Clean Air Act Final Interim Approval, Operating Permits Program; State of Alaska and Clean Air Act Final Approval in Part and Disapproval in Part, Section 112(l) Program Submittal; State of Alaska

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 61, 63 and 70

[AD-FRL-5658-4]

Clean Air Act Final Interim Approval, Operating Permits Program;

State of Alaska and Clean Air Act Final Approval in Part and

Disapproval in Part, Section 112(l) Program Submittal; State of Alaska

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final Interim Approval, and Final Approval in Part and

Disapproval in Part.

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SUMMARY: EPA grants final interim approval of the operating permits

program submitted by the Alaska Department of Environmental

Conservation 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.

EPA also grants final approval in part and disapproval in part of

the program submitted by the Alaska Department of Environmental

Conservation for the purpose of implementing and enforcing the

hazardous air pollutant requirements under section 112 of the Act.

EFFECTIVE DATE: December 5, 1996.

ADDRESSES: Copies of the State's submittal and other supporting

information used in developing the final interim approval, and the

approval in part and disapproval in part, are available for inspection

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

Environmental Protection Agency, Region 10, 1200 Sixth Avenue, Seattle,

Washington.

FOR FURTHER INFORMATION CONTACT: David C. Bray, Office of Air Quality,

OAQ-107, U.S. Environmental Protection Agency, 1200 Sixth Avenue,

Seattle, Washington 98101; telephone (206) 553-4253.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Title V--Background

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

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

promulgated rules which define the minimum elements of an approvable

State operating permits program and the corresponding standards and

procedures by which EPA will approve, oversee, and withdraw approval of

State operating permits programs (see 57 FR 32250 (July 21, 1992)).

These rules are codified at 40 Code of Federal Regulations (CFR) part

70. Title V requires States to develop, and submit to EPA, programs for

issuing these operating permits to all major stationary sources and to

certain other sources.

The Act requires that States develop and submit these programs to

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

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

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

70 regulations, which together outline criteria for approval or

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

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

a period of up to two years. If EPA has not fully approved a program by

two years after the November 15, 1993 date, or by the end of an interim

program, it must establish and implement a federal program.

EPA must apply sanctions to a State 18 months after EPA disapproves

the program. In addition, discretionary sanctions may be applied any

time during the 18-month period following the date required for program

submittal or program revision. If the State has no approved program two

years after the date required for submission of the program, EPA will

impose additional sanctions, where applicable, and EPA must promulgate,

administer, and enforce a federal permits program for the State. EPA

has the authority to collect reasonable fees from the permittees to

cover the costs of administering the program.

On May 31, 1995, the Alaska Department of Environmental

Conservation (referred to herein as ``ADEC,'' ``the Department,''

``Alaska'' or ``the State'') submitted a title V program for EPA review

and approval. EPA notified the State in writing on July 13, 1995, that

the submittal was complete. The State submitted additional information

to EPA to supplement its May 31, 1995, submittal on August 16, 1995,

February 6, 1996, February 27, 1996, July 5, 1996, and August 2, 1996.

EPA considered these supplemental submittals to be a material change to

ADEC's May 31, 1995, program submittal and extended its official review

period by 8 months to January 31, 1997. On September 18, 1996, EPA

proposed to grant interim approval to Alaska's title V program. See 61

FR 49091. EPA received several comments on its proposal, which are

discussed in section II below.

[[Page 64464]]

B. Section 112--Background

Section 112(l) of the Act established new, more stringent

requirements for a State or local agency that wishes to implement and

enforce a hazardous air pollutant program pursuant to section 112 of

the Act. Prior to November 15, 1990, delegation of NESHAP regulations

to State and local agencies could occur without formal rulemaking by

EPA. However, the new section 112(l) of the Act requires EPA to approve

State and local hazardous air pollutant rules and programs under

section 112 through formal notice and comment rulemaking. Now State and

local air agencies that wish to implement and enforce a federally-

approved hazardous air pollutant program must make a showing to EPA

that they have adequate authorities and resources. Approval is granted

by EPA through the authority contained in section 112(l), and

implemented through the federal rule found in 40 CFR part 63, subpart

E, if the Agency finds that: (1) The State or local program or rule is

``no less stringent'' than the corresponding federal rule or program,

(2) adequate authority and resources exist to implement the State or

local program or rule, (3) the schedule for implementation and

compliance is sufficiently expeditious, and (4) the State or local

program or rule is otherwise in compliance with federal guidance.

On May 17, 1995, the State requested delegation for all existing

applicable 40 CFR parts 61 and 63 regulations as adopted by reference

into 18 AAC 50.040. The State also requested authority to implement and

enforce all future 40 CFR part 61 and 63 regulations which Alaska

adopts by reference into State law. Finally, the State requested

approval under the authority of 40 CFR 63.93 to substitute its State

preconstruction review program regulations for the federal

preconstruction review regulations in 40 CFR 63.5(b)(2)-(4) and 63.54,

as these rules apply to newly constructed major affected sources or the

construction of a new emission unit. The State amended its May 17, 1995

delegation request on February 27, 1996 and July 5, 1996 to include

additional part 61 and part 63 regulations adopted by reference into 18

AAC 50.040.

In this notice, EPA is taking final action to promulgate interim

approval of the operating permits program for the State of Alaska, and

to approve in part and disapprove in part the Alaska program for

implementing section 112 of the Act. EPA is also responding to comments

received on the September 18, 1996, proposal.

II. Changes to Regulations and Response to Comments

A. Changes to Alaska's Regulations

On October 17, 1996, ADEC submitted a final version of the State's

regulations which were adopted on September 17, 1996. These regulations

included numerous editorial changes from the version that was submitted

on August 2, 1996. EPA has reviewed this final version and finds, with

the exceptions noted below in the response to public comment, that the

editorial changes do not affect any of the preliminary decisions made

in EPA's notice of proposed interim approval.

B. Response to Public Comment on Proposed Interim Approval of Alaska's

Title V Program

Most of the comments EPA received on the September 18, 1996,

Federal Register notice addressed EPA's proposed interim approval of

Alaska's title V program. All of the comments supported interim

approval of the program. EPA received comments from four oil and gas

companies, two branches of the Department of Defense, a coalition of

Alaska industries, and the Alaska Department of Environmental

Conservation. The following summarizes the comments received and

provides EPA's responses thereto.

1. Comments Relating to the State Implementation Plan

Several comments addressed regulations that do not relate to

Alaska's title V program. Two commenters requested that EPA exclude 18

AAC 50.100(b) through (e) from approval under title V. EPA agrees that

these provisions, which regulate sulfur dioxide emissions from nonroad

engines, are not related to title V operating permits requirements and

are not covered under this interim approval. These provisions will be

acted on by EPA in a separate rulemaking if they are re-submitted by

the State as a revision to the Alaska state implementation plan (SIP).

One commenter voiced opposition to the fuel restrictions for

nonroad engines contained in 18 AAC 50.100(b) through (e). As discussed

above, these provisions are not title V requirements and have not been

proposed for approval by EPA as part of Alaska's title V program.

Therefore, the comment is not germane to this action.

Similarly, one commenter voiced concern with respect to a change to

the State's opacity standards and the State's new provisions for excess

emissions due to routine operations like soot blowing, start-up, or

shutdown. Again, these provisions are not title V requirements and have

not been proposed for approval by EPA as part of Alaska's title V

program. Therefore, the comment is not germane to this action.

2. Sources Subject to the Federally-Approved Program

One commenter requested that EPA clarify in its final action that

operating permits required for the Anchorage Terminal bulk loading

facility under 18 AAC 50.325(d) would not be considered federal title V

operating permits but only State operating permits. EPA disagrees. Part

70 states, ``A State program with whole or partial approval under this

part must provide for permitting of at least the following sources.''

40 CFR 70.3(a) (emphasis added). Therefore, a State is authorized to

include in its federally-approved title V program more sources than are

required to be covered under 40 CFR 70.3. 18 AAC 50.325 sets forth the

categories of sources that are required to obtain operating permits

under State law and this entire section has been submitted to EPA as

part of Alaska's title V submittal. There is nothing in the submittal

from the State nor in the State's rules themselves that would

distinguish sources listed in 18 AAC 325(d) from other sources required

to obtain federal title V permits. (Compare, for example, the language

of 18 AAC 50.325(d) to that of 50.325(c), which covers sources subject

to parts C and D permits and which are also required to have title V

permits under section 502(a) of the Act and 40 CFR 70.3.) Although the

State could clearly amend its regulations and program submittal in the

future to exempt from its title V program sources that are not required

to have title V permits as a matter of federal law, EPA can only act on

what has been formally submitted at this time. Therefore, until such

time as the Alaska program is revised, all sources required to have

operating permits under 18 AAC 50.325 are required to have federal

operating permits under title.

