Clean Air Act Final Interim Approval of Operating Permits Program; Arizona; Direct Final Interim Approval of Operating Permits Program; Pinal County Air Quality Control District, Arizona

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5642-1]

Clean Air Act Final Interim Approval of Operating Permits

Program; Arizona; Direct Final Interim Approval of Operating Permits

Program; Pinal County Air Quality Control District, Arizona

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval; direct final interim approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating

Permits Program submitted by the State of Arizona, which comprises

programs from the Arizona Department of Environmental Quality (ADEQ),

the Maricopa County Environmental Services Department, (Maricopa), the

Pima County Department of Environmental Quality (Pima), and the Pinal

County Air Quality Control District (Pinal) for the purpose of

complying with federal requirements for an approvable state program to

issue operating permits to all major stationary sources, and to certain

other sources. The EPA is also taking direct final action to promulgate

interim approval of specified portions of the Pinal County Operating

Permits Program submitted by ADEQ on behalf of Pinal County on August

15, 1995. These specified portions of the program reflect changes to

the permitting regulation that was part of Pinal's original program

submittal.

DATES: The final interim approval of the Arizona program is effective

on November 29, 1996. The direct final interim approval of the

specified portions of the Pinal County program as codified in paragraph

(d)(2) of the Arizona entry of Appendix A to part 70, is effective on

December 30, 1996 unless adverse or critical comments are received by

November 29, 1996. If the effective date is delayed, a timely notice

will be published in the Federal Register.

ADDRESSES: Copies of the State and county submittals and other

supporting information used in developing the final interim approval

and direct final interim approval are available for inspection (docket

number AZ-95-1-OPS) 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: Regina Spindler (telephone 415-744-

1251), 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

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

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

Code of Federal Regulations (CFR) Part 70 require that states develop

and submit operating permits programs to EPA by November 15, 1993, and

that EPA act to approve or disapprove each program within 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. On July 1, 1996, EPA promulgated the

part 71 regulations that govern EPA's implementation of a federal

operating permits program in a state or tribal jurisdiction. See 61 FR

34202. On July 31, 1996, EPA published a notice at 61 FR 39877 listing

those states whose part 70 operating permits programs had not been

approved by EPA and where a part 71 federal operating permit program

was therefore effective. In that notice EPA stated that part 71 is

effective in the State of Arizona. The EPA also stated its belief that

it would promulgate interim approval of the Arizona part 70 program

prior to the deadline for sources to submit permit applications under

part 71. Today's action cancels the applicability of a part 71 federal

operating permits program in Arizona in those areas under the

jurisdiction of the State and county agencies. The part 71 application

deadline contained in the July 31, 1996 notice is now superseded

[[Page 55911]]

by the State and county part 70 application deadlines.

On July 13, 1995, EPA published a notice of proposed rulemaking

(NPR) in which it proposed interim approval of the operating permits

program for ADEQ, Maricopa, Pima, and Pinal. See 60 FR 36083. The NPR

identified several deficiencies in the State and county programs and

proposed that the Arizona agencies make specified changes to correct

those deficiencies as a condition of full approval. The EPA received

public comment on the proposal and is responding to most of those

comments in this document. The EPA has addressed all of the comments

received on the proposal in a separate ``Response to Comments''

document contained in the docket at the Regional Office. After

considering the comments, EPA determined that some of the changes

proposed in the NPR are not necessary. In this final interim approval,

EPA has therefore modified the list of changes (``interim approval

issues'') that was set forth in section II.B.1. of the NPR. The public

comments that prompted EPA to modify the list are discussed below in

II.B. along with other issues raised during the public comment period.

In addition, ADEQ, on behalf of Pinal County, has submitted a revised

operating permits program for Pinal. Some of the revisions to the list

of interim approval issues for Pinal result from revisions to the Pinal

program that the County made in response to EPA's NPR. These revisions

to the Pinal program are also discussed in section II.B. of this

rulemaking. Revisions to portions of the Pinal program that were not

addressed by EPA's NPR are discussed in III.A. below. The EPA is taking

direct final action to promulgate interim approval of these changes to

the Pinal operating permits program.

The EPA's NPR also proposed approval, under section 112(l), of the

State and county programs for accepting delegation of section 112

standards as promulgated. The EPA received public comment on this

proposed action for the Pinal County program only, as is discussed

below in II.B.

In this document EPA is taking final action to promulgate interim

approval of the operating permits programs for ADEQ, Maricopa, Pima,

and Pinal. In this document EPA is also taking final action to approve,

under section 112(l), these agencies' programs for accepting delegation

of section 112 standards as promulgated. Finally, EPA is taking direct

final action today to promulgate interim approval of specific changes

to the Pinal County operating permits program.

II. Final Action and Implications

A. Analysis of State Submission

The title V programs for ADEQ, Maricopa, Pima, and Pinal were

submitted by ADEQ on November 15, 1993. Additional material was

submitted by ADEQ on March 14, 1994; May 17, 1994; March 20, 1995; and

May 4, 1995. Additional information was submitted by Maricopa on

December 15, 1993; January 13, 1994; March 9, 1994; and March 21, 1995.

Additional information was submitted by Pima on December 15, 1993;

January 27, 1994; April 6, 1994; and April 8, 1994. On Pinal's behalf,

ADEQ submitted a revision to Pinal's program on August 16, 1994. On

July 13, 1995, EPA proposed interim approval of The Arizona State title

V operating permits program in accordance with Sec. 70.4(d), on the

basis that the program ``substantially meets'' part 70 requirements.

Additional material submitted by the State and county agencies in

response to EPA's NPR is referenced below in II.B. in the discussion of

public comments.

The analysis of the State submittal given in the July 13, 1995

proposed action is supplemented by the discussion of public comments

made on the NPR, including the discussion of the additional material

submitted by the State and county agencies, and the resulting changes

to the interim approval issues list. Otherwise, the analysis in the

proposed document remains unchanged and will not be repeated in this

final document. The program deficiencies identified in the proposed

document have been modified as discussed below in II.B. The program

deficiencies that remain, however, must be corrected for the State and

counties to have fully approvable programs. These program deficiencies,

or interim approval issues, are enumerated in II.C. below.

B. Public Comments and Responses

The EPA received comments on the NPR for the Arizona program from

fifteen interested parties. The majority of the comments are discussed

below. Comments that are not addressed in this document are addressed

in a separate ``Response to Comments'' document contained in the docket

(AZ-95-1-OPS).

Several commenters expressed a general concern that sources which

have already submitted permit applications in accordance with the

existing Arizona regulations should not be required to submit new

applications due to program deficiencies identified by EPA in this

document. The EPA is therefore clarifying that today's final interim

approval of the Arizona program authorizes the State and county

agencies to implement the interimly approved programs as the title V

operating permits program for a period of two years. The EPA has

identified certain deficiencies in the program that must be corrected

by the end of this two year period but until that time, the agencies

may implement the program in accordance with the interimly approved

regulations cited in today's document. Therefore, sources that have

submitted applications in accordance with these regulations need not

reapply. The applications will not be deemed incomplete or returned for

revision solely because the permit application relies upon the Arizona

agencies' interimly approved regulations. If an applicant submitted a

timely and complete application in accordance with these regulations,

its application shield is not jeopardized by changes to the interimly

approved regulations that the State or county agencies may make. Other

comments on the July 13, 1995 proposal are discussed below.

1. Insignificant Activities

Section 70.5(c) provides that states may develop as part of their

program, and EPA may approve, a list of insignificant activities and

emissions levels that need not be included in permit applications but

that applications may not omit information needed to determine the

applicability of, or to impose, any applicable requirement, or to

evaluate appropriate fees. Several commenters disagreed with EPA's

requirement in the NPR that all activities identified as insignificant

by the Director of ADEQ must first be approved by EPA. The EPA proposed

that in order to receive full approval, ADEQ must remove the provisions

in its current title V regulation that gives the Director the

discretion to identify activities as insignificant without prior EPA

approval. These commenters argued that Sec. 70.5(c) provides only that

EPA may approve a list of insignificant activities as part of a

permitting authority's title V program and by including discretionary

authority as one item on the list, ADEQ has met the requirements of

Sec. 70.5(c). They also argued that nothing in Sec. 70.5(c) suggests

that all insignificant activities must be submitted to EPA in the form

of a rule and requiring so would unnecessarily limit the flexibility of

states to identify new insignificant activities as they arise. The

commenters also stated that EPA would have opportunity to review such

newly designated insignificant activities when it receives permit

applications

[[Page 55912]]

identifying such activities. Several commenters also cited the

discussion in EPA's July 10, 1995 ``White Paper for Streamlined

Development of Part 70 Permit Applications'' (``White Paper'') of

trivial activities. They argued that the discretion allowed permitting

authorities by EPA to list additional items as trivial should also be

extended to insignificant activities.

The EPA's reading of Sec. 70.5(c) is that EPA must approve as part

of a state's title V program any activities the state considers to be

insignificant. The EPA's ``White Paper'' also states that activities

that are not clearly trivial ``still need to be approved by EPA before

being added to State lists of insignificant activities.'' The EPA

therefore does not agree that the reasons offered by the commenters are

adequate to support full approval of the State rule provision discussed

here. However, EPA does believe this provision is fully approvable for

the reasons discussed in the following paragraph.

