[Federal Register Volume 60, Number 108 (Tuesday, June 6, 1995)]
[Proposed Rules]
[Pages 29809-29814]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-13788]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5216-8]


Clean Air Act Proposed Interim Approval of Operating Permits 
Program; Sacramento Metropolitan Air Quality Management District

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed interim approval.

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SUMMARY: The EPA proposes interim approval of the Operating Permits 
Program submitted by the Sacramento Metropolitan Air Quality Management 
District (``Sacramento'' or ``District'') 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.

DATES: Comments on this proposed action must be received in writing by 
July 6, 1995.

ADDRESSES: Comments should be addressed to Ed Pike at the Region IX 
address. Copies of the State's submittal and other supporting 
information used in developing the proposed interim approval are 
available for inspection [[Page 29810]] during normal business hours at 
the following location: Air and Toxics Division, US EPA-Region IX, 75 
Hawthorne Street, San Francisco, California 94105.

FOR FURTHER INFORMATION CONTACT:
Ed Pike (telephone 415/744-1248), Operating Permits Section, A-5-2, Air 
and Toxics Division, US EPA-Region IX, 75 Hawthorne Street, San 
Francisco, California 94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the 1990 Clean Air Act Amendments 
(sections 501-507 of the Clean Air Act (``the Act'')), EPA has 
promulgated rules which define the minimum elements of an approvable 
State operating permits program and the corresponding standards and 
procedures by which the EPA will approve, oversee, and withdraw 
approval of State operating permits programs (see 57 FR 32250 (July 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. 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 two years. If EPA has not fully approved a program by 
two years after the November 15, 1993 date, or by the end of an interim 
program, it must establish and implement a Federal program.

B. Federal Oversight and Sanctions

    If EPA were to finalize this proposed interim approval, it would 
extend for two years following the effective date of final interim 
approval, and could not be renewed. During the interim approval period, 
the District would be protected from sanctions, and EPA would not be 
obligated to promulgate, administer, and enforce a Federal permits 
program for the District. Permits issued under a program with interim 
approval have full standing with respect to part 70, and the one year 
time period for submittal of permit applications by subject sources 
begins upon the effective date of interim approval, as does the three 
year time period for processing the initial permit applications.
    Following final interim approval, if the District failed to submit 
a complete corrective program for full approval by the date six months 
before expiration of the interim approval, EPA would start an 18-month 
clock for mandatory sanctions. If the District then failed to submit a 
corrective program that EPA found complete before the expiration of 
that 18-month period, EPA would be required to apply one of the 
sanctions in section 179(b) of the Act, which would remain in effect 
until EPA determined that the District had corrected the deficiency by 
submitting a complete corrective program. Moreover, if the 
Administrator found a lack of good faith on the part of the District, 
both sanctions under section 179(b) would apply after the expiration of 
the 18-month period until the Administrator determined that the 
District had come into compliance. In any case, if, six months after 
application of the first sanction, the District still had not submitted 
a corrective program that EPA found complete, a second sanction would 
be required.
    If, following final interim approval, EPA were to disapprove the 
District's complete corrective program, EPA would be required to apply 
one of the section 179(b) sanctions on the date 18 months after the 
effective date of the disapproval, unless prior to that date the 
District had submitted a revised program and EPA had determined that it 
corrected the deficiencies that prompted the disapproval. Moreover, if 
the Administrator found a lack of good faith on the part of the 
District, both sanctions under section 179(b) would apply after the 
expiration of the 18-month period until the Administrator determined 
that the District had come into compliance. In all cases, if, six 
months after EPA applied the first sanction, the District had not 
submitted a revised program that EPA had determined corrected the 
deficiencies that prompted disapproval, a second sanction would be 
required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the end of an interim approval period if a District has 
not timely submitted a complete corrective program or EPA has 
disapproved a submitted corrective program. Moreover, if EPA has not 
granted full approval to a District program by the expiration of an 
interim approval and that expiration occurs after November 15, 1995, 
EPA must promulgate, administer and enforce a Federal permits program 
for that District upon interim approval expiration.
II. Proposed Action and Implications