3. Definition of ``Regulated Air Contaminant''

In the September 18, 1996, proposal, EPA stated that the Alaska

definition of ``regulated air contaminant'' in AS 46.14.990(21)

appeared to be narrower in scope than EPA's definition of ``regulated

air pollutant'' in 40 CFR 70.2. See 61 FR 49094-49095. The State of

Alaska questioned whether this issue is an ``applicability'' issue, the

heading

[[Page 64465]]

EPA used for the discussion in the September proposal. EPA believes the

State misunderstood EPA's use of the term ``applicability.'' EPA agrees

that the difference in the two definitions does not affect the sources

that are required to obtain a title V operating permit. The narrower

scope of the Alaska definition, however, does impact the applicability

of the requirements of Alaska's title V rules. As the State's own

analysis shows, the applicability of certain requirements, specifically

requirements for permit applications and off-permit changes, will be

affected by the difference in the two definitions. Therefore, as

discussed in the proposed interim approval, EPA still believes that the

Alaska definition of ``regulated air contaminant'' is inconsistent with

EPA's definition of ``regulated air pollutant'' and must be changed to

receive full approval. EPA is clarifying, however, that this difference

does not affect the sources required to have permits, but rather the

applicability of certain requirements of the permitting program to

sources required to have title V permits.

4. EPA-Issued Permits

One commenter requested clarification on EPA's discussion of the

status of EPA-issued PSD permits. As discussed in the proposed interim

approval, terms and conditions of EPA-issued PSD permits are applicable

requirements which must be included in title V permits and the Alaska

rules include the necessary provisions to ensure this occurs. See 61 FR

49093. The commenter expressed concern, however, that many terms and

conditions of the old EPA-issued permits are obsolete, environmentally

insignificant, or otherwise no longer appropriate, and requested

clarification as to how such terms could be excluded from the title V

permit or revised through the title V permitting process. EPA agrees

that terms and conditions in some EPA-issued PSD permits and old

preconstruction permits issued by States may no longer be appropriate

or applicable, and therefore need not be included in a source's title V

permit. As the commenter noted, EPA has issued guidance with respect to

how sources and permitting authorities may utilize the title V

permitting process to address this issue. See Section II.B.7 of the

``White Paper for Streamlined Development of Part 70 Permit

Applications,'' from Lydia N. Wegman to Air Office Directors, dated

July 10, 1995 (White Paper No. 1). This memorandum provides guidance on

how to identify and address terms and conditions which are obsolete,

environmentally insignificant, or otherwise no longer appropriate.

White Paper No. 1 clearly states, however, that the title V permit

issuance process cannot be used to revise terms and conditions that

still clearly apply to the source. Such revisions must be made using

revision procedures under the applicable new source review program, but

may be done concurrently with the title V permit issuance process. EPA

commits to working with the State and with sources in Alaska to

identify provisions of EPA-issued PSD permits that are obsolete,

environmentally insignificant, or otherwise no longer appropriate, and

to act expeditiously on requests for permit revisions.

5. Authority to Implement Section 112 Requirements

In the September 18, 1996, Federal Register notice, EPA noted that

Alaska lacked authority to implement several section 112(l)

requirements, but believed that these deficiencies were not so serious

as to warrant disapproval. 61 FR 49095. Alaska commented that the

September 17, 1996, final version of the adopted State rules included

the adoption by reference of 40 CFR 61.150 and 40 CFR 61.154 and asked

that EPA remove the specific interim approval conditions related to

these provisions. EPA agrees that the adoption of these two provisions

remedies the deficiencies regarding implementation and enforcement of

the asbestos NESHAP for waste disposal and active waste disposal

sites.1 Alaska has still not adopted, however, the provisions of

40 CFR part 61, subpart I (radionuclide NESHAP for facilities licensed

by the Nuclear Regulatory Commission). Therefore, the State still lacks

sufficient authority to implement all applicable section 112

requirements for title V sources in Alaska. As such, EPA concludes that

the Alaska program must be granted interim rather than full approval

because of this deficiency.

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\1\ As discussed in section III.B.1. below, however, EPA has

continuing concerns regarding the lack of training of ADEC staff who

will be performing asbestos inspections.

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6. Insignificant Emission Units.

In the September 18, 1996, Federal Register notice, EPA raised two

concerns with respect to Alaska's insignificant source regulations. See

18 AAC 50.335(m), 50.335(q)-(v), and 50.335(m). EPA received comments

on both issues.

a. ``Director's discretion'' provision. EPA's first concern with

Alaska's insignificant source regulations related to 18 AAC 50.335(u),

which contains a list of sources that may be determined to be

insignificant on a case-by-case basis. EPA stated that, before EPA

could approve such a ``director's discretion'' provision, Alaska must

demonstrate that each of the sources on the list would qualify as

``insignificant'' in all cases. 61 FR 49095. One commenter objected to

this concern, stating that the list of sources in 18 AAC 50.335(u)

narrowly defines the type and size of sources eligible for case-by-case

exemption and that EPA's concern with over broad delegation was

unwarranted. EPA continues to believe for the reasons discussed at 61

FR 49095 that 18 AAC 50.335(u), as submitted at the time of EPA's

proposed action, was unapprovable. As the commenter notes, however,

Alaska has since revised 18 AAC 50.335(u) and eliminated all but two of

the sources eligible for case-by-case treatment as insignificant

sources: (1) NPDES permitted ponds and lagoons used solely for settling

solids and skimming oil and grease; and (2) coffee roasters with

capacity of less than 15 pounds per day of coffee. See 18 AAC 50.335(u)

(adopted September 17, 1996). EPA agrees that Alaska has adequately

demonstrated that these two sources could qualify as insignificant

sources in all cases. Therefore, the concern raised by EPA in the

proposal regarding the scope of 18 AAC 50.335(u) has been resolved and

is no longer a basis for interim approval.

b. Exemption from monitoring, recordkeeping, reporting, and

compliance certification requirements. The second concern raised by EPA

in the proposed interim approval was Alaska's express exemption of

insignificant sources that are subject only to generally applicable

requirements from the monitoring, recordkeeping, reporting, and

compliance certification requirements set forth in 40 CFR 70.6. See 18

AAC 50.350(m)(3). In the proposal, EPA explained why it believes that

part 70 does not allow such sources to be exempt from the monitoring,

recordkeeping, reporting, and compliance certification requirements of

40 CFR 70.6, but that part 70 instead provides only a limited exemption

from some permit application requirements for insignificant sources. 61

FR 49096-49097.

EPA also discussed EPA's March 5, 1996, guidance document entitled

``White Paper Number 2 for Improved Implementation of the Part 70

Operating Permits Program'' from Lydia N. Wegman, Deputy Director,

Office of Air Quality Planning and Standards, to Regional Air Directors

(``White Paper No. 2''), which specifically addresses how title V

permits can address

[[Page 64466]]

insignificant emission units and activities subject to generally

applicable requirements in a State implementation plan in a manner that

minimizes the burden associated with the permitting of such emission

units and activities. Briefly summarized, White Paper No. 2 makes clear

that it is within the permitting authority's discretion to decide the

extent to which additional monitoring (beyond that provided in the

applicable requirement itself) will be required in the title V permit

for insignificant emission units or activities subject to generally

applicable requirements, based on the likelihood that a violation could

occur from those emission units or activities. White Paper No. 2,

however, in no way suggests that emission units and activities subject

to applicable requirements can be exempted from compliance

certification, even on a permit-by-permit basis. 61 FR 49096.

EPA also discussed in the September 18, 1996, proposal the effect

of the recent Ninth Circuit decision addressing EPA's action on similar

insignificant source regulations submitted as part of Washington's

title V program. Western States Petroleum Association v. EPA, 87 F.3d

280 (9th Cir. 1996) (``WSPA''). The WSPA case concerned EPA's interim

approval of the Washington State operating permits program, which also

contains an exemption from monitoring, recordkeeping, reporting, and

compliance certification requirements for insignificant emission units

and activities subject to generally applicable SIP requirements.\2\ See

60 FR 62992, 62996 (December 5, 1995) (final interim approval of

Washington title V program based on exemption of insignificant emission

units from certain permit content requirements); 60 FR 50166, 50171

(September 28, 1995) (proposed interim approval of Washington's title V

program on same basis). The petitioners in the WSPA case challenged

EPA's identification of this exemption as grounds for interim approval,

asserting that such an exemption was allowed by part 70, and that EPA

had acted inconsistently by approving other title V programs with

similar exemptions. The Ninth Circuit did not opine on whether EPA's

position on Washington's insignificant emission units regulations was

consistent with part 70. The Court did, however, find that EPA had

acted inconsistently in its title V approvals, and had failed to

explain the departure from precedent the Court perceived in the

Washington interim approval. The Court then ordered EPA to fully

approve Washington's insignificant emission unit regulations. Since the

September 18, 1996, proposal, the Ninth Circuit has denied EPA's

request for rehearing on the remedy ordered by the Court.

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\2\ The Alaska insignificant source provisions are modeled

closely after the Washington provisions.

