Clean Air Act Proposed Interim Approval Of Operating Permits Program; Washington

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5300-3]

Clean Air Act Proposed Interim Approval Of Operating Permits

Program; Washington

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed action and proposed notice of correction.

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SUMMARY: EPA is reproposing interim approval of one element of the

State of Washington's title V air operating permits program. On

November 9, 1994, EPA granted interim approval to Washington's

operating permits program. 59 FR 55813 (November 9, 1994). One of the

basis for granting Washington's program interim rather than full

approval was that EPA determined that Washington's exemption for

``insignificant emission units'' exceeded the exemption authorized for

such units under the Clean Air Act. A coalition of industries filed a

petition for review of EPA's decision to condition full approval on

changes to Washington's treatment of insignificant emission units. Upon

EPA's request for a voluntary remand, the Court remanded this interim

approval issue to EPA for reconsideration. EPA continues to believe

that Washington has impermissibly expanded the exemption for

insignificant emission units, but for somewhat different reasons, and

therefore again proposes to condition full approval of the Washington

operating permits program on changes to Washington's treatment of

insignificant emission units.

EPA also proposes to approve a change to the jurisdiction of the

Benton County Clean Air Authority.

Finally, EPA is proposing to correct the date for expiration of the

interim approval and the due date of the required submission addressing

the interim approval issues.

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

October 30, 1995.

ADDRESSES: Written comments should be addressed to: David C. Bray,

Permits Program Manager, U.S. Environmental Protection Agency, Region

10, Air and Radiation Branch (AT-082), 1200 Sixth Avenue, Seattle,

Washington 98101.

Copies of the State's submittal and other information supporting

this proposed action are available for inspection during normal

business hours at the following location: U.S. Environmental Protection

Agency, Region 10, Air & Radiation Branch (AT-082), 1200 Sixth Avenue,

Seattle, Washington 98101.

FOR FURTHER INFORMATION CONTACT: David C. Bray, Permits Program

Manager, Air and Radiation Branch (AT-082), U.S. Environmental

Protection Agency, Region 10, Seattle, Washington, (206) 553-4253.

SUPPLEMENTARY INFORMATION

I. Background and Purpose

A. Introduction

As required under title V of the 1990 Clean Air Act Amendments

(sections 501-507 of the Clean Air Act (``the Act'')), EPA has

promulgated rules which 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

[[Page 50167]]

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

(CFR) part 70. Title V requires States to develop, and submit to EPA,

programs for issuing these operating permits to all major stationary

sources and to certain other sources.

The Act requires that States develop and submit these programs to

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

each program within 1 year after receiving the submittal. EPA's program

review occurs pursuant to section 502 of the Act and the part 70

regulations, which together outline criteria for approval or

disapproval. Where a program substantially, but not fully, meets the

requirements of part 70, EPA may grant the program interim approval for

a period of up to 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.

B. Previous Action on Washington's Program

Washington submitted its operating permits program to EPA in

November 1993. In August 1994, EPA proposed to grant interim approval

to Washington's program and proposed to condition full approval on,

among other things, revisions to Washington's regulations pertaining to

the treatment of insignificant emission units (IEUs). See 59 FR 42552,

42557-42558 (August 18, 1994). In proposing that Washington be required

to revise its IEU regulations as a condition of full approval, EPA

stated:

Under 40 CFR 70.5(c), EPA may approve as part of a State program

a list of insignificant activities and emissions levels which need

not be included in permit applications. However, no activity for

which there is an applicable requirement may be defined as

insignificant.

59 FR 42558. Several parties commented that Washington's IEU rules

met the requirements of title V and part 70 and should therefore not be

a basis for interim approval. These commenters disagreed with EPA's

statement that no unit for which there is an applicable requirement

could be defined as ``insignificant.'' The commenters further stated

that such an interpretation would prevent Washington and most other

States from granting any relief for insignificant emission units, which

they argued is inconsistent with the intent of part 70, because it

would subject all emissions, regardless of size and environmental

impact to all part 70 requirements, including periodic monitoring,

reporting, recordkeeping and compliance certification.

