Clean Air Act Proposed Interim Approval of Operating Permits Program; Santa Barbara County Air Pollution Control District, California

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5256-6]

Clean Air Act Proposed Interim Approval of Operating Permits

Program; Santa Barbara County Air Pollution Control District,

California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes interim approval of the Operating Permits

Program submitted by the Santa Barbara County Air Pollution Control

District (Santa Barbara or District) 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.

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

August 9, 1995.

ADDRESSES: Comments should be addressed to Martha Larson, Mail Code A-

5-2, U.S. Environmental Protection Agency, Region IX, Air and Toxics

Division, 75 Hawthorne Street, San Francisco, CA 94105.

Copies of the District submittal and other supporting information

used in developing the proposed interim approval are available for

inspection during normal business hours at the following location: U.S.

Environmental Protection Agency, Region IX, 75 Hawthorne Street, San

Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Martha Larson (telephone: 415/744-

1238), Mail Code A-5-2, U.S. Environmental Protection Agency, Region

IX, Air and Toxics Division, 75 Hawthorne Street, San Francisco, CA

94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

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

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

an approvable State operating permits program and the

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corresponding standards and procedures by which 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 (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 title V programs to

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

each program within 1 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, EPA may grant the program interim approval for

a period of up to 2 years. If 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 notice focuses on specific elements

of Santa Barbara's title V operating permits program that must be

corrected to meet the minimum requirements of 40 CFR part 70. The full

program submittal, the Technical Support Document (TSD), which contains

a detailed analysis of the submittal, and other relevant materials are

available for inspection as part of the public docket. The docket may

be viewed during regular business hours at the address listed above.

1. Title V Program Support Materials

Santa Barbara's original title V program was submitted by the

California Air Resources Board (CARB) on November 15, 1993. Additional

material was submitted on March 2, 1994, August 8, 1994, December 8,

1994 and June 15, 1995. The submittal was found to be complete on

January 13, 1994. The Governor's letter requesting source category-

limited interim approval, California enabling legislation, and Attorney

General's legal opinion were submitted by CARB for all districts in

California and therefore were not included separately in Santa

Barbara's submittal. The Santa Barbara submission does contain a

complete program description, District implementing and supporting

regulations, and all other program documentation required by Sec. 70.4.

An implementation agreement is currently being developed between Santa

Barbara and EPA.

2. Title V Operating Permit Regulations and Program Implementation

Santa Barbara's regulations adopted or revised to implement title V

include Regulation XIII, Part 70 Operating Permit Program, adopted

November 9, 1993; Rule 202, Exemptions to Rule 201: Sections 202.A.1.,

202.A.2., 202.A.3., 202.C., 202.D., 202.E., and 202.F., adopted March

10, 1992; Rule 205, Standards for Granting Applications: Sections

205.C.1.a.23., definition of ``Net Emissions Increase,''

205.C.5.b.1.a.2.c., significant increases for new source nonattainment

review, and 205.C.5.c.6., public notification and comment period,

adopted July 30, 1991; and Rule 210, Fees, adopted May 7, 1991. The

regulations substantially meet the requirements of 40 CFR part 70,

Secs. 70.2 and 70.3 for applicability; Secs. 70.4, 70.5, and 70.6 for

permit content, including operational flexibility; Sec. 70.7 for public

participation and minor permit modifications; Sec. 70.5 for complete

application forms; and Sec. 70.11 for enforcement authority. Although

the regulations substantially meet part 70 requirements, there are

several deficiencies in the program that are outlined under Section

II.B. below as interim approval issues and further described in the

Technical Support Document.

a. Variances--Santa Barbara has authority under State and local law

to issue a variance from State and local requirements. Sections 42350

et sec. of the California Health and Safety Code and District

Regulation V, Rule 506 allow the District to grant relief from

enforcement action for permit violations. In the 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.)

