[Federal Register Volume 60, Number 121 (Friday, June 23, 1995)]
[Rules and Regulations]
[Pages 32606-32612]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-15038]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 52 and 70

[CA 77-1-6996; AD-FRL-5216-5]


Clean Air Act Final Interim Approval of the Operating Permits 
Program; Final Approval of State Implementation Plan Revision for the 
Issuance of Federally Enforceable State Operating Permits; Bay Area Air 
Quality Management District, California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: The EPA is promulgating interim approval of the title V 
operating permits program submitted by the Bay Area Air Quality 
Management District (Bay Area, BAAQMD, or District) for the purpose of 
complying with federal requirements that mandate that states develop, 
and submit to EPA, programs for issuing operating permits to all major 
stationary sources and to certain other sources. In addition, EPA is 
promulgating final approval of a revision to Bay Area's portion of the 
California State Implementation Plan (SIP) regarding synthetic minor 
regulations for the issuance of federally enforceable state operating 
permits (FESOP). In order to extend the federal enforceability of state 
operating permits to hazardous air pollutants (HAP), EPA is also 
finalizing approval of Bay Area's synthetic minor regulations pursuant 
to section 112(l) of the Clean Air Act (CAA or Act). Finally, today's 
action grants final approval to Bay Area's mechanism for receiving 
delegation of section 112 standards as promulgated.

EFFECTIVE DATE: July 24, 1995.

ADDRESSES: Copies of Bay Area's submittals and other supporting 
information used in developing the final approvals are available for 
inspection (docket number CA-BA-94-1-OPS) during normal business hours 
at the following location: U.S. Environmental Protection Agency, Region 
IX, Air & Toxics Division, 75 Hawthorne Street, San Francisco, CA 
94105. Copies of the regulations being incorporated by reference in 
today's rule are also available for inspection at the following 
location: Air Docket (6102), U.S. Environmental Protection Agency, 401 
M Street, S.W., Washington, D.C. 20460.

FOR FURTHER INFORMATION CONTACT: Celia Bloomfield (telephone 415/744-
1249), Mail Code A-5-2, U.S. Environmental Protection Agency, Region 
IX, Air & Toxics Division, 75 Hawthorne Street, San Francisco, CA 
94105.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

    Title V of the 1990 Clean Air Act Amendments (sections 501-507 of 
the Clean Air Act (Act)), and implementing regulations at 40 Code of 
Federal Regulations (CFR) part 70, require that states develop and 
submit operating permits programs to EPA by November 15, 1993, and that 
EPA act to approve or disapprove each program within 1 year after 
receiving the submittal. The EPA's program review occurs pursuant to 
section 502 of the Act and the part 70 regulations, which together 
outline criteria for approval or disapproval. Where a program 
substantially, but not fully, meets the requirements of part 70, EPA 
may grant the program interim approval for a period of up to 2 years. 
If EPA has not fully approved a program by 2 years after the November 
15, 1993 date, or by the end of an interim program, it must establish 
and implement a federal program.
    On November 29, 1994, EPA proposed interim approval of the 
operating permits program for Bay Area, California. See 59 FR 60939. 
The November 29, 1994 Federal Register document also proposed approval 
of Bay Area's interim mechanism for implementing section 112(g) and 
program for delegation of section 112 standards as promulgated. Public 
comment was solicited on these proposed actions. EPA received public 
comment on the proposal and is responding to those comments in this 
document and in a separate ``Response to Comments'' document that is 
available in the docket at the Regional office. In this notice, EPA is 
promulgating interim approval of Bay Area's operating permits program 
and approving the section 112(g) and section 112(l) mechanisms noted 
above.
    On June 28, 1989 (54 FR 27274), EPA published criteria for 
approving and incorporating into the SIP regulatory programs for the 
issuance of federally enforceable state operating permits. Permits 
issued pursuant to a program meeting the June 28, 1989 criteria and 
approved into the SIP are considered [[Page 32607]] federally 
enforceable for criteria pollutants. The synthetic minor mechanism may 
also be used to create federally enforceable limits for emissions of 
hazardous air pollutants (HAP) if it is approved pursuant to section 
112(l) of the Act.
    In the November 29, 1994 Federal Register document, EPA also 
proposed approval of Bay Area's synthetic minor program for creating 
federally enforceable limits in District operating permits. In this 
notice, EPA is promulgating approval of the synthetic minor program for 
the Bay Area as a revision to Bay Area's SIP and pursuant to section 
112(l) of the Act.