After reviewing the comments, EPA determined that Washington's IEU

rules did in fact exceed the exemption authorized under part 70 for

IEUs and therefore conditioned full approval of Washington's program on

certain specified changes to Washington's IEU rules and changes to four

other aspects of Washington's operating permits program. In responding

to these comments in the final interim approval action, EPA stated:

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

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

such units are subject to an applicable requirement. Section 504(a)

of the Act requires that ``each permit issued under this title shall

include enforceable emission limitations and standards, a schedule

of compliance, a requirement that the permittee submit to the

permitting authority, no less often than every 6 months, the results

of any required monitoring, and such other conditions as are

necessary to assure compliance with applicable requirements of the

Act, including the requirements of the applicable implementation

plan.'' (emphasis added). Section 70.6(a)(1) provides that each

permit shall include ``emission limitations and standards, including

those operational requirements and limitations that assure

compliance with all applicable requirements at the time of permit

issuance''. Furthermore, Sec. 70.6(c)(1) requires that each permit

shall contain ``compliance, certification, testing, monitoring,

reporting, and recordkeeping requirements sufficient to assure

compliance with the terms and conditions of the permit.'' The fact

that an emission unit may emit only small quantities of pollutants

does not provide a basis to exempt it from the fundamental statutory

requirement that the permit specifically include, and ensure

compliance with, all applicable requirements.

59 FR 55814. EPA therefore required Washington, as a condition of full

approval, to:

(5) Revise WAC 173-401-530(2) to define an emission unit as

insignificant only if it is subject to no federally enforceable

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

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

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

59 FR 55818. On January 9, 1995, the Washington States Petroleum

Association, Northwest Pulp & Paper Association, Aluminum Company of

America, Columbia Aluminum Corporation, Intalco Aluminum Corporation,

Kaiser Aluminum & Chemical Corporation and Vanalco Inc. (collectively,

``Petitioners'') filed a petition with the United States Court of

Appeals for the Ninth Circuit seeking review of the conditions in EPA's

final interim approval of Washington's operating permits program.

Western States Petroleum Association, et al v. EPA, et al, No. 95-70034

(9th Cir., Jan. 6, 1995). In their petition and subsequent brief,

Petitioners claimed that EPA had exceeded its authority in requiring

Washington to revise its IEU rules as a condition of full approval and

that this condition was arbitrary, capricious, an abuse of discretion

and not otherwise in accordance with the law. Petitioners' brief

clarified that Petitioners were challenging only EPA's requirement that

Washington revise its IEU rules to obtain full approval and did not

challenge any of the four other conditions for full approval. The State

of Washington filed a brief as intervenor in the matter.

In reviewing the issue, EPA determined Petitioners and the State of

Washington had raised a substantial question concerning EPA's

interpretation of the IEU provisions of part 70 and the specific

regulatory revisions EPA had ordered the State to make to its IEU rules

as a condition of full approval. EPA therefore moved the Court on May

23, 1995, to vacate and remand to EPA those portions of EPA's final

interim approval of Washington's operating permits program concerning

IEUs, specifically, Condition 5 of EPA's conditions for full approval

of Washington's operating permits program as described in the November

9, 1994 Federal Register. 59 FR 55818. The Court granted EPA's motion

on July 7, 1995, thereby vacating Condition 5 of EPA's conditions for

full approval of the Washington program and remanding Condition 5 to

EPA for reconsideration and amended decision.

Following the Court's order, EPA has again reviewed the part 70

regulations and Washington IEU provisions. EPA now believes that it was

overly broad in stating that title V and part 70 preclude the

designation of emission units as ``insignificant'' if such units are

subject to a federally-enforceable applicable requirement and in

requiring Washington to change its regulations to allow the designation

of an emission unit as insignificant only if it is not subject to a

federally-enforceable applicable requirement. As discussed below, EPA

believes there are circumstances in which an emission unit or activity

can be defined as ``insignificant'' under a State operating permits

program, even if it is subject to an applicable requirement. However, a

title V application must still contain information needed to determine

the applicability of or to impose any applicable requirement or any

required fee and a title V permit must still meet the requirements of

Sec. 70.6 for all emission units, including IEUs, subject

[[Page 50168]]

to applicable requirements. EPA therefore continues to believe that the

Washington IEU provisions extend the exemption for IEUs beyond the

limited exemption authorized by part 70. Accordingly, EPA is again

proposing that full approval of the Washington operating permits

program be conditioned on changes to Washington's treatment of IEUs.

II. Discussion

A. Proposed Interim Approval of Washington IEU Regulations

1. Part 70 Requirements for Insignificant Emission Units

EPA's regulations for operating permits programs authorize States

to establish provisions for IEUs. Specifically, 40 CFR 70.5(c) states:

The Administrator may approve as part of a State program a list

of insignificant activities and emissions levels which need not be

included in permit applications. However, for insignificant

activities which are exempted because of size or production rate, a

list of such insignificant activities must be included in the

application. An application may not omit information needed to

determine the applicability of, or to impose, any applicable

requirement, or to evaluate the fee amount required under the

schedule approved pursuant to Sec. 70.9 of this part.

In addition, Sec. 70.5(c)(3)(i) states:

A permit application shall describe all emissions of regulated

air pollutants emitted from any emissions unit, except where such

units are exempted under this paragraph (c) of this section. The

permitting authority shall require additional information related to

the emissions of air pollutants sufficient to verify which

requirements are applicable to the source, and other information

necessary to collect any permit fees owed under the fee schedule

approved pursuant to Sec. 70.9(b) of this part.