The EPA regards these State and district variance provisions as

wholly external to the program submitted for approval under part 70,

and consequently, is proposing to take no action on these provisions of

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

State or local law, such as the variance provisions referred to, that

are inconsistent with the Act. The EPA does not recognize the ability

of a permitting authority 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 modification 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 40 CFR 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.''

b. Permit Content--Santa Barbara's permit content rule (Rule 1303)

does not include certain important Sec. 70.6 permit content

requirements. Santa Barbara's rule does not require the level of detail

regarding recordkeeping associated with monitoring found in

Sec. 70.6(a)(3)(ii) (A) and (B). Paragraph D.1.f. of Rule 1303 more

generally addresses the requirements for recordkeeping associated with

monitoring. Paragraph 1303.D.1.f. provides that operating permits

issued pursuant to this rule will contain conditions establishing

applicable recordkeeping requirements. Although 1303.D.1.f. does not

explicitly state the recordkeeping requirements associated with

monitoring, the paragraph's general language is consistent with the

requirements of Sec. 70.6(a)(3)(ii) (A) and (B).

In addition to lacking specific recordkeeping requirements of

Sec. 70.6, paragraph 1303.D.1.b. of Santa Barbara's rule does not

require the permit to contain identification of any difference in form

from the applicable requirement upon which a term or condition is

based, as is required under Sec. 70.6(a)(1)(ii). Additionally, Santa

Barbara's definition of ``prompt'' reporting in the case of deviations,

found in 1303.D.1.g, applies only to deviations due to emergency upset

conditions, and does not define ``prompt'' for all deviations, as is

required under Sec. 70.6(a)(3)(iii)(B).

Santa Barbara's part 70 program submittal included a ``Standard

Permit Format,'' (Appendix B-1, submitted November 15, 1993). The

conditions of the Standard Permit Format included conditions that would

correct the deficiencies identified above. For interim approval, EPA is

specifically approving the Standard Permit Format

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that was submitted as part of Santa Barbara's part 70 program [Appendix

B-1, Sections C, E.3.c through h, and E.6, submitted November 15,

1993.] Any modifications to these sections of the Standard Permit

Format must be approved by EPA. Failure to include these conditions in

part 70 permits will be cause for EPA to object to a District operating

permit. See Sec. 70.8(c)(1). In order to receive full approval, Santa

Barbara must modify Rule XIII to include the level of detail regarding

recordkeeping associated with monitoring found in Sec. 70.6(a)(3)(ii)

(A) and (B), identification of difference in form from the applicable

requirement, consistent with the requirements of Sec. 70.6(a)(1)(ii),

and definition of ``prompt'', consistent with Sec. 70.6(a)(3)(iii)(B).

c. 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 purpose 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.

Santa Barbara submitted District Rule 202, its current permit

exemption rule, as its list of insignificant activities. It is clear

that Rule 202 was not developed with the purpose of defining

insignificant activities under the District's title V program in mind;

the applicability provisions of the rule state that the exemptions

apply to the requirements of Rule 201, the District requirements for

obtaining Authority to Construct permits and non-federally enforceable

Permits to Operate. Santa Barbara did not provide EPA with criteria

used to develop the exemptions list, information on the level of

emissions from the activities, nor with a demonstration that these

activities are not likely to be subject to an applicable requirement.

Therefore, EPA cannot propose full approval of the list as the basis

for determining insignificant activities.

For other State and district programs, EPA has proposed to accept,

as sufficient for full approval, emission levels for insignificant

activities of 2 tons per year for criteria pollutants and the lesser of

1000 pounds per year, Section 112(g) de minimis levels, or other title

I significant modification levels for hazardous air pollutants (HAP)

and other toxics (40 CFR 52.21(b)(23)(i)). The EPA believes that these

levels are sufficiently below the applicability thresholds of many

applicable requirements to assure that no unit potentially subject to

an applicable requirement is left off a title V application. The EPA is

requesting comment on the appropriateness of these emission levels for

determining insignificant activities in Santa Barbara. This request for

comment is not intended to restrict the ability of States or districts,

including Santa Barbara, to propose, and EPA to approve, different

emission levels if the State or 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.

d. Definition of Title I Modification--Among the several criteria

that Santa Barbara includes in its definition of ``significant part 70

permit modification'' is the provision that it not included a ``minor

permit modification.'' Santa Barbara's exclusion of minor permit

modifications as well as its definition of ``title I (or major)

modification'' to include only modifications that are major under

federal NSR and PSD resulting in a `significant' net emissions

increase, or a new or modified HAPs source resulting in a `de minimis'

increase of HAPs, clearly indicates that Santa Barbara does not

interpret ``title I modification'' to include ``minor NSR changes.''