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In the Alaska proposal, EPA explained in detail why it believed its

inconsistencies in approving State insignificant emission unit

provisions in other title V permit programs were minimal. EPA first

demonstrated that, of the eight title V programs cited by the WSPA

Court as inconsistent with EPA's decision on Washington's regulations,

four of them (Massachusetts, North Dakota, Knox County, Tennessee, and

Florida) were in fact consistent with EPA's position that insignificant

sources subject to applicable requirements may not be exempt from

permit content requirements. EPA then stated that it was still

evaluating for consistency the other four programs cited by the Court

as inconsistent with EPA's decision on Washington's program (Hawaii,

Ohio, North Carolina, and Jefferson County, Kentucky) and that these

four programs may ultimately be determined to impermissibly exempt

insignificant emission units from permit content requirements. EPA

noted, however, that as of September 1996, EPA had given or proposed to

give full or interim approval to 113 State and local title V programs,

and that, at most, only Hawaii, Ohio, North Carolina, and Jefferson

County, Kentucky, presented inconsistencies with EPA's proposed action

on Alaska's insignificant source regulations. EPA concluded that these

four potential inconsistencies represented a relatively minor set of

deviations from EPA's normal policy as manifested in the vast majority

of title V program approvals and in White Paper No. 2. 61 FR 69096-

69097.

The commenter raised several issues with respect to EPA's proposal

that Alaska eliminate the exemption from monitoring, recordkeeping,

reporting, and compliance certification requirements for insignificant

sources subject to generally applicable requirements. First, the

commenter asserted that the Alaska insignificant source rules satisfy

all applicable gatekeepers set forth in part 70 and incorporated by

reference the positions stated in petitioners' briefs in the WSPA case

regarding the criteria for EPA review of State and local title V

programs. In essence, the commenter argued that part 70 allows a

permitting authority to exempt insignificant sources subject to only

generally applicable requirements from the monitoring, recordkeeping,

reporting, and compliance certification requirements of 40 CFR 70.6.

EPA has addressed at length its position that part 70 does not

allow the exemption of insignificant sources subject to generally

applicable requirements from the monitoring, recordkeeping, reporting,

and compliance certification requirements of 40 CFR 70.6 in its

decisions on the Washington title V program, the Tennessee title V

program, the proposal on the Alaska title V program and the United

States briefs filed in the WSPA case. See 61 FR 49091 (proposed interim

approval of Alaska title V program); 61 FR 39335 (July 29, 1996) (final

interim approval of Tennessee title V program); 61 FR 9661 (March 11,

1996) (proposed interim approval of Tennessee title V program); 60 FR

62992 (final interim approval of Washington title V program); 60 FR

50166, 50171 (September 28, 1995) (proposed interim approval of

Washington title V program).\3\ EPA incorporates by reference the

analysis set forth in those documents. In summary, EPA believes that 40

CFR 70.5 authorizes a permitting authority to grant certain relief for

insignificant emission units from title V permit application

requirements so long as no application omits any information necessary

to determine the applicability of or to impose any applicable

requirement or any required fee. Nothing in part 70, however,

authorizes a permitting authority to exempt from the title V permit

applicable requirements that apply to insignificant emission units; any

monitoring, recordkeeping, or reporting necessary to assure compliance

with those applicable requirements; and the requirement to certify

compliance with all permit terms and conditions, including those that

apply to insignificant emission units.

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\3\ The briefs filed by the United States in the WSPA case are

in the docket.

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Next, the commenter disagreed with EPA's conclusion that EPA has

approved programs that exempt insignificant emission units subject to

applicable requirements from some or all permit content requirements in

only a handful of cases. Specifically, the commenter argued that the

plain language of the Massachusetts and Florida programs exempt

insignificant emission units from permit content requirements and that

EPA has since taken or proposed action on three additional programs

that exempt insignificant emission units from permit content

requirements. The commenter also stated that the majority of the 113

programs on which EPA has taken or proposed full or interim approval

are silent on whether insignificant emission units must be regulated in

title V

[[Page 64467]]

permits and that the decision to exempt such units from monitoring,

recordkeeping, reporting, and compliance certification will therefore

be made at the time of permit issuance in most of those States.

EPA disagrees with the commenter's assertions. With respect to the

Massachusetts and Florida title V programs, EPA acknowledged in the

September 18, 1996, Federal Register notice that those programs do

appear to exempt insignificant emission units from permit content

requirements. That does not end the inquiry, however. In acting on the

Massachusetts program, EPA carefully examined the list of exempt

activities and determined that the listed activities either named

activities that are not subject to applicable requirements or that any

applicable requirement implicated by a listed activity was not designed

to be implemented by addressing emission units in the permit (such as

open burning activities). See 61 FR 49096 and ``Addendum to Technical

Support Document for Proposed Action on Alaska Title V Program

Insignificant Emission Units and Activities,'' dated August 22, 1996.

With respect to Florida, EPA explained its view that, in order to

remedy the deficiencies identified by EPA in the Florida interim

approval notice, which included the State's failure to include

gatekeeper language that assured the completeness of permit

applications, the State would necessarily have to address the exemption

created from permit content requirements. It follows that, to the

extent Florida's regulations can be read as creating an exemption from

permit content, this should also be considered grounds for EPA's

interim approval of Florida's program. 61 FR 49097 and ``Addendum to

Technical Support Document for Proposed Action on Alaska Title V

Program Insignificant Emission Units and Activities,'' dated August 22,

1996. In short, EPA believes that its decisions on the Massachusetts

and Florida title V programs are consistent with its position that part

70 does not allow insignificant emission units subject to applicable

requirements to be exempted from monitoring, recordkeeping, reporting,

or compliance certification requirements.

EPA also disagrees with the commenter's unsupported and unexplained

assertion that EPA's final or proposed actions on the Michigan, New

Hampshire, and South Coast Air Quality Management District (South

Coast) programs demonstrate that EPA continues to give full approval to

title V programs that exempt insignificant emission units from permit

content requirements.\4\ EPA has carefully reviewed the relevant

portions of the regulations, Federal Register notices, and supporting

dockets for each these three programs. Each of these programs does

contain a limited exemption from certain permit application

requirements or the requirement to list certain equipment in the

permit. EPA is unaware of any provision in any of these State programs,

however, that exempts insignificant emission units subject to

applicable requirements from the permit content requirements of 40 CFR

70.6. For a more detailed discussion of EPA's conclusion that the

Michigan, New Hampshire, and South Coast programs are consistent with

EPA's action on the Alaska program, please refer to the ``Addendum to

Technical Support Document for Final Action on Alaska Title V Program

Insignificant Emission Units and Activities'' in the docket.

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\4\ The commenter did not explain the assertion that EPA's

proposed action on the Alaska program was inconsistent with EPA's

proposed or final action on the Michigan, New Hampshire, and South

Coast programs. EPA is therefore left to guess at the commenter's

concerns.

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EPA agrees with the commenter that the majority of the 113 title V

programs on which EPA has taken or proposed full or interim approval do

not expressly state that insignificant emission units subject to

applicable requirements are subject to permit content requirements. EPA

vigorously disagrees with the inference drawn by the commenter from

this fact, namely, that these title V programs implicitly or in

practice exempt insignificant emission units from permit content

requirements. EPA has made clear in the Federal Register notices acting

on the Washington and Tennessee title V programs that part 70 does not

allow the exemption of insignificant emission units subject to

applicable requirements from the permit content requirements of 40 CFR

70.6. EPA also discussed this position at length in White Paper No. 2.

EPA's approval of State and local title V programs has been based on

the assumption that the State and local program regulations, which in

many cases closely track the language in 40 CFR 70.6, will be

interpreted in the same way that EPA has interpreted part 70. In

addition, except perhaps in the handful of cases in which EPA may have

approved programs which improperly exempt insignificant emission units

with applicable requirements from permit content requirements, EPA has

required that permits issued for insignificant emission units subject

to applicable requirements comply with the requirements of section

70.6.

In short, where a State or local title V program does not

specifically exempt insignificant emission units from permit content

requirements, EPA has assumed that no such exemption will be inferred

and has therefore not objected to this aspect of the program. Where EPA

has been concerned that a State or local program could be interpreted

to provide such an exemption from permit content requirements, EPA has

clarified its expectation in the Federal Register notice acting on such

programs that the permitting authorities must ensure that all permits

issued ``assure compliance with all applicable requirements at the time

of permit issuance.'' See 60 FR 32603, 32608 (June 23, 1995); 60 FR

44799, 44801 (August 29, 1995). If, during implementation of such

programs, permits are issued which do not comply with the requirements

of section 70.6 with respect to insignificant emission units subject to

applicable requirements, EPA would consider this grounds for objecting

to individual permits, 40 CFR 70.8(c)(1), as well as grounds for

withdrawing approval of such State or local programs, 40 CFR

70.10(c)(1)(ii)(B).

In summary, EPA believes that there are only a handful of programs

out of the more than 113 that EPA has acted or proposed action on as of

this date that either have been confirmed to be inconsistent with part

70 or for which consistency is still an unresolved issue. These are

Hawaii, Ohio, North Carolina, and Jefferson County, Kentucky.5 In

other cases, EPA believes that it has been consistent in acting in

accordance with the part 70 regulations and EPA's stated policy, as

evidenced in the Washington and Tennessee title V interim approvals and

White Paper No. 2, of not giving full approval to title V programs that

exempt insignificant emission units subject to applicable requirements

from some or all permit content requirements.

