Clean Air Act Final Interim Approval of Operating Permits Program, State of Idaho; Clean Air Act Proposed Delegation of National Emission Standards for Hazardous Air Pollutants as They Apply to Title V Sources and Approval of Streamlined Mechanism for Future Delegations, State of Idaho

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5657-5]

Clean Air Act Final Interim Approval of Operating Permits

Program, State of Idaho; Clean Air Act Proposed Delegation of National

Emission Standards for Hazardous Air Pollutants as They Apply to Title

V Sources and Approval of Streamlined Mechanism for Future Delegations,

State of Idaho

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval and delegation.

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SUMMARY: EPA is promulgating final interim approval of the Operating

Permits Program submitted by the Idaho Division of Environmental

Quality (IDEQ) 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 is also

promulgating final interim approval of IDEQ's request for delegation of

authority to implement and enforce State-adopted hazardous air

pollutant regulations, which adopt by reference the Federal National

Emission Standards for Hazardous Air Pollutants (NESHAP) contained

within 40 CFR parts 61 and 63 as in effect on April 1, 1994, as these

regulations apply to sources that are required to obtain a Federal

operating permit. EPA is also approving a mechanism for Idaho to

receive delegation of future NESHAP standards that the State adopts by

reference into State law.

EFFECTIVE DATE: January 6, 1997.

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

information used in developing the final interim approval 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: Elizabeth Waddell, 1200 Sixth Avenue,

OAQ-107, Seattle, WA 98101, (206) 553-4303.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

1. Title V

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 October 27, 1995, EPA proposed disapproval of Idaho's title V

operating permits program because of deficiencies in the State's

provisions for excess emissions and administrative amendments. In the

alternative, EPA proposed interim approval of Idaho's program provided

Idaho revised its regulations to address these deficiencies and

submitted the revisions to EPA before final action on Idaho's

submittal. See 60 FR 54990. EPA received a single letter of public

comment which addressed sources located on Tribal lands and Idaho's

insignificant activities list. On January 12, 1996, Idaho submitted

program revisions addressing EPA's two proposed grounds for

disapproving Idaho's program.

On June 17, 1996, EPA reproposed action on two aspects of Idaho's

title V program. 61 FR 30570. First, EPA proposed that one of the four

deficiencies EPA initially noted in the October 27, 1996, Federal

Register in Idaho's general permitting regulations be eliminated as an

interim approval issue. 61 FR 30571. Second, EPA identified additional

reasons it believed that the audit immunity provisions of the Idaho

Environmental Audit Protection Act 1, Idaho Code 9-801 to 9-811,

required interim rather than full approval and proposed that Idaho also

be required to revise or address the audit privilege provisions of the

Idaho Audit Act as a condition of full approval. 61 FR 30571-30573. EPA

did not address the single comment it received on the October 27, 1995,

proposal or the effect of the State's revisions to its title V program

on the two disapproval issues because neither the comment nor the

State's program revisions involved the two title V issues on which EPA

reproposed action in the June 17, 1996, Federal Register document.

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\1\ In the October 27, 1995, and June 17, 1996, Federal Register

notices, EPA referred to the legislation as the ``Idaho

Environmental Audit Statute.'' The comments submitted by IDEQ and

the Idaho Attorney General refer to the legislation as the ``Idaho

Environmental Audit Protection Act,'' shortened to the ``Idaho Audit

Act.'' EPA will refer to this legislation by the latter title in

this notice.

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2. Section 112

Section 112(l) of the Clean Air Act authorizes EPA to approve State

air toxic programs or rules that operate in place of the Federal air

toxic program or rules. The Federal air toxic program implements the

requirements found in section 112 of the Act pertaining to the

regulation of hazardous air pollutants. Approval of an air toxic

program is granted by EPA if the Agency finds that: (1) The State

program is ``no less stringent'' than the corresponding Federal program

or rule, (2) the State has adequate authority and resources to

implement the program, (3) the schedule for implementation and

compliance is sufficiently expeditious, and (4) the program is

otherwise in compliance with Federal guidance. Once approval is

granted, the air toxic program can be implemented and enforced by State

or local agencies, as well as EPA.

On September 15, 1995, Idaho requested delegation of authority to

implement and enforce specific NESHAP regulations in 40 CFR parts 61

and 63 that Idaho had adopted as a matter of Idaho law on April 1,

1994. On December 14, 1995, Idaho also requested approval of its

mechanism for receiving automatic delegation of future NESHAP standards

as promulgated. In the June 17, 1996, limited reproposal on Idaho's

title V submittal, EPA also proposed interim approval of Idaho's

request for delegation under section 112(l) and requested public

comment on this action. Additionally, EPA proposed approval of a

mechanism for Idaho to receive delegation of the NESHAP standard which

the State may adopt by reference into State law in the future. See 61

FR 30570.

Idaho received numerous comments on the June 17, 1996, reproposal,

all addressing Idaho's title V submittal and all except for one

addressing the Idaho

[[Page 64623]]

Audit Act. None of the comments addressed EPA's proposed action under

section 112(l). In this document, EPA is taking final action to

promulgate interim approval of the operating permits program for the

State of Idaho, to delegate the NESHAPs as adopted by Idaho as they

apply to title V sources and as in effect on April 1, 1994 2, and

to approve a streamlined mechanism for future NESHAP delegations. EPA

is also responding to comments received on the October 27, 1995,

proposal and the June 17, 1996, reproposal.

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\2\ With the exception of the radionuclide NESHAP regulations in

40 CFR part 61, subparts B, H, I, Q, R, T, and W.

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II. Final Action and Implications

A. Analysis of Idaho's Title V Submission and Response to Public

Comments

1. Changes to Idaho's Regulations

Through an emergency rulemaking effective November 20, 1995, the

Idaho Division of Environmental Quality (IDEQ) repealed all of the

excess emission provisions in its title V regulations (IDAPA

16.01.01.326 through .332) except for IDAPA 16.01.01.332, which

provides an affirmative defense comparable to that provided in part 70

for violations of technology-based emission limits due to an

``emergency.'' See 40 CFR 70.6(g). These revisions adequately address

EPA's concerns that Idaho's excess emissions program for title V

sources did not assure compliance with all applicable requirements.

Idaho also made revisions to the excess emissions provisions that apply

to all sources in Idaho. See IDAPA 16.01.01.130 through .136. EPA will

review these changes as a revision to Idaho's State Implementation

Plan, which has been submitted to EPA for approval.

The emergency rulemaking also made revisions to Idaho's permit to

construct procedures applicable to title V sources. See IDAPA

16.01.01.209. These revisions ensure that the terms of preconstruction

permits incorporated into title V permits by administrative amendment

will contain compliance requirements substantially equivalent to the

requirements of a title V permit and adequately address the proposed

grounds for disapproval identified by EPA in the October 27, 1995,

Federal Register document.

IDEQ has made two other revisions to its title V permitting

regulations, neither of which affect the approvability of Idaho's title

V program. First, Idaho extended the deadline for the submission of

title V permit applications for sources existing on May 1, 1994, from

January 1, 1996, to June 1, 1996. See IDAPA 16.01.01.313.01.a. This

date will still ensure that all permit applications are submitted

within 12 months of when a source becomes subject to Idaho's title V

program, as required by 40 CFR 70.5(a)(1). Second, Idaho has made minor

revisions to the regulation specifying the information required in a

permit application. See IDAPA 16.01.01.314. These changes do not affect

the approvability of Idaho's permit application requirements.

2. Response to Public Comment

EPA received a single public comment on the October 27, 1995,

Federal Register document. The commenter disagreed with EPA's proposed

decisions regarding the geographic scope of the proposed approval and

insignificant activities. EPA received numerous comments on the June

17, 1996, reproposal. One commenter stated generally that it supports

full approval of the Idaho title V program, but did not explain why it

believed Idaho was entitled to full rather than interim approval. EPA

continues to believe that interim approval is appropriate for the

reasons set forth in the October 27, 1995, proposal (60 FR 54990), the

June 17, 1996, reproposal (61 FR 30570) and this document. All other

comments on the June 17, 1996, reproposal addressed the Idaho Audit

Act.

a. Geographic Scope of Idaho Program--Tribal Lands. EPA proposed to

exclude from the Idaho title V program title V sources located within

the exterior boundaries of Indian Reservations in Idaho 3 because

the State did not establish that it had authority to issue permits to

and enforce permits against such sources. The commenter expressed

concern over the complexity of the jurisdiction issue and that EPA's

proposal might cause hardships to sources on Indian Reservations, but

did not elaborate on what these hardships might be. EPA continues to

believe that the State of Idaho has not made a sufficient showing to

obtain title V approval for sources located within Indian Country in

Idaho and, therefore, is taking final action to exclude such sources

from the scope of this interim approval.

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\3\ Although the October 27, 1995, Federal Register notice used

the term ``within the exterior boundaries of Indian Reservations,''

EPA's position is that State's generally do not have civil

jurisdiction within ``Indian Country,'' as defined in 18 USC 1151.

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To obtain title V program approval, a State must demonstrate that

it has adequate authority to issue permits and to assure compliance by

all sources required to have permits under title V with each applicable

requirement under the Act. See Section 502(b)(5) of the Act; 40 CFR

70.4(b)(3)(i). The authority must include:

A legal opinion from the Attorney General from the State or the

attorney for those State, local, or interstate air pollution control

agencies that have independent counsel, stating that the laws of the

State, locality, or interstate compact provide adequate authority to

carry out all aspects of the program. This statement shall include

citations to the specific sta[tut]es, administrative regulations,

and, where appropriate, judicial decisions that demonstrate adequate

authority.

40 CFR 70.4(b)(3). Thus, the Act requires States to support their title

V program submittals with a specific showing of adequate legal

authority over all regulated sources, including sources located on

lands within Indian Country.