Additionally, Santa Barbara's definition of ``title I modification''

does not include modifications under part 60. Santa Barbara's

definition of ``significant part 70 permit modification'' includes only

``Any equivalent or identical replacement of an emissions unit that is

subject to standards promulgated under CAA, sections 111 or 112.''

Therefore, Santa Barbara's rule would not require all modifications

under part 60 to be processed as significant permit revisions. Part 70

requires all modifications under title I of the Act to be processed as

significant permit modifications (Sec. 70.7(e)(2)(i)(A)(5)). 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'' in 40 CFR 70.7(e)(2)(i)(A)(5) 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 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 definition of ``title I modification'' to receive

interim approval (59 FR 44572). The Agency explained its view that the

better reading of ``title I modification'' includes minor NSR, and

solicited public comment on the proper interpretation of that term (59

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

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

modification'' should be interpreted as including minor NSR changes, it

would revise the interim approval criteria as needed to allow States

with a narrower definition to be eligible for interim approval.

Santa Barbara's exclusion of certain types of modifications under

part 60 from the definition of ``title I (or major) modification'' and

``significant part 70 permit revision'' is an interim approval issue.

EPA's initial part 70 proposal (56 FR 21712) identified part 60

modifications as title I modifications. No comment was received on the

inclusion of part 60 modifications in the definition of ``title I

modification,'' and EPA is not considering modifying the definition to

remove modifications under part 60. With respect to minor NSR, the EPA

hopes to finalize its rulemaking revising the interim approval criteria

under 40 CFR 70.4(d) expeditiously. If EPA establishes in its

rulemaking that the definition of ``title I modification'' can be

interpreted to exclude changes reviewed under minor NSR programs, Santa

Barbara's exclusion of minor new source review from the definition of

``significant part 70 permit modification'' and interpretation of

``title I (or major) modification'' would be consistent with part 70.

Conversely, if EPA establishes through the rulemaking that the

definition of ``title I modification'' must include changes reviewed

under minor NSR, Santa Barbara's definition and

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interpretation will become a basis for interim approval. If the

definition and interpretation become a basis for interim approval as a

result of EPA's rulemaking, Santa Barbara would be required to revise

its definition and interpretation to include minor NSR in addition to

revising the definition and interpretation to include all part 60

modifications in order to conform to the requirements of part 70.

Accordingly, today's proposed approval does not identify Santa

Barbara's exclusion of minor new source review from the definition of

``significant part 70 permit modification'' and interpretation of

``title I (or major) modification'' as necessary grounds for either

interim approval or disapproval. EPA does not believe that it is

appropriate to determine whether this is a program deficiency until EPA

completes its rulemaking on this issue. Santa Barbara submitted a June

15, 1995 letter from Peter Cantle, Engineering Division Manager, Santa

Barbara County Air Pollution Control District, committing to revise the

definitions of ``title I (or major) modification'' and ``significant

part 70 permit revision'' to include all modifications under 40 CFR

part 60. EPA has therefore identified Santa Barbara's definitions of

``signification part 70 permit modification'' and ``title I (or major)

modification'' as an interim approval issue on the basis that the

definitions do not adequately include modifications under part 60.

3. Permit Fee Demonstration

Section 502(b)(3) of the Act requires 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 title V 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 per year (adjusted annually based on the Consumer Price Index

(CPI), relative to 1989 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,'' (40 CFR

70.9(b)(2)(i)).

Santa Barbara has opted to make a presumptive minimum fee

demonstration. The fees collected under Santa Barbara's existing fee

schedule in Rule 210 results in title V facilities paying an average of

$112.20 per permitted ton in permitting and emissions fees. Santa

Barbara calculated its fee level at $112.20 per ton by adding up the

annual permit equipment and emissions fees paid by sources identified

as title V facilities ($2,373,000), and dividing that number by the

permitted emissions (tons per year of regulated air pollutants) from

those facilities.

In addition, Santa Barbara's title V fee rule (Rule 1304.D.11)

requires that all costs incurred by the District for issuance of Part

70 permits be ``reimbursable costs.'' This will result in additional

fees of $119,000 per year, an additional $20.65 per ton of actual

emissions, as calculated by the District. Based on a conservative

billing rate of $80 per hour, the District expects revenues of $119,000

annually. These fees combined result in collection of an amount that is

well above the presumptive minimum. The District does not specifically

require this emissions-based fee to be adjusted annually based upon the

CPI. However, the District meets this requirement as a practical

matter, because Santa Barbara's fees are significantly above the

presumptive minimum. Santa Barbara's fee schedule was developed based

on an estimation of workload associated with administration of the

title V program. For more information, see Section III.C of Santa

Barbara's Title V Operating Permit Program Description, and Appendix B-

10 of the program submittal, available in the docket.