A. Analysis of State Submission

    EPA is proposing to grant interim approval to the District's part 
70 operating permit program. The program qualifies for interim approval 
because it substantially, but not fully, meets the requirements of part 
70 and meets the requirements for interim approval in 40 CFR 70.4(d). 
The Technical Support Document (``TSD''), which is included in the 
docket, includes a detailed analysis of the program elements that meet 
the requirements of part 70 and the program elements that must be 
revised to qualify for full approval.
1. Support Materials
    The California Air Resources Board (``ARB'') submitted an 
administratively complete part 70 permitting program on behalf of the 
District on August 1, 1994 with a letter requesting source-category 
limited interim approval. California law currently exempts agricultural 
sources from permitting requirements, including title V. The ARB 
submitted a statement from the California Attorney General and copies 
of state enabling legislation on behalf of all California air districts 
on November 16, 1993. The Attorney General stated that California law 
provides air districts with sufficient authority, including enforcement 
authority, to implement title V except for permitting agricultural 
sources.
    Sacramento's program includes a description of the permitting 
program, permitting rules, permit forms, and the District requirements 
for permit applications (which are contained in Sacramento's ``List and 
Criteria''). EPA intends to finalize an implementation agreement prior 
to final interim approval of the program. The implementation agreement 
will address data management, a mechanism for straight delegation of 
section 112 standards under section 112(1) of the Act, and other 
implementation details.
2. Regulations and Program Implementation
    Sacramento's submittal contains three rules with part 70 
requirements. District rule 207 (adopted June 7, 1994) contains most 
permit program requirements. Rule 201 (as amended June 7, 1994) 
contains permit exemptions and rule 301 (as amended June 7, 1994) 
contains fee requirements. The District also submitted its ``List and 
Criteria'' and permit application forms to specify the permit 
application requirements. The program substantially meets part 70 
[[Page 29811]] requirements as described below and in the TSD.
    a. Applicability. The District's regulation requires that all part 
70 sources, except agricultural sources exempted under state law, apply 
for a part 70 permit (rule 207 section 102). Initial applications are 
due within one year of EPA's approval of the program, except that 
sources with actual emissions below certain levels are given three 
years from the date of EPA's approval of the program to apply for 
permits. The program does not require non-major sources subject to New 
Source Performance Standards (NSPS) or National Emission Standards for 
Hazardous Air Pollutants (NESHAP) to obtain permits except as required 
by EPA.
    Sacramento opted for source category limited interim approval. In 
addition to agricultural sources exempted under state law, the District 
temporarily excluded sources with the potential to emit at major source 
levels but actual emissions below certain levels. During the initial 
three years, Sacramento will defer permitting sources with actual 
emissions less than fifty percent of the major source threshold for 
criteria pollutants. The deferred sources must also have hazardous air 
pollutant (HAP) emissions of less than seven tons per year of each HAP 
and fifteen tons per year of total HAPs. The District submitted a 
demonstration that sixty percent of all major sources and eighty 
percent of the title V emissions inventory will be permitted within the 
first three years after the program is approved. The District intends 
to use this time to create federally-enforceable potential to emit 
limits. These deferred sources must be permitted within the first five 
years of the program if they do not obtain federally enforceable limits 
on their potential to emit. The program is consistent with EPA's August 
2, 1993 guidance on source-category limited interim approval 
(memorandum signed by John Seitz, Director of the Office of Air Quality 
Planning and Standards) except for the District permit issuance 
deadlines, which must be revised as described under Requirements for 
Full Approval.
    EPA is in the process of changing the District's attainment status 
for ozone from serious to severe. The redesignation will reduce the 
major source potential to emit threshold from 50 tons per year to 25 
tons per year for nitrogen oxides and volatile organic compounds. EPA 
expects that this change will be promulgated and effective by June 1, 
1995, which is prior to EPA's deadline for final action on the 
District's title V permitting program. The District's major stationary 
source definition (District rule 207 section 219) references the title 