In its title V program submittal, Idaho made no attempt either to

claim or to show authority over sources located within Indian Country.

Indeed, the State clarified on April 5, 1995, that its submittal ``was

not an attempt to address jurisdictional issues over tribal lands.''

Furthermore, the Shoshone-Bannock Tribes and the Kootenai Tribe of

Idaho wrote to EPA on April 11, 1995, and March 22, 1995, respectively,

asserting that the State had ``not demonstrate[d] authority to

institute an air permitting program on reservations as is required

under title V of the Act.'' Accordingly, EPA concludes that Idaho has

not demonstrated authority to regulate title V sources in Indian

Country and, therefore, does not grant program approval to the State

for these sources.

b. Insignificant activities. The commenter also disagreed with

EPA's proposal to grant interim rather than full approval to Idaho's

insignificant activities list. The commenter referred to the EPA

guidance document entitled White Paper for Streamlined Development of

Part 70 Permit Applications, from Lydia N. Wegman, Deputy Director,

Office of Air Quality Planning and Standards, to the Air Division

Directors (July 10, 1995), as supporting the development of

insignificant activities lists. The commenter believes that EPA should

encourage IDEQ to develop the proper regulatory guidance to go with

Idaho's list and that such guidance would give Idaho and the regulated

community further time to evaluate the list and to propose any changes

that may be warranted.

EPA agrees with the commenter and fully intended this outcome by

granting

[[Page 64624]]

Idaho interim approval of its program for insignificant activities. By

granting Idaho interim approval on this issue, Idaho will have 18

months to submit changes that address EPA's concerns. In the interim,

IDEQ and the regulated community may use the lists as currently

promulgated by the State. This time period will allow Idaho and the

regulated community the time that the commenter requests to develop

guidance and evaluate and revise the list as required by EPA as a

condition of full approval. Accordingly, EPA will continue to require

that Idaho address the issues identified in Section II.A.6. below as a

condition of full approval.

c. Idaho Audit Act. In the June 17, 1996, Federal Register document

reproposing action on Idaho's title V program, EPA explained in great

detail why EPA believed that the Idaho Audit Act impermissibly

interfered with the enforcement requirements of title V and part 70 and

thus posed a bar to full approval. EPA received four comment letters

strongly opposing EPA's proposal with respect to the Idaho Audit Act.

These included comments jointly submitted by IDEQ and the Idaho

Attorney General's Office; comments submitted by the Idaho Association

of Commerce & Industry, which represents members of the Idaho business

community; and comments from two law firms representing nationwide

trade organizations and industries. EPA also received three comment

letters from environmental and public interest organizations agreeing

with EPA that the Idaho Audit Act was inconsistent with the enforcement

requirements of title V and part 70 and urged interim approval or

disapproval.\4\

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\4\ EPA has recently received a copy of rules promulgated by

IDEQ under the Idaho Audit Act. See IDAPA 16.01.10.000-018. EPA does

not believe that these rules remedy the problems identified with the

Idaho Audit Act in the June 17, 1996, Federal Register notice and

this notice. EPA notes with concern, however, the provision of IDAPA

16.01.10.015.03(b) which defines a violation disclosed within 60

days after discovery through an environmental audit as a violation

disclosed in a ``timely manner'' and thus entitled to immunity. EPA

is concerned that this lengthy time period would not require prompt

reporting of violations involving a potential of imminent and

substantial endangerment as a condition of immunity.

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i. Comments that the Idaho Audit Act does not pose a bar to full

title V approval. (A) Effect of the Idaho Audit Act on Idaho's

enforcement authority. The commenters opposing EPA's action with

respect to the Idaho Audit Act raise numerous issues. As an initial

matter, several of the commenters stated that nothing in the Clean Air

Act or part 70 contains a prohibition against State audit protection

and/or immunity laws or precludes a State from determining that

criminal or civil prosecution is inappropriate in certain defined

situations, such as those specified in the Idaho Audit Act.

Section 502(b)(5)(E) of the Clean Air Act lays out the minimum

enforcement authorities which Congress required a State to have in

order to secure Federal approval to implement and enforce a title V

operating permits program. That section requires, as a condition of

Federal approval, that a State have adequate authority to issue permits

and assure compliance; to terminate or revoke such permits for cause;

and to enforce permits, permit fee requirements, and the requirement to

obtain a permit, including authority to recover civil penalties of at

least $10,000 per day for each violation and to provide appropriate

criminal penalties. The part 70 implementing regulations, at 40 CFR

70.11, elaborate upon those authorities. Part 70 requires a State to

have authority to issue emergency orders and seek injunctive relief (40

CFR 70.11(a) (1) and (2)) and to assess civil and criminal penalties in

a maximum amount of not less than $10,000 per day per violation (40 CFR

70.11(a)(3)). Although neither title V nor part 70 expressly prohibits

State audit privilege and/or immunity laws, the analysis in the June

17, 1996, Federal Register document shows how the Idaho Audit Act

interferes with the requirements for civil and criminal penalty

authority set forth in title V and the part 70 implementing regulations

so as to preclude full approval of Idaho's operating permits program.

For example, as EPA explained in the June 17, 1996, Federal Register

document, the immunity provisions of the Idaho Audit Act alter and in

fact eliminate the State's authority to recover any civil or criminal

penalties under the circumstances identified in the Idaho Audit Act.

See 61 FR 30571-30573. The immunity provision of the Idaho Audit Act

bars prosecution of intentional and knowing violations that would

otherwise be a basis for criminal liability unless the source has

previously and repeatedly violated the same requirements within the

past three years. Moreover, the provisions of the Idaho Audit Act

preventing the compelled disclosure of environmental audit reports

prevents the State from obtaining potentially important information on

whether a violation was knowing or whether a violation has been

corrected. If the State, by virtue of such laws, surrenders its ability

to thoroughly investigate potential violations or its discretion to

take appropriate enforcement action in the face of violations, then the

State's fundamental enforcement authority is compromised. EPA believes

that this is the case with the Idaho Audit Act.

In a similar vein, the commenters argue that the State of Idaho has

the general authorities enumerated in section 502(b)(5)(E) of the Clean

Air Act and 40 CFR 70.11 to enforce permits, permit fee requirements

and the requirement to obtain a permit and to recover civil and

criminal penalties in a maximum amount of not less than $10,000 per day

of violation, and that nothing in the text of section 502(b)(5)(E) of

the Act or the part 70 regulations authorizes EPA to consider the

effect of State laws of general applicability on a State's title V

civil and criminal enforcement authorities. The commenters further

argue that the logical corollary of EPA's proposed action with respect

to the Idaho Audit Act is that every State procedural and evidentiary

rule must be evaluated and amended whenever EPA believes that it could

in some fashion, directly or indirectly, interfere with environmental

enforcement.

Laws of general applicability are an appropriate subject for EPA

review as is evident from the language of the part 70 regulations

themselves. The regulations require that a State applying for a title V

operating permits program include copies of ``all applicable State or

local statutes and regulations including those governing State

administrative procedures that either authorize the part 70 program or

restrict its implementation.'' 40 CFR 70.4(b)(2) (emphasis added). The

regulations also require a legal opinion from the State Attorney

General asserting that the laws of the State provide adequate authority

to carry out ``all aspects of the program.'' 40 CFR 70.4(b)(3). It is

certainly EPA's expectation that, in issuing such a legal opinion, the

Attorney General is certifying that no State laws, even laws of general

applicability or laws of evidence, interfere with the State's authority

to administer and enforce the title V program. See 59 FR 47105, 47108

(September 14, 1994) (requiring Oregon to revise or clarify meaning of

criminal statute appearing to limit criminal liability of corporations

as a condition of full title V approval); 59 FR 61820, 61825 (December

2, 1994) (accepting Oregon Attorney General's opinion regarding effect

of statute).\5\

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\5\ One commenter argues that section 116 of the Clean Air Act

bars EPA from seeking to preempt State audit privilege and/or

immunity laws. Section 116 states that, subject to limited

exceptions, nothing in the Clean Air Act shall preclude or deny the

right of any State to adopt or enforce emissions standards or

limitations or requirements respecting the control or abatement of

air pollution ``except where such emission standard or limitation is

less stringent than required by the Clean Air Act.'' Such an

interpretation would mean that EPA has no authority to disapprove

any State enforcement provisions as a condition of title V approval.

Section 502(b)(5)(E), which requires EPA to promulgate minimum

enforcement authorities required for approval of a State title V

program, clearly belies such an argument.

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[[Page 64625]]

Several commenters also argued that the Idaho Audit Act does not

interfere with the enforcement requirements of title V because it is

qualified in a number of important respects. The commenters note in

particular that the Idaho Audit Act, like most other State audit

privilege and/or immunity legislation, does not offer immunity or

protection from disclosure for information required by law to be

collected, developed, reported or otherwise made available to a

government agency. See Idaho Code 9-805, 9-807, 9-809(5). One commenter

stated that the Idaho Audit Act covers ``almost every conceivable

disclosure affected by a Title V Clean Air Act permit * * * In fact, it

is difficult to conceive of a situation under a Title V program in

which there was not a specific permit condition to make the disclosure

voluntary.''

EPA noted in the June 17, 1996, Federal Register document that the

Idaho Audit Act does contain provisions which narrow its scope, and

noted particularly the provisions which exclude from the scope of the

immunity and protection from disclosure information that is required to

be collected, developed, or reported under State or Federal law. 61 FR

60572-73. Therefore, EPA agrees with the commenters that in many cases

disclosure of a violation discovered during an audit would not be

considered ``voluntary'' and thus would not be entitled to immunity

under the Idaho Audit Act. Similarly, EPA agrees that in many cases the

information necessary to bring an enforcement action will be

information that a facility is required to collect, develop, report, or

otherwise make available to the government and therefore not subject to

the protection from disclosure provided by the Idaho Audit Act. At

least one other State has issued an opinion stating that its audit

immunity statute does not apply to title V sources because the statute

does not apply to violations that are required to be reported by the

source and because of the extensive monitoring, recordkeeping, and

reporting requirements of that State's title V operating program. See

61 FR 42224-42225 (August 14, 1996) (proposed interim approval of New

Hampshire title V program); 61 FR 51370 (October 2, 1996) (final

interim approval of New Hampshire title V program). It is not clear,

however, as a matter of Idaho law, that all evidence of violations of

title V permits and permit requirements would be required to be

reported to the State of Idaho under its title V regulations, thus

excluding such violations from the immunity of Idaho Code 9-809 and

from the prohibition against compelled disclosure of Idaho Code 9-804.

