[Federal Register Volume 59, Number 159 (Thursday, August 18, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-19774]


[[Page Unknown]]

[Federal Register: August 18, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[WA-TV-1, AD-FRL-5040-1]

 

Clean Air Act Proposed Interim Approval or Disapproval of 
Operating Permit Programs in the State of Washington

AGENCY: U.S. Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: EPA proposes interim approval of the operating permit programs 
submitted by the Washington Department of Ecology (Ecology), the 
Washington Energy Facility Site Evaluation Council (EFSEC), the 
Northwest Air Pollution Authority (NWAPA), the Olympic Air Pollution 
Control Authority (OAPCA), the Puget Sound Air Pollution Control Agency 
(PSAPCA), the Spokane County Air Pollution Control Authority (SCAPCA), 
and the Southwest Air Pollution Control Authority (SWAPCA) for the 
purpose of complying with Title V of the Federal Clean Air Act which 
mandates that States develop and submit to EPA programs for issuing 
operating permits to all major stationary sources and to certain other 
sources.
    EPA proposes two alternative actions on the operating permit 
programs submitted by the Benton-Franklin Counties Clean Air Authority 
(BFCCAA) and the Yakima County Clean Air Authority (YCCAA): disapproval 
or, if these permitting authorities make certain specified changes to 
their operating permit programs by the time EPA takes final action on 
this proposed rulemaking, interim approval. In the event of 
disapproval, Ecology's operating permit program will apply to sources 
located in Benton and Franklin Counties and Yakima County, 
respectively.

DATES: Comments on this proposed action must be received in writing by 
September 19, 1994.

ADDRESSES: Comments should be sent to Elizabeth Waddell, U.S. 
Environmental Protection Agency, Region 10, 1200 Sixth Avenue, AT-082, 
Seattle, Washington 98101.
    Copies of the State and local agencies' submittals and other 
supporting information used in developing the proposed rule 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, (206) 553-4303.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under Title V of the Clean Air Act (Act) as amended 
(1990), EPA has promulgated rules which define the minimum elements of 
an approvable State operating permit program and the corresponding 
standards and procedures by which the EPA will approve, oversee, and 
withdraw approval of State operating permit programs (see 57 FR 32250 
(July 21, 1992)). These rules are codified at 40 Code of Federal 
Regulations (CFR) Part 70. Title V requires States to develop and 
submit to EPA programs for issuing these operating permits to all major 
stationary sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within one year after receiving the submittal. EPA's 
program review occurs pursuant to section 502 of the Act and Part 70 
which together outline criteria for approval or disapproval. Where a 
program substantially, but not fully, meets the requirements of Part 
70, EPA may grant the program interim approval for a period of up to 
two years. If EPA has not fully approved a program by two years after 
the November 15, 1994 date, or by the end of an interim program, it 
must establish and implement a federal program.