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

a. Authority and Commitments for Section 112 Implementation--Santa

Barbara has demonstrated in its title V program submittal adequate

legal authority to implement and enforce all section 112 requirements

through the title V permit. This legal authority is contained in the

State of California enabling legislation and in regulatory provisions

defining ``federally enforceable requirements'' and requiring each

permit to incorporate conditions that assure compliance with all such

federally enforceable requirements. EPA has determined that this legal

authority is sufficient to allow Santa Barbara to issue permits that

assure compliance with all Section 112 requirements.

EPA is interpreting the above legal authority to mean that Santa

Barbara is able to carry out all Section 112 activities. For further

rationale on this interpretation, please refer to the Technical Support

Document accompanying this rulemaking and the April 13, 1993 guidance

memorandum titled ``Title V Program Approval Criteria for Section 112

Activities,'' signed by John Seitz, Director of the Office of Air

Quality Planning and Standards, U.S. EPA.

b. Authority and Commitments for Title IV Implementation--Santa

Barbara certified in a letter from Peter Cantle, Engineering Division

Manager, Santa Barbara County Air Pollution Control District, dated

March 2, 1994, that there are no acid rain sources in the District.

Santa Barbara committed in the March 2, 1994 letter to expeditiously

adopt the appropriate legal authority necessary to issue timely Title

IV permits to new or existing sources that become subject to or opt

into Title IV.

B. Proposed Interim Approval and Implications

The EPA is proposing to grant interim approval to the operating

permits program submitted by CARB on behalf of the Santa Barbara County

Air Pollution Control District on November 15, 1993, and supplemented

on March 2, 1994, August 8, 1994, December 8, 1994, and June 15, 1995.

If EPA were to finalize this proposed interim approval, it would extend

for two years following the effective date of final interim approval,

and could not be renewed. During the interim approval period, Santa

Barbara 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 interim approval, as does the 3-year

time period for processing the initial permit applications.

Following final interim approval, if the District failed to submit

a complete corrective program for full approval by the date 6 months

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

clock for mandatory sanctions. If Santa Barbara then failed to submit a

corrective program that EPA found complete before the expiration of

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

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

until EPA determined that the District had corrected the deficiency by

submitting a complete corrective program. Moreover, if the

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

both sanctions under section 179(b) would apply after the expiration of

the 18-month period until the Administrator determined that the

District had come into compliance. In any case, if, six months after

application of the first sanction, the District still had not submitted

a corrective program that

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EPA found complete, a second sanction would be required.

If, following final interim approval, EPA were to disapprove Santa

Barbara's complete corrective program, EPA would 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 had submitted a revised program and EPA had determined that it

corrected the deficiencies that prompted the disapproval. Moreover, if

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

District, both sanctions under section 179(b) would apply after the

expiration of the 18-month period until the Administrator determined

that the District had come into compliance. In all cases, if, six

months after EPA applied the first sanction, Santa Barbara had not

submitted a revised program that EPA had determined corrected the

deficiencies that prompted disapproval, a second sanction would be

required.

In addition, discretionary sanctions may be applied where 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 title V operating permits 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.

1. Santa Barbara's Title V Operating Permits Program

If EPA finalizes this interim approval, Santa Barbara must make the

following changes, or changes that have the same effect, to receive

full approval (all required revisions are to District Rule XIII unless

otherwise noted):

a. Variances--Revise Rule 1305.G(1) to read ``The terms and

conditions of any variance or abatement order that would prescribe a

compliance schedule shall be incorporated into the permit as a

compliance schedule, to the extent required by Part 70 rules.''

b. Permit Content--Revise Rule 1303.D.1.f. permit content

requirements to provide adequate specificity with regard to the

applicable recordkeeping requirements. See Sec. 70.6(a)(3)(ii)(A) and

(B).

c. Insignificant Activities--Provide a demonstration that

activities that are exempt from permitting under Rule XIII, (pursuant

to rule 202, the District's permit exemption list) are truly

insignificant and are not likely to be subject to an applicable

requirement. Alternatively, Rule XIII may restrict the exemptions 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 HAP 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. See Sec. 70.4(b)(2).