The Idaho Attorney General's Office has not provided EPA with such an

opinion, and EPA must therefore infer that there could be violations at

a title V source discovered through an environmental audit that would

be entitled to immunity or protection against compelled disclosure

under the Idaho Audit Act. Therefore, the concerns raised by EPA in the

June 17, 1996, Federal Register document remain.

The commenters also take issue with EPA's interpretation of the

title V and part 70 requirements for enforcement authority, as

evidenced in the April 5, 1996, memorandum entitled ``Effect of Audit

Immunity/Privilege Laws on States' Ability to Enforce Title V

Requirements'' (hereinafter, the ``April 5 Title V Memorandum'') and

the June 17, 1996, Federal Register document reproposing action on the

Idaho title V program. The commenters argue that EPA's interpretation

and application of the title V enforcement requirements improperly

interferes with the States' role as independent sovereigns, improperly

divests States of their primary responsibility for implementing and

enforcing the Clean Air Act, and conflicts with the Clinton

Administration's stated policy to allow States to experiment with

alternative approaches to achieve environmental protection. The

commenters further argue that the determination of the Idaho

legislature that criminal or civil penalties are inappropriate under

the circumstances set forth in the Idaho Audit Act is within the

statutory boundaries and flexibility provided by the Clean Air Act. The

commenters continue that the immunity provisions of the Idaho Audit Act

reflect the Idaho legislature's judgment as to the ``appropriate''

penalty for companies that voluntarily disclose and correct instances

of environmental noncompliance and reflect a reasonable allocation of

the State's enforcement resources.

EPA agrees that, in enacting the Clean Air Act, Congress believed

that States and local governments should have the primary

responsibility for controlling air pollution at its source. See Section

101(a)(3) of the Clean Air Act. EPA also agrees with the commenters

that the States are to be given broad flexibility to select alternative

means to achieve the minimum Federal requirements established in the

Act by Congress and by EPA in the part 70 regulations and fully

supports State experimentation to achieve greater compliance with

environmental laws. Such flexibility and experimentation, however, must

be, as the commenters' acknowledge, within the bounds of the statutes

enacted by Congress and the implementing regulations promulgated by

EPA. It cannot cancel out the requirement that States must meet some

minimum Federal requirements as a condition of Federal approval of

their programs.

In the case of the Clean Air Act operating permits program, those

minimum Federal requirements are set forth in title V and the part 70

regulations. It is these requirements that EPA is insisting that the

State of Idaho meet as a condition of full approval of its title V

program. In short, EPA does not believe that the Idaho title V program

is within the statutory boundaries established by Congress or the

flexibility provided by the Clean Air Act because the Idaho Audit Act

would limit the enforcement authority Congress and EPA required States

to have as a condition of Federal approval.

Moreover, the commenters' argument that the Idaho Audit Act governs

areas of law traditionally committed to States in their role as

independent sovereigns--if taken to its logical conclusion--would mean

that a State could not be required to have any civil or criminal

penalty authority to get full title V approval. It is an argument that

goes to the validity of section 502(b)(5)(E) and 40 CFR 70.11

themselves and therefore is untimely in this context. As stated above,

Congress through title V, and EPA through the part 70 implementing

regulations, required States to satisfy certain minimum requirements

for enforcement authority as a condition of Federal approval of a Clean

Air Act operating permits program. By conditioning full approval of the

Idaho title V program on changes to the Idaho Audit Act or a

demonstration by the State satisfactory to EPA that the Idaho Audit Act

does not interfere with the enforcement requirements of title V, EPA is

simply seeking to assure that Idaho has the required enforcement

authorities before receiving Federal approval of its program. Cf.

Commonwealth of Virginia v. Browner, 80 F.3d 869, 880 (4th Cir. 1996)

(in rejecting Virginia's argument that requiring State to change its

judicial standing rules as a condition of title V

[[Page 64626]]

approval violated State's sovereignty, the Court stated: ``Even

assuming arguendo the accuracy of Virginia's assertion that its

standing rules are within the core of its sovereignty, we find no

constitutional violation because federal law `may, indeed, be designed

to induce state action in areas that would otherwise be beyond

Congress' regulatory authority,' '' citing FERC v. Mississippi, 456

U.S. 742, 766 (1982)).

The commenters also assert that EPA's use of its title V program

approval authority to ``force'' States to modify their audit privilege

and/or immunity legislation is contrary to Congress' general expression

of intent against the automatic use of audit reports for enforcement of

the Clean Air Act, as expressed in the Joint Explanatory Statement of

the Conference Committee Report for the 1990 Amendments. S. Conf. Rep.

101-952, 101st Cong. 2d Sess. 335, 348 (Oct. 26, 1990), reprinted in

Legislative History at 941-42, 955, 1798. The commenters further assert

that Idaho's decision to provide qualified audit immunity is consistent

with that Congressional intent.

As an initial matter, EPA disagrees that it is using the title V

approval process to ``force'' States to modify their audit legislation.

Instead, as stated above, EPA is simply analyzing to what extent the

audit privilege and/or immunity laws of a particular State compromise

the enforcement authorities required by Congress in title V, as

interpreted by EPA through the part 70 regulations, as a condition of

Federal approval of the State's operating permits program.

With respect to the issue of Congress' intent, the language from

the Conference Report cited by the commenters does not clearly express

a desire that audit reports not be used for enforcement of the Clean

Air Act requirements. Rather, the text expresses some general support

for the concept of auditing and a desire that the criminal penalties of

section 113(c) ``should not be applied in a situation where a person,

acting in good faith, promptly reports the results of an audit and

promptly acts to correct any deviation. Knowledge gained by an

individual solely in conducting an audit or while attempting to correct

deficiencies identified in an audit or the audit report should not

ordinarily form the basis for intent which results in criminal

penalties.'' (emphasis added). The legislative history merely indicates

that the circumstances involving violations discovered through an audit

report and voluntarily disclosed by a company will generally not meet

the requirements for criminal liability. Importantly, Congress did not

in any way suggest that a company which self-disclosed violations

discovered through an environmental audit should be immune from civil

penalties. In any case, when Congress amended the Clean Air Act in

1990, there were no audit privilege and/or immunity laws on the books

in any State. Any legislative history on auditing and enforcement from

that period must be read in light of that reality. EPA does not believe

Congress intended that the growth of environmental auditing--in itself

a laudable goal fully supported by EPA--come at the expense of the

enforcement of environmental laws.\6\ If Congress had wished to give

special status to self-disclosed violations detected during an

environmental compliance audit or to prohibit the use for general

enforcement purposes of audits conducted under the Clean Air Act and

EPA approved programs, Congress could have done so in the language of

the 1990 amendments. If anything, the legislative history of the Act is

evidence of Congress' intent that such incentives for audits should be

a basis for the exercise of prosecutorial discretion, and not a

legislative grant of immunity or protection from disclosure.

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\6\ That distinction is also reflected in ``Incentives for Self-

Policing; Discovery, Disclosure, Correction and Preventions of

Violations,'' 60 FR 66706 (December 22, 1995) (hereinafter, ``EPA's

Self-Disclosure Policy''), which offers significant incentives for

businesses to audit and self-disclose violations, while at the same

time retaining safeguards to ensure the protection of public health

and the environment.

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The commenters also argue that Congress intended to vest the States

with discretion in enforcing title V permit requirements and that the

part 70 regulations merely provide that penalties assessed under a

title V program must be ``appropriate'' to the violation. Nothing

requires a State to obtain a penalty for every violation or prohibits a

State from rewarding good actors who identify, disclose, and correct

violations, the commenters continue.

EPA agrees that a State is not required to collect a penalty for

every violation and is not precluded from using its discretion to

reward companies that conduct environmental audits and disclose and

correct any violations discovered through such an audit. EPA disagrees,

however, that the only inquiry for title V approval is whether a State

has authority to assess ``appropriate'' penalties. The part 70

regulations first state that civil and criminal fines must be

recoverable ``in a maximum amount of not less than $10,000 per day per

violation.'' 40 CFR 70.11(a)(3)(i)-(iii) (emphasis added).\7\ Section

70.11(c) then provides that ``[a] civil penalty or criminal fine

assessed, sought, or agreed upon by the permitting authority under

paragraph (a)(3) of this section shall be appropriate to the

violation.'' (emphasis added). By interpreting title V and part 70 to

require only that States have authority to assess ``appropriate''

penalties, the commenters are reading out of the regulations the

independent requirement that States have the authority to assess civil

and criminal penalties in a maximum amount of not less than $10,000 per

day per violation. Read together, 40 CFR 70.11(a)(3) and 70.11(c)

require that a State have authority to assess a civil or criminal

penalty of up to $10,000 per day per violation and that, in addition,

the penalty assessed in any particular case be ``appropriate'' to the

violation at issue. Thus, EPA agrees with the commenters that it is

within Idaho's discretion to impose a penalty less than the statutory

maximum if a lesser penalty is appropriate under the facts and

circumstances of a particular case or to determine that criminal or

civil prosecution is inappropriate under the facts and circumstances of

a particular case so long as the State has the authority to assess

penalties for each day of violation. The legislative history cited by

the commenters in support of their position is, in fact, consistent

with EPA's position on this issue. See Legislative History at 5815

(``states are not going to be required to impose these minimum fines of

$10,000 for permit violations. Instead, the bill is revised to make

clear that states shall ensure that they have the authority to impose

this. It is not mandated, it is authority.'') (emphasis added).

