted above for all

Districts, the Modoc District must make the following changes to its

part 70 rule, Rule 2.13--Additional Procedures for Issuing Permits to

Operate for Sources Subject to Title V of the Federal Clean Air Act

Amendments of 1990, adopted November 16, 1993, in order to receive full

approval:

(1) Revise all deadlines for final permit action in Rule 2.13 IV.C.

(except for C.1. and C.5.) to be no later than the appropriate number

of months after the complete application is received, rather than after

the application is deemed to be complete, as required by Secs. 70.4

(b)(11)(iii) and 70.7 (a)(2).

(2) Revise Rule 2.13 IV.B.4. to clarify that the APCO's approval of

a minor permit modification prior to EPA's review is not a final permit

action. Rule 2.13 IV.B.4. allows the APCO to approve minor permit

modifications changes prior to the EPA's review; however,

Sec. 70.7(e)(2)(iv) precludes the District from issuing a final permit

modification until after EPA's review period or until the EPA has

notified the District that EPA will not object, although the District

may approve the permit modification prior to that time.

(3) Revise Rule 2.13 IV.B.4. to incorporate the compliance

provisions of Sec. 70.7 (e)(2)(v). Rule 2.13 IV.B.4. allows the APCO to

approve minor permit modifications prior to the EPA's review. While

this is allowed under Sec. 70.7 (e)(2)(v), Rule 2.13 does not state, as

does Sec. 70.7 (e)(2)(v), that until the District takes final action to

issue or deny the requested permit modification or determines that it

is a significant modification, the source must comply with both the

applicable requirements governing the change and the proposed permit

terms and conditions, but the source need not comply with the existing

permit terms and conditions being modified. Rule 2.13 should also be

revised to state that if the source fails to comply with the permit

terms and conditions in the requested modification, the existing permit

terms and conditions being modified may be enforced against it.

(4) Revise Rule 2.13 IV.B.3. to limit the discretion of the APCO to

authorize sources to commence operations of significant permit

modifications prior to final permit action to when the changes meet the

criteria of Sec. 70.5 (a)(1)(ii). Rule 2.13 IV.B.3. allows the APCO to