II. Proposed Action and Implications

A. Analysis of Submission by State and Local Authorities

1. Support Materials
    The program submittal by the State of Washington includes 
submissions by Ecology, EFSEC and the seven local air pollution control 
authorities (local air authorities). Collectively, these submissions 
meet the requirements of 40 CFR Part 70, Sec. 70.4, for a complete 
program submittal including a letter of submittal from the Washington 
Governor's designee requesting program approval, complete program 
descriptions, the legal opinions of the Attorney General and the 
attorneys of the local air authorities, permit program documentation, 
and fully adopted implementing regulations of Ecology, EFSEC and the 
local air authorities. An implementation agreement is currently being 
developed between Ecology, EFSEC, and the local air authorities 
(collectively, the permitting authorities) and EPA.
2. Regulations and Program Implementation
    a. Ecology. The statutes authorizing the Washington state operating 
permit program are contained in chapter 70.94 of the Revised Code of 
Washington (RCW), in particular RCW 70.94.161 (Operating Permits for 
Air Contaminant Sources--Generally--Fees, report to legislature), 
70.94.162 (Annual fees from operating permit program sources to cover 
cost of program) and 70.94.422 (Department of health powers regarding 
radionuclides--Energy facility site evaluation council authority over 
permit program sources). RCW 70.94.161(2)(a) required Ecology to 
promulgate rules for a state-wide operating permit program consistent 
with Title V of the Clean Air Act. Chapter 173-401 of the Washington 
Annotated Code (WAC) sets out the specific requirements of the state-
wide operating permit program. This rule, together with ch. 70.94 RCW, 
and the other supporting statutes and regulations submitted by Ecology, 
substantially meet the requirements of 40 CFR Part 70, Section 70.2 and 
70.3 for applicability, Section 70.4, 70.5, and 70.6 for permit content 
including operational flexibility, Section 70.7 for public 
participation and minor permit modifications, Section 70.5 for criteria 
which define insignificant activities, Section 70.11 for requirements 
for enforcement authority, and Section 70.5 for complete application 
forms.
    b. EFSEC. RCW 70.94.422(2) gives EFSEC authority to issue operating 
permits to and administer the operating permit program for large energy 
facilities regulated under ch. 80.50 RCW, and does not require EFSEC to 
apply to Ecology for delegation of the operating permit program. EFSEC 
has adopted by reference all of ch. 173-401 WAC and the provisions of 
ch. 173-400 WAC necessary to implement the operating permit program 
(see WAC 463-39-005). In issuing Title V permits, EFSEC will contract 
with Ecology or the local air authority with jurisdiction over the 
geographic area where the EFSEC source is located to develop the air 
operating permit which will be incorporated into the source's 
``certification,'' the document containing all requirements with which 
the EFSEC source must comply. EFSEC has used this approach in the past 
for Prevention of Significant Deterioration and water quality 
permitting issues.
    c. Local Air Authorities. RCW 70.94.161(2)(b) authorizes local air 
authorities to request delegation from Ecology to implement the 
operating permit program for sources within their respective 
jurisdictions. Each of Washington's seven local air authorities, which 
together cover 22 of the 39 counties in the State, has requested and 
received delegation from Ecology contingent on EPA approval of the 
local air authority operating permit program. All Title V sources 
within the jurisdiction of a delegated local air authority will be 
subject to the operating permit program of such local air authority, 
except for primary aluminum smelters, kraft pulping mills, sulfite 
pulping mills, energy facilities under EFSEC's jurisdiction and sources 
on the U.S. Department of Energy's Hanford Nuclear Reservation. These 
sources, along with sources in the 17 counties not covered by local air 
authorities, will be subject to Ecology's operating permit program, 
with the exception of energy facilities that will be subject to EFSEC's 
program.
    Each of the seven local air authorities has promulgated a rule 
authorizing the assessment and collection of fees from permit program 
sources as required by State law (see RCW 70.94.162(1)). With respect 
to the other requirements of the operating permit program, the local 
air authorities have taken one of four different approaches to program 
implementation. SCAPCA has not promulgated any rules to implement Title 
V, except for fee rules. Instead, SCAPCA will be implementing the 
operating permit program by enforcing the State rule, ch. 173-401 WAC, 
as authorized by State law (see RCW 70.94.161(2)(a)). SWAPCA has issued 
a local rule which restates the State operating permit rule (see SWAPCA 
Ch. 401). NWAPA, PSAPCA and OAPCA have each adopted rules requiring 
operating permit program sources subject to their respective 
jurisdictions to comply with the State operating permit program rule 
(see NWAPA Sec. 326; PSAPCA Reg. I, Sec. 7.01, 7.03 and 7.05; OAPCA 
Reg. 1, Sec. 6.01).
    BFCCAA and YCCAA have each adopted a rule expressing the 
authority's intent to implement the State air operating permit program 
(BFCCAA Reg. 1, Sec. 4.01; YCCAA Reg. I, Sec. 6.01 and Sec. 12.01), and 
have also adopted rules addressing which sources are subject to the 
program; program delegation; permit application; permit content; permit 
issuance, renewal, reopenings and revisions; public involvement; and 
fee assessment (see BFCCAA Reg. 1, Sec. 4.02-4.08; YCCAA Reg. I, Sec. 
6.02-6.09). These rules do not, however, cover many of the requirements 
of Part 70. Although both BFCCAA and YCCAA apparently intended that the 
State operating permit rule (ch. 173-401 WAC) would supplement and fill 
in the gaps in their local regulations, there is a serious question 
regarding whether this is the case.
    There are many potential inconsistencies between the operating 
permit regulations of BFCCAA and YCCAA and the operating permit rule of 
the State. For example, the local regulations require that renewal 
applications be submitted at least six months prior to the expiration 
of the permit but do not place any outside limit on the submission of a 
renewal application (see BFCCAA Reg. 1, Sec. 4.06(C); YCCAA Reg. I, 
Sec. 6.06). State law, however, as required by Title V, provides that 
in no event shall a renewal application be submitted more than 18 
months before the expiration of the permit (see WAC 173-401-710(1)). 
Because the local regulations were adopted after ch. 173-401 WAC, it is 
questionable whether the provisions of the State operating permit rule 
that are inconsistent with the operating permit rules of BFCCAA and 
YCCAA could be enforced against a Title V source. This is especially 
true for YCCAA because the YCCAA regulation that incorporates ch. 173-
401 WAC by reference states that State regulations are not adopted to 
the extent they are inconsistent with any YCCAA regulations (see YCCAA 
Reg. I, Sec. 12.01).
    d. Tribal Lands. The Governor's letter to EPA states that Ecology, 
EFSEC and the delegated local air authorities will serve as the 
permitting authorities for sources over which they each, respectively, 
have jurisdiction. Except with respect to certain sources located on 
the Puyallup Reservation, there is no further discussion in the 
submittals of Ecology, EFSEC or the local air authorities of any basis 
for the assertion of jurisdiction by Washington permitting authorities 
over sources on Tribal lands.