Although both of these provisions authorize a State permitting

program to grant certain relief for IEUs in its permit application,

both provisions also require that the source submit sufficient

information for the permitting authority to be able to verify the

requirements applicable to the source and to collect appropriate permit

fees. Where information about an IEU is necessary to determine the

applicability of, or to impose in the permit, an applicable

requirement, then the permit application must contain sufficient

information to make that determination. Similarly, if the approved fee

schedule imposes fees based on all emissions from a source, including

emissions from IEUs, and requires the fee amount to be determined in

the permit application, then the application must include emissions

information for IEUs.

In addition, a title V permit must contain all requirements

applicable to the source, including those requirements applicable to

IEUs. Section 504(a) of the Act requires that ``each permit issued

under this title shall include enforceable emission limitations and

standards, a schedule of compliance, a requirement that the permittee

submit to the permitting authority, no less often than every 6 months,

the results of any required monitoring, and such other conditions as

are necessary to assure compliance with applicable requirements of (the

Act), including the requirements of the applicable implementation

plan.'' (emphasis added). Section 70.6(a)(1) provides that each permit

shall include ``emission limitations and standards, including those

operational requirements and limitations that assure compliance with

all applicable requirements at the time of permit issuance.''

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

``compliance, certification, testing, monitoring, reporting, and

recordkeeping requirements sufficient to assure compliance with the

terms and conditions of the permit.'' The fact that an emission unit

may emit only small quantities of pollutants does not provide a basis

for exempting it from the fundamental statutory requirement that the

permit specifically include, and ensure compliance with, all applicable

requirements.

As such, EPA interprets part 70 as allowing States to substantially

reduce the burden of information required in permit applications for

IEUs, but requiring that sufficient information still be provided in

the application to determine the applicability of, and to impose in the

permit, all applicable requirements that apply to IEUs. EPA also

interprets part 70 as requiring a title V permit to contain all

applicable requirements for all emission units, even for IEUs.

This means that some of the information required by

Secs. 70.5(c)(3) through (9) (Standard application form and required

information) may need to be included in the permit application for IEUs

in order for the permitting authority to draft an adequate operating

permit. As an example, where an IEU is not in compliance with an

applicable requirement at the time of permit issuance, the permit

application would need to contain a compliance plan, including a

compliance schedule, for achieving compliance with the applicable

requirement. As another example, if a source has some IEUs within a

category that are subject to an applicable requirement and some within

that same category that are not subject to that applicable requirement

because the applicability criteria for the applicable requirement are

different from the applicability criteria for IEUs, the permit

application would generally be required to include sufficient

information on the IEUs for the permitting authority to determine which

units are subject to the applicable requirement and to include that

applicable requirement in the permit for the subject IEUs. EPA believes

that part 70 would also authorize EPA to approve a State program that

requires a permit application to simply list the applicable

requirements that apply to IEUs generally, rather than requiring the

permit application to explicitly identify which IEUs are subject to

which applicable requirements. The State would then issue a permit

imposing the applicable requirements in the permit, but not

specifically identifying which IEUs are subject to those applicable

requirements. In such a case, however, EPA believes that 40 CFR 70.6(f)

would not authorize the State to grant a permit shield to IEUs because

there would have been no determination in the permitting process that

certain IEUs were or were not subject to certain applicable

requirements.

2. Washington Requirements for Insignificant Emission Units

a. Definition of ``insignificant activities'' and ``insignificant

emission units'' under the Washington program. WAC 173-401-200(16)

defines an ``insignificant activity'' or an ``insignificant emission

unit'' as any activity or emission unit located at a title V source

which qualifies as insignificant under the criteria listed in WAC 173-

401-530. Section 173-401-530(1) authorizes activities and emission

units to be considered insignificant if (a) actual emissions of all

regulated pollutants from the unit or activity are less than the

emission thresholds established in WAC 173-401-530(4); (b) the activity

or emission unit is listed in WAC 173-401-532 as ``categorically

exempt''; (c) the activity or emission unit is listed in WAC 173-401-

533 and is considered insignificant based on size or production rate;

or (d) the activity or emission unit generates only fugitive emissions,

which are subject to no applicable requirement other than generally

applicable requirements of the Washington state implementation plan

(SIP).