ADEQ's rule clearly states that certain activities may be

considered insignificant only if the emissions unit ``is not otherwise

subject to any applicable requirement.'' (Arizona Administrative Code

(AAC) R18-2-101(54)) AAC R18-2-304(E)(7) requires that all

insignificant activities be listed in the permit application. This goes

beyond the Sec. 70.5(c) requirement that ``for insignificant activities

which are exempted because of size or production rate, a list of such

insignificant activities must be included in the application.'' The

preamble to the final part 70 rule clarifies the distinction. It

discusses a boiler that is insignificant because it is below a

specified size as an example of an insignificant activity that is

exempted because of size and would be required by Sec. 70.5(c) to be

listed in the application. It goes on to state that for insignificant

activities ``which apply to an entire category of activities, such as

space heaters, the application need not contain any information on the

activity.'' [57 FR 32273, July 21, 1992] ADEQ does not distinguish its

insignificant activities in this way and instead requires that all

insignificant activities be listed in the application. The ``White

Paper'' generally provides that sources need only submit detailed

emissions information on emissions units as necessary to determine the

applicability of requirements, to verify compliance, and to compute

permit fees. The EPA believes that ADEQ's handling of insignificant

activities is consistent with this discussion. By requiring all

insignificant activities to be listed, ADEQ provides that information

on all emission units will be included in the application. Any units

that are subject to applicable requirements may not be considered

insignificant and the source must provide more detailed information for

those units. It therefore is appropriate that the Director of ADEQ may

allow activities other than those on the list submitted as part of its

title V program to be merely listed in the application. Because these

activities would be listed in the application, ADEQ and EPA would have

an opportunity to review the list and request additional information if

they believed the activity did not qualify as insignificant.

Regarding the proposal that ADEQ submit a demonstration to EPA that

the specific activities listed in R18-2-101(54)(a-i) are truly

insignificant, EPA has further evaluated the activities on this list

and found that they do qualify for treatment as insignificant in the

title V application because their exclusion is not likely to interfere

with determining or imposing applicable requirements in the State or

with the determination of fees. Therefore, no further demonstration is

necessary.

The EPA is therefore revising its proposal regarding insignificant

activities. The EPA is eliminating ADEQ's interim approval issue

regarding insignificant activities and finds that the provisions in

ADEQ rules regarding insignificant activities are fully approvable.

In the July 13, 1995 proposal, EPA stated that Pinal County's 200

pound per year insignificant activity threshold may not be appropriate

for units emitting hazardous air pollutants (HAP) and proposed that in

order to receive full approval Pinal must demonstrate that this

threshold level is insignificant compared to the level of HAP emissions

from units required to be permitted. The EPA also proposed that Pinal

demonstrate that the insignificant activities specifically listed in

its program are truly insignificant. Pinal County commented that they

have no objection to adopting lower thresholds for HAPs (such as

Sec. 112(g) de minimis levels) that EPA may set by rule but that they

should not be required to submit a demonstration that their listed

activities are truly insignificant until EPA establishes by rule what

qualifies as insignificant.

The EPA has further evaluated the activities specifically listed by

Pinal in its definition of ``insignificant activity'' and determined

that they are acceptable because their exclusion is not likely to

interfere with determining or imposing applicable requirements in the

County or with the determination of fees. The EPA has also reevaluated

its proposal regarding Pinal's emissions threshold definition of

``insignificant activity'' in light of the ``White Paper'' guidance on

permit applications. Pinal's rule (PCR Sec. 3-1-050(E)) provides that

title V applications need not contain emissions data regarding

insignificant activities but that all insignificant activities must be

listed in the application. Pinal's definition of ``insignificant

activity'' excludes any activities subject to an applicable requirement

(PCR Sec. 1-3-140(74a)). As discussed above regarding ADEQ's

insignificant activity provisions, EPA believes that this approach is

consistent with the ``White Paper'' guidance. Pinal is assuring that

information on all emission units will be included in the application

by requiring insignificant activities to be listed and that more

detailed information, including emissions information, will be provided

for those units subject to applicable requirements. The EPA believes

that the 200 pound per year threshold used to define insignificant

activities in Pinal's regulation is appropriate for the County given

these other provisions in the rule. The EPA is, therefore, eliminating

the proposed interim approval issue regarding Pinal's insignificant

activities and finds that these provisions are fully approvable.

The EPA did not receive any comments specific to its proposal

regarding Pima's insignificant activities provision. Pima's rule (PGC

Sec. 17.12.160(E)(7)) provides that emission units that do not emit

more than 2.4 pounds per day of VOC or 5.5 pounds per day on any other

regulated air pollutant must be listed in the application but the

application need not provide detailed information on these units. The

EPA stated in its proposal its concern that the emissions thresholds

may not be acceptable for defining insignificant activities for HAP.

The EPA also stated in the proposal that Pima must restrict such

insignificant emission units to those that are not likely to be subject

to an applicable requirement. The EPA now believes that if Pima adds

the restriction that emissions units that are subject to any unit-

specific applicable requirements may not be eligible for treatment as

insignificant, then the County's treatment of insignificant emission

units will be consistent with the ``White Paper'' guidance as discussed

above regarding the ADEQ and Pinal insignificant activity provisions.

With the ``applicable requirement'' restriction, and the requirement

that all insignificant emission units be listed in the application, EPA

believes that the

[[Page 55913]]

emissions thresholds described above are appropriate for Pima County.

The EPA is therefore modifying the proposed interim approval issue

accordingly. (See II.C.1.c.3 below.)

Maricopa County's Regulation II, Rule 210, section 301.5(g) allows

that emissions information for activities included in an extensive list

(MAPC Regulation II, Rule 200, section 303.3(c)) need not be included

in applications though the activities themselves must be listed in the

application. The EPA proposed that Maricopa be required to submit a

demonstration that the activities are truly insignificant and not

likely to be subject to an applicable requirement. Alternately, EPA

proposed that Maricopa restrict the exemptions to activities that are

less than County-established emission levels and that are not likely to

be subject to an applicable requirement. The EPA believes that there

are items on Maricopa's list that could emit significant amounts of

pollutants and/or that could be subject to non-general applicable

requirements. Maricopa County Environmental Services Department was the

only commenter that addressed EPA's proposal on Maricopa's

insignificant activities provision. Maricopa responded that they agree

to provide EPA with a demonstration that the activities are truly

insignificant and not likely to be subject to an applicable requirement

and also to revise Rule 200 to include emissions and/or operation

limits for the activities as necessary. The EPA is requiring,

therefore, that for full approval Maricopa must demonstrate that the

activities on its list are insignificant. It must revise the list to

ensure that nothing on the list will be subject to a unit-specific

requirement. In some cases, this may require removing some items from

the list completely. Another option is to add emissions cut-offs or

size limitations to items on the list to ensure that the listed

activities are below any applicability thresholds for applicable

requirements.

Several commenters took exception to EPA's proposal that one way to

identify insignificant activities is to set emissions limits. The

commenters argue that this contradicts both the purpose of establishing

insignificant activities and the ``White Paper.'' They contend that

establishing an emissions cutoff for insignificant activities would

require sources to quantify and document the level of emissions from

insignificant activities in an effort to show that they do indeed

qualify as insignificant. This emissions quantification, they argue, is

exactly what the concept of insignificant activities and the ``White

Paper'' discussion of application content intended to avoid. The

purpose of the insignificant activities exclusion, they say, is to

relieve sources from the obligation to develop and submit detailed

information about activities that are not relevant to determining fees

or the applicability of CAA requirements. The commenters also cite the

``White Paper'' discussion which says that emissions estimates should

not be required when they serve no useful purpose.

While EPA is not requiring that states set an emissions level

cutoff to define insignificant activities, the agency maintains that it

is acceptable to do so as long as such levels are insignificant

compared to the level of emissions from units that are subject to

applicable requirements. The EPA also believes that where a state's

list of insignificant activities contains activities that may be

significant if emitting above a certain level, then imposing an

emissions cap on the list will ensure that the activities are truly

insignificant. As to the comment that emissions cutoffs defeat the

purpose of an exemption, EPA notes that Pima and Pinal Counties chose

to define insignificant activities in this way. The EPA's proposal

merely expressed the concern that the chosen levels may be too high. As

discussed above, EPA now believes the emissions thresholds set by Pima

and Pinal to be acceptable in their jurisdictions given the other

conditions placed on emissions units to be treated as insignificant in

these counties.

2. Excess Emissions

Numerous parties commented on EPA's proposal to require ADEQ to

clarify that its excess emissions affirmative defense provision does

not apply to part 70 sources. They challenged EPA's authority to assert

that part 70 programs may not contain an affirmative defense for excess

emissions beyond that provided in section 70.6(g) for emergency

situations and cited section 70.6(g)(5) which provides that the

emergency affirmative defense ``is in addition to any emergency or

upset provision contained in any applicable requirement.'' They contend

that ADEQ's excess emissions provision is necessary because part 70

sources will have unavoidable excess emissions for purely technological

reasons and not emergencies as described in section 70.6(g). Many

sources, they argue, are unable to maintain emissions below applicable

emissions limits during startup and shutdown events as well as during

malfunctions. They also cite EPA's recognition of this situation in

many NSPS regulations which provide that emission limits do not apply

during periods of startup, shutdown, and malfunction. The commenters

also pointed out that the purpose of title V is not to impose new

substantive requirements but to set forth all requirements that apply

to a source in a single document. They assert that establishing the

emergency provision of section 70.6(g) as the only defense for

violations would increase the stringency of EPA's NSPS regulations and

Arizona State rules. By prohibiting an affirmative defense that has

been in Arizona regulations for many years, they argue, EPA will create

new standards for sources. The commenters also referred to EPA's

September 22, 1986 proposal to approve the ADEQ excess emissions

provision as part of the SIP. They argued that if EPA had finalized its

action on this rule then there would be no question as to its

applicability to part 70 sources.

The EPA agrees that it is not the purpose of title V to create any

new substantive requirements for sources but rather to assure source

compliance with federal applicable requirements. The EPA's proposal to

not fully approve a provision that would allow sources an affirmative

defense to noncompliance with federal applicable requirements is fully

consistent with this purpose. The EPA does recognize that there are

times when it is technologically infeasible for sources to comply with

applicable emissions limits. This rationale was behind the promulgation

of the 70.6(g) affirmative defense. Moreover, where EPA, in

promulgating individual standards, has found that it is necessary to

provide relief from compliance during such periods, it has done so.

Several NSPS and recently promulgated NESHAP allow, as commenters

noted, that standards apply at all times except periods of startup,

shutdown, and malfunction. Similarly, a state could, within a specific

source category rule approved into the SIP, provide such relief where

appropriate.