    Opinion letters from the Washington Attorney General and PSAPCA's 
attorney rely on the Washington Indian (Puyallup) Land Claims 
Settlement, 25 USC sections 1773-1773j, and the Agreement between the 
Puyallup Tribe of Indians, Local Governments in Pierce County, the 
State of Washington, the United States of America, and certain private 
property owners, dated August 27, 1988 (Settlement Agreement) to 
support their assertion of jurisdiction over portions of the Puyallup 
Reservation. The Settlement Agreement specifically gives federal, state 
and local governments exclusive jurisdiction for the administration and 
implementation of federal, state and local environmental laws on all 
non-trust lands within the 1873 Survey Area and gives the federal 
government and the Puyallup Tribe the same exclusive jurisdiction over 
all trust and restricted lands within the 1873 Survey Area (as ``non-
trust lands,'' ``trust lands,'' ``restricted lands'' and ``1873 Survey 
Area'' are defined in the Settlement Agreement). Based on the terms of 
the Settlement Agreement, EPA is proposing to grant interim approval of 
the operating permit programs of Ecology and PSAPCA for all non-trust 
lands within the 1873 Survey Area of the Puyallup Reservation.
    Because the Washington permitting authorities have not 
demonstrated, consistent with applicable principles of Indian law and 
federal Indian policies, legal authority to regulate other sources on 
Tribal lands under the Clean Air Act, the proposed interim approval of 
the Washington operating permit programs will not extend to any trust 
or restricted lands within the Puyallup 1873 Survey Area or to lands 
within the exterior boundaries of any other Indian Reservation.1 
Title V sources located within the exterior boundaries of other Indian 
Reservations in Washington will be subject to the federal operating 
permit program, to be promulgated at 40 CFR Part 71, or subject to the 
operating permit program of any Tribe approved after issuance of the 
regulations under Section 301(d) of the Clean Air Act authorizing EPA 
to treat Tribes in the same manner as States for appropriate Clean Air 
Act provisions.2
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    \1\This is not a determination that the Washington permitting 
authorities could not possibly demonstrate jurisdiction over sources 
within the exterior boundaries of Indian Reservations in Washington. 
However, no such showing has been made, except as discussed above 
with respect to portions of the Puyallup Reservation.
    \2\Tribes may also have inherent sovereign authority to regulate 
air pollutants from sources on Tribal lands.
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    e. Applicable Requirements. Part 70 requires that all federally-
enforceable applicable requirements be included in an operating permit 
(see 40 CFR 70.4(3)(v) and 70.6(a)). RCW 70.94.161(10) could be read to 
require that only the most stringent of any federal, state or local 
requirement be included in the permit. According to the Attorney 
General's opinion, however, this provision does not preclude Washington 
permitting authorities from including all federally-enforceable 
applicable requirements in the permit, and several other State 
regulations in fact require the permitting authority to do so. The 
Attorney General first points to RCW 70.94.161(2)(a), which requires 
that the rules establishing the State's permitting program be 
consistent with the Federal Clean Air Act. The Attorney General then 
relies on WAC 173-401-600, which requires that the permit assure 
compliance with all applicable requirements and that, where a federally 
enforceable applicable requirement is less stringent than a State or 
local requirement, both the federal requirement and the State or local 
requirement be included in the permit. EPA notes, as well, that WAC 
173-401-625(b) specifically requires any ``state-only'' terms and 
conditions be designated as not being federally enforceable. In order 
for a permit to assure compliance with a federally enforceable 
applicable requirement which is less stringent than a ``state-only'' 
requirement, both requirements would have to be included in the permit. 
Moreover, EPA notes that pursuant to WAC 173-401-640 a Title V source 
would be shielded from enforcement of a federally-enforceable 
applicable requirement only if the requirement is included in the 
permit or is specifically determined not to be applicable. Based on the 
opinion of the Attorney General and on the assurances of the Washington 
permitting authorities that all federally-enforceable applicable 
requirements will be included in Title V permits, EPA believes that RCW 
70.94.161(10) does not preclude approval of the Washington submittal.
    f. Compliance Orders. WAC 173-400-161 authorizes Washington 
permitting authorities to issue regulatory orders requiring that 
sources be brought into compliance in accordance with a compliance 
schedule.3 It further provides that a source which has been issued 
such a regulatory order shall be deemed to be in compliance with ``this 
chapter'' if the source is in compliance with all of the requirements 
of the regulatory order, including the compliance schedule. This 
provision would pose a problem for Title V approval if a Washington 
permitting authority would be precluded from assessing penalties 
against a source with a Title V operating permit who had been issued 
and was in compliance with such a regulatory order, but was not in 
compliance with the underlying permit requirements. It would also be 
problematic if a compliance schedule submitted by a source pursuant to 
WAC 173-401-510(2)(h)(iii) became a regulatory order under WAC 173-400-
161 when it becomes a part of a Title V operating permit and thus 
precluded the permitting authority from assessing penalties for the 
source's noncompliance with the underlying permit requirements.
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    \3\EFSEC has incorporated this provision by reference (see WAC 
463-39-005). Several local air authorities have comparable 
provisions (see OAPCA Reg. 1, Sec. 329; SCAPCA Reg. I, Art. VII; 
SWAPCA 400-161). The same analysis of the State's authority to issue 
compliance orders applies for EFSEC and these local air authorities.
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    The Attorney General's opinion states that a regulatory order 
issued under WAC 173-400-161 is a completely separate device from a 
Title V operating permit issued under ch. 173-401 WAC, even though both 
may contain compliance schedules. Moreover, the Attorney General's 
letter points out that WAC 173-401-620(2) makes any noncompliance with 
a Title V permit grounds for an enforcement action and that a permit 
condition can be changed only through a permit modification, not a 
regulatory order. Finally, the Attorney General states that even if a 
compliance schedule is issued under WAC 173-400-161 to a Title V 
source, compliance with such a schedule only constitutes compliance 
with the requirements of ``this chapter,'' ch. 173-400 WAC, and not the 
operating permit rule, ch. 173-401 WAC. Therefore, a source could still 
be subject to an enforcement action for being in violation of the 
permit but in compliance with the compliance schedule. Based on the 
Attorney General's opinion, EPA believes that WAC 173-400-161 does not 
bar approval of the Washington submittal. If, during program 
implementation, Washington permitting authorities issue regulatory 
orders containing compliance schedules to Title V sources without 
collecting appropriate penalties, EPA will consider this grounds for 
withdrawing approval of such permitting authority's program in 