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\5\ This list excludes those programs where the inconsistency

was identified as an interim approval issue.

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EPA stated in its September 18, 1996, proposal on Alaska's program

that EPA would determine which title V programs are in fact

inconsistent with the part 70 requirements regarding inclusion of all

applicable requirements in permits, and would act to either bring those

programs into consistency with part 70 or to explain any departures.

EPA has given further consideration to the treatment of insignificant

emission units in title V permits in general since the September 18,

1996, proposal and

[[Page 64468]]

plans to address the issue, as well as any potentially inconsistent

programs, as follows. EPA intends to publish a notice of proposed

rulemaking that will serve two purposes. First, it will propose to add

clarifying language to 40 CFR 70.6 that will make clear EPA's position

that insignificant emission units that are subject to applicable

requirements may not be excluded from part 70 permits and permit

content requirements. EPA believes this requirement is clear under the

current part 70 regulations, but wishes to put to rest the continuing

dispute over the meaning of the current regulations. In this regard,

the notice will also reiterate the guidance EPA has provided in White

Paper No. 2 regarding possibilities for streamlined treatment of

insignificant emission units subject only to generally applicable

requirements.

Second, the notice will solicit comment as to whether part 70

should be revised to allow for an approach similar to that taken in the

State of Washington and Alaska. EPA believes at this time that it has

answered the legitimate implementation concerns associated with this

issue. However, some States continue to request additional flexibility.

EPA believes these requests deserve a fair hearing, and so will request

comments explaining exactly what implementation concerns remain, and

how part 70 might be revised to address these concerns. EPA will also

request comment on how, if part 70 were to be amended, rule language

could be crafted to retain appropriate limitations and safeguards.

Specifically, EPA will seek to understand how part 70 could be

structured so that (1) excluded units would be truly small and (2) the

flexibility to exclude subject units would be limited to requirements

that are truly generic, that is, universally applicable.

EPA expects that this rulemaking will result in either the addition

of clarifying language that confirms EPA's interpretation of the

current part 70 regulations, or in revisions to part 70 that will allow

a new level of flexibility for insignificant emission units subject to

generally applicable requirements. In either case, programs that are

inconsistent with part 70 as it stands at the conclusion of this

forthcoming rulemaking will be required to submit program corrections

within a specified time period. Although EPA has authority to require

inconsistent programs to make corrections more expeditiously, EPA does

not wish to make States conduct serial program adjustments on the same

issue. Given the narrow scope of the forthcoming rulemaking, EPA

believes it can be finalized relatively quickly.

EPA believes that it can best ensure the consistency required by

the Ninth Circuit in the WSPA case by requiring Alaska to meet the same

requirements under the current part 70 regulations that EPA has applied

to all but perhaps a handful of title V programs, namely, that

insignificant emission units subject to applicable requirements may not

be exempted from the monitoring, recordkeeping, reporting or compliance

certification requirements of 40 CFR 70.6. As discussed below, Alaska

will have 18 months to address this and all other interim approval

issues identified in this final interim approval. This should give EPA

sufficient time to complete the forthcoming rulemaking discussed above

for insignificant emission units and also give Alaska sufficient time

to respond to this forthcoming rulemaking before expiration of the two

year interim approval period.

c. Additional issues on insignificant emission units. One commenter

raised several other concerns regarding EPA's proposed interim approval

of Alaska's regulations for insignificant sources. The commenter stated

that EPA incorrectly asserted that 18 AAC 50.335(m) requires the

inclusion of emission data, such as monitoring data, for insignificant

emission units in the final permit. EPA is uncertain of the language in

the proposal that led to the commenter's concern. 18 AAC 50.335(m)

requires a permit application to contain reasonable documentation

consistent with the requirements of Alaska's title V regulations to

verify the accuracy and adequacy of the information submitted in the

permit application, including calculations on which the information is

based. That provision also states that an application may not omit

information needed to determine the applicability of or to impose any

applicable requirement or to impose any fee, the so-called ``applicable

requirements gatekeeper'' required by 40 CFR 70.5. EPA stated that this

``applicable requirements gatekeeper'' applied to insignificant

sources, 61 FR 49095, and it is perhaps this language that concerned

the commenter. EPA did not intend, by this statement, to imply that a

permit application must contain all information identified by 18 AAC

50.335(m), such as emission data, for insignificant sources. Instead,

EPA intended to emphasize that the requirement that an application may

not omit information necessary to determine the applicability of or to

impose an applicable requirement or a fee applies to insignificant

sources as well as to other sources. This is made clear in 18 AAC

50.335(q)(2) through (4) as well.

The commenter also asserted that Alaska's regulations for

insignificant sources adequately ensure that insignificant sources that

increase emissions so as to cause them to fall outside of the

regulatory definition of an insignificant source must then be treated

as significant and be included in the operating permit. EPA agrees that

the Alaska program is adequate to ensure that insignificant sources

which increase emissions so as to be considered significant will be

appropriately addressed in the operating permit.

The commenter next states that ``EPA's position is that a facility

must forever verify that (insignificant sources) do not increase their

emissions and violate SIP requirements.'' The commenter suggests that

EPA's position that insignificant sources may not be exempt wholesale

from monitoring, recordkeeping, reporting and compliance certification

requirements means that sources will have to constantly monitor

insignificant sources. EPA has never stated or implied that facilities

must engage in constant and costly monitoring of insignificant sources.

To the contrary, in acknowledgement of the legitimate concern raised by

the commenter, EPA has given clear guidance on how insignificant

sources subject to applicable requirements can be addressed in title V

permits in a manner that minimizes the burden associated with the

permitting of such sources. See White Paper No. 2.

The commenter next states that ``EPA would be satisfied if Alaska

established a regulatory presumption that (insignificant sources)

normally maintain emissions that are insignificant.'' The commenter

appears to have misinterpreted some language in the September 18, 1996,

proposal. EPA stated that a State could meet the monitoring,

recordkeeping, and reporting requirements for insignificant sources

subject to generally applicable requirements by establishing a

regulatory presumption that no additional monitoring, recordkeeping,

and reporting is necessary for such sources to assure compliance, so

long as the State had the authority to impose such requirements on a

case-by-case basis if necessary to ensure compliance. 61 FR 49096 n. 4.

This is one method EPA has suggested by which a State can meet the

monitoring, recordkeeping, and reporting requirements of 40 CFR 70.6

for insignificant sources in a

[[Page 64469]]

manner that imposes minimal burden on sources and the permitting

agency.

The commenter also stated that the present Alaska program

sufficiently prevents insignificant sources from violating applicable

requirements. Enhancing and ensuring compliance is indeed a major goal

of the title V program. Congress and EPA insisted on certain program

elements, however, to achieve that goal. As discussed above, part 70

requires permits to contain terms and conditions necessary to assure

compliance with all applicable requirements and requires sources to

certify compliance with all permit terms and conditions. Part 70

contains no exemption for insignificant emission units subject to

applicable requirements. The Alaska program contains such an exemption

and therefore does not meet the requirements of part 70 for permit

content.

7. Inspection and Entry Requirements

One commenter objected to EPA's concern that Alaska's entry and

inspection requirements do not appear to meet the requirements of 40

CFR 70.6(c)(2). That provision states that all title V permits must

contain ``(i)nspection and entry requirements that require that, upon

the presentation of credentials and other documents as may be required

by law, the permittee shall allow the permitting authority or an

authorized representative'' to conduct specified entry, inspection,

copying, and sampling functions (emphasis added).

The comparable provision of Alaska law requires title V permits to

contain the following provision:

The permittee shall allow an officer or employee of the

department or an inspector authorized by the department, upon

presentation of credentials and at reasonable times with the consent

of the owner or operator to (conduct specified entry, inspection,

copying, and sampling functions).

18 AAC 50.345(7) (emphasis added). See also AS 46.14.515 (statute

authorizing inspections of air emission sources ``upon presentation of

credentials and at reasonable times with the consent of the owner or

operator) (emphasis added); AS 46.03.02(6) (same). Where an owner or

operator does not grant consent, the permitting authority must obtain a

warrant under AS 46.03.860.

In the September 18, 1996, Federal Register notice, EPA expressed

concern that Alaska law explicitly required that owners or operators

consent to an inspection or that the Department obtain a warrant. 61 FR

49097. EPA therefore proposed to require, as a condition of full

approval, that Alaska demonstrate to EPA's satisfaction that its

provisions for entry and inspection meet the requirements of part 70.

In objecting to EPA's proposal, the commenter stated that the

``other documents as may be required by law'' language of 40 CFR

70.6(c)(2) includes ``the requirement under state law to present a

warrant prior to entry in cases where consent has been withheld by an

owner or operator.'' The commenter further stated that Alaska law

simply codifies the fundamental constitutional protections against

unreasonable search and seizure.