The section 70.6(g)(5) provision which recognizes upset provisions

``in addition'' to the Sec. 70.6(g) emergency defense is intended to

confirm that startup, shutdown, and malfunction provisions contained in

specific federal applicable requirements will continue to have effect

once those requirements are incorporated into part 70 permits. Section

70.6(g)(5) does not imply that affirmative defenses may be established

beyond those found in the applicable requirements or in Sec. 70.6(g).

AAC R18-2-310 (Rule 310) is broader that Sec. 70.6(g), and moreover

would provide a defense to noncompliance with federal applicable

requirements where the applicable requirement itself requires

[[Page 55914]]

compliance. By approving such a provision, EPA would be granting

authority to the State to change applicable requirements through title

V beyond what Sec. 70.6(g) specifically allows.

The EPA is not increasing the stringency of the Arizona SIP rules

by not approving Rule 310 into the State's title V program. Because

Rule 310 has never been approved into the SIP, the provisions of Rule

310 have never been part of these federal applicable requirements.

Regardless of whether such provisions have existed as a matter of

Arizona State law, they have never had legal effect as a matter of

federal law. It follows that Arizona's SIP rules will be no more

stringent when incorporated into the title V permit. Similarly, because

Rule 310 never applied to NSPS and other federal standards, they will

be no more stringent after incorporation into the title V permit. As

section 70.6(g)(5) confirms, any exemptions or defenses included in

these federal requirements will still be available once the

requirements are incorporated into the title V permit, along with the

emergency defense allowed by Sec. 70.6(g).

As to the comments regarding EPA's 1986 proposed approval of

Arizona's excess emissions provision, EPA did not finalize its action

on the excess emissions rule and therefore this rule is not part of the

SIP and does not affect any federally enforceable applicable

requirement. The EPA has informed ADEQ that it would not approve such a

broadly applicable rule into the SIP because it is inconsistent with

EPA's policy on excess emissions. See EPA's ``Policy on Excess

Emissions During Startup, Shutdown, Maintenance, and Malfunctions''

from Kathleen Bennett dated September 28, 1982 and as revised on

February 15, 1983.

The EPA maintains that a fully approvable part 70 program must not

provide for an affirmative defense to violations beyond that provided

by the section 70.6(g) emergency provision. AAC R18-2-310 is therefore

not fully approvable because it is a more broadly applicable provision

than the section 70.6(g) emergency defense. Rather than being limited

to emergencies, it applies during startup, shutdown, malfunction, and

scheduled maintenance. It is also available as a defense to violations

of all standards while section 70.6(g) applies only to technology-based

standards. For full approval, ADEQ must correct these deficiencies such

that its rule is consistent with section 70.6(g) (see II.C.1.a.5

below). During the interim approval period, however, ADEQ may implement

its title V program according to the regulations receiving interim

approval in today's action, including the AAC R18-2-310 excess

emissions affirmative defense provision.

3. Criminal Affirmative Defense/Material Permit Conditions

The EPA received a number of comments regarding the affirmative

defense to criminal prosecution for violation of emission and opacity

requirements and the revisions to the regulatory definitions of

material permit condition EPA proposed in sections II.B.1.a.9.,

II.B.1.b.3, II.B.1.c.8, and II.B.1.d.9. of the NPR. ADEQ and a number

of industry commenters opposed EPA's proposed revisions. ADEQ's

comments explained that the types of permit conditions which EPA had

proposed to add to the regulatory definition are already covered by

existing statutory provisions. After reviewing these provisions

(Arizona Revised Statutes (ARS) Secs. 49-464(C), (G), (J), and (U)),

EPA defers to the State's interpretation of the statute and is

therefore removing the requirements to revise the definition of

material permit condition in the State and county regulations. The EPA

is, however, finalizing the requirement that ADEQ clarify that a

material permit condition may be contained in a permit or permit

revision issued by the Control Officer of a county agency as well as by

the Director of ADEQ. (See II.C.1.a.6 below.)

One commenter felt that the State regulatory definition of material

permit condition was also deficient in that it covers only those

emission limits imposed to avoid classification as a major source or

modification or to avoid triggering other requirements. Such

requirements are commonly referred to as synthetic minor restrictions.

While these limits can be federally enforceable, they are not required

under the federal CAA in the same way that other emission limits are

because they are opted into by the source voluntarily to avoid other

requirements. Thus, ADEQ included such limits in the definition of

material permit condition to fill a perceived gap. However, as ADEQ

pointed out in its comment letter, the criminal violation of emission

limits in general is specifically covered by ARS Sec. 49-464(C). ARS

Sec. 49-464(G) makes it clear that emissions limit violations are to be

addressed under subsection (C). The commenter also argued that R18-2-

331(B) incorporates the excess emissions defense which EPA has cited as

an interim approval issue. The EPA disagrees with this analysis. This

provision does not provide a defense; rather it decreases the available

criminal charge from a felony to a misdemeanor in a narrowly proscribed

set of circumstances.

4. Public Notice

ADEQ, the Arizona Chamber of Commerce, and the Arizona Mining

Association (AMA) disagreed with EPA's proposal to require revision of

the Arizona agencies' rules to allow for providing ``notice by other

means if necessary to assure adequate notice to the affected public.''

All three parties contend that the public notice provisions in the

State and county rules go well beyond the minimum federal requirements

and will allow for more than adequate notice to the affected public.

AMA also argued that the addition of a vague and indefinite requirement

for additional notice could lead to litigation claiming that issued

permits are invalid because public notice was inadequate. While EPA

recognizes that the State and county notice provisions are quite

extensive, there may be certain instances when the agencies must use

alternative means not specifically provided for in their rules to reach

a particular community or group of people that may be affected by a

permitting action. On July 22, 1996, the Office of the Attorney General

of Arizona submitted a supplement to the Attorney General's opinion in

response to EPA's proposal on this matter. This supplement cites ARS

49-104(B)(3) which gives ADEQ the power to ``utilize any medium of

communication, publication and exhibition in disseminating information,

advertising, and publicity in any field of its purposes, objectives and

duties.'' This, in the Attorney General's opinion, gives ADEQ the power

to provide notice by any means as necessary to assure adequate notice

to the affected public. The EPA is deferring to the Attorney General's

opinion, and is therefore eliminating the interim approval issue

regarding the public notice provision (see II.B.1.a.8 of the NPR)

identified in the proposed interim approval of ADEQ's program.

Neither the Attorney General's Office, nor the county attorney's

offices, submitted a statement citing a provision in State or county

law that gives similar broad authority to the counties. Maricopa stated

in its comment letter on the proposed interim approval and also in a

letter from the County Attorney submitted on August 5, 1996 that its

rule was revised in February, 1995 to authorize notice by other means

necessary to assure adequate notice. Pinal County revised its rules to

add such a provision to its public notice procedures (Pinal County Code

of

[[Page 55915]]

Regulations (PCR) Sec. 3-1-107(C)(3)) and Pima has also added such a

provision to its rules. Pinal submitted its revised rules, including

the revised section 3-1-107(C)(3), as a revision to its title V program

submittal on August 15, 1995 and therefore EPA is eliminating the

interim approval issue for Pinal's program related to public notice

(see II.B.1.d.8. of EPA's July 13, 1995 proposal) such that Pinal's

public notice procedures are now fully approvable. Maricopa and Pima

have not submitted their revised rules as revisions to their title V

programs and thus EPA must finalize action on the Maricopa and Pima

public notice provisions as proposed (see II.C.1.b.11 and II.C.1.c.6

below). The EPA recognizes, however, that once Maricopa and Pima submit

their revised rules for approval under title V, the public notice

provisions regarding notice by other means necessary to assure adequate

notice will be fully approvable.

5. Public Access to Records

The Arizona Center for Law in the Public Interest (ACLPI) commented

that the Arizona State program does not meet the Clean Air Act

requirement (Sec. 7661a(b)(8)) that state permit programs include the

authority and procedures to make available to the public any permit

application, compliance plan, permit, and monitoring or compliance

report. ACLPI argues that ARS Sec. 49-432 allows a source to declare a

wide variety of information confidential, and therefore unavailable to

the public, upon submittal to the permitting authority. ACLPI argues

further that the burden is on the permitting authority to demonstrate

in court that the information does not qualify as confidential and that

there is no avenue of redress for a citizen if the permitting authority

chooses not to contest a claim of confidentiality.

The Attorney General's opinion submitted as part of the State

program addresses public access to permit information. The Attorney

General states that AAC R18-2-305(A) provides that all permits,

including all elements required to be in the permit pursuant to AAC

R18-2-306, shall be made available to the public and that no permit may

be issued unless the information required by AAC R18-2-306 is present

in the permit. The Attorney General goes on to state that the Director

of ADEQ has 30 days to determine whether the information satisfies the

requirements for trade secret or competitive position pursuant to ARS

Sec. 49-432(C)(1) and if the Director decides that the material does

not satisfy these requirements, he may direct the Attorney General's

office to seek a court order authorizing disclosure. The Attorney

General further asserts that the ``burden of proof in a court

proceeding is on the party asserting the affirmative of an issue, the

claimant. The statute in question shifts the burden of proceeding but

does not shift the burden of proof.'' He also states that if the

Director disagrees with a permit applicant's assertion of

confidentiality, the permit application is incomplete until the

disagreement is resolved.

The regulations clarify this interpretation. AAC R18-2-305(B)

requires that any notice of confidentiality submitted pursuant to ARS

Sec. 49-432(C) must contain sufficient supporting information to allow

the Director to evaluate whether such information satisfies the

requirements related to trade secrets or how the information, if

disclosed, is likely to cause substantial harm to competitive position.

AAC R18-2-305(C) further provides that the Director shall make a

determination as to whether the information satisfies the requirements

for trade secret or competitive position and notify the applicant. Only

if the Director agrees that the applicant's notice satisfies the

statutory requirements will the Director attach a notice to the

applicant's file that certain information is confidential.