Additionally, Revise Rule XIII to require that insignificant

activities that are exempted because of size or production rate be

listed in the permit application. See Sec. 70.5(c). See 1302.D.1.f.,

Definition of insignificant activities.

Additionally, Revise Rule 1301 definition of ``Insignificant

Activities'' to delete the last sentence, which contradicts the

requirement that applications may not omit information needed to

determine the applicability of, or to impose, any applicable

requirement, or to evaluate the fee amount required. See Sec. 70.5(c).

d. Definition of Administrative Permit Amendment--Revise 1301,

definition of ``Administrative Permit Amendment'' part 6. Santa Barbara

must define by rule what ``other changes'' will be determined to be

administrative permit amendments. In order for ``other changes'' to

qualify as an administrative permit amendment, the specific changes

must be approved by the Administrator as part of the part 70 program.

See Sec. 70.7(d)(1)(iv).

e. Operational Flexibility Notification--Rule 1304.E.2 and E.3 must

be revised to incorporate a requirement that sources notify EPA of

changes made under the operational flexibility provisions. See

Sec. 70.4(b)(12).

f. Public Notification Requirement--Revise Rule 1304.D.6 to include

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

affected public.'' See Sec. 70.7(h)(1).

g. Significant Changes to Monitoring Requirements--Revise Rule

1301, definition of ``Minor Permit Modification'' part (4) to read

``The modification does not involve any relaxation of any existing

reporting or recordkeeping requirements in the permit, or any

significant changes to existing monitoring requirements in the

permit.'' See Sec. 70.7(e)(2)(i)(2) and Sec. 70.7(e)(4)(i).

h. Form of Applicable Requirement--The rule does not require the

identification of any difference in form from the applicable

requirement upon which the term or condition is based. Regulation XIII

must be revised to include this requirement. This requirement is

included in the Standard Permit Format. EPA is specifically approving

the Standard Permit Format that was submitted as part of Santa

Barbara's part 70 program (Appendix B-1, Section C, November 15, 1993

submittal). Any modifications to the standard permit format must be

approved by EPA. Failure to include these conditions in part 70 permits

will be cause for EPA to object to a District operating permit. See

Sec. 70.6(a)(1)(i).

i. Applicable Requirement Trading--Add emissions trading provisions

consistent with Sec. 70.6(a)(10), which require that trading must be

allowed where an applicable requirement provides for trading increases

and decreases without a case-by-case approval.

j. Prompt Reporting of Deviations--Santa Barbara has not defined

``prompt'' in their program with respect to reporting of all

deviations. Part 70 of the operating permits regulations requires

prompt reporting of deviations from the permit requirements. Section

70.6(a)(3)(iii)(B) requires the permitting authority to define prompt

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

applicable requirements. Santa Barbara's requirement for reporting of

deviations is limited to deviations due to emergency upset conditions.

Under part 70, deviations include, but are not limited to, upset

conditions. Santa Barbara must revise rule 1303.D.1.g to be consistent

with the more inclusive part 70 requirement. To make Rule XIII more

inclusive, Rule 1303.D.1.g could be revised to read ``* * * Deviations

shall be reported within 72 hours of the occurrence * * *.''

Although the permit program regulations should define prompt for

purposes of administrative efficiency and clarity, an acceptable

alternative is to define prompt in each individual permit. Therefore,

as an alternative to the revision to Rule 1303.D.1.g above, Rule XIII

could be revised to require prompt reporting of all deviations, and to

require that prompt be defined in each permit. Rule 1303.D.1.g could be

revised to read ``Conditions establishing all applicable reporting

requirements; conditions establishing prompt reporting of any

deviations from permit-stipulated requirement, including definition(s)

of ``prompt'' for all deviations. All applicable reports shall be

submitted every 6 months and shall be certified by a responsible

official. Deviations due to emergency upset conditions shall be

reported within 72

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hours of the occurrence. All other deviations shall be reported

promptly, as defined in the permittee's permit. The probable cause of

deviations and remedial measure taken to correct this shall also be

reported at this time.'' The EPA believes that prompt should generally

be defined as requiring reporting 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, given this is

a distinct reporting obligation under Sec. 70.6(a)(3)(iii)(A). Where

``prompt'' is defined in the individual permit but not in the program

regulations, EPA may veto permits that do not contain sufficiently

prompt reporting of deviations.