The language in part 70 concerning authority for inspection and

entry is almost identical to the language that has been required in

EPA- and State-issued permits under the Clean Water Act, the Resource

Conservation and Recovery Act (RCRA), and the Underground Injection

Control (UIC) program since 1980. See 40 CFR 122.41(i); 144.51(i);

270.30(i); see also 45 FR 33290 (May 19, 1980). In responding to

commenters' concerns in the promulgation of the Clean Water Act, RCRA,

and UIC regulations that this language did not incorporate a

requirement for the presentation of a warrant, EPA stated:

Several commenters stated that the provision should incorporate

the legal principles set forth in Marshall v. Barlow's, Inc., 436

U.S. 307 (1978), relating to the necessity for presentation of a

warrant under appropriate circumstances. Some commenters feared that

by including entry and inspection requirements as a permit

condition, EPA might be requiring permittees to waive certain rights

under the Fourth Amendment to the United States Constitution. It is

not EPA's intent to deprive any permittee of its Fourth Amendment

rights as interpreted by Supreme Court decisions. However, we have

retained the general wording requiring ``presentation of credentials

and such other documents as may be required by law'' because of the

complexity and changing nature of this area of law, and the

possibility that any particular formulation or citation could be

inaccurate or inapplicable.

45 FR 33304-33305.

That the ``other documents as required by law'' language is

included in EPA-issued permits issued under most EPA programs 6

makes clear that the relevant inquiry is what documents are required as

a matter of Federal law as a condition of the right to enter and

inspect a title V source and not, as the commenter asserts, what other

documents may be required as a matter of State law. This is also clear

from EPA's response to comments quoted above. EPA believes the same is

true under 40 CFR 70.6(c)(2). The purpose of title V and part 70 is to

set forth minimum requirements for approval of State programs. EPA's

clear intent to set the Federal requirements for entry and inspection

as the minimum standard in order to prevent States from imposing

additional restrictions on the permitting authority's right to enter

and inspect. Thus, for example, to the extent a State requires a

warrant as a condition of entry where none is required as a matter of

Federal law, EPA believes the State program would not qualify for full

title V approval. Similarly, if a State imposes restrictions on

obtaining a warrant that are more burdensome than the requirements for

obtaining a warrant under Federal law, the State program would not

qualify for full approval.

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\6\ The same language is also used in the regulation setting

forth the requirements for title V permits issued by EPA under part

71. See 40 CFR 71.6(c)(2).

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EPA does not necessarily agree that Marshall v. Barlow's precludes

warrantless inspections under section 114 of the Clean Air Act. See New

York v. Burger, 482 U.S. 691 (1987) (warrantless search of automobile

junkyard conducted pursuant to a State statute authorizing inspection

of such commercial property falls within exception to the warrant

requirement for administrative inspections of pervasively regulated

industries). EPA's long-standing policy in conducting inspections under

the Clean Air Act, however, is to first seek the consent of the owner

or operator before entering and inspecting a facility and, if such

consent is denied, to obtain a warrant to confirm EPA's statutory

authority to enter and inspect. See Memorandum entitled ``Effect of

Supreme Court Decision in Marshall v. Barlow's, Inc., on EPA

Information Gathering Authority,'' from EPA General Counsel to

Assistant Administrators, dated June 29, 1978 (hereinafter, ``Barlow

OGC Memo''); Memorandum entitled ``Conduct of Inspections After the

Barlow's Decision,'' from EPA Assistant Administrator for Enforcement

to Regional Administrators, dated April 11, 1979 (hereinafter, ``Barlow

OE Memo''). This is based on EPA's belief that it is less resource

intensive in the long run to take the precautionary action of obtaining

a warrant than it would be to litigate the issue under each of the

environmental laws.

Although Alaska law, at first glance, appears consistent with EPA's

policy, EPA remains concerned that Alaska law may be more restrictive

than federal law. There are several areas where a right of warrantless

entry clearly exists under federal law. For example, a warrantless

inspection is permissible in emergencies, such as situations involving

potential imminent hazards or

[[Page 64470]]

the potential destruction of evidence. See Camera v. Municipal Court,

387 U.S. 523 (1967); see also Barlow OGC Memo, p. 2, n. 4; Barlow OE

Memo, p. 5. Furthermore, under the ``open fields'' and ``plain view''

doctrines, observations by inspectors of things that are able to be

seen by anyone in lawful position or place to make such observations do

not require a warrant. See Dow Chemical Company v. United States, 476

U.S. 227, 238 (1986); Oliver v. United States, 466 U.S. 170, 179

(1984); Reeves Brothers, Inc. v. EPA, No. 94-0053-L (W.D. Va. April 11,

1995); see also Barlow OE Memo, p. 6. The express requirement in AS

46.14.515 and 18 AAC 50.345(7) that an owner or operator consent to an

inspection could be interpreted to constrain these clear exceptions to

the warrant requirement. For example, Alaska law could be interpreted

to require the consent of an owner or operator before a Department

inspector enters property that would otherwise be classified as ``open

fields'' and from which an inspector would be authorized under Federal

law to gather information and conduct observations without a warrant.

Moreover, as discussed above, warrants are not required for

administrative searches of pervasively regulated industries under

certain circumstances. See New York v. Burger, 482 U.S. 691. In

addition, an Alaska Supreme Court case cited by the Alaska Attorney

General as well as the commenter states that the protections afforded

by the Alaska Constitution against warrantless entry are greater than

provided by the Fourth Amendment. See Woods and Rhode, Inc. v.

Department of Labor, 565 P.2d 138, 148 (Alaska 1977). EPA therefore

continues to believe that Alaska must demonstrate to EPA's

satisfaction, as a condition of full approval, that the restrictions on

its authority to enter, inspect, copy records, and sample do not exceed

the restrictions that apply as a matter of federal law under 40 CFR

70.6(c)(2).

8. Compliance Certification

In the proposal, EPA stated that Alaska's provisions regarding

compliance certification do not appear to comply with the requirements

of 40 CFR 70.6(c)(5), which requires compliance certification ``with

terms and conditions contained in the permit, including emission

limitations, standards, and work practice requirements.'' The Alaska

regulations require compliance certification only with specified

requirements. See 61 FR 49098. One commenter stated that the phrase

``including emission limitations, standards, or work practices'' in 40

CFR 70.6(c)(5) is an exclusive list of the conditions in a permit that

require certification. EPA vigorously disagrees. The phrase must be

read in context of the entire provision, which states that a permit

shall contain ``Requirements for compliance certification with terms

and conditions contained in the permit, including emission limitations,

standards, or work practices.'' (emphasis added). The phrase ``terms

and conditions contained in the permit'' is all inclusive and covers

all applicable requirements and other provisions required by part 70 to

be contained in a permit, not just emission limitations, standards, or

work practices. For example, a requirement in 40 CFR part 60 that a

source install, maintain, and operate continuous emission monitors in

conformance with certain performance specifications is a monitoring

requirement of an applicable requirement that requires a compliance

certification. Similarly, compliance with ``gapfilling'' monitoring,

recordkeeping, or reporting required under 40 CFR 70.6(a) is a part 70

requirement that requires certification.

In further support of its position, the commenter points to

language in 40 CFR 70.6(c)(5)(iii)(A) stating that compliance

certifications must include an ``identification of each term or

condition of the permit that is the basis of the certification.'' The

commenter believes this language implies that not all terms and

conditions need be identified in the certification. Again, EPA

disagrees. It would be both unreasonable and inconsistent with section

504(c) of the Act if a source was not required to certify compliance

with otherwise applicable requirements and part 70 requirements

contained in a title V permit. Therefore, EPA maintains that the Alaska

provisions for compliance certification fail to comply with the

requirements of 40 CFR 70.6(c)(5) and must be revised in order to

receive full approval.

9. Affirmative Defense for Emergencies

In the proposal, EPA stated that Alaska's affirmative defense for

unavoidable emergencies, malfunctions, and nonroutine repairs was

broader than the affirmative defense allowed under part 70 for

emissions in excess of technology-based standards due to emergencies

under 40 CFR 70.6(g) for two reasons, the definition of technology-

based standards and the reporting period. See 61 FR 49098. One

commenter argued that Alaska's emergency provisions are consistent with

40 CFR 70.6(g), although the commenter addressed only one the

definition of technology-based standard. Specifically, the commenter

stated that the use of the word ``primarily'' in the Alaska definition

of ``technology-based emission standard'' is consistent with part 70.

EPA disagrees. EPA defines a technology-based standard as one for which

the stringency of the standard is not based on considerations of air

quality impacts of the source or source category in question, but

instead based on a determination of what is technologically feasible.