The EPA defers to the opinion of the Attorney General that

Arizona's confidentiality provisions will not interfere with the

public's access to information intended to be public under title V. If

EPA finds, however, that Arizona is routinely withholding information

that EPA would release to the public under federal confidentiality

provisions, EPA will revisit this portion of the program approval. The

EPA also notes that AAC R18-2-304(F) requires a source that is applying

for a title V permit and has submitted information under a claim of

confidentiality to submit a copy of that information directly to EPA.

The release of this information to the public by EPA would be governed

by federal confidentiality provisions under Sec. 114(c) of the Act.

6. Exemption of Agricultural Activities

ACLPI commented that the Arizona program exempts from permitting

``agricultural vehicles or agricultural equipment used in normal farm

operations'' (ARS Sec. 49-426.01) and that title V does not allow for

such an exemption. ACLPI further commented that ADEQ's regulatory

definition of ``agricultural equipment used in normal farm operations''

as not including equipment that would require a title V permit could be

readily challenged by farm interests as not reflecting the plain

language of the statute.

The Attorney General's Opinion submitted as part of ADEQ's title V

program states that in granting ``agricultural equipment used in normal

farm operations'' an exemption from the permitting requirement, the

``legislature sought in no way to exempt any major sources.'' The

opinion goes on to state that AAC R18-2-302(C)(3) clarifies this point

by providing that ``agricultural equipment used in normal farm

operations'' does not include equipment that requires a permit under

title V or is subject to a standard under 40 CFR parts 60 or 61. The

EPA defers to the opinion of the Attorney General regarding this issue.

However, if, as ACLPI suggests, a successful legal challenge to the

regulation occurs, EPA will revisit this portion of the program

approval.

7. Deadline for Permit Applications

ACLPI commented that ADEQ's rules do not require all sources to

submit applications within 12 months of EPA approval of the State's

program. ACLPI references AAC R18-2-303(E) which provides that permit

applications that were determined to be complete prior to the effective

date of ADEQ's rules shall be deemed complete for title V purposes and

that the Director shall include a compliance schedule in the source's

permit for submitting a title V application according to the newly

effective rules. ACLPI argues that because there is no time limit on

the compliance schedule it could go beyond the title V statutory

requirement. ACLPI also commented that there is no deadline for Class

II sources (non-title V) to submit permit applications other than 180

days from a written request from the Director.

AAC R18-2-303(E) allows that permits issued to sources whose

applications were deemed complete prior to the effective date of ADEQ's

rules shall contain a schedule of compliance for submitting an

application to address the additional elements that were not included

in the original application. The EPA considers this a reasonable

approach since sources that submitted applications prior to the rule's

effective date prepared the application pursuant to ADEQ's permit

application requirements in effect before the new rules were adopted.

AAC R18-2-303(B) contains a schedule by which existing sources

requiring a Class I permit (title V permit) must submit permit

applications. The last date that any source requiring a Class I permit

[[Page 55916]]

could submit its complete application was May 1, 1995, well in advance

of EPA's statutory deadline. The EPA considers AAC R18-2-303(B) to be

the permit application deadline for all Class I sources, regardless of

whether that source had submitted an application prior to the effective

date of the ADEQ rules.

Regarding the application deadline for Class II operating permits,

as these are state-only enforceable permits and not title V permits,

they need not meet the requirements of title V.

The EPA's NPR did identify a deficiency with the application

deadline as applied to certain existing sources that are not Class I

sources during the initial phase of the program but that later become

Class I sources after obtaining Class II permits. The EPA's proposal

included a requirement that ADEQ revise its regulation to include an

application deadline (12 months from becoming subject) for existing

sources that become Class I sources after initial permit issuance is

complete. One example is a source with a Class II permit that removes

operational limits such that it is no longer nonmajor. ADEQ's

regulation contains a specific schedule for existing Class I sources to

submit permit applications and does not contain a general requirement

that all Class I sources submit applications within one year of

becoming subject to Class I permit requirements. ADEQ argued in its

comment letter that any existing source that makes a facility change or

seeks to remove limits on its potential to emit such that it qualifies

for a Class I permit is required to obtain a significant revision to

its existing permit, or under AAC R18-2-302, if not previously

regulated, a new Class I permit. The EPA agrees that the regulation

requires a significant permit revision or new Class I permit prior to

making the change in such cases but significant permit revisions

normally address only the portion of the source and permit that is

being modified and for any source obtaining its initial Class I permit,

the entire permit must be subject to the full Class I permit issuance

procedures including public comment and EPA review. ADEQ's regulation

does not clearly provide that this would occur in the instances

discussed above. The EPA has, therefore, finalized the interim approval

identifying this as a deficiency that must be corrected but has

clarified that the rule must be revised to ensure that an entire source

is issued a permit under the Class I permitting procedures (see

II.C.1.a.2 below).

The EPA also proposed requiring revisions to the county regulations

to clarify that all existing title V sources must submit title V permit

applications within 12 months of EPA's approval of the Arizona program

and all sources that become subject after the program is approved must

apply within 12 months of becoming a title V source. Maricopa and Pinal

counties submitted comments that they intend to revise the rules

accordingly. No parties commented on this proposed requirement for

Pima. The EPA is therefore finalizing its action regarding the

application deadline issue as proposed for Maricopa, Pima, and Pinal

counties (see II.C.1.b.5, II.C.1.c.2, and II.C.1.d.5 below).

8. Conditional Orders

ACLPI commented that it believes Arizona's conditional order

provisions are inconsistent with title V. ADEQ has authority under ARS

Sec. 49-437 through Sec. 49-441 to grant a conditional order that

allows a source to vary from any provision of ARS Title 49, Chapter 3,

Article 2, any rule adopted pursuant to Article 2, or any requirement

of a permit issued pursuant to Article 2. The county agencies have

similar authority under ARS Sec. 49-491 through Sec. 49-495. In the

NPR, EPA stated that it considers such conditional order provisions as

wholly external to the program submitted for approval under part 70. In

that proposal, EPA also described how the State and county regulations

limit the applicability of the conditional order provisions. ADEQ

provides that conditional orders may only apply to non-federally

enforceable conditions of a permit and that issuance of a conditional

order may not constitute a violation of the Act. The county regulations

all provide that conditional orders may not be granted to part 70

sources. (Please see the July 13, 1995 NPR for more detail.) In

consideration of the regulatory limitations placed on the issuance of

conditional orders and the fact that EPA considers the statutory

provisions to be external to the title V program, EPA believes it does

have authority to approve Arizona's program without further regard to

the conditional order provisions than was expressed in the NPR.

The EPA did propose that Pinal modify its conditional order

provisions in PCR Sec. 3-4-420 to provide that a conditional order may

not be granted to vary from the requirement to obtain a title V permit.

Pinal submitted a comment that it acknowledges the need for this

correction. The EPA is finalizing this interim approval issue as

proposed (see II.C.1.d.8 below).

9. Permit Renewal Provisions

The EPA proposed that the State and counties revise their

regulations, in accordance with Sec. 70.4(b)(10), to include a

provision that a source's permit not expire until a renewed permit is

issued or denied or, alternately, provide that the terms and conditions

of the source's existing permit remain in effect until the permit

renewal action is final. ADEQ informed EPA in its comment letter that

ARS Sec. 41-1064 provides that an existing permit does not expire until

the issuing agency has acted on the application for renewal. The EPA

agrees that this statutory provision satisfies the requirement of

Sec. 70.4(b)(10) for all the Arizona agencies and has eliminated the

proposed interim approval issues regarding permit renewal accordingly

(see II.B.1.a.7, II.B.1.b.8, II.B.1.c.6, and II.B.1.d.7 of the NPR).

The EPA recognizes in this final interim approval action that Pinal

County has clarified in its revised title V regulation under section 3-

1-089 that any source relying on a timely and complete application as

authority to operate after expiration of a permit must comply with the

terms of the expired permit.

10. Fines for Fee and Filing Violations

As discussed in II.B.1.a.10, II.B.1.b.4, II.B.1.c.9, and

II.B.1.d.10 of the NPR, EPA believed that ADEQ and the counties needed

to revise their regulations to provide for adequate criminal penalties

for knowing violations of fee and filing requirements. This proposal

was based on EPA's evaluation of Arizona's statute, specifically ARS

Sec. 49-464(L)(3) and Sec. 49-514(L)(3), which provide for criminal

enforcement of fee and filing requirements due to criminal negligence

only, which carries lower penalties than knowing violations.

ADEQ's comment stated that the ``criminal negligence'' standard

covers knowing violations and that penalties associated with such

violations are $20,000 maximum for each violation. The Arizona Attorney

General's Office submitted a clarifying statement on July 22, 1996

citing ARS Sec. 13-202(C) as providing that if ``criminal negligence

suffices to establish an element of an offense, that element also is

established if a person acts intentionally, knowingly or recklessly * *

* '' The statement went on to say that ARS Sec. 49-464(L)(3),

therefore, already imposes criminal fines for knowing violations of fee

or filing requirements and that the fine imposed may be up to $20,000

per violation for an enterprise (see ARS Sec. 13-803). Because the

penalty

[[Page 55917]]

applicable to individuals is lower, and not adequate for title V

purposes, it is important to establish that all permits are issued to

enterprises. ARS Sec. 13-105(12) defines an enterprise to include any

corporation, association, labor union or other legal entity. The July

22, 1996 Attorney General's statement assured that air permits are

issued only to enterprises because AAC Sec. R18-2-304(B) provides that

all air permits be issued only to businesses. Given that ARS Sec. 49-

480(B) requires that county permitting procedures be identical to ADEQ

title V permitting procedures, EPA assumes that county title V permits

may be issued only to businesses. The EPA is deferring to the Attorney

General's interpretation of the relevant Arizona statutory and

regulatory provisions as assurance that the State and county agencies

have adequate enforcement authority for violations of fee and filing

requirements and is therefore eliminating the interim approval issues

regarding such authority as proposed in the NPR.