I major source definitions and will automatically incorporate this 
change.
    b. Permit applications. The program meets the part 70 requirements 
for permit application deadlines and permit application content. Rule 
207 contains the correct permit application deadlines and requires that 
sources submit a complete permit application (section 301). The ``List 
and Criteria'' and the permit application forms meet the requirements 
for permit application content and require that sources submit 
information to verify all applicable requirements and fees. Rule 207 
section 208 states that a complete application must contain the 
requirements in the ``List and Criteria'' and section 401 states that 
the District will use the ``List and Criteria'' to determine whether 
the application is complete. Rule 207 requires complete applications 
but does not contain the specific permit application content 
requirements. EPA is approving the ``List and Criteria'' and the permit 
application forms as part of the title V permitting program to ensure 
that the permit application content requirements are met.
    c. Permit content. Each part 70 permit must contain emission 
limitations and standards that assure compliance with all applicable 
requirements (rule 207 section 305.1). The permit must also contain 
monitoring, recordkeeping, and other compliance terms sufficient to 
ensure compliance with the permit terms. The program allows alternative 
operating scenarios and operational flexibility (rule 207 sections 305 
and 308.1).
    d. Public participation and EPA oversight. The District will 
provide the public with notice of and an opportunity to comment on all 
initial permits, permit renewals, reopenings, and significant 
modifications. Each initial permit, renewal, and significant and minor 
modification is subject to EPA oversight and veto (rule 207 sections 
403 through 406).
    e. Variances. The District has the authority to issue a variance 
from requirements (except the requirement to obtain a permit to 
construct or operate) imposed by state and local law. (See California 
Health and Safety Code sections 42350-42364 and Sacramento rule 601.) 
In the opinion submitted with California operating permit programs, 
California's Attorney General states that ``[t]he variance process is 
not part of the title V permitting process and does not affect federal 
enforcement for violations of the requirements set forth in a title V 
permit.'' (Emphasis in original.)
    The EPA regards the State and District variance provisions as 
wholly external to the program submitted for approval under part 70 and 
consequently is proposing to take no action on these provisions of 
state and local law. The EPA has no authority to approve provisions of 
state law that are inconsistent with the CAA. The EPA does not 
recognize the ability of a permitting authority to grant relief from 
the duty to comply with a federally enforceable part 70 permit, except 
where such relief is granted through procedures allowed by part 70. A 
part 70 permit may be issued or revised (consistent with part 70 
permitting procedures) to incorporate those terms of a variance that 
are consistent with applicable requirements. A part 70 permit may also 
incorporate, via part 70 permit issuance or revision procedures, the 
schedule of compliance set forth in a variance. However, EPA reserves 
the right to pursue enforcement of applicable requirements 
notwithstanding the existence of a compliance schedule in a permit to 
operate. This is consistent with 40 CFR 70.5(c)(8)(iii)(C), which 
states that a schedule of compliance ``shall be supplemental to, and 
shall not sanction noncompliance with, the applicable requirements on 
which it is based.''
    f. Title I modification definition. Sacramento's rule requires a 
significant permit modification for a permit change that involves a 
``title I modification'' but does not explicitly define the term (rule 
207 section 233). The significant modification definition explicitly 
states that title I modification includes modifications under 40 CFR 
parts 61 and 63 and case-by-case determinations of emissions limits and 
standards, but does not explicitly include changes reviewed under the 
District's minor new source review program (``minor NSR changes''). The 
EPA is currently in the process of determining the proper definition of 
``title I modification.'' As further explained below, EPA has solicited 
public comment on whether the phrase ``modification under any provision 
of title I of the Act'' in 40 CFR 70.7(e)(2)(i)(A)(5) should be 
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, including the District's, approved by EPA as part of 
the State Implementation Plan under section 110(a)(2)(C) of the Clean 
Air Act.
    On August 29, 1994, EPA proposed revisions to the interim approval 
criteria in 40 CFR 70.4(d) to, among other [[Page 29812]] things, allow 