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\7\ One commenter appears to assert that a State need only have

the authority to assess ``appropriate'' criminal penalties. In doing

so, the commenter ignores the clear language of the part 70

regulations. Section 502(b)(5)(E) requires States to have authority

to ``recover civil penalties in a maximum amount of not less than

$10,000 per day for each violation, and provide appropriate criminal

penalties.'' In promulgating part 70, EPA determined that to provide

``appropriate criminal penalties'' for purposes of title V approval,

a State must have authority to issue criminal penalties in a maximum

amount of not less than $10,000 per day per violation. See 40 CFR

70.11(a)(3) (ii) and (iii). If the commenter believes that the

enforcement authorities enumerated in the part 70 regulations,

including the requirement for criminal penalty authority of up to

$10,000 per day per violation, are excessive or in any way

inconsistent with the statutory authorities, the commenter should

have challenged the part 70 regulations at the time of promulgation

in 1992.

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Several commenters stated that section 113(e) of the Clean Air Act

only sets forth penalty factors that EPA or a Federal court must

consider in imposing

[[Page 64627]]

civil penalties for noncompliance with the Act, that it has no bearing

on EPA's authority to approve or disapprove State title V programs, and

that nothing in section 113, title V, or part 70 authorizes EPA to

condition approval of a State's title V permit program on the State's

ability to consider penalty factors comparable to those set out in

section 113(e). The commenters further assert that, although section

113(e) is inapplicable, section 113(a) authorizes EPA in certain

defined circumstances to take appropriate action, namely, filing an

action against a facility where EPA believes the State's response was

inadequate. This back-up authority, and not wholesale invalidation of a

State's title V permits program, the commenters continue, is EPA's tool

for ensuring to its own satisfaction that State audit legislation does

not allow egregious Clean Air Act violations to go unsanctioned. In any

event, the commenters assert, the Idaho Audit Act does take the section

113(e) factors into account.

EPA agrees that the purpose of section 113(e) is, as the commenters

assert, to set forth factors which EPA and the Federal courts must

consider in assessing civil penalties under the Clean Air Act. EPA

believes, however, that the section 113(e) factors can also serve as

guidance in determining what civil penalty authority is minimally

necessary in a State title V program.

In order for a State to have the authority to assess penalties that

are ``appropriate'' to the violation in any particular case as required

by 40 CFR 70.11(c), a State must have, in addition to the authority to

assess a penalty of at least $10,000 per day per violation, the

authority to consider mitigating or aggravating factors. In enacting

section 113(e), Congress set forth factors it believed EPA and Federal

judicial and administrative courts should consider in determining an

appropriate penalty under the specific facts and circumstances before

it. Although EPA believes that the factors enumerated by Congress in

section 113(e) are the most fundamental, EPA believes that States may

consider other factors as well. To the extent that a State has

surrendered its ability to consider factors such as those set forth in

section 113(e), EPA believes that a State does not have adequate

authority, on a case-by-case basis, to collect penalties that are

``appropriate'' to the violation, as required by 40 CFR 70.11(c).

Industry commenters argue that, because the section 113(e) factors

do not apply to State programs, it must follow that Congress did not

prescribe factors a State must apply in assessing ``appropriate''

penalties under title V, and that a State must therefore be given full

approval as long as it possesses ``appropriate'' enforcement authority.

There are two flaws in this reasoning. The commenters misunderstand the

purpose of EPA's reference to section 113(e). As explained above, the

question for EPA at the program approval stage is not how the State

will exercise its enforcement discretion to assess penalties in any

particular case. Rather, it is whether the State has sufficient

authority to assess appropriate penalties in every case. Before

granting full approval to a title V program, EPA must ensure, first,

that the State has the general authority to assess penalties up to the

amounts specified in section 70.11. EPA must also ensure that the State

has authority to consider factors similar to those in section 113(e)

such that the penalty actually assessed in any case may be appropriate

to the violation. Because the immunity provisions of the Idaho Audit

Act preclude the State from considering the factors set forth in

section 113(e) or any other factors in determining an ``appropriate''

penalty in cases in which the source has disclosed and corrected

violations discovered in an environmental audit, Idaho lacks this

authority.

EPA also disagrees with the commenters' assertion that EPA's sole

remedy where EPA believes a State does not have adequate enforcement

authority is to take its own enforcement actions to address violations

in that State. Although EPA does file Federal actions where the State

fails to take enforcement action or where State action is inadequate to

address a particular violation, before approving a State title V

program EPA must also ensure that the State has demonstrated the

capacity to administer and fully enforce a delegated program as

required by law and regulation. If Federal action were the only remedy

for situations in which a State does not possess adequate enforcement

authority, there would have been no need for Congress to direct EPA to

promulgate rules setting forth minimum enforcement requirements for

Federal approval of a State operating permits program. See 59 FR 61825

(rejecting similar comment in acting on Oregon's title V program).

Finally, EPA disagrees with the commenters' contention that the

Idaho Audit Act does give consideration to the penalty factors set

forth in section 113(e). As EPA stated in the June 17, 1996, Federal

Register document and has reiterated above, the immunity provisions of

the Idaho Audit Act prevent the State from considering all but one of

the factors set forth in section 113(e) of the Clean Air Act. For

example, the Idaho Audit Act precludes the assessment of civil

penalties for violations voluntarily disclosed in an environmental

audit even if the violations resulted in serious harm or risk of harm

to the public or the environment or resulted in substantial economic

benefit to the violator. To the extent the Idaho Audit Act prevents

consideration of these factors, EPA believes that Idaho has surrendered

its authority to assess appropriate penalties as required by section

502(b)(5)(E) of the Clean Air Act and 40 CFR 70.11. See 61 FR 30572.

Several commenters stated that EPA's approach on State audit

privilege and/or immunity laws is bad policy and not supported by

empirical evidence. The commenters expressed strong support for

environmental auditing as a means of obtaining compliance with

increasingly complex environmental requirements. These commenters argue

that EPA's reaction against such audit statutes is a ``knee-jerk''

reaction that ignores the potentially huge benefits that these laws

offer. EPA has wrongly concluded, the commenters continue, that the

existence of a limited and qualified affirmative defense to penalties

for violations discovered through environmental audits and protection

for information in audit reports weakens Idaho's authority to enforce

the law or to ensure compliance and that the evidence to date, both in

Idaho and in other States with such laws, shows in fact that audit

privilege and/or immunity legislation encourages self-correction and

increased compliance. At the same time, the commenters argue, EPA has

not cited any specific instance in which the Idaho Audit Act or some

other State audit privilege and/or immunity law has compromised or

inhibited enforcement of the Clean Air Act or a title V permit

program.8

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\8\ One commenter noted that private industry has been in the

forefront of environmental auditing, and that governmental agencies

that are also subject to environmental regulation have in some

instances lagged behind in implementing auditing programs. This

commenter went on to express concern that EPA has used the title V

approval process as a mechanism to limit environmental auditing when

Federal and State agencies are not conducting environmental audits.

EPA agrees that private industry has played an important role in the

development and implementation of environmental auditing programs

and that government entities should follow the example of many

private industries in conducting environmental audits.

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EPA has expressed strong support for incentives which encourage

responsible companies to audit to prevent noncompliance and to disclose

and correct any violations that do occur. See, e.g., EPA's Self-

Disclosure Policy.

[[Page 64628]]

The issue involved in this Federal Register action, however, is not

whether environmental auditing is good or bad policy. Rather, the issue

is whether the Idaho Audit Act, in offering immunity and protection

against compelled disclosure to companies conducting environmental

audits, so deprives the State of its authority to take enforcement

action for violations of title V requirements that the State does not

have the necessary authority required for full title V approval.

Moreover, EPA believes that it is premature at this point to expect

significant empirical evidence to document whether environmental audit

privilege and/or immunity laws enhance or impede environmental

compliance. Most of the State audit statutes, such as Idaho Audit Act,

are little more than one year old and only a few States have issued

permits under approved title V programs. In any event, EPA is aware of

at least one on-going environmental enforcement action in a State with

an audit privilege and/or immunity law in which the audit privilege

appears to be interfering with prosecutors' efforts to obtain and

utilize certain evidence.9

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\9\ The confidentiality prerequisites that attach to all on-

going enforcement actions prevent the Agency from revealing

additional details at this time.

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The commenters go on to argue that the reasoning set forth in the

April 5 Title V Memorandum and the June 17, 1996, Federal Register

document could have far-reaching and unintended effects on the

relationship between EPA and States in the implementation of the Clean

Air Act and other environmental laws such as approvals of State

Implementation Plans and State programs under the Clean Water Act and

Resource Conservation and Recovery Act.

EPA agrees that the rationale behind the April 5 Title V Memorandum

and EPA's action on the Idaho title V program has implications for

other Federal programs delegated to the States. Because of that, the

Agency has for some months been analyzing the effects of State audit

privilege and/or immunity laws on enforcement authorities under the

Clean Water Act, the Resource Conservation and Recovery Act, and other

statutes. The rationale behind the April 5 Title V Memorandum and EPA's

action on the Idaho title V program as it relates to the Idaho Audit

Act, however, is dictated not by political or policy considerations,

but rather by statutes and regulations that were finalized after public

notice and comment.