11. General Permit Public Notice Procedures

The EPA proposed that ADEQ and the counties revise their general

permit public notice provisions to ensure that they contain all of the

part 70 public notice requirements. Article 5 [general permit

requirements] of ADEQ's rule provides that ``unless otherwise stated,

the provisions of Article 3 [individual permit requirements] shall

apply to general permits.'' The EPA is concerned, however, that because

Article 5 contains specific public notice provisions and these

provisions state that ``this section applies to issuance, revision or

renewal of a general permit,'' that these would supersede the public

notice provisions of Article 3. The Article 5 provisions do not contain

all of the public notice requirements of part 70. The Attorney

General's July 19, 1996 addendum clarified that in his opinion all

public notice and hearing provisions contained in Article 3 of

Regulation 18 of Chapter 2 of the AAC apply to general permits issued

pursuant to Article 5. The EPA is deferring to the Attorney General's

opinion and is therefore eliminating the interim approval issue for

ADEQ as proposed in II.B.1.a.11 of its July 13, 1995 NPR.

Pinal County commented that following the County's regulatory

revisions of February 22, 1995, PCR Sec. 3-5-500, which contained

public notice procedures for the issuance of general permits, has been

repealed. The County rules, which were submitted as a title V program

revision on August 15, 1995, no longer provide for local issuance of

general permits. The EPA has eliminated the interim approval issue

related to public notice for general permit issuance as proposed in

II.B.1.d.12 of the July 13, 1995 NPR.

Maricopa and Pima provisions for general permit public notice are

the same as the provisions in ADEQ's regulations. Because ARS Sec. 49-

480(B) requires county permitting procedures to be identical to

procedures used by ADEQ, EPA assumes that the counties will interpret

their regulations in the same way as the Attorney General has

interpreted ADEQ's general permit public notice provisions. The EPA is

therefore eliminating the interim approval issues for Maricopa and Pima

as proposed in II.B.1.b.15 and II.B.1.c.10 of the NPR.

12. Title I Modification

In the NPR, EPA discussed its position that the definition of

``title I modification'' is best interpreted as not including changes

reviewed under minor NSR programs or changes that trigger the

application of a pre-1990 NESHAP requirement. The EPA stated that it

considers the definitions of ``title I modification'' in the ADEQ,

Maricopa, and Pinal programs, which are consistent with this

interpretation, to be fully consistent with part 70. The EPA also found

Pima's interpretation of ``title I modification'', which included minor

source preconstruction review changes, to be consistent with part 70

since nothing in part 70 bars a state from considering minor NSR to be

a title I modification.

Several commenters stated that they agree with EPA's interpretation

that ``title I modification'' does not include minor NSR. The

commenters also objected to EPA's approval of the Pima County

interpretation of ``title I modification'' on the grounds that it is

inconsistent with EPA's interpretation and also because it is contrary

to Arizona State law which requires that county agencies have identical

title V permit issuance procedures to ADEQ. On August 14, 1995, Pima

County submitted a letter to EPA dated August 11, 1995, in which Pima's

Director, David Esposito, informs EPA that in order to conform with

these requirements of state law, Pima now interprets ``title I

modification'' not to include changes reviewed under a minor source

preconstruction review program, consistent with ADEQ's interpretation.

The EPA recognizes this revised interpretation as the Pima County

definition of ``title I modification'' being acted on today and finds

that it is fully consistent with part 70.

Pinal County also submitted a comment suggesting a clarification of

EPA's statement in the proposal that Pinal does not interpret ``title I

modification'' to include changes reviewed under a minor source

preconstruction review program. Pinal believes it is more accurate to

state that: ``At least to the extent that a change does not trigger any

additional applicable requirements, and merely requires new monitoring

and recordkeeping requirements rather than modification of existing

provisions, Pinal does not interpret `title I modification' to include

changes eligible for approval as `off-permit' revisions under Sec. 3-2-

180 or minor permit revisions under Sec. 3-2-190.'' Pinal went on to

state that in general, changes at an existing source, including the

addition of new emissions units, that do not involve ``significant''

increases in emission levels and do not trigger or violate applicable

requirements may be processed as an ``off-permit'' revision or minor

permit revision.

13. Applicability of the Pinal County Program

In the NPR, EPA indicated that in addition to major sources,

affected sources, and solid waste incinerators, Pinal requires nonmajor

sources subject to a standard under section 111 or section 112 to

obtain a title V permit. Pinal County submitted a comment that while

this statement accurately reflects the program as originally submitted

on November 15, 1993 and amended on August 18, 1994, that on February

22, 1995, the County adopted revised rules that allow nonmajor sources

regulated under sections 111 or 112 to defer or be exempted from the

title V permit requirement to the extent allowed by the Administrator.

See PCR Sec. 3-1-040(B)(1) (b) and (c). Pinal submitted these revised

regulations on August 15, 1995. The approach taken in Pinal's revised

program is clearly consistent with part 70, represents the norm among

State part 70 programs, and so would not have presented an issue at

proposal had it been a feature of the originally submitted program. The

EPA is therefore finalizing its interim approval of Pinal's program

with this understanding of the applicability of the program.

This change in the applicability of Pinal's program affects EPA's

approval under section 112(l) of Pinal's program for accepting

delegation of section 112 standards as promulgated. The EPA stated in

the NPR that requirements for approval under 40 CFR 70.4(b) encompass

the section 112(l)(5)

[[Page 55918]]

requirements for approval of a program for delegation of section 112

standards. Because Pinal's original program submittal included all

sources subject to section 112 standards in the universe of sources

subject to its title V permitting requirements, EPA's proposed approval

of Pinal's program under section 112(l) extended to section 112

standards as applicable to all sources. In cases where a permit program

has chosen to defer or exempt certain sources subject to section 112

requirements from the title V permitting requirement as allowed by EPA

(e.g., nonmajor sources), approval under section 112(l) of the program

for delegation extends to section 112 standards as applicable to only

those sources that will receive title V permits. Pinal's program no

longer applies to all sources subject to section 112 standards. On

August 23, 1995, however, ADEQ submitted a separate request on behalf

of Pinal for approval under section 112(l) of Pinal's program for

seeking delegation of section 112 standards even insofar as they extend

to sources that are deferred or exempted from the title V permit

requirement under the Pinal program. (See letter from Donald

Gabrielson, Pinal County Air Pollution Control Officer, to David

Howekamp, Director, Air and Toxics Division, EPA Region IX, dated June

8, 1995.) Pinal refers to this request in its comment letter. Pinal's

request for approval under section 112(l) references the information

contained in Pinal's original title V program submittal as a

demonstration that Pinal meets the criteria under section 112(l)(5) and

section 63.91 for approval of a delegation program. The EPA is

therefore finalizing its approval under section 112(l) of Pinal's

program for delegation of section 112 standards as they apply to all

sources. See II.C.2 below.

14. Major Source Definition in Pinal Program

In response to EPA's proposed interim approval issue regarding

inclusion of HAP fugitive emissions in determining major source status

(see II.B.1.d.2 of the NPR), Pinal commented that it has revised its

definition of ``major source'' in PCR Sec. 1-3-140(79)(b) accordingly.

This revision was included in the revised Pinal program submitted on

August 15, 1995. The EPA believes that this provision requires further

revision, however, to clarify that fugitive emissions must be included

in determining whether the source is major for purposes of both the 10

ton per year and 25 ton per year HAP major source thresholds.

Currently, the phrase ``including any fugitive emissions of any such

pollutants'' modifies only the 25 ton per year threshold. The EPA is

modifying the interim approval issue to reflect this necessary

clarification. See II.C.1.d.2 below.

The EPA's NPR also required Pinal to revise its ``major source''

definition to provide that fugitive emissions shall not be considered

in determining whether it is a major source for purposes of section

302(j) of the Act unless the source belongs to one of the categories of

sources listed in section 70.2 under the definition of ``Major

source,'' paragraph 2, items (i) to (xxvii). Pinal commented that its

revised program submittal addresses this issue. Pinal revised PCR

Sec. 1-3-140(79)(c) to include a provision for defining when fugitive

emissions must be included in determining a sources potential emissions

for purposes of title V applicability. This provision includes the list

of categories as discussed above except for the final item on the list,

namely ``all other stationary source categories regulated by a standard

promulgated under section 111 or 112 of the Act, but only with respect

to those air pollutants that have been regulated for that category.''

Instead, Pinal's definition of major source states that fugitive

emissions shall be considered in determining whether a source is major

for purposes of Sec. 302(j) of the Act if the source is regulated by a

standard promulgated as of August 7, 1980 under section 111 or section

112 of the Act or if a section 111 or section 112 standard expressly

requires inclusion of fugitive emissions in determining major source

status (PCR Sec. 1-3-140(79)(c)(ii),(iii), and (iv)). This definition

is not consistent with the current section 70.2 definition of ``major

source'' and therefore is not fully approvable.

In today's final interim approval action on the Pinal County

program, EPA is requiring that for full approval Pinal must revise its

definition of major source to provide that fugitive emissions must be

included in determining if a source is major for purposes of section

302(j) of the Act if that source belongs to a source category regulated

by a standard promulgated under section 111 or section 112 of the Act,

but only with respect to those pollutants that have been regulated for

that category. See II.C.1.d.3 below. The EPA notes that it has proposed

revisions to the major source definition with regard to the inclusion

of fugitives in determining major source status. (See 59 FR 44527,

August 29, 1994 and 60 FR 45565, August 31, 1995.) The EPA recognizes

that Pinal may be required to revise its major source definition

differently than described above should EPA finalize its proposed

revisions to the major source definition prior to the date that Pinal

must submit its revised program submittal.

C. Final Action

1. Title V Operating Permits Program

The EPA is promulgating interim approval of the operating permits

program submitted by the Arizona Department of Environmental Quality on

behalf of itself, the Maricopa County Environmental Services

Department, the Pima County Department of Environmental Quality, and

the Pinal County Air Quality Control District on November 15, 1993 as

supplemented by additional materials as referenced in II.A and II.B of

this document. The EPA is also promulgating interim approval of the

portions of the revised Pinal County operating permits program

submitted on August 15, 1995 that address the program deficiencies and

other issues discussed in EPA's July 13, 1995 proposed interim

approval. These provisions include Sections 1-3-140(79)(b) and 1-3-

140(79)(c) of Article 3 of Chapter 1; Sections 3-1-040(B)(1), 3-1-

089(C), and 3-1-107(C)(3) of Article 1 of Chapter 3; and Section 3-5-

500 of Article 5 of Chapter 3 of the Pinal County Code of Regulations

as adopted or revised on February 22, 1995. The remainder of the Pinal

County revised program is addressed by the direct final action in

section III of this document.