State programs with a more narrow definition of ``title I 
modifications'' to receive interim approval (59 FR 44572). The Agency 
explained its view that the better reading of ``title I modifications'' 
includes minor NSR, and solicited public comment on the proper 
interpretation of that term (59 FR 44573). The Agency stated that if, 
after considering the public comments, it continued to believe that the 
phrase ``title I modifications'' should be interpreted as including 
minor NSR changes, it would revise the interim approval criteria as 
needed to allow States with a narrower definition to be eligible for 
interim approval.
    The EPA hopes to finalize its rulemaking revising the interim 
approval criteria under 40 CFR 70.4(d) expeditiously. If EPA 
establishes in its rulemaking that the definition of ``title I 
modifications'' can be interpreted to exclude changes reviewed under 
minor NSR programs, Sacramento's definition of ``title I modification'' 
would be fully consistent with part 70. Conversely, if EPA establishes 
through the rulemaking that the definition must include changes 
reviewed under minor NSR, Sacramento's lack of a ``title I 
modifications'' definition that explicitly includes minor NSR will 
become a basis for interim approval. If the definition becomes a basis 
for interim approval as a result of EPA's rulemaking, Sacramento would 
be required to revise its definition to conform to the requirements of 
part 70.
    Accordingly, today's proposed approval does not identify 
Sacramento's lack of a ``title I modification'' definition that 
explicitly includes minor NSR as necessary grounds for either interim 
approval or disapproval. For similar reasons, the EPA will not construe 
40 CFR 70.7(e)(2)(i)(A)(3) to prohibit Sacramento from allowing minor 
NSR changes to be processed as minor permit modifications. See 59 FR 
44573-44574. Again, although EPA has reasons for believing that the 
better interpretation of ``title I modifications'' is the broader one, 
EPA does not believe that it is appropriate to determine whether this 
is a program deficiency until EPA completes its rulemaking on this 
issue.
    g. Insignificant activities. Section 70.4(b)(2) requires that 
States include in their part 70 programs any criteria used to determine 
insignificant activities or emission levels for the purposes of 
determining complete applications. Section 70.5(c) states that an 
application for a part 70 permit may not omit information needed to 
determine the applicability of, or to impose, any applicable 
requirement, or to evaluate appropriate fee amounts. Section 70.5(c) 
also states that 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. Under part 70, a State must request 
and EPA must approve as part of that State's program any activity or 
emission level that the State wishes to consider insignificant. Part 
70, however, does not establish appropriate emission levels for 
insignificant activities. Instead, the rule requires a case-by-case 
determination of appropriate levels based on the particular 
circumstances of the part 70 program under review.
    Sacramento provided its current permit exemption lists as its list 
of insignificant activities. The District did not provide criteria or 
information on the level of emissions of activities, did not 
demonstrate that these activities are not likely to be subject to an 
applicable requirement or fees, and did not explain the basis for 
determining that these activities are insignificant. Therefore, EPA 
cannot propose full approval of the program without additional 
information and/or revisions to the list of insignificant activities.
    h. Enhanced new source review changes. New source review 
modifications that undergo ``enhanced'' NSR may be administratively 
incorporated into title V permits to avoid a second review process. 
Rule 207 section 202.5 requires that enhanced NSR modifications meet 
the NSR requirements of rule 202, the title V procedural requirements 
of rule 207 (sections 401 through 408), and the compliance requirements 
of rule 207 (section 305).
3. Permit Fee Demonstration
    The District assesses three types of fees. The District collects 
equipment fees and emissions fees based on actual emissions. The 
District stated that at least one quarter of these fees will be used 
for title V activities. The District also collects separate fees based 
on the amount of staff time required to issue a title V permit. The 
District stated that a total of $744,722 will be collected for 
implementing the title V program during the first three years and that 
an average of $97 per ton of regulated pollutant (for fee purposes) 
will be collected. These fees are above the presumptive minimum ($25 
adjusted by the Consumer Price Index since 1989) in Sec. 70.9. 
Therefore, EPA believes that these fees are sufficient to fund the 