accordance with the provisions of 40 CFR 70.10(c).
    g. Technical Assistance Visits. Washington has two statutes which 
address violations observed during technical assistance visits, RCW 
43.21A.087 and RCW 70.94.035. RCW 70.94.035, which was enacted in 1991 
and specifically applies to the air program, prohibits enforcement 
action ``unless and until the facility owner or operator has been 
provided a reasonable time to correct the violation.'' According to the 
Attorney General's opinion, this provision does not prevent a 
permitting authority from commencing an enforcement action for a 
violation observed during a technical assistance visit, but merely 
requires the permitting authority to give the source a reasonable 
opportunity to comply before deciding whether enforcement action is 
appropriate. The Attorney General similarly interprets RCW 43.21A.087, 
enacted in 1992, which allows the permitting authority to reinspect the 
facility and take enforcement action ``[i]f the owner or operator of 
the facility does not correct the violation.''4 The Attorney 
General also states that because RCW 70.94.035 applies specifically to 
the air program and specifically requires that the technical assistance 
program be consistent with the Federal Clean Air Act, this provision 
would prevail in the event of any conflict with RCW 43.21A.087, which 
applies to technical assistance visits under all of Ecology's 
environmental programs. EPA does not believe the plain language of RCW 
43.21A.087 supports the Attorney General's opinion and that it could 
prohibit enforcement action if a violation observed during a technical 
assistance visit is promptly corrected. EPA does agree, however, that 
RCW 70.94.035 would allow enforcement action in such a case provided 
the enforcement action was commenced after the source had had an 
opportunity to comply. EPA also believes that RCW 70.94.035, and not 
RCW 43.21A.087, applies in the case of technical assistance visits 
under the air program. EPA therefore believes that Washington's 
technical assistance statutes, as interpreted by the Attorney General, 
do not bar approval of Washington's operating permit program.
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    \4\Both statutes allow Ecology to commence immediate enforcement 
action for any violation that places anyone in imminent danger of 
death or substantial bodily harm or causes substantial property 
damage.
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    h. Variances. State law allows sources to petition the permitting 
authority for a variance from requirements governing the quality, 
nature, duration or extent of discharges of air contaminants (see RCW 
70.94.181; WAC 173-400-180)). Each of the local air authorities has 
also adopted a regulation authorizing variances under certain 
circumstances (see BFCCAA Reg. 1, Sec. 3.01; NWAPA Sec. 350; PSAPCA 
Reg. I, Sec. 4.01; OAPCA Reg. 1, Sec. 3.23; SCAPCA Reg. I, Art. III; 
SWAPCA Reg. 401-180; YCCAA Reg. I, Sec. 7.01). State law also prohibits 
any State or local air authority from incorporating a variance in a 
permit unless the variance has been approved by EPA as part of the 
State Implementation Plan or from issuing a variance that sets aside or 
delays any requirements of the Federal Clean Air Act except with the 
approval and written concurrence of the EPA (see RCW 70.94.181(8); WAC 
173-400-180(3)). The program submittal is approvable based on these 
limitations on the issuance of variances.5
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    \5\Although the variance regulations of BFCCAA, NWAPA, SWAPCA 
and YCCAA do not expressly state that EPA must approve any variance 
to requirements of the Federal Clean Air Act or any variance 
incorporated into an operating permit, the Attorney General's 
opinion letter confirms that State law prohibits a local authority 
from issuing such a variance.
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    i. Additional Information. The full program submittal and the 
Technical Support Document are available for review for more detailed 
information about this proposed action.
3. Permit Fee Demonstration
    a. EFSEC. RCW 80.50.071(1)(b) and (c) require that an applicant for 
an EFSEC certification pay all ``reasonable costs actually and 
necessarily incurred'' by EFSEC in processing applications and 
inspecting and determining compliance. RCW 70.94.422(2) additionally 
gives EFSEC the same authority as local air authorities to collect fees 
from Title V sources subject to EFSEC's jurisdiction. As discussed 
above, EFSEC will contract with Ecology or the relevant local air 
authority to perform certain technical tasks, including developing the 
Title V permit terms and monitoring compliance with those terms. 
Ecology and any participating local air authority will then charge 
EFSEC the same fees they would charge a source subject to their 
jurisdiction for issuing a permit and monitoring compliance. EFSEC will 
pass these fees onto the EFSEC source, along with its administrative 
costs (staff costs) for the air operating permit program as 
``reasonable costs actually and necessarily incurred'' by EFSEC in 
processing applications and inspecting and determining compliance. 
EFSEC estimates its air operating permit program administrative costs 
to be approximately $1,121 per year per source. Based on this estimate, 
EPA believes that the combined contract and administrative fees are 
sufficient to meet the Act's requirements to cover the permit program 
costs.
    b. NWAPA and SWAPCA. NWAPA and SWAPCA have opted for fees below the 
presumptive minimum ($30.18 a ton for FY95). NWAPA will collect the 
equivalent of $19.29 per ton for the first year of the program. 
Operating permit fees will be based on a two-tiered model in which 20% 
of the total fees collected will be distributed equally between all the 
affected sources and 80% will be distributed based on the quantity of 
emissions emitted by each of the sources. In addition to the fees 
assessed by NWAPA, each of the sources will also be responsible for a 
portion of Ecology's oversight costs. EPA believes the combined State 
and local air authority fees are sufficient to cover the permit program 
costs based on NWAPA's detailed fee demonstration using a workload 
analysis. NWAPA is a small agency in a relatively rural and low cost 
area of the State. There are several sources in its jurisdiction that 
emit very large tonnages but few sources overall. This high ratio of 
tons of emissions to number of permits lowers the cost per ton of 
implementing an operating permit program. NWAPA has committed in its 
submittal to review its fee schedule annually and increase fees, as 
needed, to reflect actual program implementation costs.
    SWAPCA will collect the equivalent of $19.13 per ton for the first 
year of the program. Operating permit fees will be based on a three-
tiered model with equal weight given to each part. The model divides 
the fees collected into a flat fee for all affected sources, a fee 
based on quantity of emissions, and a fee based on the complexity of 
the permit. In addition to the fees assessed by the Authority, each of 
the sources will also be responsible for a portion of Ecology's 
oversight costs. EPA believes that the combined State and local air 
authority fees are sufficient to cover permit program costs based on 
SWAPCA's detailed fee demonstration using a workload analysis. As with 
NWAPA, SWAPCA is a small agency in a relatively rural and low cost area 
of the State with several sources in its jurisdiction that emit very 
large quantities of emissions but few sources overall. Once again, this 
high ratio of tons of emissions to number of permits lowers the cost 