As discussed in II.A.2 of the NPR, this interim approval does not

apply to the State and county operating permit programs for non-part 70

sources or to State and county preconstruction review programs. This

interim approval applies only to that part of the State and county

permit programs that provide for the issuance of Class I operating

permits (in ADEQ), Title V operating permits (in Maricopa and Pima),

and Class A operating permits (in Pinal).

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

November 30, 1998. During this interim approval period, ADEQ, Maricopa,

Pima, and Pinal are protected from sanctions, and EPA is not obligated

to promulgate, administer and enforce a Federal operating permits

program in Arizona. 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 this interim approval, as does the 3-

year time period for processing the initial permit applications.

If the State or county agencies fail to submit a complete

corrective program

[[Page 55919]]

for full approval by May 30, 1998, EPA will start an 18-month clock for

mandatory sanctions. If the State or counties then fail to submit a

corrective program that EPA finds complete before the expiration of

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

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

until EPA determines that the State or counties have corrected the

deficiency by submitting a complete corrective program. Moreover, if

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

or counties, both sanctions under section 179(b) will apply after the

expiration of the 18-month period until the Administrator determined

that the State or counties had come into compliance. In any case, if,

six months after application of the first sanction, the State or

counties still have not submitted a corrective program that EPA has

found complete, a second sanction will be required.

If EPA disapproves the ADEQ, Maricopa, Pima or Pinal complete

corrective program, EPA will be required to apply one of the section

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

disapproval, unless prior to that date the State or county agency has

submitted a revised program and EPA has determined that it corrected

the deficiencies that prompted the disapproval. Moreover, if the

Administrator finds a lack of good faith on the part of the State or

county agency, both sanctions under section 179(b) shall apply after

the expiration of the 18-month period until the Administrator

determines that the State or county agency has come into compliance. In

all cases, if, six months after EPA applies the first sanction, the

State or counties have not submitted a revised program that EPA has

determined corrects the deficiencies, a second sanction is required.

In addition, discretionary sanctions may be applied where warranted

any time after the expiration of an interim approval period if the

State or counties have not timely submitted a complete corrective

program or EPA has disapproved its submitted corrective program.

Moreover, if EPA has not granted full approval to the Arizona State or

county agency program by the expiration of this interim approval, EPA

must promulgate, administer and enforce a Federal permits program for

the State or counties upon interim approval expiration.

Areas in which the Arizona program is deficient and requires

corrective action prior to full approval are as follows:

a. Arizona Department of Environmental Quality. ADEQ must make the

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

full approval:

(1) Revise AAC R18-2-101(61)(b) to clarify that fugitive emissions

of hazardous air pollutants must be considered in determining whether

the source is major for purposes of both the 10 ton per year and 25 ton

per year major source thresholds. The phrase ``including any major

source of fugitive emissions'' in the current rule modifies only the 25

ton per year threshold. This phrase could also imply that fugitives are

included in the potential to emit determination only if the source

emits major amounts of fugitive emissions. The EPA expects, however,

that ADEQ will implement this provision consistent with the EPA policy

that all fugitive emissions of hazardous air pollutants at a source

must be considered in determining whether the source is major for

purposes of section 112 of the CAA.

(2) Revise AAC R18 to clarify that, when an existing source obtains

a significant permit revision to revise its permit from a Class II

permit to a Class I permit, the entire permit, and not just the portion

being revised, must be issued in accordance with part 70 permit

application, content, and issuance requirements, including requirements

for public, affected state, and EPA review.

(3) Section 70.6(a)(8) requires that title V permits contain a

provision that ``no permit revision shall be required under any

approved economic incentives, marketable permits, emissions trading and

other similar programs or processes for changes that are provided for

in the permit.'' AAC R18-2-306(A)(10) includes this exact provision but

also includes a sentence that negates this provision. ADEQ must either

delete the negating sentence:

``This provision shall not apply to emissions trading between

sources as provided in the applicable implementation plan.''

or revise this sentence as follows:

``This provision shall not apply to emissions trading between

sources [as provided] if such trading is prohibited in the

applicable implementation plan.''

(Sec. 70.6(a)(8))

(4) Section 70.4(b)(12) provides that sources are allowed to make

changes within a permitted facility without requiring a permit

revision, if the changes are not modifications under any provision of

title I of the Act and the changes do not exceed the emissions

allowable under the permit. Specifically, section 70.4(b)(12)(iii)

provides that if a permit applicant requests it, the permitting

authority shall issue a permit allowing for the trading of emissions

increases and decreases in the permitted facility solely for the

purpose of complying with a federally enforceable emissions cap,

established in the permit independent of otherwise applicable

requirements. AAC R18-2-306(A)(14) provides for such permit conditions

but does not restrict the allowable changes to those that are not

modifications under title I of the Act and those that do not exceed the

emissions allowable under the permit. ADEQ must revise AAC R18-2-

306(A)(14) to clarify that changes made under this provision may not be

modifications under any provision of title I of the Act and may not

exceed emissions allowable under the permit.

(5) Revise AAC R18-2-310 to be consistent with the section 70.6(g)

provision for an emergency affirmative defense. Part 70 programs may

only provide for an affirmative defense to actions brought for

noncompliance with technology-based emission limits when such

noncompliance is due to an emergency situation.

(6) Revise AAC R18-2-331(A)(1) to provide under the definition of

``material permit condition'' that ``the condition is in a permit or

permit revision issued by the Director or the Control Officer after the

effective date of this section.''

b. Maricopa County Environmental Services Department. Maricopa must

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

receive full approval:

(1) Delete the following language from MAPC Regulation I, Rule 100,

section 224:

``Properties shall not be considered contiguous if they are

connected only by property upon which is located equipment utilized

solely in transmission of electrical energy.''

This language, which is part of the definition of a stationary source,

is not consistent with the stationary source definition in section

70.2.

(2) Revise MAPC Regulation I, Rule 100, section 251.2 to clarify

that fugitive emissions of hazardous air pollutants must be considered

in determining whether the source is major for purposes of both the 10

ton per year and 25 ton per year major source thresholds. The phrase

``including any major source of fugitive emissions'' in the submitted

Sec. 251.2 modifies only the 25 ton per year threshold. This phrase

could also imply that fugitives are included in the potential to emit

determination only if

[[Page 55920]]

the source emits major amounts of fugitive emissions. The EPA expects,

however, that Maricopa will implement this provision consistent with

the EPA policy that all fugitive emissions of hazardous air pollutants

at a source must be considered in determining whether the source is

major for purposes of section 112 of the CAA.

(3) Revise MAPC Regulation I, Rule 100, section 505 to clarify that

for Title V sources, records of all required monitoring data and

support information must be retained for a period of five years, as

provided in Regulation II, Rule 210, section 302.1(d)(2).

(Sec. 70.6(a)(3)(ii)(B))

(4) Revise MAPC Regulation I, Rule 100, section 506 to clarify that

for Title V sources, all permits, including all elements of permit

content specified in Rule 210, section 302, shall be available to the

public, as provided in Regulation II, Rule 200, section 411.1.

(Sec. 70.4(b)(3)(viii))

(5) Revise MAPC Regulation II, Rule 200, section 312.2 to define

when sources become ``subject to the requirements of Title V.'' A

source becomes subject to the requirements of title V from the

effective date of EPA's approval of the County's program when the

source meets the applicability requirements as provided in section 302

of Rule 200. In addition, revise section 312.5 to require that existing

sources that do not hold a valid installation or operating permit must

submit an application within 12 months of becoming subject to the

requirements of title V.

(6) Provide a demonstration that the activities listed in MAPC

Regulation II, Rule 200, Section 303.3(c) are insignificant. Remove

from the list any activities that are subject to a unit-specific

applicable requirement. Another option is to add emissions cut-offs or

size limitations to ensure that the listed activities are below any

applicability thresholds for applicable requirements. (Sec. 70.5(c),

Sec. 70.4(b)(2))

(7) For the reason explained above in II.C.1.a.(3), revise MAPC

Regulation II, Rule 210, Section 302.1(j) by either deleting the

following sentence:

``This provision shall not apply to emissions trading between

sources as provided in the applicable implementation plan.''

or by revising this sentence as follows:

``This provision shall not apply to emissions trading between

sources [as provided] if such trading is prohibited in the

applicable implementation plan.''

(Sec. 70.6(a)(8))

(8) For the reason explained above in II.C.1.a.(4), revise MAPC

Regulation II, Rule 210, Section 302.1(n) to clarify that changes made

under this provision may not be modifications under any provision of

title I of the Act and may not exceed emissions allowable under the

permit. In addition, revise this provision to require the notice

required by sections 403.4 and 403.5 to also describe how the increases

and decreases in emissions will comply with the terms and conditions of

the permit. (Sec. 70.4(b)(12))

(9) Delete the provision of MAPC Regulation II, Rule 210, section

404.1(e) that provides for equipment removal that does not result in an

increase in emissions to be processed as an administrative permit

amendment. Equipment removal, even if it does not result in an increase

in emissions, is not similar to the types of changes that EPA has

included in the part 70 definition of ``administrative permit

amendment.'' In some cases removal of equipment, such as monitoring

equipment, will require processing as a significant permit revision. In

other situations removal of equipment may qualify for processing as a

minor permit revision or possibly for treatment under the operational

flexibility provisions. (Sec. 70.7(d), Sec. 70.7(e)(4))

(10) Delete the following language from the criteria for minor

permit revisions in MAPC Regulation I, Rule 210, section 405.1(c):

`` * * * other than a determination of RACT pursuant to Rule

241, Section 302 of these rules, * * *''

This language is included in the rule as an exception to the

prohibition against allowing case-by-case determinations to be

processed as minor permit revisions. The definition of RACT in section

272 of Rule 100 states that ``RACT for a particular facility, other

than a facility subject to Regulation III, is determined on a case-by-

case basis * * *'' Rule 241 is not in Regulation III, so RACT

determinations made pursuant to this rule are done so on a case-by-case

basis. Excepting RACT determinations from the prohibition against

processing case-by-case determinations through the minor permit

revision process violates the requirement of section

70.7(e)(2)(i)(A)(3).