Several commenters also stated that EPA's proposed interim approval

of Idaho's program based on the Idaho Audit Act is inconsistent with

existing EPA and Department of Justice enforcement policies, which

reflect the appropriateness of limiting enforcement discretion. The

commenters point to ``Factors in Decisions on Criminal Prosecutions for

Environmental Violations in the Context of Significant Voluntary

Compliance or Disclosure Efforts by the Violator,'' DOJ, July 1, 1991;

``The Exercise of Investigative Discretion,'' EPA, January 12, 1994;

``Policy on Flexible State Enforcement Responses to Small Community

Violations'' EPA, November 1995 (``EPA Policy on Small Communities'')

10; ``Policy on Compliance Incentives for Small Businesses,'' EPA,

May 1996; and EPA's Self-Disclosure Policy.

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\10\ One commenter describes EPA's ``Policy on Flexible State

Enforcement Responses to Small Community Violations'' (hereinafter,

``EPA's Policy on Small Community Violations'') as one that

``encourages states to give small communities an unqualified waiver

of civil penalties--regardless of any economic benefit or the

seriousness of the violation--as an incentive to compliance.'' EPA

disagrees with this characterization. Although the policy does

encourage States to provide small communities an incentive to

request compliance assistance by waiving all or part of a penalty

under certain circumstances, it does not encourage States to give

small communities ``an unqualified waiver of civil penalties,'' as

the commenter asserts. For example, the EPA Policy on Small

Community Violations is directed at a very narrowly defined class of

potential violators--non profit, government entities with fewer than

2,500 residents that are unable to satisfy all applicable

environmental mandates without the State's compliance assistance.

The policy directs States to assess a small community's good faith

and compliance status before granting any relief from penalties and

identifies a number of factors that a State should consider in

determining whether relief from civil penalties is appropriate in

the particular circumstances. Contrary to the commenter's assertion,

EPA's Policy on Small Community Violations does direct a State to

consider the seriousness of the violation. See EPA's Policy on Small

Community Violations, page 4. Although the policy does not direct

the State to consider economic benefit in determining the

appropriate enforcement response, the policy is available only to

those small communities that are financially unable to satisfy all

applicable environmental mandates without the State's compliance

assistance.

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There is an important distinction between the policies cited by the

commenters, which adopt an ``enforcement discretion'' approach, and the

Idaho Audit Act. EPA and the Department of Justice have announced

policies guiding the exercise of their enforcement discretion under

certain narrowly defined circumstances, while preserving the underlying

statutory and regulatory authority. State audit privilege and/or

immunity laws, such as the Idaho Audit Act, by contrast, constrain

enforcement discretion as a matter of law, impermissibly surrendering

the underlying statutory and regulatory enforcement authorities

required for Federal approval of State programs.

Several commenters stated that EPA's proposed action on the Idaho

program is inconsistent with several previous title V approvals where

audit privilege and/or immunity legislation has not posed a bar to full

approval. As examples of previous title V approvals which the

commenters believe are inconsistent with EPA's proposed action on the

Idaho program, as it relates to the Idaho Audit Act, the commenters

point to EPA's action on the Oregon, Kansas, and Colorado title V

programs. Relying on the recent Ninth Circuit decision in Western

States Petroleum Association v. EPA, 87 F.3d 280 (9th Cir. 1996)

(``WSPA''), the commenters state that, where EPA is departing from a

prior course of action, more is required of the Agency than conclusory

statements concerning the potential impact of the Idaho Audit Act on

the State's title V enforcement authority. Instead, the commenters

argue that EPA must provide a basis for deviating from its earlier

approaches in Oregon, Kansas, and Colorado.

As an initial matter, EPA notes its action on Idaho's title V

program is consistent with its approach with respect to the Texas title

V program, 61 FR 32693, 32696-32699 (June 25, 1996) (final interim

approval), and the Michigan title V program. 61 FR 32391, 32394-32395

(June 24, 1996) (proposed interim approval). Moreover, EPA has notified

the States of Arizona, Florida and Ohio that audit privilege and/or

immunity laws that these States have enacted, or were contemplating

enacting, could interfere with the enforcement requirements of title V

and part 70.

With respect to the three programs cited by the commenters as

inconsistent with EPA's proposed action on the Idaho program, EPA is

still in the process of reviewing the audit privilege and/or immunity

statutes in Oregon, Kansas, and Colorado, and their effects on the

title V enforcement requirements in those States, in order to determine

whether EPA acted inconsistently in approving those programs. If EPA

determines that it acted inconsistently in acting on those programs,

EPA intends to take appropriate action to follow the WSPA Court's

mandate that EPA act consistently or explain any departures.

Finally, the commenters challenge the April 5 Title V Memorandum

itself arguing that the memorandum imposes requirements on EPA approval

of a State

[[Page 64629]]

operating permits program in addition to those required by section

502(b)(5)(E) of the Act and the part 70 rules. Because the April 5

Title V Memorandum sets additional substantive and binding standards

for approval of State title V operating permits programs not included

in the part 70 regulations, the commenters continue, the memorandum is

a rule disguised as guidance and must be promulgated in accordance with

the Administrative Procedures Act. This requires, among other things,

public notice and comment.

EPA disagrees. The April 5 Title V Memorandum does not, as the

commenters assert, ``purport to change fundamentally the requirements

in section 70.11 by adding provisions that (1) effectively prohibit a

state from adopting an audit protection or immunity law and (2) impose

at least four new penalty criteria.'' Rather, the memorandum simply

recounts and reiterates existing statutory and regulatory requirements

for enforcement authority under the title V program and shows how audit

privilege and/or immunity laws may prevent a State from meeting those

requirements. It creates no new ``substantive and binding standards''

for approval of title V programs, and therefore is not subject to

notice and comment rulemaking of the Administrative Procedures

Act.11 Moreover, in explaining why the Idaho Audit Act precludes

full approval, EPA is relying on the requirements of title V and part

70 themselves, and not the April 5 Title V Memorandum. Moreover, EPA's

application of the title V and part 70 enforcement requirements to the

specific circumstances before EPA in the case of the Idaho Audit Act is

subject to notice and comment rulemaking.12

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\11\ One commenter also stated that EPA expressly recognized in

its earlier approval of the Oregon title V program that EPA would

have to use rulemaking to modify its part 70 rules before EPA could

prohibit States from adopting audit privilege and/or immunity laws.

The commenter misstates the Agency's position. As an initial, the

Oregon audit statute, Oregon Revised Statute 468.963, contains only

an audit privilege and does not contain an immunity provision. In

proposing interim approval of the Oregon title V program, EPA stated

it was in the process of developing a national position regarding

EPA approval of environmental programs in States that have

environmental audit privileges, and that, therefore, EPA proposed to

take no action on the Oregon audit provision in the context of the

Oregon title V approval. EPA noted, moreover, that it might consider

such a privilege grounds for withdrawing program approval under 40

CFR 70.10(c) in the future if EPA later determined that the Oregon

audit provision interfered with Oregon's enforcement

responsibilities under title V and part 70. 59 FR 47105, 47106

(September 14, 1994). During the public comment period on EPA's

proposal, one commenter stated that EPA's suggestion that a State

audit privilege could be grounds for interim approval or withdrawal

was bad policy and that Oregon's audit privilege statute was

consistent with the Clean Air Act. In addition to responding to the

merits of the comment, EPA stated that the commenter's concerns were

premature because, as the commenter acknowledged, EPA had not

proposed to take any action on Oregon's environmental audit

privilege statute in the context of final interim approval of the

Oregon program. EPA further stated that any such concerns about

EPA's position on the Oregon audit privilege statute would be

properly made if EPA later proposed to withdraw Oregon's title V

approval based on Oregon's audit privilege or if EPA ``revised part

70 to prohibit environmental audit provisions such as Oregon's.'' 59

FR 61820, 61824 (December 2, 1994). EPA did not say in that Federal

Register document that a rulemaking would be required in order for

the Agency to disapprove a title V program in a State with an

environmental audit privilege and/or immunity statute.

\12\ EPA also disagrees with one commenter's assertion that the

Congressional review provisions of Subtitle E of the Small Business

Regulatory Enforcement Fairness Act of 1996, P.L. 104-121 (SBREFA),

require EPA to submit the April 5 Title V Memorandum to Congress.

EPA does not believe that the April 5 Title V Memorandum is subject

to Congressional review under SBREFA because it is not a rule and it

does not substantially affect the rights or obligations of a

nonagency party. Even if the Memorandum were subject to review, EPA

has not relied on that Memorandum as a basis for this action, but

has instead relied on the requirements of title V and part 70.

Therefore, any procedural defect with respect to the April 5 Title V

Memorandum is irrelevant to the legal sufficiency of this action.

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(B) Effect of the immunity provisions of the Idaho Audit Act on

Idaho's ability to issue emergency orders and seek injunctive relief.

In the June 17, 1996, Federal Register document, EPA expressed concern

that the Idaho Audit Act could be interpreted to interfere with the

State's authority to issue emergency orders and seek injunctive relief,

as required by section 502(b)(5)(E) and 40 CFR 70.11(a) (1) and (2).

First, EPA was concerned with the subsection of the immunity provision

of the Idaho Audit Act stating:

Except as specifically provided, this section does not affect

any authority of an environmental agency to require remedial action

through a consent order or action in district court or to abate an

imminent hazard, associated with the information disclosed in any

voluntary disclosure of an environmental violation.

Idaho Code 8-809(7). EPA queried what might be included within the

``Except as specifically provided'' clause of that provision and

whether the provision specifically authorizing persons to enter into

voluntary settlements (Idaho Code section 9-809(4)) could be

interpreted to mean that Idaho would be prevented from issuing a

unilateral order or seeking a court order requiring an owner or

operator to correct a violation on a specified schedule, at least where

the violation did not involve an imminent hazard. 61 FR 30570, 30572.

In the comments jointly submitted by IDEQ and the Idaho Attorney

General, Idaho stated that no specific provision of the Idaho Audit Act

affects the State's authority to issue emergency orders or seek

injunctive relief and that these authorities are therefore

uncompromised by the Idaho Audit Act. Several of the other commenters

agreed with the Attorney General that the immunity provision of the

Idaho Audit Act only prohibits the State from recovering civil and

criminal penalties from an owner or operator who discovers violations

during a voluntary audit and meets the other conditions of the law.