per ton of implementing an operating permit program. SWAPCA has 
committed in its submittal to review its fee schedule annually and to 
increase fees, as needed, to reflect actual program implementation 
costs.
    c. Ecology, BFCCAA, OAPCA, PSAPCA, SCAPCA and YCCAA. The fees to be 
assessed by Ecology, BFCCAA, OAPCA, PSAPCA, SCAPCA, and YCCAA all 
exceed the presumptive minimum. Fees range from $40 per ton to $64.72 
per ton. In addition, each agency provided a detailed fee 
demonstration. Together, all permitting authorities in Washington will 
collect an estimated $4.6 million in the first year of program 
implementation. Each permitting authority has committed in its 
submittal to review its fee schedule annually and to increase fees, as 
needed, to reflect actual program implementation costs.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority and Commitments for Section 112 Implementation. The 
Washington permitting authorities have indicated in their Title V 
program submittals that they are constitutionally precluded from 
implementing and enforcing future federally-promulgated applicable 
requirements by reference, but must instead first adopt state 
regulations in order to incorporate such requirements into permits and 
enforce them. Ecology has demonstrated, however, that it has broad 
legal authority to adopt regulations necessary to implement any and all 
section 112 requirements (see RCW 70.94.141(1); 70.94.331(2)). The 
local air authorities may include these requirements in their Title V 
permits as soon as Ecology adopts such requirements (see RCW 
70.94.161(2)(a)).\6\ EFSEC, which has the legal authority to adopt air 
quality standards consistent with those established by Ecology and the 
local air authorities (see RCW 70.94.422(2)), intends to incorporate by 
reference the section 112 standards adopted by Ecology. In their 
submittal, the Washington permitting authorities have committed to 
adopting regulations necessary to implement the section 112 
requirements in a timely manner.
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    \6\A local authority may also promulgate its own requirements, 
which may be not less stringent than those promulgated by Ecology 
(see RCW 70.94.331(6); WAC 173-400-020(2)).
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    EPA has determined that this broad statutory and regulatory 
authority is adequate for the Washington permitting authorities to 
implement all section 112 requirements provided they expeditiously 
adopt appropriate implementing regulations as new federal regulations 
are promulgated. EPA regards the commitments of the Washington 
permitting authorities as an acknowledgement of their obligation to 
adopt regulations necessary to issue permits that assure compliance 
with section 112 applicable requirements. Should a Washington 
permitting authority fail to adopt regulations necessary to maintain 
adequate legal authority to issue timely permits, EPA will consider 
this grounds for withdrawing approval of such permitting authority's 
program in accordance with the provisions of 40 CFR 70.10(c). For 
further discussion of this determination, please refer to the April 13, 
1993 guidance memorandum entitled ``Title V Program Approval Criteria 
for Section 112 Activities,'' signed by John Seitz.
    b. Implementation of Section 112(g) Upon Program Approval. After 
the effective date of the Washington operating permit programs, no new 
major source or major modification to an existing major source may be 
constructed unless it has been subject to a case-by-case determination 
of maximum achievable control technology (MACT) or offsets by the 
permitting authority under section 112(g) of the Federal Clean Air Act. 
The results of such case-by-case determination of MACT or offsets must 
be federally-enforceable by the time that construction begins on the 
new source or modification. Unless and until the Washington permitting 
authorities\7\ submit, and EPA approves, air toxics permitting 
regulations, there will be no mechanism for making federally-
enforceable MACT or offset determinations, thereby effectively 
prohibiting construction of new major sources and major modifications 
to existing major sources as of the date EPA grants interim approval of 
the Washington operating permit programs.
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    \7\As stated above, as a matter of State law, once Ecology 
adopts air toxics permitting regulations, the local air authorities 
may either directly implement Ecology's regulations, may incorporate 
Ecology's regulations by reference or may adopt their own, more 
stringent regulations. The EFSEC must incorporate Ecology's 
regulations by reference or adopt their own regulations.
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    Because EPA has not yet promulgated regulations to implement 
section 112(g) of the Act, EPA has determined it has authority to 
approve many existing state air toxics permitting regulations under the 
authority of Title V and sections 112(g) and 112(l) of the Act solely 
for the purpose of implementing section 112(g) during the transition 
period between Title V approval and adoption of State rules 
implementing EPA's forthcoming section 112(g) regulations. Submission 
by Washington and approval by EPA of Washington's existing state air 
toxics permitting rules could provide Washington permitting authorities 
with an interim mechanism for establishing federally-enforceable 
restrictions for section 112(g) purposes. The scope of such an approval 
of Washington's air toxic regulations would be narrowly limited to 
section 112(g) and would not confer or imply approval for purposes of 
any other provision under the Act. Furthermore, such approval would be 
for an interim period only, until such time as the Washington 
permitting authorities adopt regulations consistent with regulations 
promulgated by EPA to implement section 112(g) of the Act. Accordingly, 
if Washington submits its existing air toxics permitting rules and EPA 
determines that such rules are approvable pending adoption of State 
rules implementing EPA's forthcoming section 112(g) regulations, EPA 
would limit the duration of such an approval to a reasonable time 
following promulgation of section 112(g) regulations so that the 
Washington permitting authorities act expeditiously to adopt 
regulations consistent with the section 112(g) regulations.
    c. Delegation of Section 112 Standards. As discussed above, State 
law prohibits Washington permitting authorities from implementing and 
enforcing federal standards until they are adopted as State or local 
regulations. Therefore, the Washington permitting authorities can only 
request, and EPA can only grant, delegation of section 112 standards 
after the Washington permitting authorities adopt and submit their 
regulations to EPA for approval under section 112(l) of the Act.
    The Washington permitting authorities have adopted all of the 
National Emission Standards for Hazardous Air Pollutants (NESHAP) in 40 
CFR part 61 and have submitted a request for delegation of those 
standards in accordance with section 112(l) of the Act. Since the 
adopted regulations and the requests for delegation cover sources in 
addition to those subject to Title V, EPA will be acting on these 
request under separate rulemaking pursuant to the provisions of 40 CFR 
part 63.
    d. Commitments for Title IV Implementation. The Washington 
permitting authorities have committed to adopting and submitting to EPA 
by January 1, 1995, a program implementing Title IV of the Clean Air 
Act. This commitment is supported by adequate legal authority (see RCW 
70.94.161(2)(c)).