59 FR 45530, 45559 (August 31, 1995). The Alaska definition, however,

could allow many SIP emission limitations to be considered to be

technology-based emission standards. The determination of emission

limitations needed to ensure attainment and maintenance of NAAQS

necessarily includes consideration of what is technologically feasible

for sources contributing to the air quality problem, and in many cases

the final emission limitations are based entirely on what is

technologically feasible. However, such SIP emission limitations are

considered to be health-based emission limitations and not technology-

based emission standards since they are specifically established to

ensure attainment and maintenance of the NAAQS. Furthermore, many

emission limitations in PSD permits are set at levels equivalent to

that of ``best available control technology'' (BACT) limits. However,

emission limits in PSD permits whose purpose is to protect the NAAQS

and PSD increments are considered health-based emission limitations,

even if they are identical in stringency to the BACT limits. Therefore,

EPA continues to believe that the Alaska emergency provisions are

inconsistent with the requirements of 40 CFR 70.6(g) and must be

revised in order to obtain full approval.7

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\7\ The commenter did not address EPA's concern that the Alaska

regulations allow sources more time than allowed by part 70 to

submit notice of an emergency to the permitting authority. See 61 FR

49098. This also remains as an interim approval issue.

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10. Minor Permit Modification Procedures

One commenter requested clarification regarding EPA's finding that

the State's provisions for minor permit modifications do not conform to

EPA's requirements regarding changes to monitoring, reporting, and

recordkeeping terms and conditions. EPA's regulations state that

``every relaxation of reporting or recordkeeping permit terms shall be

considered significant,'' 40 CFR 70.7(e)(4), and must be processed as a

significant permit modification. In contrast, the Alaska regulation

requires only changes

[[Page 64471]]

that ``materially alter or reduce'' the frequency, accuracy, or

precision of existing reporting requirements to be processed as a

significant permit modification. EPA expressed concern that the Alaska

program would allow a relaxation of reporting or recordkeeping

requirements to be processed as a minor permit modification so long as

the revision did not ``materially alter or reduce'' the frequency,

accuracy, or precision of existing reporting requirements. See 61 FR

49099. The commenter asked how reporting or recordkeeping could be

relaxed without materially altering or reducing the frequency,

accuracy, or precision of existing requirements. The term

``materially'' is defined in the Random House Dictionary of the English

Language as ``to an important degree; considerably.'' EPA therefore

believes that not every change that alters or reduces the frequency,

accuracy, or precision of existing requirements would be required to be

processed as a significant permit modification under Alaska law. As a

result, EPA continues to maintain that the Alaska procedures for minor

permit modifications fail to comply with the provisions of 40 CFR

70.7(e) with respect to changes to reporting or recordkeeping

requirements.

C. Response to Public Comment on Proposed Section 112 Approval in Part

and Disapproval in Part

The only comments EPA received on its proposed actions under

section 112 were from the State of Alaska. The State commented on EPA's

belief that sources could ``net out'' of State preconstruction review

requirements, but could not avoid preconstruction review under the

federal program. See 61 FR 49102. The State appeared to agree with

EPA's interpretation on ``net outs'' but disagrees with EPA's

contention that 40 CFR 63.5(b) could be applicable to a source that

does not have the potential to emit hazardous air pollutants (HAPs) in

quantities greater than major source levels. Regarding the latter, EPA

has reviewed this issue in further detail and has concluded that, at

present, Alaska's interpretation is correct in that EPA has not set

lower quantity cutoffs for defining a major source. Therefore, EPA

believes this is no longer grounds for disapproval.

With respect to the fact that sources could ``net out'' of

preconstruction review as a matter of State law, Alaska has requested

that EPA grant partial approval under the authority of CAA section

112(l) and 40 CFR 63.93 to its rule substitution request in light of

the fact that Alaska does not have adequate authority to administer 18

AAC 50.300 for all potential situations where 40 CFR 63.5(b)(3) is

applicable. EPA is denying this request for two reasons: (1) Based on

previous experience with partial delegations in the PSD program, EPA

has found practical implementation of such a system to be cumbersome

and one which may place added liability on a source should it fail to

obtain approval from the proper agency. In this regard, in order to

obtain approval to substitute its State rule, Alaska must amend 18 AAC

50.300 so that it does not allow newly constructed major HAP sources to

``net out'' of state preconstruction review. (2) EPA does not yet have

the authority under section 112(l) of the CAA or 40 CFR part 63,

subpart E, to approve partial delegation requests of this nature.

III. Final Action and Implications

A. Title V

EPA is promulgating final interim approval of the operating permits

program submitted by Alaska on May 31, 1995, and supplemented on August

16, 1995, February 6, 1996, February 27, 1996, July 5, 1996, August 2,

1996, and October 17, 1996. The State must make the following changes

to receive full approval.\8\

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\8\ See the discussion in EPA's proposed interim approval for a

full discussion of EPA's findings as to why the Alaska program does

not fully meet EPA's requirements in these respects. See 61 FR

49096-49100.

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1. Applicability of Permit Program Requirements

The Alaska definition of ``regulated air contaminant'' in AS

46.14.990(21) is inconsistent with the EPA definition of the term

``regulated air pollutant'' in 40 CFR 70.2 in that it does not

adequately cover pollutants required to be regulated under section

112(j) of the Act. As a condition of full approval, Alaska must

demonstrate to EPA's satisfaction that its definition of ``regulated

air contaminant'' is consistent with EPA's definition of ``regulated

air pollutant'' in 40 CFR 70.2.

2. Applicable Requirements

The Alaska definition of ``applicable requirement'' does not

include all of the EPA regulations implementing title VI (40 CFR part

82) but only subparts B and F. Although EPA has proposed to revise 40

CFR part 70 to limit the definition of ``applicable requirement'' to

only those provisions promulgated under sections 608 and 609 of the Act

(which EPA has promulgated in 40 CFR part 82, subparts B and F), this

proposed revision is not yet adopted. Should EPA revise part 70 as

proposed, Alaska's rules will be consistent and no revisions will be

needed. However, if EPA does not revise part 70 as proposed, Alaska

must adopt and submit appropriate revisions as a condition of interim

approval.

3. Authority to Implement Section 112 Requirements

Alaska has not adopted by the requirements of 40 CFR part 61

subpart I (radionuclide NESHAP for facilities licensed by the Nuclear

Regulatory Commission). EPA is requiring, as a condition of full

approval, that Alaska update its incorporation by reference to include

all of the NESHAP that currently apply to title V sources in Alaska.

4. Insignificant Emission Units

The Alaska program improperly exempts insignificant sources subject

to applicable requirements from monitoring, recordkeeping, reporting,

and compliance certification requirements. Alaska must eliminate this

exemption as a condition of full approval.

5. Emissions Trading Provided for in Applicable Requirements

The Alaska program does not contain a provision implementing the

part 70 requirement that the permitting authority must include terms

and conditions, if the permit applicant requests them, for trading of

emissions increases and decreases in the permitted facility, to the

extent that the applicable requirements provide for trading such

increases without a case-by-case approval of each emissions trade. See

40 CFR 70.6(a)(10). As a condition of full approval, Alaska must ensure

that its program includes the necessary provisions to meet the

requirements of 40 CFR 70.6(a)(10).

6. Inspection and Entry Requirements

Part 70 requires each title V permit to contain a provision

allowing the permitting authority or an authorized representative, upon

presentation of credentials and other documents as may be required by

law, to perform specified inspection and entry functions. See 40 CFR

70.6(c)(2). As a condition of full approval, Alaska must demonstrate to

EPA's satisfaction that its inspection and entry authority meets the

requirements of 40 CFR 70.6(c)(2) and imposes no greater restrictions

on the State's inspection authority than exist under federal law.

[[Page 64472]]

7. Progress Reports

The Alaska program does not require the submission of progress

reports, consistent with the applicable schedule of compliance and 40

CFR 70.5(c)(8), to be submitted in accordance with the period specified

in an applicable requirement. See 40 CFR 70.6(c)(4). As a condition of

full approval, Alaska must demonstrate to EPA's satisfaction that its

program complies with the requirements of 40 CFR 70.6(c)(4).

8. Compliance Certification.

The Alaska program does not meet the requirements of part 70 that a

permitting program contain requirements for compliance certification

with terms and conditions contained in the permit, including emissions

limitations, standards or work practices. See 40 CFR 70.6(c)(5). As a

condition of full approval, Alaska must demonstrate to EPA's

satisfaction that its program complies with the requirements of 40 CFR

70.6(c)(5).

9. General Permits

The Alaska provisions for general permits fail to comply with the

requirements of part 70 in one respect. The Alaska provisions do not

require that applications for general permits which deviate from the

requirements of 40 CFR 70.5 otherwise meet the requirements of title V.

See 40 CFR 70.6(d)(2). As a condition of full approval, Alaska must

demonstrate to EPA's satisfaction that applications for general permits

meet the requirements of title V.

10. Affirmative Defense for Emergencies

The Alaska program does not comply with the requirement of part 70

with respect to the provisions for an affirmative defense to an action

brought for noncompliance with a technology-based limitation in a title

V permit. The Alaska regulations include a definition of ``technology-

based standard'' which is broader than allowed by part 70 and the

Alaska program gives a permittee up to one week after the discovery of

an exceedence to provide ADEC with written notice rather than within

two working days as required by 40 CFR 70.6(g)(3)(iv). As a condition

of full approval, Alaska must demonstrate to EPA's satisfaction that

its emergency provisions are consistent with the requirements of 40 CFR

70.6(g).

11. Off-Permit Provisions

The Alaska program does not comply with the part 70 ``off-permit''

provisions which require the permittee to keep a record at the facility

describing each off-permit change and to provide ``contemporaneous''

notice of each off-permit change to EPA and the permitting authority.