program.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority and commitments for section 112 implementation. 
Sacramento has demonstrated in its title V program submittal adequate 
legal authority to implement and enforce all section 112 requirements 
through the title V permit. This legal authority is contained in the 
State of California enabling legislation and in rule 207 provisions 
defining ``applicable federal requirements'' (section 206) and stating 
that the permit must incorporate all applicable federal requirements 
(see section 305). EPA has determined that this legal authority is 
sufficient to allow Sacramento to issue permits that assure compliance 
with all section 112 requirements.
    EPA is interpreting the above legal authority to mean that 
Sacramento is able to carry out all section 112 activities. For further 
rationale on this interpretation, please refer to the Technical Support 
Document accompanying this rulemaking and the April 13, 1993 guidance 
memorandum titled ``Title V Program Approval Criteria for Section 112 
Activities,'' signed by John Seitz, Director of the Office of Air 
Quality Planning and Standards, U.S. EPA.
    b. District preconstruction permit program to implement 112(g). 
Sacramento will be required to implement the Maximum Achievable Control 
Technology requirements of section 112(g) of the Act as a component of 
the part 70 program. Under the interpretive notice EPA has published in 
the Federal Register, State and local agencies may delay implementing 
112(g) of the Act until EPA promulgates a final 112(g) rule. 
Alternatively, State and local agencies may implement the requirements 
of 112(g) prior to EPA promulgation of the 112(g) rule as a matter of 
State or local law. See 60 FR 8333 (February 14, 1995). The notice also 
states that EPA is considering whether to further delay the effective 
date of section 112(g) beyond the date of promulgation of the Federal 
rule so as to allow State and local agencies time to adopt rules 
implementing the Federal rule. EPA will provide for any such additional 
delay in the final section 112(g) rulemaking. Unless and until EPA 
provides for such an additional postponement of section 112(g), the 
District must be able to implement section 112(g) during the period 
between promulgation of the Federal section 112(g) rule and adoption of 
implementing District regulations and may choose to implement section 
112(g) sooner as a matter of local law. [[Page 29813]] 
    For this reason, EPA is proposing to approve the use of the 
District's preconstruction review program (District rule 202) and the 
District's New Source Guidelines for Toxics (Appendix B-6 of submittal) 
solely as a mechanism to implement section 112(g) during the transition 
period between promulgation of the section 112(g) rule and District 
adoption of rules specifically designed to implement section 112(g). 
However, since approval is intended soley to confirm that State and 
local agencies have a mechanism to implement section 112(g) during the 
transition period, the approval itself will be without effect if EPA 
decides in the final section 112(g) rule that there will be no 
transition period. The EPA is proposing that twelve months will be 
adequate for the District to adopt implementing regulations but 
solicits comments on whether this timeframe will be adequate.
    c. Program for delegation of section 112 standards as promulgated. 
Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) requirements for approval of a program for delegation 
of section 112 standards as promulgated by EPA, as they apply to part 
70 sources. Section 112(l)(5) requires that the District's program 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under part 70. Therefore, the EPA is also proposing to grant approval 
under section 112(l)(5) and 40 CFR 63.91 to Sacramento's program for 
receiving delegation of section 112 standards that are unchanged from 
the Federal standards as promulgated. Sacramento can accept delegation 
of section 112 standards through automatic delegation, as provided for 
by sections 39658 and 42301.10 of the California Health and Safety 
Code. The details of this delegation mechanism will be set forth in an 
implementation agreement between Sacramento and EPA, and EPA expects to 
complete this agreement prior to approval of Sacramento's section 
112(l) program for straight delegations. This program applies to both 
existing and future standards but is limited to sources covered by the 
part 70 program.
    d. Commitments for title IV implementation. Sacramento stated in 
the program description that no title IV affected sources are located 
in the District. Therefore, EPA is not requiring that the District 
adopt an acid rain program prior to receiving interim approval. If acid 
rain sources are constructed in the District or existing sources become 
subject to the program, the District will be required to adopt an acid 
rain program expeditiously.