As a third alternative, Santa Barbara could revise Rule XIII to

include definitions of ``prompt'' for other types of deviations in

addition to those caused by emergency upset conditions. Part 70 allows

the permitting authority to define ``prompt'' in relation to the degree

and type of deviation. Therefore, Santa Barbara may also revise Rule

XIII to define reporting times for other types of deviations, if the

types of deviations and their related reporting times are specifically

defined in Santa Barbara's rule.

Meeting the requirements of Sec. 70.6(a)(3)(iii)(B) through one of

the three methods outlined above is a requirement for full approval of

Santa Barbara's part 70 program.

k. Exemptions--Delete Rule 1301.B.4. Section 70.3(b) requires that

major sources, affected sources (acid rain sources), and solid waste

incinerators regulated pursuant to section 129(e) of the CAA may not be

exempted from the program. Although section 129(g)(1)(3) of the CAA

exempts solid waste incineration units subject to section 3005 of the

Solid Waste Disposal Act, part 70 does not exempt these units. Any

solid waste incineration unit that meets the definition of ``major

source'' under part 70 would be subject to the requirement to obtain a

part 70 permit regardless of the unit's applicability under section

129.

l. Recordkeeping for off-permit changes--Santa Barbara's rule does

not require that the permittee keep records describing off-permit

changes and the emissions resulting from these changes. Santa Barbara's

rule must be revised to be consistent with the requirements of

Sec. 70.4(b)(14)(iv).

m. Definition of Title I Modifications and Significant Part 70

Permit Modifications--Rule 1301 defines ``modification'' to include all

modifications under 40 CFR part 60. However, the definitions of ``title

I (or major) modification'' and ``significant part 70 permit

modification'' do not clearly define all modifications under part 60 as

title I modifications and do not clearly ensure they will be treated as

significant permit modifications. See discussion in Section II.A.2.d of

this notice. Santa Barbara submitted a June 15, 1995 letter from Peter

Cantle, Engineering Division Manager, Santa Barbara County Air

Pollution Control District, committing to provide interpretive guidance

demonstrating that all modifications under 40 CFR part 60 will be

treated as significant permit modifications. In order to receive final

interim approval, Santa Barbara must finalize and submit to EPA

interpretive guidance demonstrating that all modifications under 40 CFR

part 60 will be treated as significant permit modifications. In order

to receive full approval, Santa Barbara must clarify the definitions of

``title I (or major) modification'' and ``significant part 70 permit

modification'' to include all modifications under 40 CFR part 60.

n. Reporting of an Emergency--In order to obtain an affirmative

defense in an emergency, Santa Barbara requires in Rule 1303.F.d.,

among other things, that the permittee submit a description of the

emergency within 4 days of the emergency. Santa Barbara must revise

1303.F.d to require submittal of notice of emergency to the permitting

authority within 2 working days of the time when emission limitations

were exceeded due to the emergency, to be consistent with

Sec. 70.6(g)(3)(iv) and in order to maintain the affirmative defense of

emergency. Prior to amending the rule, Santa Barbara should insure that

sources are aware that this 2 day notice is necessary in order to

maintain the affirmative defense. This could be accomplished by

including a permit condition in all permits issued that requires notice

of emergency to be submitted within 2 days.

2. California Enabling Legislation--Legislative Source Category Limited

Interim Approval Issue

Because California State law currently exempts agricultural

production sources from permit requirements, the California Air

Resources Board has requested source category-limited interim approval

for all California districts. The EPA is proposing to grant source

category-limited interim approval to the operating permits program

submitted by the California Air Resources Board on behalf of Santa

Barbara on November 15, 1993. In order for this program 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.

The above described program and legislative deficiencies must be

corrected before Santa Barbara can receive full program approval. For

additional information, please refer to the TSD, which contains a

detailed analysis of Santa Barbara's operating permits program and

California's enabling legislation.