Although WAC 173-401-200(16) and WAC 173-401-530 meet the

requirements of part 70 for designating

[[Page 50169]]

IEUs,1 the Washington program contains unacceptably broad

exemptions from permit program requirements. WAC 173-401-200(16)

provides that activities and units deemed insignificant under WAC 173-

401-530 are exempt from Washington's permit program requirements,

except as provided in WAC 173-401-530. As discussed in more detail

below, WAC 173-401-530 does not include all of the requirements of part

70 which are necessary to comply with the provisions of Sec. 70.5

regarding permit applications and Sec. 70.6 regarding permit content

for those IEUs which are subject to applicable requirements. It also

appears to exempt IEUs in determining whether a source is even subject

to Washington's operating permits program. WAC 173-401-532 and 173-401-

533 also state that IEUs are ``exempt from this chapter [WAC 173-

401].'' 1a

\1\ It is important to distinguish EPA's concept of

``insignificant activities and emission levels'' as envisioned in

section 70.5(c) and Washington's definition of ``insignificant

activity'' and ``insignificant emission unit'' in WAC 173-401-

200(16) and WAC 173-401-530. Section 70.5(c) allows State programs

to include a list of ``insignificant activities'' and

``insignificant emission levels'' which are based solely on

classification by source category and/or emission rates. The

Washington definition utilizes a similar approach but further

restricts ``insignificant activities'' and ``insignificant emission

units'' to those activities and units that are subject only to

generally applicable requirements of the Washington SIP and no any

other federally enforceable applicable requirements.

\1a\ For purposes of this action, ``IEU'' refers to activities

and emissions units that are defined as insignificant under WAC 173-

401-200(16) and 173 401-530, when used in discussing the Washington

program, and refers to the generic concept under part 70, when used

in discussing the requirements of part 70.

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WAC 173-401-530(2)(a) does limit the exemption of WAC 173-401-

200(16) by providing that no activity or emission unit subject to a

federally enforceable applicable requirement (other than generally

applicable requirements of the Washington SIP) shall qualify as

insignificant. Nonetheless, EPA believes that the Washington program

impermissibly exempts from many of the permit content requirements,

certain permit application requirements, and possibly even

applicability determinations those IEUs that are subject to federally

enforceable generally applicable requirements of the Washington SIP,

but no other federally enforceable applicable requirements. Thus,

although the Washington regulations comply with part 70 regarding the

designation of IEUs, they do not comply with the requirements for the

treatment of IEUs.

b. Permit content. As stated above, WAC 173-401-200(16) exempts

IEUs from Washington's ``permit program requirements except as provided

in WAC 173-401-530.'' IEUs are therefore exempt from all of the permit

content requirements in WAC 173-401-600 through 650.2 In addition,

WAC 173-401-530(2)(c) specifically (and redundantly) exempts IEUs from

the testing, monitoring, reporting and recordkeeping requirements of

WAC 173-401-615 and WAC 173-401-630(1) except where generally

applicable requirements of the Washington SIP specifically impose such

requirements, and WAC 173-401-530(2)(d) specifically (and again

redundantly) exempts IEUs from the compliance certification

requirements of WAC 173-401-630(5). Finally, WAC 173-401-532 and -533,

which contain the lists of IEUs, specifically state that IEUs are

``exempt from this chapter (WAC 173-401).'' In place of those

requirements, WAC 173-401-530(2)(b) simply requires the permit

application to list and the permit to contain all generally applicable

requirements that apply to IEUs.

\2\ These include WAC 173-401-600 (Permit content); 173-401-610

(Permit duration); WAC 173-401-615 (Monitoring and related

recordkeeping and reporting requirements); WAC 173-401-620 (Standard

terms and conditions); WAC 173-401-625 (Federally enforceable

requirements); 173-401-630 (Compliance requirements); 173-401-635

(Temporary sources); 173-401-640 (Permit shield); 173-401-645

(Emergency provision); 173-401-650 (Operational flexibility).

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Nothing in part 70 authorizes a State to omit from a title V permit

applicable requirements or the elements of a title V permit specified

in section 40 CFR 70.6. Although the Washington regulations ensure that

all applicable requirements will be included in a title V permit, WAC

173-401-200(16) exempts IEUs from all of the required title V permit

elements except for the generally applicable requirements of the

Washington SIP. In other words, a title V permit would not be required

to contain any elements required by Sec. 70.6 for IEUs other than the

generally applicable requirements themselves. Thus, a title V permit in

Washington would not be required to include ``gapfilling'' testing,

monitoring, recordkeeping and reporting requirements for IEUs, as

required by 40 CFR 70.6(a)(3)(i), (ii) and (iii); compliance

certification, testing, monitoring, reporting and recordkeeping

requirements sufficient to assure compliance with the generally

applicable requirements for subject IEUs, as required by 40 CFR

70.6(c)(1); compliance certification for IEUs, as required by 40 CFR

70.6(c)(5); and, for IEUs not in compliance, a compliance schedule and

progress reports, as required by 40 CFR 70.6(c)(3) and (4).