EPA remains concerned regarding why the Idaho legislature included

the ``Except as specifically provided'' clause in the provision

affirming the State's continued ability to issue emergency orders and

seek injunctive relief. EPA is willing to defer, however, to the

opinion of the Idaho Attorney General's office that no provision of the

Idaho Audit Act does specifically create an exception to the State's

ability to issue emergency orders and seek injunctive relief. If,

however, during program implementation, EPA determines that the Idaho

Audit Act does compromise the State's authority to issue emergency

orders and seek injunctive relief as required by title V and part 70,

EPA will consider this grounds for withdrawing program approval in

accordance with 40 CFR 70.10(c).

Second, EPA expressed concern with the subsection of the immunity

provision of the Idaho Audit Act stating that ``appropriate efforts to

correct the noncompliance'' for purposes of immunity ``may be

demonstrated by the submittal of a permit application or equivalent

document within a reasonable time.'' Idaho Code 9-809(3). EPA was

concerned that this subsection appeared to allow an owner or operator

to continue an unlawful activity for which a permit was required

without being subject to penalty or the State's emergency authority or

injunctive relief.

The comments submitted by the Idaho Attorney General do not address

the effect of Idaho Code 9-809(3) on the State's ability to assess

penalties against an owner or operator for the failure to obtain a

permit. EPA therefore continues to believe that this issue must be

addressed as a condition of full approval. See Section II.A.2.c.i.A

above. The Idaho Attorney General did, however, directly address EPA's

concern that Idaho Code 9-809(3) might also preclude the State from

seeking an emergency order or injunctive relief against an owner or

operator who had failed to obtain a permit. The Attorney General

unequivocally stated that the Idaho Audit Act does not under any

[[Page 64630]]

circumstances alleviate the owner's or operator's responsibility to

correct any violations identified in an audit or restrict the State's

ability to take an action to abate any noncompliance. Other commenters

agreed with this interpretation. EPA is willing to defer to the opinion

of the Idaho Attorney General on this issue, subject to the

qualification discussed above that EPA will closely monitor the impact

of the Idaho Audit Act on the State's ability to issue emergency orders

and obtain injunctive relief during program implementation.

(C) Additional concerns regarding the effect of the disclosure

provisions of the Idaho Audit Act on the State's enforcement authority.

Several of the commenters, including IDEQ and the Idaho Attorney

General, disagreed with EPA's statement that the Idaho Audit Act

contains a privilege for environmental audit reports which

impermissibly interferes with the enforcement requirements of title V

and part 70. The commenters first take issue with EPA's

characterization of Idaho Code 9-804 as a ``privilege'' for

environmental audit reports arguing that in Idaho such a privilege on

the disclosure of information in a judicial action can only be created

by constitution, a statute implementing a constitutional right, or by

rules of the Idaho Supreme Court. See Idaho Rules of Evidence, Rule

501; Idaho Code 9-808. EPA has again reviewed Idaho Code 9-804 and, on

further reflection, agrees that the Idaho statute does not create a

true evidentiary privilege--that is, a privilege to refuse to disclose

an environmental audit report in a judicial action. Rather, the statute

prohibits any State agency from requiring an owner or operator to

disclose the contents of an environmental audit report to the State

agency.13 EPA accurately described the effect of the Idaho Audit

Act in its June 17, 1996, Federal Register document, but incorrectly

characterized it as a ``privilege.'' 14

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\13\ One commenter interprets Idaho Code 9-804 as not preventing

the State from obtaining environmental audit reports, but only

preventing the State from disclosing to the public environmental

audit reports that are voluntarily disclosed to the State. EPA

disagrees. Idaho Code 9-804 clearly prevents the State from

requiring an owner or operator to disclose an environmental audit

report to the State. Section 9-340 additionally prevents the State

from disclosing to the public an environmental audit report that has

been voluntarily provided by an owner or operator to the State.

\14\ EPA notes that the Idaho legislature also used the term

``privilege'' to describe the intent of the Idaho Audit Act. See

Idaho Code 9-802(2) (``the legislature of the state of Idaho

recognizes that an environmental audit privilege is necessary'').

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The commenters next assert that the Idaho Audit Act does not

interfere with IDEQ's authority to seek or use an environmental audit

report as evidence in a judicial action because the Idaho Audit Act

does not create an evidentiary privilege. Although the Idaho Audit Act

is a prohibition on the compelled disclosure of information and not a

true evidentiary privilege, EPA still believes that the disclosure

provisions of the Idaho Audit Act impermissibly interfere with the

enforcement requirements of title V and part 70. The commenters do not

controvert the basic fact that the Idaho Audit Act prevents a State

agency, such as IDEQ, from requiring an owner or operator to produce an

environmental audit report to the State agency under the State's

general information gathering authority. Where an audit report produces

evidence of noncompliance, the Idaho Audit Act would prevent the State

from reviewing that evidence, short of filing an enforcement action in

court, to determine whether the violation will be corrected and

compliance assured. When a case is far enough advanced that litigation

is necessary, little flexibility remains for assuring that compliance

is achieved in a timely and efficient manner. Similarly, where an

environmental audit reveals evidence of criminal intent on the part of

managers or employees, Idaho would be barred from obtaining and using

such information unless Idaho otherwise has sufficient information to

first file an enforcement action in State court. Although, as the Idaho

Attorney General points out, a source must voluntarily disclose the

relevant portions of the audit report in order to obtain immunity from

civil or criminal penalties, an owner or operator can elect not to

disclose violations in an audit report in the hopes that the violations

will not otherwise come to the attention of the State agency.

Similarly, a facility could elect to disclose the fact of a violation,

but not the related evidence of whether the violation was intentional.

The decision of whether to disclose all or any part of an environmental

audit report to the State rests solely with the owner or operator. EPA

therefore believes that, although the Idaho Audit Act does not create a

true evidentiary privilege, it still so interferes with the State's

information gathering authority as to deprive the State from obtaining

appropriate criminal penalties and assuring compliance with the Clean

Air Act, as required by section 502(b)(5)(E) of the Act and 40 CFR

70.11.

One commenter also stated that adequate title V enforcement

authority cannot depend on access to voluntarily prepared audit

reports. If such were the case, the commenter reasoned, State

regulators would necessarily lack adequate enforcement authority over

those entities which do not conduct audits voluntarily.

EPA agrees that access to voluntarily prepared audit reports is not

per se a prerequisite for adequate enforcement authority for title V

approval. However, such access is important if the report exists and it

contains information on criminal intent or whether the violation has

been promptly corrected. The lack of such access can adversely affect

the adequacy of enforcement authority, at least with respect to the

ability to enforce against criminal violations and to verify

compliance.

One commenter also stated that State audit protection legislation

does not inhibit whistle blowers but instead merely prohibits

unauthorized disclosure of an audit report because whistle blowers are

free to disclose any ``non-audit'' information to support their

allegations without fear of violating the laws.

As an initial matter, EPA notes that this concern is irrelevant in

EPA's action on Idaho's title V program. To EPA's knowledge, neither

the Idaho Audit Act nor any other provision of Idaho law specifically

restricts the information that a whistle blower may disclose to a State

agency, and EPA therefore did not raise this as a concern in proposing

action on Idaho's title V program.

The commenter appears to be responding to an issue discussed in the

April 5 Title V Memorandum. In that memorandum, EPA expressed concern

with State audit privilege and/or immunity statutes that impose special

sanctions upon persons who disclose privileged information. See April 5

Title V Memorandum, pp. 5-6. Although irrelevant to action on Idaho's

title V program, EPA believes, as stated in the memorandum, that the

Clean Air Act provision which gives explicit protection to whistle

blowers makes no distinctions with respect to the source of the

information relied upon by the whistle blower. EPA believes that it is

inconsistent with section 322 of the Clean Air Act for States to remove

audit reports from the universe of information which employees may rely

upon in reporting violations to local or State authorities.

ii. Comments that the Idaho Audit Act poses a bar to full title V

approval. EPA received three comment letters from environmental and

public interest groups agreeing with that the Idaho Audit Act is

incompatible with the

[[Page 64631]]

enforcement requirements of title V and part 70. Several of these

organizations also argued that the prohibition against the compelled

disclosure of audit reports in the Idaho Audit Act ``is incompatible

with the [Clean Air Act's] mandate for public participation in

permitting.''

EPA agrees that the prohibition against compelled disclosure

contained in the Idaho Audit Act is an unfortunate hindrance to public

access to potentially useful and important information affecting public

health and the environment. EPA does not believe, however, that the

Idaho statute interferes with the public access requirements of title V

and part 70 (as opposed to the enforcement requirements) because, by

its terms, the Idaho statute does not allow documents and other

information which must be collected, developed, and reported pursuant

to Federal and State law to be withheld from the State or the public.

See Idaho Code 9-805. As noted in the October 27, 1995, Federal

Register document proposing action on Idaho's title V program, EPA

believes that Idaho's general statutory and regulatory confidentiality

provisions allow far more information to be kept confidential from the

public than is authorized under part 70 and section 114 of the Clean

Air Act. See 60 FR 54999. EPA has required, as a condition of full

approval, that Idaho revise these provisions or demonstrate to EPA's

satisfaction that they meet the requirements of title V and part 70.

EPA does not believe, however, that the Idaho Audit Act independently

interferes with the title V requirements for public access to

information.