B. Requirements for Full Approval

    The EPA is proposing to grant interim approval to the operating 
permits program submitted by Sacramento on August 1, 1994. If this 
interim approval is promulgated, the State and the District must make 
the following changes to receive full approval:
1. Necessary Change to California Enabling Legislation
    a. Legislative source category limited interim approval issue. 
Because California state law currently exempts agricultural production 
sources from permit requirements, the California Air Resources Board 
has requested source category limited interim approval for all 
California air districts. EPA is proposing to grant source category 
limited interim approval to the operating permits program submitted by 
the California Air Resources Board on behalf of the District on August 
1, 1994. In order for this program to receive full approval (and to 
avoid a disapproval upon the expiration of this interim approval), the 
California Legislature must revise the Health and Safety Code to 
eliminate the exemption of agricultural production sources from the 
requirement to obtain a permit.
2. Necessary Changes to Sacramento's Rule
    a. Agricultural exemption. The District permit exemption rule also 
contains a blanket exemption for agricultural operations. The District 
must also remove the agricultural permit exemption to qualify for full 
approval.
    b. Insignificant activities. EPA cannot propose full approval of 
the District's list of permit exemptions under the insignificant 
activities provisions of Sec. 70.5(c) because the District did not 
submit information justifying these exemptions. In addition, EPA has 
noted several types of activities in rule 201 that are likely to be 
subject to applicable requirements. For instance, the exemption for 
internal combustion engines (rule 201 section 112) could apply to a 
source near the major source threshold. The exemption for cooling 
systems (rule 201 section 115) will apply to large systems subject to 
emission standards under title VI. Therefore, the District must revise 
the list of insignificant activities and provide criteria for 
determining insignificant activities. The District must also show that 
information omitted from permit applications will not be necessary to 
determine the applicability of, or to impose, any applicable 
requirement or fee.
    For other State and local programs, EPA has proposed to accept, as 
sufficient for full approval, emission levels for insignificant 
activities of two tons per year and the lesser of 1000 pounds per year, 
section 112(g) de minimis levels, or other title I significant 
modification levels for HAPs and other toxics (40 CFR 52.21(b)(23)(i)). 
EPA believes that these levels, or lower levels for non-attainment 
pollutants, are sufficiently below applicability thresholds for many 
applicable requirements to assure that it is unlikely that a unit 
potentially subject to an applicable requirement will be left off a 
title V application. EPA is requesting comments on whether these 
thresholds are appropriate. This request for comment is not intended to 
restrict Sacramento's ability to propose other emission levels for EPA 
approval if Sacramento demonstrates that such alternative emission 
levels are insignificant compared to the types of units that are 
permitted or subject to applicable requirements and the level of 
emissions from these units.
    c. Operational flexibility. The District's limits on operational 
flexibility are not as explicitly restrictive as the limits in part 70. 
Section 308.3 of rule 207 does not allow operational flexibility for 
title I modifications, which is consistent with 70.4(b)(12)(i); 
however, the reference to ``title I modification'' is unclear. EPA has 
interpreted the term title I modification to include all modifications 
under title I of the Act, and has specifically determined that the term 
includes section 111 modifications (New Source Performance Standards) 
and section 112(g) modifications. See 56 FR 21746. Sacramento's use of 
the term ``title I modification'' should also be read to include these 
requirements. Therefore, the District must clarify the rule through 
guidance or rulemaking changes to explicitly restrict operational 
flexibility for NSPS and section 112(g) modifications.
    On August 29, 1994 (59 FR 44573), EPA requested public comment on 
whether the definition of title I modification should include other 
section 112 modifications and minor NSR modifications. EPA may require 
that the District explicitly add additional restrictions based on the 
outcome of this rulemaking. EPA believes that other restrictions in 
section 308.8 of rule 207 are sufficiently clear to prohibit this type 
of operational flexibility for major NSR modifications.
    Sacramento's rule also allows sources to accept a federally 
enforceable [[Page 29814]] emissions cap and trade emissions increases 
and decreases within the facility to meet this cap but does not 
prohibit this trading if it involves a title I modification. This 
restriction must be added to the rule along with the correct definition 
of title I modification (Sec. 70.4(b)(12)).
    d. Permit issuance deadlines. The District must change rule 207 and 
adopt appropriate permit issuance deadlines for sources that are 
initially deferred from the program due to their actual emissions but 
do not obtain federally enforceable limits on their potential to emit. 
These deadlines must ensure that all permits are issued by December 15, 
1999, which is required by EPA's August 2, 1993 guidance on source-
category limited interim approval.
    e. Emissions trading under applicable requirements. Sacramento must 
add emissions trading provisions consistent with Sec. 70.6(a)(10). The 
permit content section of the rule must allow provisions for trading 
within the permitted facility where an applicable requirement provides 
for trading increases and decreases without case-by-case approval.
    f. Inclusion of fugitive emissions in the permit. The rule must 
explicitly require that the permit include fugitive emissions in the 
same manner as stack emissions (Sec. 70.3(d)).
    g. Public participation. The District rule must state that the 
District will provide public notice by means other than newspaper 
notice and a mailing list when necessary to ensure that adequate notice 
is given (Sec. 70.7(h)).