See 40 CFR 70.4(b)(14). Although EPA has proposed to revise 40 CFR part

70 to eliminate the off-permit requirements, this proposed revision is

not yet adopted. Should EPA revise part 70 as proposed, Alaska's rules

will be consistent with part 70 in this respect and no revisions will

be needed. However, if EPA does not revise part 70 as proposed, Alaska

must ensure that its program requires notice and records for all off-

permit changes as a condition of full approval.

12. Statement of Basis

The Alaska program does not require the permitting authority to

provide and send to EPA, and to any other person who requests it, a

statement that sets forth the legal and factual basis for the draft

permit conditions (including references to the applicable statutory or

regulatory provisions). See 40 CFR 70.7(a)(5). As a condition of full

approval, Alaska must demonstrate to EPA's satisfaction that its

program satisfies the requirements of 40 CFR 70.7(a)(5).

13. Administrative Amendments

The Alaska program, which allows alterations in the identification

of equipment or components that have been replaced with equivalent

equipment or components to be made by administrative amendment, does

not comply with the part 70 provisions which authorize States to allow

certain ministerial types of changes to title V permits to be made by

administrative amendment. See 40 CFR 70.7(d). As a condition of full

approval, Alaska must revise 18 AAC 50.370(a)(5)(D) to expand the

prohibition to include modifications and reconstructions made pursuant

to 40 CFR parts 60, 61 and 63, or to eliminate 18 AAC 50.370(a)(5) from

the list of changes that may be made by administrative amendment.

14. Minor Permit Modifications

The Alaska program does not comply with the part 70 provisions

which require States to establish procedures for minor permit

modifications which are substantially equivalent to those set forth in

40 CFR 70.7(e), for several reasons. First, the Alaska program does not

ensure that ``every significant change in existing monitoring permit

terms or conditions and every relaxation of reporting or recordkeeping

permit terms shall be considered significant.'' See 40 CFR 70.7(e)(4).

Second, the Alaska program does not ensure that an application for a

minor permit modification must include a description of the change, the

emissions resulting from the change, and any new applicable

requirements that will apply if the change occurs. 40 CFR

70.7(e)(2)(ii)(A). Finally, the Alaska program fails to include

provisions which allow minor permit modification procedures to be used

for permit modifications involving the use of economic incentives,

marketable permits, emissions trading, and other similar approaches to

the extent that such minor permit modification procedures are

explicitly provided for in an applicable implementation plan or in

applicable requirements promulgated by EPA. See 70.7(e)(2)(B). As a

condition of full approval, Alaska must demonstrate to EPA that its

program includes the necessary provisions to meet the requirements of

40 CFR 70.7(e)(2)(B).

15. Group Processing of Minor Permit Modifications

The Alaska program does not conform with the provisions of part 70

which allow a permitting authority to process as a group certain

categories of applications for minor permit modifications at a single

source in that the Alaska program does not contain any thresholds for

determining whether minor permit modifications may be processed as a

group. See 40 CFR 70.7(e)(3). As a condition of full approval, Alaska

must demonstrate that its group processing procedures are consistent

with the requirements of 40 CFR 70.7(e)(3).

16. Significant Permit Modifications

The Alaska program does not address the part 70 requirement that a

State provide for a review process that will assure completion of

review of the majority of significant permit modifications within 9

months after receipt of a complete application. 40 CFR 70.7(e)(4)(ii).

As a condition of full approval, Alaska must provide assurances that

its program is designed and will be implemented so as to complete

review on the majority of significant permit modifications within this

timeframe.

17. Reopenings

The Alaska program provisions for reopenings fail to comply with

part 70 in several respects. First, the Alaska program does not require

reopening in the event that the effective date of a new applicable

requirement is later than the permit expiration date and the permit has

been administratively extended. See 40 CFR 70.7(f)(1)(i). Second, the

Alaska program does not comply with part 70 in that the Alaska program

merely authorizes ADEC to reopen a permit

[[Page 64473]]

under specified circumstances, where as part 70 requires that a permit

be reopened if ADEC or EPA determine such circumstances exist. See 40

CFR 70.7(f)(2)(iii). Third, the Alaska program also fails to contain

required procedures in the event of a reopening for cause by EPA. See

40 CFR 70.7(g)(2) and (4). Finally, the Alaska program does not include

provisions assuring that reopenings are made as expeditiously as

practicable. See 40 CFR 70.7(f)(2). As a condition of full approval,

Alaska must demonstrate to EPA's satisfaction that its provisions for

reopenings comply with the requirements of 40 CFR 70.7(f) and (g).

18. Public Petitions to EPA

The Alaska program does not prohibit issuance of a permit if EPA

objects to the permit after EPA's 45-day review period (i.e., in

response to a petition). As a condition of full approval, Alaska must

demonstrate to EPA's satisfaction that Alaska's provisions regarding

public petitions to EPA comply with the requirements of 40 CFR 70.8(d).

19. Public Participation

The Alaska program does not conform to the part 70 requirement that

the contents of a title V permit not be entitled to confidential

treatment. See 40 CFR 70.4(b)(3)(viii). As a condition of full

approval, Alaska must demonstrate to EPA's satisfaction that nothing in

a title V permit will be entitled to confidential treatment.

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

December 7, 1998. During this interim approval period, Alaska is

protected from sanctions, and EPA is not obligated to promulgate,

administer, and enforce a federal operating permits program in Alaska.

Permits issued under a program with interim approval have full standing

with respect to title V and part 70. In addition, the 1-year time

period under State law for submittal of permit applications by subject

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

applications begin upon the effective date of this interim approval.

If Alaska fails to submit a complete corrective program for full

approval by June 5, 1998, EPA will start an 18-month clock for

mandatory sanctions. If Alaska then fails to submit a corrective

program that EPA finds complete before the expiration of that 18-month

period, EPA will be required to apply one of the sanctions in section

179(b) of the Act, which will remain in effect until EPA determines

that Alaska has corrected the deficiency by submitting a complete

corrective program. Moreover, if the Administrator finds a lack of good

faith on the part of Alaska, both sanctions under section 179(b) will

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

Administrator determines that Alaska has come into compliance. In any

case, if, six months after application of the first sanction, Alaska

still has not submitted a corrective program that EPA has found

complete, a second sanction will be required.

If EPA disapproves Alaska's complete corrective program, EPA will

be required to apply one of the section 179(b) sanctions on the date 18

months after the effective date of the disapproval, unless prior to

that date Alaska 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 Alaska, both sanctions under section 179(b) shall apply after the

expiration of the 18-month period until the Administrator determines

that Alaska has come into compliance. In all cases, if, six months

after EPA applies the first sanction, Alaska has 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 Alaska

has not timely submitted a complete corrective program or EPA has

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

granted full approval to Alaska program by the expiration of this

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

EPA must promulgate, administer and enforce a federal permits program

for Alaska upon interim approval expiration.

This final interim approval of the Alaska title V program applies

to all title V sources (as defined in the approved program) within all

geographic regions of the State of Alaska, except within ``Indian

Country'' as defined in 18 U.S.C. section 1151. See 61 FR 49092, 49101.

B. Authority for Section 112 Implementation

1. Delegation under Section 112

In its title V program submittal, Alaska has demonstrated adequate

legal authority to implement and enforce section 112 (hazardous air

pollutants (HAPS)) requirements through its title V operating permit

process. All Alaska title V permit applications are required to cite

and describe each source regulated by a federal emission standard

adopted by reference in 18 AAC 50.040 and the standard that applies to

the source (18 AAC 50.335(e)(2) and (6)). In addition, all title V

permits issued by the State are required to include terms and

conditions that assure compliance with the applicable requirements of

18 AAC 50.040 (18 AAC 50.350(d)(1)(A) and (d)(3)).

However, in regard to the delegation of 40 CFR 61.145, EPA is

concerned that Alaska does not currently have inspection personnel

trained to perform asbestos inspections. EPA believes that proper

training is necessary if Alaska is to properly enforce and assure

compliance with 40 CFR 61.145. In this regard EPA has requested Alaska

to provide for adequate training of its staff who will be performing

asbestos inspections. Although EPA is approving delegation of this

portion of the asbestos program to Alaska, EPA plans to continually

monitor Alaska's asbestos program to ensure that the staff are properly

trained and that the program is being properly implemented and

enforced.

2. Substitution of State Preconstruction Review Regulations

As stated above, Alaska seeks to replace the federal

preconstruction review regulations of 40 CFR 63.5(b)(3) and 63.54 with

comparable State-adopted regulations. Alaska adopted 40 CFR 63.5(b)(3),

(d) and (e) into 18 AAC 50.040, but did not adopt 40 CFR 63.54. EPA has

determined that the State preconstruction review requirements of AS

46.14.130 and 18 AAC 50.300 through 50.322 are less stringent than 40

CFR 63.5(b)(3) and 40 CFR 63.54 as these rules apply to newly

constructed major sources of HAPs in an important respect. Unlike 40

CFR 63.5(b)(3), Alaska preconstruction review procedures allow newly

constructed sources at an existing facility to ``net out'' of

preconstruction review. See 61 FR 49102.