One commenter also stated that the Idaho Audit Act precludes

interim approval and requires disapproval. Section 70.4(d)(3)(vii)

states that to qualify for interim approval the State must have

``authority to enforce permits, including the authority to assess

penalties against sources that do not comply with their permits or with

the requirement to obtain a permit.'' EPA believes that to qualify for

interim approval a State must have basic authority to enforce permits

and the requirement to obtain a permit, including the authority to

assess penalties, during the interim approval period. EPA has stated,

however, that interim approval can be appropriate, for example, even

though a permitting authority does not have the authority to assess

civil penalties at the full $10,000 per day per violation required by

section 70.11(a)(3)(i) or does not have any criminal authority. See

Memorandum from John S. Seitz, Director, Office of Air Quality Planning

and Standards, to Regional Air Division Directors, entitled ``Interim

Title V Approval Issues,'' dated August 2, 1993. Similarly, EPA has

granted or proposed to grant interim approval to States that have

affirmative defenses to liability that EPA believed exceeded the

defenses allowed as a matter of Federal law, and thus must be revised

as a condition of full approval, as long as the State has the general

authority to assess civil penalties for violations. See 59 FR 61824-

61825 (conditioning full approval of Oregon's title V program on

changes to or clarifications regarding the effect of Oregon's criminal

bypass statute) 15; 61 FR 32394 (proposing to condition full

approval of Michigan's title V program on revisions to or

clarifications regarding the effect of its startup, shutdown, and

malfunction provisions). EPA believes that the situation in Idaho is

similar in that the State of Idaho does have authority to assess civil

and criminal penalties for violations of title V permit requirements in

many cases. The Idaho Audit Act creates a limited, although, EPA

believes, impermissible, exception to that authority. If, during the

interim approval period, Idaho's enforcement authority proves

inadequate to address a particular violation, EPA always has concurrent

authority to enforce permit terms and conditions and the requirement to

obtain a permit. See section 113 of the Act (civil and criminal

liability provisions under the Clean Air Act). EPA therefore does not

believe that the Idaho Audit Act precludes interim approval.

---------------------------------------------------------------------------

\15\ Oregon ultimately established to EPA's satisfaction that

its affirmative defense to criminal liability for upsets and

bypasses was consistent with Federal law and thus received full

approval of its program. See 60 FR 50106, 50107 (September 28,

1995).

---------------------------------------------------------------------------

Two commenters did not urge disapproval, but instead commented

that, because the Idaho Audit Act contains a sunset provision by which

it expires at the end of 1997, the Idaho legislature must address

renewal of the law in its next regular session at the beginning of

1997. The commenters therefore argue that EPA should not grant Idaho

the full two-year interim approval period in which to address this

issue, but should instead give Idaho only until April 15, 1997, which

is presumably the date by which the commenters believe the 1997

legislative session will have concluded. Although EPA does have the

authority to allow States less than two years to correct interim

approval issues, EPA has thus far allowed all States the full two years

within which to address the initial interim approval issues. EPA

believes that Idaho should receive the same benefits as other

permitting authorities in having the full two years to respond to this

initial interim approval issue. EPA has identified 27 other interim

approval issues that the State of Idaho must address during the two

year interim approval period and proposed to give Idaho the full two

years to address these other issues. EPA received no other comments on

this proposal. Even if Idaho could address the interim approval issue

relating to the Idaho Audit Act in less than two years, EPA believes

that having the same interim approval period for all of the 28

identified interim approval issues will lessen the administrative

burden on the State.

iii. Summary. In summary, based on the opinion of the Idaho

Attorney General, EPA is satisfied that the immunity provisions of the

Idaho Audit Act do not compromise the State's ability to issue

emergency orders and seek injunctive relief to assure compliance with

title V requirements. EPA will closely monitor the Idaho title V

program during implementation to assure that this is the case. If,

during program implementation, EPA determines that the Idaho Audit Act

does compromise the State's authority to issue emergency orders and

seek injunctive relief as required by title V and part 70, EPA will

consider this grounds for withdrawing program approval in accordance

with 40 CFR 70.10(c).

EPA continues to believe, however, that the immunity provisions as

well as the disclosure provisions of the Idaho Audit Act impermissibly

interfere with the enforcement authorities required for full title V

approval. Accordingly, Idaho must revise both the immunity and

disclosure provisions of the Idaho Audit Act, Idaho Code title 9,

chapter 8, to ensure that it does not interfere with the requirements

of section 502(b)(E)(5) of the Clean Air Act and 40 CFR 70.11

identified in the June 17, 1996, Federal Register document and this

notice for adequate authority to pursue civil and criminal penalties

and otherwise assure compliance. Alternatively, Idaho must demonstrate

to EPA's satisfaction, through an Attorney General's opinion that these

required enforcement authorities are not impaired by the Idaho Audit

Act.

B. Section 112(l) Submittal

There were no comments on EPA's proposed delegation of the NESHAPs

as adopted by Idaho and as they apply to title V sources and EPA's

proposed

[[Page 64632]]

approval of a streamlined mechanism for future NESHAP delegations.

III. Final Action

A. Title V

EPA is promulgating final interim approval of the operating permits

program submitted by Idaho on January 20, 1995, and supplemented on

July 14, 1995, September 15, 1995, and January 12, 1996. The State must

make the following changes to receive full approval:

1. Applicability

Idaho must demonstrate to EPA's satisfaction by the end of the

interim approval period that its program covers all sources required to

be permitted under part 70. EPA has proposed a change to the part 70

rules that would make the definition of ``major source'' in 40 CFR 70.2

consistent with the August 7, 1980, limitation in the Idaho rule. See

59 FR 44460, 44527 (August 29, 1994). However, EPA has not yet taken

final action on that proposed change. If EPA finalizes its proposed

revision to the definition of ``major source'' before the end of

Idaho's interim approval period, Idaho will not be required to revise

its definition of ``major facility'' to delete the ``August 7, 1980''

limitation. In any case, however, Idaho must revise the reference to

``fugitive emissions'' in IDAPA 16.01.01.008.14.h.iii to refer instead

to any ``air pollutant'' and must otherwise make any changes needed to

demonstrate that its program covers all required sources.

2. Temporarily Exempt Sources

Idaho must demonstrate to EPA's satisfaction that the application

and permitting deadlines for Phase II sources and sources with solid

waste incineration units meet the requirements of part 70.

3. New Sources

Idaho must demonstrate to EPA's satisfaction that all sources in

Idaho applying for a title V permit for the first time are required to

submit a permit application within 12 months after becoming subject to

title V.

4. Option To Obtain Permit

Idaho must demonstrate to EPA's satisfaction that it has the

authority required by 40 CFR 70.3(b)(3).

5. Fugitive Emissions

Idaho must address the requirement of 40 CFR 70.3(d) that fugitive

emissions from title V sources be included in permit applications and

permits in the same manner as stack emissions regardless of whether the

source category in question is included in the list of sources

contained in the definition of major source.

6. Insignificant Activities

Idaho must define by regulation or guidance the terms used in IDAPA

16.01.01.317, provide documentation that the units and activities are

appropriate for inclusion as insignificant, assure that all activities

that are insignificant based on size or production rate be listed in

each permit, and remove any director's discretion provision that would

allow the State to determine that an activity not previously reviewed

by EPA is insignificant (except for clearly trivial activities).

7. Permit Content

Idaho must eliminate the qualification in IDAPA 16.01.01.322.01 and

16.01.01.322.03 that requires inclusion of only those requirements that

are ``identified in the application'' at the time of permit issuance

because this restriction impermissibly relieves the permitting

authority from including in a permit applicable requirements that are

not identified in a permit application. Alternatively, Idaho must

otherwise demonstrate to EPA's satisfaction that it has the authority

to include in a title V permit all applicable requirements consistent

with 40 CFR 70.6.

8. Exemption From Applicable Requirements

Idaho must eliminate the provision in IDAPA 16.01.01.325.01.c that

allows Idaho to exempt sources from otherwise applicable requirements

or, alternatively, must demonstrate to EPA's satisfaction that this

provision is consistent with the requirements of part 70.

9. Emissions Trading

Idaho must demonstrate that its emissions trading provisions meet

the requirements of 40 CFR 70.4(b)(12)(iii) and 40 CFR 70.6(a)(8). EPA

also recommends that the requirement of IDAPA 16.01.01.322.05 that a

company contemporaneously record in a company log a change from one

trading scenario to another should be specifically referred to in the

list of requirements a source must meet in IDAPA 16.01.01.383.03 in

order to make a ``Type II'' permit deviation.

10. Alternative Emission Limits

Idaho must demonstrate to EPA's satisfaction that its operating

permit program meets the requirement of 40 CFR 70.6(a)(1)(iii) that a

permit with an allowable alternative emission limit contain provisions

to ensure that any resulting emissions limit has been demonstrated to

be quantifiable, accountable, enforceable and based on replicable

procedures.

11. Reporting of Permit Deviations

Consistent with 40 CFR 70.6(a)(3)(iii)(B), the Idaho program must

be revised to require prompt reporting of deviations from all permit

requirements, not just those deviations attributable to startup,

shutdown, scheduled maintenance, upset, or breakdown.16

---------------------------------------------------------------------------

\16\ The Idaho regulations use the term ``permit deviation'' to

refer to certain changes authorized by the permit flexibility

provisions contained in 40 CFR 70.6(9) and (10) and section

502(b)(10) of the Act. See IDAPA 16.01.01.383. The part 70

regulations use the term ``permit deviation'' to refer to permit

violations. See 40 CFR 70.6(a)(3)(iii)(B). This notice uses the term

``permit deviation'' in the same way as the part 70 regulations.

---------------------------------------------------------------------------

12. Acid Rain Provisions

Idaho must demonstrate to EPA's satisfaction that its program

includes the provision of 40 CFR 70.6(a)(4)(i) that no permit revision

is required for increases in emissions that are authorized by

allowances acquired pursuant to the acid rain program, provided that

such increases do not require a permit revision under any other

applicable requirement.

13. State-Only Enforceable Requirements

Idaho must demonstrate to EPA's satisfaction that its regulations

define ``State Only'' requirements in a manner consistent with the

provisions of 40 CFR 70.6(b)(2), namely, that no requirement that is

required under the Act or under any of its applicable requirements may

be ``State Only.''