C. Effect of Interim Approval

    This interim approval, which may not be renewed, extends for a 
period of up to two years. During the interim approval period, the 
District is protected from sanctions for failure to have a program, and 
EPA is not obligated to promulgate a Federal permits program in the 
District. Permits issued under a program with interim approval have 
full standing with respect to part 70. The one year time period for 
submittal of permit applications by subject sources and the three year 
time period for processing the initial permit applications begin upon 
interim approval.
    The scope of the part 70 program EPA is proposing to approve in 
this notice applies to all part 70 sources (as defined in the approved 
program) within the Sacramento Metropolitan Air Quality Management 
District except any sources of air pollution over which an Indian Tribe 
has jurisdiction. See, e.g., 59 FR 55813, 55815-18 (Nov. 9, 1994). The 
term ``Indian Tribe'' is defined under the Act as ``any Indian tribe, 
band, nation, or other organized group or community, including any 
Alaska Native village, which is Federally recognized as eligible for 
the special programs and services provided by the United States to 
Indians because of their status as Indians.'' See section 302(r) of the 
CAA; see also 59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21, 
1993).
    Requirements for approval, specified in 40 CFR 70.4(b), encompass 
section 112(l)(5) requirements for approval of a program for delegation 
of section 112 standards as promulgated by EPA as they apply to part 70 
sources. Section 112(l)(5) requires that the District's program contain 
adequate authorities, adequate resources for implementation, and an 
expeditious compliance schedule, which are also requirements under part 
70. Therefore, the EPA is also proposing to grant approval under 
section 112(l)(5) and 40 CFR 63.91 of the State's program for receiving 
delegation of section 112 standards that are unchanged from Federal 
standards as promulgated. This program for delegations only applies to 
sources covered by the part 70 program.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of the State's submittal 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 interim 
approval. The principal purposes of the docket are:
    (1) To allow interested parties a means to identify and locate 
documents so that they can effectively participate in the approval 
process; and
    (2) To serve as the record in case of judicial review. The EPA will 
consider any comments received by July 6, 1995.
B. Executive Order 12866

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

C. Regulatory Flexibility Act

    The EPA's actions under section 502 of the Act do not create any 
new requirements, but simply address operating permits programs 
submitted to satisfy the requirements of 40 CFR part 70. Because this 
action does not impose any new requirements, it does not have a 
significant impact on a substantial number of small entities.

D. Unfunded Mandates

    Under Section 202 of the Unfunded Mandates Reform Act of 1995 
(``Unfunded Mandates Act''), signed into law on March 22, 1995, EPA 
must prepare a budgetary impact statement to accompany any proposed or 
final rule that includes a Federal mandate that may result in estimated 
costs to state, local, or tribal governments in the aggregate; or to 
the private sector, of $100 million or more. Under Section 205, EPA 
must select the most cost-effective and least burdensome alternative 
that achieves the objectives of the rule and is consistent with 
statutory requirements. Section 203 requires EPA to establish a plan 
for informing and advising any small governments that may be 
significantly or uniquely impacted by the rule.
    EPA has determined that the approval action promulgated today does 
not include a federal mandate that may result in estimated costs of 
$100 million or more to either state, local, or tribal governments in 
the aggregate, or to the private sector. This federal action approves 
pre-existing requirements under state or local law, and imposes no new 
federal requirements. Accordingly, no additional costs to state, local, 
or tribal governments, or to the private sector, result from this 
action.

List of Subjects in 40 CFR Part 70

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

    Authority: 42 U.S.C. 7401-7671q.

    Dated: May 23, 1995.
David P. Howekamp,
Acting Regional Administrator.
[FR Doc. 95-13788 Filed 6-5-95; 8:45 am]
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