B. Options for Approval/Disapproval and Implications

1. Ecology, EFSEC, NWAPA, OAPCA, PSAPCA, SCAPCA, and SWAPCA
    EPA is proposing to grant interim approval to the operating permit 
programs submitted on November 1, 1993, by Ecology, EFSEC, NWAPA, 
OAPCA, PSAPCA, SCAPCA, and SWAPCA.\8\ If and when this proposed action 
becomes final, these permitting authorities must make the following 
changes to receive full approval:\9\
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    \8\The scope of this action does not include the issuance of 
permits or the enforcement of standards for sewage sludge 
incinerators under Section 405 of the Clean Water Act, 42 USC 1345. 
Delegation of sewage sludge incinerator permitting under the Clean 
Water Act, if requested by the State, would be considered in a 
separate administrative action (see 40 CFR Parts 122 and 501).
    \9\All changes required for Ecology to receive full approval 
must be made before EFSEC or any local air authority may receive 
full approval. In addition, in order to receive full approval, EFSEC 
and each local air authority must make such changes to their 
regulations as are necessary under applicable State and local law to 
incorporate into their respective regulations all required changes 
to Ecology's operating permit program.
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    a. Ecology. (1) Revise WAC 173-401-200(33), the definition of 
``Title I modification,'' to include any modification permitted through 
a minor source preconstruction permit. The EPA believes the phrase 
``modification under an provision of title I of the Act'' in 40 CFR 
70.7(e)(2)(i)(A)(5) is best interpreted to mean literally any change at 
a source that would trigger permitting authority review under 
regulations approved or promulgated under Title I of the Act. This 
would include State preconstruction review programs approved by EPA as 
part of the State Implementation Plan under section 110(a)(2)(C) of the 
Clean Air Act and regulations addressing source changes that trigger 
the application of NESHAP established pursuant to section 112 of the 
Act prior to the 1990 amendments. The EPA intends to revise its 
criteria for interim approval in 40 CFR 70.4(d) prior to taking final 
action on this proposal to grant Washington interim approval so that 
interim approval may be granted to State programs like Washington's 
that currently allow a more narrow definition of Title I modification.
    As noted, EPA believes the better interpretation of ``Title I 
modifications'' would preclude granting full approval to the Washington 
program. However, in the proposal to revise part 70, EPA will be taking 
comment on whether the criteria in 40 CFR 70.7(e)(2)(i)(A), including 
the phrase ``modification under any provision of title I,'' should be 
interpreted in a manner that would allow changes reviewed under 
programs approved pursuant to section 110(a)(2)(C) and changes that 
trigger the application of NESHAP established pursuant to section 112 
prior to the 1990 Amendments to be eligible for processing through 
minor modification procedures. Should EPA adopt this alternative 
interpretation, the definition of ``Title I modification'' in the 
Washington program would then be fully consistent with Part 70.
    (2) Revise RCW 70.94.430(1) to provide for maximum criminal 
penalties of not less than $10,000 per day per violation, as required 
by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap penalties 
for criminal violations at $10,000. The civil penalty authority in RCW 
70.94.431(1) already meets the requirements of 40 CFR 70.11(a)(3)(i) 
for maximum civil penalties of not less than $10,000 per day per 
violation.
    (3) Revise RCW 70.94.430 to allow the imposition of criminal 
penalties 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, as required by 40 CFR 70.11(a)(3)(iii). 
This provision must include maximum penalties of not less than $10,000 
per day per violation.
    The Attorney General's opinion states that false reporting is a 
criminal violation under Washington law because RCW 70.94.430(1) makes 
it unlawful to knowingly violate any regulations adopted under ch. 
70.94 RCW, and WAC 173-401-520 requires that all application forms, 
reports and compliance certifications submitted pursuant to ch. 173-401 
WAC contain a certification as to their truth, accuracy and 
completeness. This authority, however, does not appear to be as broad 
as that required by 40 CFR 70.11(a)(3)(iii). Knowing violation of the 
certification requirement of WAC 173-401-520 would be only one criminal 
violation even if the document which was falsely certified covered 
several false material statements. Under 40 CFR 70.11(a)(3)(iii), each 
false material statement must be subject to a criminal penalty. 
Moreover, accepting the State's interpretation would render the 
specific requirement of 40 CFR 70.11(a)(3)(iii) entirely superfluous. 
Because Part 70 otherwise requires States to have the provisions on 
which the Attorney General relies (see 40 CFR 70.5(d) and 
70.11(a)(3)(ii)), no State would have to make any additional showing of 
the authority required by 40 CFR 70.11(a)(3)(iii) under the State's 
interpretation.
    (4) Revise RCW 70.94.430 to allow the imposition of criminal 
penalties against any person who knowingly renders inaccurate any 
required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
    As authority for this requirement, the Attorney General's opinion 
states that a knowing violation of WAC 173-400-040(7), which prohibits 
the use of any means which conceals or masks an emission of an air 
contaminant, would subject the offender to criminal penalties under RCW 
70.94.430(1). Again, however, this authority does not appear to be as 
broad as that required by 40 CFR 70.11(a)(3)(iii). WAC 173-400-040(7) 
only prohibits tampering that conceals air emissions; it would not 
prohibit tampering with equipment that monitors secondary parameters, 
such as fuel content or production rate.
    (5) Delete WAC 173-401-735(3) entirely or revise it so that it 
refers to RCW 34.05.570(4)(b), rather than RCW 7.16.360. Part 70 
requires that State law provide a cause of action in State court for 
the permitting authority's failure to take final action on a permit 
within the specified time period (see 40 CFR 70.4(b)(3)(xi)). WAC 173-
401-735(3) authorizes a person to seek a writ of mandamus in such a 
case ``[a]s provided in chapter 7.16 RCW.'' Chapter 7.16 RCW, however, 
authorizes the issuance of a writ of mandamus only if there is no other 
remedy available (see RCW 7.16.360). RCW 34.05.570(4)(b) provides an 
express cause of action for an agency's failure to take a required 
action. Therefore, WAC 173-401-735(3) must be revised to delete the 
reference to ch. 7.16 RCW as the basis for the cause of action.
    (6) Revise WAC 173-401-530(2) to define an emissions unit as 
insignificant only if it is subject to no federally enforceable 
applicable requirement and delete the last sentence in WAC 173-401-
200(16) (``These units and activities are exempt from permit program 
requirements except as provided in WAC 173-401-530.''). Under 40 CFR 
70.5(c), EPA may approve as part of a State program a list of 
insignificant activities and emissions levels which need not be 
included in permit applications. However, no activity for which there 
is an applicable requirement may be defined as insignificant. The 
Washington State Implementation Plan includes several ``generally'' 
applicable requirements (e.g. a 20% opacity limit for all emission 
units) that apply to any and all emission points and are ``applicable 
requirements'' under the part 70 rules. Together, WAC 173-401-530(2) 
and the last sentence of WAC 173-401-200(16) relieve sources from the 
requirement of demonstrating and certifying compliance with these 
``generally'' applicable requirements for emission units that are 
subject to no other applicable requirement and meet the other criteria 
for insignificance (e.g. size, production rate, emission level). WAC 
173-401-530(1) clarifies that these insignificant activities must still 
comply with all requirements. WAC 173-401-530(2)(b) requires that all 
such generally applicable requirements to which the source is subject 
be listed in the application and the permit. The program, taken as a 
whole, substantially fulfills the requirement under 40 CFR 70.6(a)(1) 
that a permit include emission limitations and standards that assure 
compliance with all applicable requirements.
    b. NWAPA.
    (1) Revise NWAPA Sec. 132.1 to provide for maximum criminal 
penalties of not less than $10,000 per day per violation, as required 
by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap penalties 
for criminal violations at $10,000.