3. District Preconstruction Permit Program Implementing Section 112(g)

The EPA has published an interpretive notice in the Federal

Register regarding section 112(g) of the Act (60 FR 8333; February 14,

1995). The revised interpretation postpones the effective date of

section 112(g) until after EPA has promulgated a rule addressing that

provision. The interpretive notice explains that EPA is considering

whether the effective date of section 112(g) should be delayed beyond

the date of promulgation of the federal rule so as to allow States time

to adopt rules implementing the federal rule, and that EPA will provide

for any such additional delay in the final section 112(g) rulemaking.

Unless and until EPA provides for such an additional postponement of

section 112(g), Santa Barbara must be able to implement section 112(g)

during the period between promulgation of the federal section 112(g)

rule and adoption of implementing District regulations.

For this reason, EPA is proposing to approve the use of Santa

Barbara's preconstruction review program as a mechanism to implement

section 112(g) during the transition period between promulgation of the

section 112(g) rule and adoption by Santa Barbara of rules specifically

designed to implement section 112(g). However, since the sole purpose

of this approval is to confirm that the District has a mechanism to

implement section 112(g) during the transition period, the approval

itself will be without effect if EPA decides in the final section

112(g) rule that there will be no transition period. The EPA is

limiting the duration of this proposed approval to 12 months following

promulgation by EPA of the section 112(g) rule.

[[Page 35544]]

4. Program for Delegation of Section 112 Standards as Promulgated

Requirements for approval, specified in 40 CFR 70.4(b), encompass

section 112(l)(5) requirements for approval of a program for delegation

of section 112 standards as promulgated by EPA as they apply to part 70

sources. Section 112(l)(5) requires that the State's program contain

adequate authorities, adequate resources for implementation, and an

expeditious compliance schedule, which are also requirements under part

70. Therefore, EPA is also proposing to grant approval under section

112(l)(5) and 40 CFR 63.91 of Santa Barbara's program for receiving

delegation of section 112 standards that are unchanged from federal

standards as promulgated. California Health and Safety Code section

39658 provides for automatic adoption by CARB of section 112 standards

upon promulgation by EPA. Section 39666 of the Health and Safety Code

requires that districts then implement and enforce these standards.

Thus, when section 112 standards are automatically adopted pursuant to

section 39658, Santa Barbara will have the authority necessary to

accept delegation of these standards without further regulatory action

by the District. The details of this mechanism and the means for

finalizing delegation of standards will be set forth in a Memorandum of

Agreement between Santa Barbara and EPA, expected to be completed prior

to approval of Santa Barbara's section 112(l) program for delegation of

unchanged federal standards. This program applies to both existing and

future standards but is limited to sources covered by the part 70

program.

III. Administrative Requirements

A. Request for Public Comments

The EPA is requesting comments on all aspects of this proposed

interim approval. Copies of the District's submittal and other

information relied upon for the proposed interim approval are contained

in a docket maintained at the EPA Regional Office. The docket is an

organized and complete file of all the information submitted to, or

otherwise considered by, EPA in the development of this proposed

interim approval. The principal purposes of the docket are:

(1) To allow interested parties a means to identify and locate

documents so that they can effectively participate in the approval

process, and

(2) To serve as the record in case of judicial review. The EPA will

consider any comments received by August 9, 1995.

B. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

C. Regulatory Flexibility Act

The 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.

D. Unfunded Mandates Act

Under Section 202 of the Unfunded Mandates Reform Act of 1995

(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA

must prepare a budgetary impact statement to accompany any proposed or

final rule that includes a federal mandate that may result in estimated

costs to State, local, or tribal governments in the aggregate; or to

the private sector, of $100 million or more. Under section 205, EPA

must select the most cost-effective and least burdensome alternative

that achieves the objectives of the rule and is consistent with

statutory requirements. Section 203 requires EPA to establish a plan

for informing and advising any small governments that may be

significantly or uniquely impacted by the rule.

EPA has determined that the proposed approval action promulgated

today does not include a federal mandate that may result in estimated

costs of $100 million or more to either State, local, or tribal

governments in the aggregate, or to the private sector. This federal

action approves pre-existing requirements under State or local law, and

imposes no new federal requirements. Accordingly, no additional costs

to State, local, or tribal governments, or to the private sector,

result from this action.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Hazardous substances, Intergovernmental

relations, Operating permits, Reporting and recordkeeping requirements.

Authority: 42 U.S.C. 7401-7671q.

Dated: June 30, 1995.

Felicia Marcus,

Regional Administrator.

[FR Doc. 95-16827 Filed 7-7-95; 8:45 am]

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