For example, where a source had an IEU that was subject only to a

generally applicable requirement in the Washington SIP, the title V

permit would be required to contain only those permit provisions

required by Secs. 70.6(a)(1), 70.6(a)(3)(i)(A), 70.6(a)(3)(ii) and

70.6(a)(3)(iii) that are generally applicable requirements themselves.

Washington would not be required to ``gapfill'' any testing or

monitoring requirements for IEUs subject to applicable requirements

which did not contain their own testing or monitoring methods, as

required by Sec. 70.6(a)(3)(i)(B). Washington would also not be

required to include in permits compliance and compliance certification

requirements for IEUs subject to applicable requirements, as required

by Sec. 70.6(c)(1) and (5). For these reasons, EPA believes that the

Washington provisions for IEUs do not fully meet the requirements of

Sec. 70.6 with respect to the treatment of IEUs subject to applicable

requirements.

c. Permit applications. The Washington program meets the

requirements of 40 CFR 70.5 (Permit Applications), including the

requirement of Sec. 70.5(c) that an application may not omit

information needed to determine the applicability of, or to impose, any

applicable requirement or evaluate any required fee, with respect to

all emissions units except for IEUs. See WAC 173-401-500 (Permit

application), -510 (Permit application forms), and -520

(Certification). The definition of ``insignificant activity'' and

``insignificant emission unit'' in WAC 173-401-200(16), however,

exempts IEUs from all of these requirements, except those contained in

WAC 173-401-530. Furthermore, WAC 173-401-532(1) exempts categorically

exempt units and activities from permit applications entirely and WAC

173-401-533(1) exempts emission units and activities deemed

insignificant based on size or production rate from all permit

application requirements except a requirement to include a list of such

units and activities in the permit application. In place of the permit

application requirements that apply to all other emission units at

title V sources in Washington, WAC 173-401-530(2)(b) simply requires

that the permit application list all generally applicable requirements

that apply to insignificant emission units or activities at the source

and, as stated above, WAC 173-401-530(1) requires that the permit

application contain a list of IEUs which

[[Page 50170]]

are so designated based on size or production rate.

As discussed in Section II.A.1 above, EPA believes that part 70

would authorize a State to require an applicant to simply list the

applicable requirements that apply to IEUs, rather than requiring the

applicant to specifically indicate which IEUs are subject to which

applicable requirements, provided the permit shield does not extend to

IEUs. In this respect, EPA believes that this aspect of Washington's

approach to IEU's is acceptable because WAC 173-401-530(3) specifically

states that the permit shield does not extend to IEUs designated under

the Washington rules. The Washington regulations fail to satisfy the

requirements of part 70 with respect to permit application requirements

in several other respects, however. For example, the Washington program

exempts sources from the requirement of 40 CFR 70.5(a)(2) and (d) that

a responsible official certify the truth, accuracy and completeness of

the provisions in the permit application that relate to IEUs. In

addition, WAC 173-401-500(7), which contains criteria for determining

when an application is complete, appears to contain an impermissible

exemption for IEUs. That section defines an application as complete

when it contains, among other things, ``the required information for

each emission unit (other than insignificant emission units) at the

facility.'' WAC 173-401-500(7)(a). This provision appears to define an

application as complete even if it fails to include the information

required by WAC 173-401-510(1) and (2)(c)(i) that would be necessary to

determine the applicability of, or to impose, any applicable

requirement or fee for IEUs. It would also define a permit application

as complete even if it failed to include the information regarding IEUs

required by WAC 173-401-530.

Although Washington does not appear to have intended to exclude

IEUs from all of the requirements of WAC 173-401-501, -510, and -520,

EPA believes that this is the clear effect of the exclusions contained

in WAC 173-401-200(16) and 173-401-500(7)(a). EPA therefore believes

that the provisions for permit applications in the Washington operating

permits regulations do not fully meet the requirements of Sec. 70.5

with respect to IEUs.3

\3\ In this regard, EPA believes its proposed interim approval

of Washington's IEU provisions is consistent with EPA action in

other title V program approvals. For example, in requiring Illinois

to revise its IEU provisions as a condition of full approval, EPA

stated that the Illinois program would impermissibly allow a permit

application to omit information needed to determine the

applicability of, or to impose, applicable requirements on IEUs. See

60 FR 12478 (March 7, 1995).

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d. Applicability determinations. Because WAC 173-401-530 does not

specifically require emissions from IEUs to be included in

applicability determinations, the exemption contained in the definition

of IEU could be interpreted to allow emissions from IEUs to be excluded

from the determination of whether a source is a major source under WAC

173-401-200(17) and (32) and thus subject to Washington's operating

permits program in the first instance. In other words, the requirement

to include emissions from IEUs in determining whether a source is a

major source is a permit program requirement from which IEUs appear to

be exempted under WAC 173-401-200(16). Nothing in title V or part 70

suggests that emissions from IEUs can be ignored in determining whether

a source is a title V source. See 40 CFR 70.2 (Definition of ``major

source''; 40 CFR 70.3 (Applicability). Although EPA does not believe

that Washington intended that emissions from IEUs be excluded in

applicability determinations, EPA is concerned that Washington's IEU

regulations could be interpreted to have that effect.