(11) Revise Regulation II, Rule 210, Section 408 to include a

provision for giving public notice ``by other means if necessary to

assure adequate notice to the affected public.'' (Sec. 70.7(h)(1))

c. Pima County Department of Environmental Quality. Pima must make

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

full approval:

(1) Revise the definition of major source in PCC

Sec. 17.04.340(133)(b)(i) to clarify that fugitive emissions of

hazardous air pollutants must be considered in determining whether the

source is major for purposes of both the 10 ton per year and 25 ton per

year major source thresholds. The current definition appears to require

inclusion of fugitive emissions only when determining applicability

according to the 10 ton per year major source threshold.

(2) Revise PCC Sec. 17.12.150(B) and Sec. 17.12.150(G)(1) to

clarify when a source becomes subject to obtaining title V permits. A

source becomes subject to obtaining a title V permit from the effective

date of EPA's approval of the County's program when the source meets

the applicability requirements as provided in section 17.12.140(B)(1).

(3) Revise PCC Sec. 17.12.160(E)(7) to provide that only emissions

units that are not subject to unit-specific applicable requirements may

qualify for treatment as insignificant emissions units.

(4) For the same reason discussed above in II.C.1.a.(3), revise PCC

Sec. 17.12.180(A)(10) by either deleting the following sentence:

``This provision shall not apply to emissions trading between

sources as provided in the applicable implementation plan.''

or by revising this sentence as follows:

``This provision shall not apply to emissions trading between

sources [as provided] if such trading is prohibited in the

applicable implementation plan.''

(Sec. 70.6(a)(8))

(5) For the same reason discussed above in II.C.1.a.(4), revise PCC

Sec. 17.12.180(A)(14) to clarify that changes made under this provision

may not be modifications under any provision of title I of the Act and

may not exceed emissions allowable under the permit. (Sec. 70.4(b)(12))

(6) Revise PCC Sec. 17.12.340 to include a provision for giving

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

to the affected public.'' (Sec. 70.7(h)(1))

d. Pinal County Air Quality Control District. Pinal must make the

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

full approval:

(1) Revise PCR Sec. 1-3-140(79)(b)(i) to clarify that fugitive

emissions of hazardous air pollutants must be considered in determining

whether the source is major for purposes of both the 10 ton per year

and 25 ton per year HAP major source thresholds. The phrase ``including

any fugitive emissions of any such pollutants'' in the current rule

[[Page 55921]]

modifies only the 25 ton per year threshold. The EPA expects, however,

that Pinal will implement this provision consistent with the EPA policy

that all fugitive emissions of hazardous air pollutants at a source

must be considered in determining whether the source is major for

purposes of section 112 of the CAA.

(2) Revise PCR Sec. 1-3-140(79)(c) to delete sections 79(c)(ii),

(iii), and (iv) and to add the following to the list of sources that

must include fugitive emissions when determining major source status as

defined in section 302(j) of the Act:

``The source belongs to a category regulated by a standard

promulgated under section 111 or 112 of the Act, but only with

respect to those air pollutants that have been regulated for that

category.''

(3) Revise PCR Sec. 3-1-040(C)(1) to require that the motor

vehicles, agricultural vehicles, and fuel burning equipment that are

exempt from permitting shall not be exempt if they are subject to any

applicable requirements. (70.5(c))

(4) Revise PCR Sec. 3-1-045(F)(1) to require sources requiring

Class A permits to submit a permit application no later than 12 months

after the date the Administrator approves the District program. Revise

PCR Sec. 3-1-050(C) to include an application deadline for existing

sources that become subject to obtaining a Class A permit after the

initial phase-in of the program. One example is a synthetic minor

source that is not initially required to obtain a Class A permit but

later removes federally enforceable limits on its potential emissions

such that it becomes a major source, but is not required to go through

the preconstruction review process. This application deadline must be

12 months from when the source becomes subject to the program (meets

Class A permit applicability criteria). (Sec. 70.5(a)(1)(i))

(5) For the reason discussed above in II.C.1.a.(3), revise PCR

Sec. 3-1-081(A)(10) by either deleting the following sentence:

``This provision shall not apply to emissions trading between

sources as provided in the applicable implementation plan.''

or by revising this sentence as follows:

``This provision shall not apply to emissions trading between

sources [as provided] if such trading is prohibited in the

applicable implementation plan.''

(Sec. 70.6(a)(8))

(6) For the reason discussed above in II.C.1.a.(4), revise PCR

Sec. 3-1-081(A)(14) to clarify that changes made under this provision

may not be modifications under any provision of title I of the Act and

may not exceed emissions allowable under the permit. In addition,

revise this provision to require that the permit terms and conditions

shall provide for notice that conforms to section 3-2-180(D) and (E)

and that describes how the increases and decreases in emissions will

comply with the terms and conditions of the permit. (Sec. 70.4(b)(12))

(7) Revise PCR Sec. 3-4-420 to provide that a conditional order

that allows a source to vary from the requirement to obtain a Class A

permit may not be granted to any source that meets the Class A permit

applicability criteria pursuant to PCR Sec. 3-1-040.

The scope of the part 70 programs approved in this document applies

to all part 70 sources (as defined in the approved program) within the

State of Arizona, except any sources of air pollution over which an

Indian Tribe has jurisdiction. See, e.g., 59 FR 55813, 55815-18 (Nov.

9, 1994). The term ``Indian Tribe'' is defined under the Act as ``any

Indian tribe, band, nation, or other organized group or community,

including any Alaska Native village, which is Federally recognized as

eligible for the special programs and services provided by the United

States to Indians because of their status as Indians.'' See section

302(r) of the CAA; see also 59 FR 43956, 43962 (Aug. 25, 1994); 58 FR

54364 (Oct. 21, 1993).

2. 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 state and county programs

contain adequate authorities, adequate resources for implementation,

and an expeditious compliance schedule, which are also requirements

under part 70. Therefore, EPA is also promulgating approval under

section 112(l)(5) and 40 CFR section 63.91 of ADEQ's, Maricopa's,

Pima's, and Pinal's programs for receiving delegation of section 112

standards that are unchanged from the federal standards as promulgated

and that apply to sources covered by the part 70 program.

As discussed in the NPR, because Pima's approved program requires

all sources (including nonmajor sources) subject to a requirement under

section 112 of the Act to obtain a part 70 permit, the proposed

approval of Pima's program for delegation extends to section 112

standards as applicable to all sources. ADEQ, Maricopa, and Pinal will

not issue part 70 permits to nonmajor sources subject to a section 112

standard (unless such sources are designated by EPA to obtain a permit)

but these agencies submitted addenda to their title V programs in which

they specifically requested approval under section 112(l) of a program

for delegation of unchanged section 112 standards applicable to non-

part 70 sources. (See discussion in II.B.2 of the NPR and in II.B.13 of

this document.) Therefore, today's proposed approval under section

112(l) of ADEQ's, Maricopa's, and Pinal's program for delegation

extends to non-part 70 sources as well as part 70 sources.

III. Direct Final Action on Revised Pinal County Program

A. Analysis of County Submission

ADEQ, on behalf of Pinal County, submitted a revised title V permit

program for Pinal County on August 15, 1995. The revised program

submittal consisted of a revised County code of regulations adopted by

the Pinal County Board of Supervisors on February 22, 1995 and a

supplemental County Attorney's legal Opinion. The other program

elements submitted on November 15, 1993 and subsequent dates as noted

in the proposed interim approval are considered part of this revised

program except where the revised regulation or supplemental County

Attorney's opinion change or replace those program elements. In some

cases, the County revised its regulations to correct deficiencies or

address other issues identified by EPA in its July 13, 1995 proposed

interim approval. The EPA has discussed such changes in II.B above and

taken final action on those program revisions in II.C above. The

discussion that follows and the direct final interim approval action

being taken today apply to changes to the regulation that are relevant

to implementation of the title V operating permits program that were

not addressed in the final interim approval action in section II of

this document.

The EPA is publishing this action without prior proposal because

the Agency views this as a noncontroversial action and anticipates no

adverse comments. However, in a separate document in this Federal

Register publication, the EPA is proposing interim approval of the

specified portions of the operating permit program submitted by Pinal

should adverse or critical comments be filed.

If EPA receives adverse or critical comments, this action will be

withdrawn before the effective date by publishing a subsequent document

that

[[Page 55922]]

will withdraw the final action. All public comments received will then

be addressed in a subsequent final rule based on this action serving as

the proposed rule. The EPA will not institute a second comment period.

Any parties interested in commenting on this action should do so at

this time. If no such comments are received, the public is advised that

this action will be effective on December 30, 1996.

Today's direct final action promulgates approval of specific

changes to the Pinal County Code of Regulations adopted on February 22,

1995 that are relevant to implementation and enforcement of the Pinal

County title V operating permits program. The specific provisions of

Pinal's title V regulations adopted or revised on February 22, 1995

that are addressed by this direct final action are Sections 1-3-

140(1a), 140(16a), 140(44), 140(56), 140(58e), 140(59), 140(66),

140(86), 140(89), and 140(146) of Article 3 of Chapter 1; Sections 3-1-

042, 045(C), 050(C)(4), 050(G), 080(A), 081(A)(5)(b), 081(A)(6),

100(A), and 109 of Article 1 of Chapter 3; and Articles 5 and 7 of

Chapter 3 of the Pinal County Code of Regulations (PCR). These

regulations substantially meet the requirements of 40 CFR part 70,

Secs. 70.2 and 70.3 for applicability; sections 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

criteria that define insignificant activities; Sec. 70.5 for complete

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

the regulations substantially meet part 70 requirements, there are

deficiencies in the program that are outlined under section III.C.

below as interim approval issues and further described in the Technical

Support Document.