    (2) Revise NWAPA Sec. 132 to allow the imposition of criminal 
penalties 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, as required by 40 CFR 70.11(a)(3)(iii). 
See discussion above in paragraph (3) of Ecology's interim approval 
issues.
    (3) Revise NWAPA Sec. 132 to allow the imposition of criminal 
penalties against any person who knowingly renders inaccurate any 
required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's 
interim approval issues.
    (4) Revise NWAPA Sec. 133.1 to provide for maximum civil penalties 
of not less than $10,000 per day per violation in the case of 
violations of multiple standards by a specific emissions unit, as 
required by 40 CFR 70.11(a)(3). Existing language appears to cap 
penalties for violations of multiple standards by a specific emissions 
unit at $10,000.
    c. PSAPCA.
    (1) Revise PSAPCA Reg. I, Sec. 3.13(a) to provide for maximum 
criminal penalties of not less than $10,000 per day per violation, as 
required by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap 
penalties for criminal violations at $10,000.
    (2) Revise PSAPCA Reg. I, Sec. 3.13 to allow the imposition of 
criminal penalties 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, as required by 40 CFR 
70.11(a)(3)(iii). See discussion above in paragraph (3) of Ecology's 
interim approval issues.
    (3) Revise PSAPCA Reg. I, Sec. 3.13 to allow the imposition of 
criminal penalties against any person who knowingly renders inaccurate 
any required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's 
interim approval issues.
    d. OAPCA.
    (1) Revise OAPCA Reg. 1, Sec. 3.27(b)(1) to provide for maximum 
criminal penalties of not less than $10,000 per day per violation, as 
required by 40 CFR 70.11(a)(3)(ii). Existing language appears to cap 
penalties for criminal violations at $10,000.
    (2) Revise OAPCA Reg. 1, Sec. 3.27(b) to allow the imposition of 
criminal penalties 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, as required by 40 CFR 
70.11(a)(3)(iii). See discussion above in paragraph (3) of Ecology's 
interim approval issues.
    (3) Revise OAPCA Reg. 1, Sec. 3.27(b) to allow the imposition of 
criminal penalties against any person who knowingly renders inaccurate 
any required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's 
interim approval issues.
    (4) Revise the definition of ``potential to emit'' in OAPCA Reg. 1, 
Sec. 6.00 to provide that any physical or operational limitation on the 
capacity of a source to emit a pollutant shall be treated as part of 
its design only if the limitation is federally enforceable (see 40 CFR 
70.2 (definition of potential to emit)). OAPCA regulations currently 
define ``potential to emit'' to include any such limitation that is 
enforceable by OAPCA.
    e. SCAPCA.
    (1) Revise SCAPCA Reg. I, Sec. 2.04(B) to eliminate the limitation 
on the control officer's authority to request criminal penalties to 
cases in which a violator has failed to correct the violation after a 
``reasonable and/or required period of time.'' Sections 70.11(a)(3) 
(ii) and (iii) require that States have authority to impose a criminal 
penalty for each day of violation. A requirement that a violator can be 
subject to criminal penalties only if the violator fails to correct the 
violation after an opportunity to comply is inconsistent with the 
requirements of part 70.
    (2) Revise SCAPCA Reg. I, Sec. 2.11(A)(1) to provide for maximum 
criminal penalties of not less than $10,000 per day per violation, as 
required by 40 CFR 70.11(a)(3)(ii). Under existing language, it is not 
clear that criminal penalties may be assessed for each day on which a 
violation occurs.
    (3) Revise SCAPCA Reg. I, Sec. 2.11(A) to allow the imposition of 
criminal penalties 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, as required by 40 CFR 
70.11(a)(3)(iii). See discussion above in paragraph (3) of Ecology's 
interim approval issues.
    (4) Revise SCAPCA Reg. I, Sec. 2.11(A) to allow the imposition of 
criminal penalties against any person who knowingly renders inaccurate 
any required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). See discussion above in paragraph (4) of Ecology's 
interim approval issues.
    f. SWAPCA. No changes in the SWAPCA operating permit program are 
necessary to receive full approval other than those that may be 
necessary under applicable State and local law to incorporate into 
SWAPCA's regulations all required changes to Ecology's operating permit 
program.
2. BFCCAA and YCCAA
    a. Required changes for interim approval. As discussed above, there 
is a serious question regarding whether BFCCAA and YCCAA have 
effectively incorporated by reference the State operating permit rule 
and, if so, whether the provisions of the State operating permit rule 
that are inconsistent with the operating permit rules of BFCCAA and 
YCCAA could be enforced against a Title V source. On that basis, EPA 
proposes disapproval of the operating permit programs submitted by 
BFCCAA and YCCAA. Both of these authorities have advised EPA, however, 
that they intend to make all changes necessary to receive interim 
approval by October 1994. Based on this assurance, EPA is proposing in 
the alternative to grant interim approval of the operating permit 
programs submitted by BFCCAA and YCCAA provided that they make the 
following changes by the time of final action on this rulemaking:
    BFCCAA. (1) Repeal BFCCAA Reg. 1, Sec. 4.01, or revise it to 
incorporate by reference the State operating permit regulation, ch. 
173-401 WAC, adopted on October 4, 1993, as amended to incorporate any 
changes made by Ecology at the time BFCCAA so amends BFCCAA Reg. 1, 
Sec. 4.01.
    (2) Repeal BFCCAA Reg. 1, Sec. 4.02, 4.04, 4.05, 4.06 and 4.07.
    YCCAA. (1) Repeal YCCAA Reg. 1, Sec. 6.02, 6.04, 6.05, 6.06, 6.07 
and 6.08.
    (2) Revise YCCAA Reg. 1, Sec. 12.01 to provide that the identified 
provisions of the Washington State Administrative Code are incorporated 
by reference unless the YCCAA regulation is more stringent than the 
State regulation.
    (3) Revise YCCAA Reg. 1, Sec. 12.02 so that the identified 
provisions of federal law are incorporated by reference regardless of 
whether the federal regulations are inconsistent with YCCAA 
regulations. Part 70 requires that all ``applicable requirements'' be 
included in the permit (see 40 CFR 70.6(a)(1)). The term ``applicable 
requirement'' is defined to include any standard or other requirement 
under Sections 111 and 112 of the Act (see 40 CFR 70.2). YCCAA Reg. 1, 
Sec. 12.02, however, would preclude YCCAA from including a Section 111 
or 112 standard in an operating permit if the YCCAA had a regulation 
that was less stringent than the federal standard. Therefore, YCCAA 
does not have the authority to include all ``applicable requirements'' 
in a permit as required by part 70.
    If BFCCAA or YCCAA fails to make these required changes by the time 
EPA takes final action on this proposed rulemaking, EPA will disapprove 
the operating permit program of such local air authority in the final 
action. In the event of such a disapproval, Washington's Attorney 
General has opined that Ecology's operating permit program would apply 
as a matter of State law to sources located in the counties under the 
jurisdiction of the local air authority. On that basis, EPA intends to 
grant Ecology interim approval to administer the operating permit 
program in the event of a disapproval of either local air authority 
operating permit program within the jurisdiction of such local 
authority. Therefore, no sanctions will result from a disapproval of 
the operating permit program of either local air authority because all 
sources in the State of Washington required to have an operating permit 
under part 70 will be subject to either the State or a local operating 
permit program that will have received interim approval.
    b. Required changes for full approval. EPA will grant BFCCAA and 
YCCAA interim approval of their operating permit programs provided they 
make the changes required in paragraph (a) above. If they receive 
interim approval, these local air authorities must make the following 
additional changes to receive full approval:10
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    \1\0All changes required for Ecology to receive full approval 
must be made before BFCCAA or YCCAA may receive full approval. In 
addition, in order to receive full approval, BFCCAA and YCCAA must 
make such changes to their regulations as are necessary under 
applicable State and local law to incorporate into their respective 
regulations all required changes to Ecology's operating permit 
program.
---------------------------------------------------------------------------