3. Implementation Concerns

During the public comment period on EPA's initial interim approval

of the Washington program, commenters expressed concern that permit

applications would have to describe emissions from all units and

responsible officials would be required to conduct extensive due

diligence efforts in order to certify the compliance of emission units

that emit very small quantities of pollutants. These parties argued

that this was an unreasonable regulatory burden that would result in

excessive paperwork and would likely decrease the ability of permitting

agencies to effectively enforce title V permits. The Petitioners and

the State echoed these concerns in their challenge of EPA's interim

approval action before the Ninth Circuit Court of Appeals.

Such program implementation concerns should be reduced now that EPA

has clarified that emission units subject to applicable requirements

may be defined as ``insignificant,'' provided that the application

contains sufficient information to determine the applicability of, and

to impose in the permit, all applicable requirements and fees that

apply to IEUs and that the permit contains all applicable requirements

for all emission units, even IEUs. In addition, part 70 allows States

flexibility in tailoring the quality of information required in the

permit application and the rigor of compliance requirements in the

permit to the type of emission unit and applicable requirement in

question. See White Paper for Streamlined Development of Part 70 Permit

Applications, from Lydia Wegman, Deputy Director of EPA's Office of Air

Quality Planning and Standards, to EPA Regional Air Directors (July 10,

1995). For example, the requirement to include in a permit application

information necessary to determine the applicability of an applicable

requirement does not necessarily require an applicant to describe or

quantify emissions of regulated pollutants. Units subject to an

applicable requirement can be identified as a class along with the

applicable requirement (e.g. valves and flanges subject to a leak

detection and repair requirement). Furthermore, the requirement to

include in a permit compliance certification, testing, monitoring,

reporting, and recordkeeping sufficient to assure compliance with the

terms and conditions of the permit does not require the permit to

impose the same level of rigor with respect to small emission units

that do not require extensive testing or monitoring in order to

determine compliance with the applicable requirements as it does with

respect to large emission units.

The State of Oregon, which received interim approval of its

operating permit program effective January 3, 1995,4 59 FR 61820

(Dec. 2, 1994) has already issued several final title V operating

permits. The Oregon program provides an example of how a State can meet

the requirements of part 70 for IEUs and still successfully implement

an operating permit program. The Oregon program defines certain

activities as ``insignificant,'' based either on the amount of

emissions or the activity itself. See OAR 340-28-110(5), (15), and

(50). The program requires that a permit application contain a list of

all categorically insignificant activities and an estimate of all

emissions of regulated air pollutants from those activities which are

designated insignificant because of nonexempt insignificant mixture

usage or aggregate insignificant emissions. See OAR 340-28-2120(3)(e).

The Oregon program, however, prohibits the omission of information

needed to determine the applicability of, or to impose, an applicable

requirement, or to evaluate a required

[[Page 50171]]

fee, see OAR 340-28-2120(3), and does not allow the exemption of IEUs

from the permit content requirements of Oregon's program, see OAR 340-

28-2130.

\4\ Oregon's insignificant emissions unit provisions received

full approval.

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Permits issued by the State of Oregon have included generally

applicable requirements contained in the Oregon State Implementation

Plan (A final title V permit that has been issued by Oregon is in the

docket). Permits contain provisions requiring sources to monitor IEUs

subject to applicable requirements, for example, by estimating

emissions once every five years and conducting semi-annual compliance

inspections of IEUs, the results of which are recorded in a company

log. Permits also contain a chart of test methods and procedures for

determining compliance with generally applicable requirements. In

short, by using standard permit terms to address compliance

certification, testing, monitoring, recordkeeping and reporting

requirements for common generally applicable requirements that apply to

IEUs, the State of Oregon appears to have minimized the burden of

ensuring that a permit meets the requirements of Sec. 70.6.

4. Proposed Interim Approval

In summary, EPA continues to believe that the Washington program

does not fully meet the requirements of title V and part 70 with

respect to IEUs. Specifically, Washington's definition of

``insignificant activity'' and ``insignificant emission unit'' in WAC

173-401-200(16) exempts such activities and units from all of the

permit program requirements of WAC 173-401 except those requirements

contained in WAC 173-401-530. WAC 173-401-530, however, does not ensure

that all of the necessary provisions of Secs. 70.5 and 70.6 are met for

those IEUs which are subject to applicable requirements and does not

ensure that emissions from IEUs must be included in determining whether

a source is even subject to Washington's operating permits program.