3. Section 112(l) Approval, Disapproval and Implications

In conjunction with the actions being taken in regard to Alaska's

title V program submittal, EPA is approving the State of Alaska's

delegation request of May 17, 1995, as amended on February 25, 1996,

July 5, 1996, October 17, 1996, and November 21, 1996, for all existing

applicable 40 CFR parts 61 and 63 regulations adopted by reference in

18 AAC 50.040, specifically, 40 CFR part 61 subparts A (except

Sec. 61.16), E, J, V, Y, FF, Sec. 61.154 of subpart M, and Sec. 61.145

of subpart M (along with other sections and appendices which are

[[Page 64474]]

referenced in Sec. 61.145, as Sec. 61.145 applies to sources required

to obtain an operating permit under AS 46.14.130(b)(1)-(3) and 18 AAC

50.330); and 40 CFR part 63 subparts A (except Sec. 63.6(g) and

Secs. 63.12 through 63.15), B (except Secs. 63.50 and 63.54), D, M, N

(as it applies to sources required to obtain an operating permit under

AS 46.14.130(b)(1)-(3) and 18 AAC 50.330), R, Q, T, Y, CC, DD, II, JJ,

and KK, and Appendices A and B.

EPA is also granting approval under the authority of section

112(l)(5) and 40 CFR 63.91 of a mechanism for receiving delegation of

future section 112 standards that Alaska adopts unchanged from the

federal standards. See section 5.1.2.b of EPA's ``Interim Enabling

Guidance for the Implementation of 40 CFR part 63'', subpart E, EPA-

453/R-93-040, November 1993. Under this streamlined approach, once

Alaska adopts a new or revised NESHAP standard into State law, Alaska

will only need to send a letter of request to EPA requesting delegation

for the NESHAP standard. EPA would in turn respond to this request by

sending a letter back to the State delegating the appropriate NESHAP

standards as requested. No further formal response from the State would

be necessary at this point, and if a negative response from the State

is not received by EPA within 10 days of this letter of delegation, the

delegation would then become final. Notice of such delegations will

periodically be published in the Federal Register.

EPA is disapproving Alaska's request for delegation of authority

for approving alternative non-opacity emission standards under 40 CFR

63.6(g) because such authority is reserved for the EPA Administrator

and cannot be delegated to a State or local agency. In addition,

because the State's request for approval of authority to implement and

enforce 40 CFR parts 61 and 63 does not include implementation and

enforcement for part 70 exempted sources, EPA will retain the

responsibility for implementing and enforcing 40 CFR part 61, subpart

M, for area source asbestos demolition and renovation activities, and

40 CFR part 63, subpart N, for area source chromium electroplating and

anodizers operations which have been exempted from part 70 permitting

in 40 CFR 63.340(e)(1). See 61 FR 27785, 27787 (June 3, 1996).

EPA is denying Alaska's request to implement and enforce its State-

adopted preconstruction review regulations in 18 AAC 50.300 through

50.322 in place of 40 CFR 63.5(b)(3). EPA is retaining the authority to

administer the federal preconstruction review program under 40 CFR

63.5(b)(3) as this rule applies to the construction of a new major

affected source; therefore, owners and operators subject to 40 CFR

63.5(b)(3) are still required to obtain EPA approval prior to

commencing construction.

Although EPA is delegating authority to Alaska to enforce the

NESHAP regulations as they apply to affected sources, it is important

to note that EPA retains oversight authority for all sources subject to

these federal requirements. EPA has the authority and responsibility to

enforce the federal regulations in those situations where the State is

unable to do so or fails to do so.

4. Scope of Approval

This approval of the Alaska section 112(l) programs, as with

Alaska's title V program, applies to all sources within all geographic

regions of the State of Alaska, except within ``Indian Country,'' as

defined in 18 U.S.C. section 1151.

Administrative Requirements

A. Docket

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

for the final interim approval and final partial approval and partial

disapproval, including the letters of public comment received and

reviewed by EPA on the proposal, are contained in the Alaska title V

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

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

otherwise considered by, EPA in the development of this final action.

The docket is available for public inspection at the location listed

under the ADDRESSES section of this document.

B. Executive Order 12866

The Office of Management and Budget has exempted this regulatory

action from Executive Order 12866 review.

C. Regulatory Flexibility Act

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

requirements, but simply address operating permits programs submitted

to satisfy the requirements of 40 CFR part 70. Similarly, NESHAP rule

or program delegations approved under the authority of section 112(l)

of the Act do not create any new requirements, but simply confer

federal authority for those requirements that Alaska is already

imposing. Because this action does not impose any new requirements, EPA

has determined it does not have a significant impact on a substantial

number of small entities.

D. Unfunded Mandates Reform Act

EPA has determined that the action promulgated today under section

502 and section 112(l) of the Act 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.

E. Submission to Congress and the General Accounting Office

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).

F. Effective Date

An administrative agency engaging in rulemaking must comport with

the requirement of section 553 of the Administrative Procedures Act.

See 5 U.S.C. chapter 5. Section 553 requires an agency to allow at

least 30 days from the date of publication before the effective date of

a substantive rulemaking. If, however, good cause can be shown, then

the agency may impose an effective date of less than 30 days after

publication. Good cause exists to initiate an effective date of less

than 30 days after publication when it is in the public interest and

the shorter time period does not cause prejudice to those regulated by

the rule. British American Commodity Options Corp. v. Bagley, 552 F.2d

482, 488-89 (2d Cir. 1977). An immediate effective date is in the

public's interest for several reasons.

First, ADEC is statutorily prevented from collecting and expending

permit fees until EPA has approved the State title V program. The

Alaska Legislature has only authorized ADEC to expend a limited amount

of EPA grant monies and other State revenues prior to EPA approval of

the State's title V program. These revenues have now run out and the

State agency is without funds to continue to pay salaries. Further

delay in the effective date of EPA's approval risks the loss of trained

air staff necessary to successfully implement the title V program when

it is approved.

[[Page 64475]]

Second, the federal part 71 permitting program became effective in

Alaska on July 31, 1996. 61 FR 34202 (July 1, 1996), codified at 40 CFR

part 71. Under this federal permitting program, some title V sources

are required to submit permit applications and permit fees to EPA by

January 31, 1997. See 40 CFR 71.5(a) and 71.9(f)(3). EPA understands,

however, that sources have not been preparing applications for the

federal part 71 program, but have instead been anticipating that the

State title V program would be approved prior to the first application

submittal deadline of the federal part 71 program. Delaying the

effective date of EPA's approval of the Alaska title V program could

put sources at risk of having to file applications and pay fees under

both the State part 70 and federal part 71 permitting programs.

Moreover, the State has advised EPA that sources have delayed filing

permit renewal applications under the current State operating permit

program in anticipation of the imminent approval of the State's title V

program. Such sources will be at risk of being in violation of current

State law if interim approval of Alaska's title V program is delayed.

Although it is in the public's interest to make EPA's interim

approval of Alaska's title V program effective on the date of

publication, EPA must ensure that this action will not have any

prejudicial effects upon the regulated community. Rowell v. Andrus, 631

F.2d 699, 702-703 (10th Cir. 1980). For example, EPA must ensure that

the regulated community has sufficient notice of this rulemaking and

ample opportunity to comment. EPA believes that all interested parties

have had sufficient notice of this rulemaking and ample opportunity to

comment. The State has advised EPA that it has contacted each of the

parties that commented on the proposal and none object to having this

rulemaking effective on the date of publication. The regulated

community has worked closely with the State in the development of the

State's title V program over the past several years. The State

regulations that form the basis of the State's title V program were

subject to notice and comment at the State level. EPA's proposed action

on the State's title V program was also subject to 30 days public

comment. Finally, under Alaska law, the State's operating permit

regulations do not become effective until 30 days after the effective

date of EPA approval. Because the program itself does not become

effective as a matter of State law for 30 days, it can also have no

effect as a matter of Federal law until that time. Therefore, the

purpose of the 30-day effective date under the Administrative

Procedures Act is met since sources will have 30 days notice prior to

the Alaska title V program becoming effective as a matter of both State

and federal law.

List of Subjects in 40 CFR Part 70

Environmental protection, Administrative practice and procedure,

Air pollution control, Hazardous substances, Intergovernmental

relations, Operating permits, Reporting and recordkeeping requirements.

Dated: November 22, 1996.

Chuck Clarke,

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 Alaska

in alphabetical order to read as follows:

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

Permits Programs

* * * * *

Alaska

(a) Alaska Department of Environmental Conservation: submitted

on May 31, 1995, as supplemented by submittals on August 16, 1995,

February 6, 1996, February 27, 1996, July 5, 1996, August 2, 1996,

and October 17, 1996; interim approval effective on December 5,

1996; interim approval expires December 7, 1998.

(b) (Reserved)

* * * * *

[FR Doc. 96-30865 Filed 12-4-96; 8:45 am]

BILLING CODE 6560-50-P