    BFCCAA. No additional changes are necessary for the BFCCAA 
operating permit program to receive full approval other than those that 
may be necessary under applicable State and local law to incorporate 
into BFCCAA's regulations all changes to the State operating permit 
program required for full approval.
    YCCAA. Revise YCCAA Reg. I, Sec. 2.01, to delete the requirement 
that violations be ``knowing.'' Part 70 prohibits a permitting 
authority from including a mental state as an element of proof for 
civil violations (see 40 CFR 70.11(a)(i)).

3. Effect of Interim Approval

    Interim approval of these operating permit programs, which may not 
be renewed, extends for a period of up to two years.
    During the interim approval period, the State is protected from 
sanctions for failure to have a program and EPA is not obligated to 
promulgate a federal permits program in the State. Permits issued under 
a program with interim approval have full standing with respect to part 
70. In addition, the one-year deadline for submittal of permit 
applications by subject sources and the three-year time period for 
processing the initial permit applications begin upon interim approval.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of the submittals of the State and local air 
authorities and other information relied upon for the proposed interim 
approval are contained in a docket maintained at the EPA Regional 
Office. The docket is an organized and complete file of all the 
information submitted to, or otherwise considered by, EPA in the 
development of this proposed rulemaking. The principal purposes of the 
docket are:
    (1) to allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process, and
    (2) to serve as the record in case of judicial review. EPA will 
consider any comments received by September 19, 1994.

B. Executive Order 12866

    The Office of Management and Budget has exempted this regulatory 
action from Executive Order 12866 review.

C. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act, 5 U.S.C. sections 600 et 
seq., EPA must prepare a regulatory flexibility analysis
    assessing the impact of any proposed or final rule on small 
entities. 5 U.S.C. 603 and 604. Alternatively, EPA may certify that the 
rule will not have a significant impact on a substantial number of 
small entities. Small entities include small businesses, small not-for-
profit enterprises, and government entities with jurisdiction over 
populations of less than 50,000.
    Operating permit program approvals under section 502 of the Act do 
not create any new requirements, but simply approve requirements that 
the State is already imposing. Therefore, because the federal operating 
permit program approval does not impose any new requirements, I certify 
that it does not have a significant impact on any small entities 
affected. Moreover, due to the nature of the federal-state relationship 
under the Act, preparation of a regulatory flexibility analysis would 
constitute federal inquiry into the economic reasonableness of State 
action. The Act forbids EPA to base its actions concerning operating 
permit programs on such grounds. Union Electric Co. v. U.S. E.P.A., 427 
U.S. 246, 256-66 (S.Ct 1976); 42 U.S.C. 7410(a)(2).

List of Subjects in 40 CFR Part 70

    Environmental protection, Administrative practice and procedure, 
Air pollution control, Environmental protection, Intergovernmental 
relations, Operating permits, and Reporting and recordkeeping 
requirements.

    Authority: 42 U.S.C. sections 7401-76719.

    Dated: July 18, 1994.

Chuck Clarke,
Regional Administrator.
[FR Doc. 94-19774 Filed 8-17-94; 8:45 am]
BILLING CODE 6560-50-P