EPA does not believe, however, that the deficiencies in the

Washington program with respect to IEUs warrant disapproval of the

Washington program. Section 502(g) of the Act and 40 CFR 70.4(d)

authorize EPA to grant interim approval to a State operating permits

program if the program substantially meets the requirements of part 70,

but does not qualify for full approval. Although Sec. 70.4(d)(3)(ii)

requires a program to have adequate authority to issue permits that

assure compliance with all of the requirements of title V and part 70

in order to receive interim approval, EPA believes that the

deficiencies in Washington's program with respect to IEUs are

sufficiently narrow to qualify for interim approval. Specifically, WAC

173-401-530(2)(a) limits the exemption for IEUs to just those emission

units and activities that are subject to no other federally enforceable

applicable requirements than generally applicable requirements of the

Washington SIP. Emission units or activities, regardless of size,

emission rate, or category, which are subject to any other federally

enforceable requirement do not qualify as IEUs and as such, do not

qualify for the exemption from the permit application and permit

content requirements provided by WAC 173-401-200(16) and WAC 173-401-

530. Only IEUs subject solely to the generally applicable requirements

of the SIP are exempted under the Washington program from many of the

requirements for permit applications and permit content, and those

exemptions would be limited to just those generally applicable

requirements. As such, the Washington program meets the requirements of

part 70 for most emission units and activities and EPA therefore

proposes to grant interim approval to the Washington operating permits

programs with respect to the IEU provisions.

B. Jurisdiction of the Benton County Clean Air Authority

On April 12, 1995, the Director of the State of Washington

Department of Ecology submitted a revision to the State of Washington

title V operating permits program, specifically, a change in the

jurisdiction of the Benton-Franklin Counties Clean Air Authority. The

submittal explained that on January 1, 1995 the Benton-Franklin

Counties Clean Air Authority became the Benton County Clean Air

Authority, returning jurisdiction for title V permitting and

enforcement over sources in Franklin County to the Washington

Department of Ecology as a matter of State law.

EPA has reviewed this revision to the Washington title V operating

permits program and does not believe that the proposed change in the

permitting authority for title V sources in Franklin County impacts the

approvability of the operating permits programs submitted by the Benton

County Clean Air Authority program or the Washington Department of

Ecology. Therefore, EPA proposes to approve this revision to the

Washington title V operating permits program.

C. Correction to Interim Approval Expiration Dates

EPA granted interim approval to the Washington title V operating

permits program on November 9, 1994, which action became effective on

December 9, 1994. See 59 FR 55813. Section 502(g) of the Act provides

that an interim approval shall expire on a date set by the

Administrator not later than 2 years after such approval. The Federal

Register notice stated, however, that the interim approval of the

Washington program would expire on November 9, 1996, which is 2 years

from the date of publication of the notice, and not, as EPA intended, 2

years from the effective date of the notice, or December 9, 1996. The

notice also set May 9, 1996 as the submittal date for a corrective

program, which is only 17 months after the effective date of the

interim approval, rather than June 9, 1996, which is 18 months after

the effective date. EPA is therefore by this notice proposing to

correct the dates in 40 CFR part 70, Appendix A for expiration of the

interim approval of the Washington State title V operating permits

program from November 9, 1996 to December 9, 1996, and proposing to

correct the date by which the State must submit a corrective program

from May 9, 1996 to June 9, 1996.

III. Proposed Action and Implications

A. Proposed Action

EPA is proposing to require that the State of Washington change its

regulations addressing IEUs to conform to the requirements of part 70

as a condition of full approval of the operating permits program

submitted by the State of Washington on November 16, 1993. If

promulgated, the State must make the following revisions to its IEU

provisions to receive full approval:

(5) Revise WAC 173-401-200(16) (Definition of ``insignificant

activity'' and ``insignificant emission unit''), WAC 173-401-500

(Permit applications), WAC 173-401-510 (Permit application form),

WAC 173-401-530 (Insignificant emission units), WAC 173-401-532

(Categorically exempt insignificant emission units) and WAC 173-401-

533 (Units and activities defined as insignificant on the basis of

size or production rate) to ensure that emissions from IEUs are not

exempted from applicability determinations; that permit applications

contain a list of all IEUs which are exempted because of size or

production rate; that permit applications contain all information

needed to determine the applicability of or to impose any applicable

requirement or required fee; and that permits contain all applicable

requirements and meet all permit content requirements of 40 CFR 70.6

for all emission units, even for IEUs.