The analysis contained in this document focuses on the specific

elements of the revised Pinal title V operating permits program that

must be corrected to meet the minimum requirements of 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 (AZ-95-1-OPS).

The docket may be viewed during regular business hours at the address

listed above.

1. General Permits.

Section 70.6(d) provides that permitting authorities may issue a

general permit covering numerous similar sources. General permits must

meet all requirements applicable to other part 70 permits and must

specify the criteria that sources must meet to be covered under the

general permit. Qualifying sources may then apply for coverage under

the terms and conditions of the permit. Article 5 of Chapter 3 of the

Pinal County regulations contain the provisions pertaining to general

permits. Article 5 as submitted on November 15, 1993 provided that the

Control Officer of Pinal County could issue a general permit for a

class of facilities that had similar operations, similar emissions, and

similar applicable requirements. Article 5 as amended by Pinal on

February 22, 1995 and submitted to EPA on August 15, 1995 repeals the

authority of the Control Officer to issue a general permit. Instead,

the regulations provide for the District to administer general permits

that are issued by ADEQ. Administration of general permits includes

receiving applications from sources in the District that seek

authorization to operate under a general permit; issuing, denying, or

revoking such authorizations to operate under the permit; and enforcing

the terms and conditions of the general permit.

PCR Sec. 3-5-490 contains the requirements for applying for

coverage under a general permit. There are several deficiencies in this

portion of the rule that must be corrected before Pinal can receive

full approval of its revised program. PCR Sec. 3-5-490(C) provides that

an existing source that files a timely and complete application seeking

coverage under a general permit either as a renewal of authorization

under the general permit or as an alternative to renewing an individual

part 70 permit may operate within the limitations set forth in its

application until the District takes action on the application. This is

inconsistent with the requirements of part 70 and with other provisions

of Pinal's rules. Section 70.4(b)(10) requires that if a timely and

complete application for a permit renewal is submitted but the state

has failed to issue or deny the renewal permit before the end of the

term of the previous permit then either: (1) The permit shall not

expire until the renewal permit has been issued or denied; or (2) All

terms and conditions of the permit shall remain in effect until the

renewal permit has been issued or denied. PCR Sec. 3-1-089 requires

that any source relying on a timely and complete application as

authority to operate after expiration of the permit shall be legally

bound to adhere to and conform to the terms of the expired permit. This

provision is consistent with part 70. Pinal must revise PCR Sec. 3-5-

490(C) to be consistent with Sec. 70.4(b)(10) and EPA recommends that

it be revised to be consistent with PCR Sec. 3-1-089.

Section 490(C) also provides that if an existing source seeking

coverage under a general permit as an alternative to renewing an

individual permit is denied authorization to do so, that the source

must apply for an individual permit within 180 days of being notified

to do so but may continue to operate within the limitations of the

general permit under which coverage was denied during that 180 day

period. This also conflicts with Sec. 70.4(b)(10). Pinal must revise

the rule to require that the source must continue to comply with the

terms and conditions of its individual source permit. In addition,

Pinal must revise section 490(C) to clarify, consistent with

Sec. 70.7(d) and Sec. 70.4(b)(10), that notwithstanding the 180 day

permit application deadline set by the District in its notification to

the source, the source that was denied coverage under the general

permit may not operate after the date that its individual permit

expires unless it has submitted a timely and complete application to

renew that individual permit in accordance with PCR Sec. 3-1-050(C)(2).

PCR Sec. 3-5-550 includes provisions for the Control Officer to

revoke a source's authorization to operate under a general permit and

require that it obtain an individual source permit. PCR Sec. 3-5-550(C)

provides that a source previously authorized to operate under a general

permit may operate under the terms of the general permit until the

earlier of the date of expiration of the general permit, the date it

submits a complete application for an individual permit, or 180 days

after receipt of the notice of termination of any general permit. This

provision also requires the source to comply with the provisions of PCR

Sec. 3-1-089, which requires that any source relying on a timely and

complete application as authority to operate after a permit expires

must comply with the terms of the expired permit. PCR Sec. 3-5-550(C)

therefore contradicts itself. Pinal must revise the rule to clarify

that if the Control Officer revokes the source's authorization to

operate under a general permit then, if the source submits a timely and

complete application for an individual source permit as required by the

Control Officer, it may continue to operate under the terms of the

general permit until the District issues or denies the individual

source permit.

B. Direct Final Interim Approval and Implications

The EPA is promulgating direct final interim approval of the

following

[[Page 55923]]

provisions of the revised operating permits program submitted by the

Arizona Department of Environmental Quality, on behalf of the Pinal

County Air Quality Control District, on August 15, 1995: Sections 1-3-

140(1a), 140(16a), 140(44), 140(56), 140(58e), 140(59), 140(66),

140(86), 140(89), and 140(146) of Article 3 of Chapter 1; Sections 3-1-

042, 045(C), 050(C)(4), 050(G), 080(A), 081(A)(5)(b), 081(A)(6),

100(A), and 109 of Article 1 of Chapter 3; and Articles 5 and 7 of

Chapter 3 of the Pinal County Code of Regulations (PCR).

This direct final interim approval does not apply to the County

operating permit program for non-part 70 sources or to the County

preconstruction review program. This interim approval applies to the

regulatory provisions cited above only as they apply to Class A

operating permits.

Areas in which Pinal's program is deficient and requires corrective

action prior to full approval are as follows. Pinal must correct these

deficiencies by November 30, 1998. This is the expiration date of the

interim approval granted by EPA to the original program submitted by

Pinal on November 15, 1993 as discussed above in II.C.1. The timeframes

and conditions of this direct final interim approval action and for EPA

oversight and sanctions are the same as discussed above in II.C.1.

Pinal must make the following changes, or changes that have the

same effect, to receive full approval:

(1) Revise PCR Sec. 3-5-490(C) to provide that when an existing

source that files a timely and complete application seeking coverage

under a general permit either as a renewal of authorization under the

general permit or as an alternative to renewing an individual part 70

permit, that the source must continue to comply with the terms and

conditions of the permit under which it is operating, even if that

permit expires, until the District issues or denies the authorization

to operate under the general permit.

(2) Revise PCR Sec. 3-5-490(C) to require that if an existing

source seeking coverage under a general permit as an alternative to

renewing an individual permit is denied authorization to do so, that

the source must continue to comply with the terms and conditions of its

individual source permit. In addition, Pinal must revise Sec. 3-5-

490(C) to clarify that notwithstanding the 180 day permit application

deadline set by the District in its notification to the source, the

source that was denied coverage under the general permit may not

operate after the date that its individual permit expires unless it has

submitted a timely and complete application to renew that individual

permit in accordance with PCR Sec. 3-1-050(C)(2).

(3) Revise PCR Sec. 3-5-550(C) to clarify that if the Control

Officer revokes the source's authorization to operate under a general

permit then, if the source submits a timely and complete application

for an individual source permit as required by the Control Officer, it

may continue to operate under the terms of the general permit until the

District issues or denies the individual source permit.

IV. Administrative Requirements

A. Docket

Copies of the State and county submittals and other information

relied upon for the final interim approval and direct final interim

approval, including public comments on the proposal from 15 different

parties, are contained in docket number AZ-95-1-OPS 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 final interim approval and direct final interim

approval. The docket is available for public inspection at the location

listed under the ADDRESSES section of this document.

B. 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.

C. Unfunded Mandates

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.

The EPA has determined that the 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.

D. Small Business Regulatory Enforcement Fairness Act

Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business

Regulatory Enforcement Fairness Act of 1996, EPA submitted a report

containing this rule and other required information to the U.S. Senate,

the U.S. House of Representatives and the Comptroller General of the

General Accounting Office prior to publication of the rule in today's

Federal Register. This rule is not a ``major rule'' as defined by 5

U.S.C. 804(2).

E. Executive Order 12866

The Office of Management and Budget has exempted this action from

Executive Order 12866 review.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Intergovernmental relations, Operating permits,

Reporting and recordkeeping requirements.

Dated: October 18, 1996.

John Wise,

Acting Regional Administrator.

Part 70, title 40 of the Code of Federal Regulations is amended as

follows:

PART 70--[AMENDED]

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

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

2. Appendix A to part 70 is amended by adding the entry for Arizona

in alphabetical order to read as follows:

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

Permits Programs

* * * * *

Arizona

(a) Arizona Department of Environmental Quality: submitted on

November 15, 1993 and amended on March 14, 1994; May 17, 1994; March

20, 1995; May 4, 1995; July 22, 1996; and August 12, 1996; interim

approval effective on November 29, 1996; interim approval expires

November 30, 1998.

(b) Maricopa County Environmental Services Department: submitted

on November 15, 1993 and amended on

[[Page 55924]]

December 15, 1993; January 13, 1994; March 9, 1994; and March 21,

1995; July 22, 1996; and August 12, 1996; interim approval effective

on November 29, 1996; interim approval expires November 30, 1998.

(c) Pima County Department of Environmental Quality: submitted

on November 15, 1993 and amended on December 15, 1993; January 27,

1994; April 6, 1994; and April 8, 1994; August 14, 1995; July 22,

1996; and August 12, 1996; interim approval effective on November

29, 1996; interim approval expires November 30, 1998.

(d) Pinal County Air Quality Control District:

(1) submitted on November 15, 1993 and amended on August 16,

1994; August 15, 1995; July 22, 1996; and August 12, 1996; interim

approval effective on November 29, 1996; interim approval expires

November 30, 1998.

(2) revisions submitted on August 15, 1995; interim approval

effective on December 30, 1996; interim approval expires November

30, 1998.

* * * * *

[FR Doc. 96-27836 Filed 10-29-96; 8:45 am]

BILLING CODE 6560-50-P