14. General Permits

Idaho must revise its regulations authorizing general permits to be

consistent with 40 CFR 70.6(d), including provisions that: (a) Require

the permitting authority to grant the conditions and terms of a general

permit to sources that qualify; (b) require specialized general permit

applications to meet the requirements of title V; and (c) govern

enforcement actions for operation without a permit if the source is

later determined not to qualify for the conditions and terms of the

general permit. As discussed above, EPA now believes that IDAPA

16.01.01.335.05, which provides that the issuance of authorization to

operate under a general operating permit is a final agency action for

purposes of administrative and judicial review, is consistent with the

requirements of 40 CFR 70.6(d)(2) and

[[Page 64633]]

no revisions to this provision are required.

15. Operational Flexibility

Idaho must address to EPA's satisfaction the requirement in 40 CFR

70.4(b)(12) that the permitting authority attach a copy of the notice

of a permitted operational change to the relevant permit.

16. Off-Permit Provisions

Idaho must revise its regulations to require a source to record an

off-permit change in a log at the facility on the same day that the

change is made.

17. Permit Renewals

Idaho must revise its regulations to ensure that an application for

a permit renewal will not be considered timely if it is filed more than

18 months before permit expiration.

18. Completeness Determination

Idaho must revise its regulations to ensure that applications will

be deemed complete within 60 days of receipt for all sources, or

establish to EPA's satisfaction that no sources will in fact fall

within the exception of IDAPA 16.01.01.361.02.a.ii.

19. Administrative Amendments

Idaho must delete from the list of changes in IDAPA

16.01.01.384.01.a that may be accomplished by administrative amendment

the following categories: compliance orders (IDAPA

16.01.01.384.01.a.vi) and applicable consent orders, judicial consent

decrees, judicial orders, administrative orders, settlement agreements,

and judgments (IDAPA 16.01.01.384.01.a.vii).

20. Minor Permit Modifications

Idaho must revise its rules to prohibit the issuance of any permit

until after the earlier of expiration of EPA's 45-day review period or

until EPA has notified the permitting authority that EPA will not

object to issuance of the permit modification.

21. Group Processing of Minor Permit Modifications

Idaho must delete the ``director's discretion'' provision of IDAPA

16.01.01.385.07.b.iv or make a showing consistent with 40 CFR

70.7(e)(3)(i)(B) for alternative thresholds. In addition, as with

Idaho's procedures for minor modifications, Idaho must revise its rules

to prohibit the issuance of any permit until after the earlier of

expiration of EPA's 45-day review period or until EPA has notified the

permitting authority that EPA will not object to issuance of the permit

modification.

22. Reopenings

Idaho must revise its regulations to require that the EPA notice

contain no more information than that specified by 40 CFR 70.7(g)(1).

23. Public Participation

Idaho must demonstrate to EPA's satisfaction that its restrictions

on the release to the public of permits, permit applications, and other

related information under its laws governing confidentiality do not

exceed those allowed by 40 CFR 70.4.(b)(3)(viii) and section 114(c) of

the Clean Air Act.

24. Permits for Solid Waste Incineration Units

Idaho must ensure that no permit for a solid waste incineration

unit may be issued by an agency, instrumentality, or person that is

also responsible, in whole or in part, for the design and construction

or operation of the unit.

25. Maximum Criminal Penalties

Idaho must demonstrate to EPA's satisfaction that it has sufficient

authority to recover criminal penalties in the maximum amount of not

less than $10,000 per day per violation, as required by 40 CFR

70.11(a)(3)(ii).

26. False Statements and Tampering

Idaho must demonstrate to EPA's satisfaction that it has the

criminal enforcement authorities required by 40 CFR 70.11(a)(3)(iii),

which require that criminal fines be recoverable in a maximum amount of

$10,000 per day per violation against any person who knowingly makes

any false material statement, representation, or certification in any

form, in any notice or report required by a permit, or who knowingly

renders inaccurate any required monitoring device or method.

27. Environmental Audit Statute

Idaho must revise both the immunity and disclosure provisions of

the Idaho Audit Act, Idaho Code title 9, chapter 8, to ensure that they

do not interfere with the requirements of section 502(b)(E)(5) of the

Clean Air Act and 40 CFR 70.11 that EPA identified in the June 17,

1996, Federal Register document and this notice for adequate authority

to pursue civil and criminal penalties and otherwise assure compliance.

Alternatively, Idaho must demonstrate to EPA's satisfaction through an

Attorney General's opinion that these required enforcement authorities

are not compromised by the Idaho Audit Act.

28. Correction of Typographical Errors and Cross-References

Idaho must correct the following typographical errors and erroneous

cross references:

a. IDAPA 16.01.01.006.31: The reference in the definition of

``emissions unit'' should be to 42 U.S.C. sections 7561 through 7561o

rather than to 42 U.S.C. sections 7561 through 7561.

b. IDAPA 16.01.01.008.05.f: The reference in subsection (f) to the

definition of ``applicable requirement'' should be to 42 U.S.C. section

7661c(b), rather than to section 7661a(b) (ie., to section 504(b) of

the Clean Air Act rather than to section 502(b)).

c. IDAPA 16.01.01.008.12: The reference to the general permit

regulation in the definition of ``general permit'' should be to section

335 (ie., IDAPA 16.01.01.335), rather than to section 322.

d. IDAPA 16.01.01.008.14: The reference in the definition of

``major facility'' to the definition of ``facility'' should be to

section 006.35 (i.e., IDAPA 16.01.01.006.35), rather than to 006.34.

e. IDAPA 16.01.01.322.10.1.i: The reference in the requirements for

the initial compliance plan should be to ``a verifiable sequence of

actions'' rather than to ``a variable sequence of actions.''

f. IDAPA 16.01.01.384.01.a.vi: The reference to compliance schedule

in this subsection should be to section 322.12.d (i.e., IDAPA

16.01.01.322.12.d), rather than to section 322.13.d.

g. IDAPA 16.01.01.385.01.a.iv: The words ``of title I of the Clean

Air Act'' or some other description of the type of provisions being

referred to appears to have been omitted after the phrase ``as a

modification under any provision.''

h. IDAPA 16.01.01.387.02.a.iii: The word ``least'' appears to have

been omitted from the phrase ``shall be sent at one (1) day.''

The scope of the Idaho title V program approved in this notice

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

within the State of Idaho except any sources within Indian Country.

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

January 6, 1999. During this interim approval period, Idaho is

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

administer, and enforce a Federal operating permits program in Idaho.

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

[[Page 64634]]

initial permit applications begin upon the effective date of this

interim approval.

If Idaho fails to submit a complete corrective program for full

approval by July 6, 1998, EPA will start an 18-month clock for

mandatory sanctions. If Idaho 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 Idaho

has corrected the deficiency by submitting a complete corrective

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

the part of Idaho, both sanctions under section 179(b) will apply after

the expiration of the 18-month period until the Administrator

determines that Idaho has come into compliance. In any case, if, six

months after application of the first sanction, Idaho still has not

submitted a corrective program that EPA has found complete, a second

sanction will be required.

If EPA disapproves Idaho'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 Idaho 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 Idaho, both sanctions under section 179(b) shall apply after the

expiration of the 18-month period until the Administrator determines

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

EPA applies the first sanction, Idaho 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 Idaho

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 Idaho 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 Idaho upon interim approval expiration.

B. Section 112(l)

With this interim approval EPA is delegating Idaho the authority to

implement and enforce 40 CFR part 61, subparts A, C, D, E, F, J, L

through P, V, Y, BB, and FF, and 40 CFR part 63, subparts A, D, L, and

M, as these rules apply to title V sources.17 EPA will retain

implementation and enforcement authority for these rules as they apply

to non-part 70 sources. EPA has reconsidered its proposed action to

delegate the radionuclide NESHAP regulations found under 40 CFR part 61

and has determined that Idaho does not have adequate resources to

implement and enforce these regulations at present. In this respect,

EPA is retaining authority to implement and enforce 40 CFR part 61

subparts B, H, I, K, Q, R, T, and W as these regulations apply to all

sources in Idaho.

---------------------------------------------------------------------------

\17\ With the exception of the radionuclide NESHAP regulations

found in part 61, subparts B, H, I, K, Q, R, T, and W.

---------------------------------------------------------------------------

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

section 112 standards that are unchanged from the Federal standards,

but only as these standards apply to title V sources (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 Idaho adopts a new or revised NESHAP

standard into State law, Idaho 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.

Because EPA has determined that Idaho's enforcement authorities do

not meet the requirements of 40 CFR 70.11, EPA is promulgating interim,

rather than full, approval of Idaho's request for delegation. In this

respect, it is important to note that, although EPA is delegating

authority to Idaho on an interim basis to enforce the NESHAP

regulations as they apply to title V sources, EPA retains oversight

authority for all sources subject to these Federal Clean Air Act

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.

III. Administrative Requirements

A. Docket

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

for the final interim approval, including the letters of public comment

received and reviewed by EPA on the proposal, are contained in the

Idaho 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 Idaho 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

[[Page 64635]]

today's Federal Register. This rule is not a ``major rule'' as defined

by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 70

Administrative practice and procedure, Air pollution control,

Environmental protection, Hazardous substances, Intergovernmental

relations, Operating permits, Reporting and recordkeeping requirements.

Dated: November 21, 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 Idaho

in alphabetical order to read as follows:

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

Permits Programs

* * * * *

Idaho

(a) Idaho Division of Environmental Quality: submitted on

January 20, 1995, and supplemented on July 14, 1995, September 15,

1995, and January 12, 1996; interim approval effective on January 6,

1997; interim approval expires January 6, 1999.

(b) Reserved.

* * * * *

[FR Doc. 96-31121 Filed 12-5-96; 8:45 am]

BILLING CODE 6560-50-P