This proposed requirement replaces Condition 5 under the heading

``Ecology'' in Section II.B. of EPA's November 9, 1994, Federal

Register notice granting final interim approval of

[[Page 50172]]

the Washington operating permits program. See 59 FR 55818. Note that

this proposal in no way affects the changes necessary to address all

other interim approval issues identified in the November 9, 1994

Federal Register notice. In other words, as a condition of full

approval, Washington must also correct the four other deficiencies in

its program identified in the November 9, 1994, notice and the other

Washington permitting authorities must correct all deficiencies in

their respective programs identified in the November 9, 1994, notice.

See 59 FR 55818-55819.

EPA is also proposing to approve as a program revision the transfer

of title V permitting and enforcement authority for sources in Franklin

County to the Washington Department of Ecology.

Finally, EPA is proposing to correct the expiration dates in

Appendix A for the interim approval of the Washington State and local

operating permits programs as well as the date by which the State is

required to submit a corrective program.

B. Effective Date of Interim Approval

If EPA were to finalize this proposed interim approval, it will not

change the time period for the initial interim approval, which is

December 9, 1996. During this ongoing interim approval period, the

State is protected from sanctions for failure to have a program, and

EPA is not obligated to promulgate, administer and enforce a Federal

permits program for the State of Washington. Permits issued under the

Washington program have full standing with respect to part 70. In

addition, the 1-year deadline for submittal of permit applications by

subject sources and the 3-year time period for processing the initial

permit applications began upon the effective date of interim approval,

which in this case was December 9, 1994.

If the State of Washington were to fail to submit a complete

corrective program for full approval by the date 6 months before

expiration of the interim approval (by June 9, 1996) EPA would start an

18-month clock for mandatory sanctions. If the State of Washington were

then to fail to submit a complete corrective program 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 State of Washington had corrected

the deficiency by submitting a complete corrective program. Moreover,

if the Administrator were to find a lack of good faith on the part of

the State of Washington both sanctions under section 179(b) would apply

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

determined that the State of Washington had come into compliance. In

any case, if, 6 months after application of the first sanction, the

State of Washington still had not submitted a corrective program that

EPA found complete, a second sanction would be required.

If, following expiration of final interim approval, EPA were to

disapprove the State of Washington'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 State of Washington 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 State of Washington both sanctions

under section 179(b) would apply after the expiration of the 18-month

period until the Administrator determined that the State of Washington

had come into compliance. In all cases, if, 6 months after EPA applied

the first sanction, the State of Washington 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 State 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 State 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

State upon expiration of interim approval.

IV. Administrative Requirements

A. Request for Public Comments

EPA is requesting comments on two issues addressed in this notice,

specifically, (1) conditioning full approval of the Washington

operating permits program on changes to Washington's regulations

addressing insignificant emission units; and (2) approving a change to

the jurisdiction of the Benton County Clean Air Authority. All other

aspects of EPA's interim approval of Washington's operating permits

program, as discussed in 59 FR 42552, including all other conditions on

full approval of Washington's operating permit programs, remain

unchanged by this proposal and are not open for public comment.

Correction of the expiration date of the final interim approval of

Washington's operating permits program and the date by which Washington

must submit a corrective program are being made as an administrative

correction and is not open for public comment.

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

for this proposed action and notice 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 October 30, 1995.

B. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

C. Regulatory Flexibility Act

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

requirements, but simply address operating permits programs submitted

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

action does not impose any new requirements, it does not have a

significant impact on a substantial number of small entities.

D. Unfunded Mandates

Under Section 202 of the Unfunded Mandates Reform Act of 1995,

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 action proposed today does not include

a Federal mandate that may result in estimated costs of $100 million or

more

[[Page 50173]]

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, Intergovernmental relations, Operating permits,

Reporting and recordkeeping requirements.

Dated: September 14, 1995.

Chuck Clarke,

Regional Administrator.

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

proposed to be amended as follows:

PART 70--[AMENDED]

21. The authority citation for part 70 continues to read as

follows:

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

2. Part 70 is proposed to be amended by revising the Washington

paragraph of Appendix A to read as follows:

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

Permits Programs

* * * * *

Washington

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

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

December 9, 1996.

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

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

expires December 9, 1996.

(c) Benton County Clean Air Authority (BCCAA): submitted on

November 1, 1993 and amended on September 29, 1994 and April 12,

1995; effective on December 9, 1994; interim approval expires

December 9, 1996.

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

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

expires December 9, 1996.

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

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

expires December 9, 1996.

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

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

expires December 9, 1996.

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

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

interim approval expires December 9, 1996.

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

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

interim approval expires December 9, 1996.

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

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

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

* * * * *

[FR Doc. 95-23967 Filed 9-27-95; 8:45 am]

BILLING CODE 6560-50-P