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

    On November 29, 1994, EPA proposed interim approval of Bay Area's 
title V operating permits program as it was submitted on November 16, 
1993 and amended on October 27, 1994. Since the time that EPA proposed 
interim approval, Bay Area adopted regulations to implement title IV of 
the Act. On September 21, 1994, Bay Area incorporated part 72 by 
reference into District Regulation 2, Rule 7. Regulation 2, Rule 7 was 
submitted to EPA on December 29, 1994, and it corrects the first 
program deficiency (i.e., acid rain definitions) identified in the 
proposed interim approval notice by incorporating the federal acid rain 
definitions by reference and by stating that ``if the provisions or 
requirements of 40 CFR Part 72 are determined to conflict with 
Regulation 2, Rule 6, the provisions and requirements of Part 72 shall 
apply and take precedence.''
    EPA recently became aware that the November 29, 1994 proposal 
incorrectly identified District Regulation 1, sections 431-433. Those 
regulations are SIP-approved District breakdown provisions (September 
2, 1981, 46 FR 43968) and are recognized by EPA.
    EPA received comments on the proposed interim approval of the Bay 
Area program from three public commenters: New United Motor 
Manufacturing Inc. (NUMMI), BAAQMD, and the National Stone Association 
(NSA). Several interim approval issues set forth in the November 29, 
1994 proposal were modified as a result of public comment. These 
changes are discussed below along with other issues raised during the 
public comment period. EPA's final action, as set forth in section 
II.B. below, is being revised from the proposed notice in response to 
public comment. EPA received no adverse public comment on the proposed 
approval of Bay Area's synthetic minor program or program for receiving 
section 112(l) standards as promulgated.
1. Section 112(g) Implementation
    One commenter stated that in the absence of a final section 112(g) 
regulation, Bay Area should be allowed to use its existing air toxics 
program and de minimis levels to determine case-by-case Maximum 
Achievable Control Technology (MACT) for new, reconstructed, and 
modified sources. The commenter further stated that the broad statutory 
requirements of section 112(g) should not supersede Bay Area's existing 
toxics program.
    EPA has received many comments on various state part 70 programs 
concerning this issue and agrees that it is not reasonable to expect 
the states and districts to implement section 112(g) before a rule is 
issued. EPA has therefore published an interpretive notice in the 
Federal Register regarding section 112(g) of the Act: 60 FR 8333 
(February 14, 1995). This notice outlines EPA's revised interpretation 
of section 112(g) applicability prior to EPA's issuing the final 
section 112(g) rule. The notice states that major source modifications, 
constructions, and reconstructions will not be subject to section 
112(g) requirements until the final rule is promulgated. EPA expects to 
issue the final section 112(g) rule in September 1995.
    The interpretative notice further explains that EPA is considering 
whether the effective date of section 112(g) should be delayed beyond 
the date of promulgation of the federal rule so as to allow states time 
to adopt rules implementing the federal rule, and that 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), Bay Area 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.
    In the November 29, 1994 Federal Register notice proposing interim 
approval for the Bay Area's title V program, EPA also proposed to 
approve the use of Bay Area's preconstruction review program as a 
mechanism to implement section 112(g) during the transition period 
between promulgation of the section 112(g) rule and adoption by the Bay 
Area of rules specifically designed to implement section 112(g). Since 
approval is intended solely to confirm that the District has 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.
    Bay Area commented that EPA should allow California districts 18 
months, rather than 12 months, to develop section 112(g) regulations 
following EPA's promulgation of the federal section 112(g) rule. Bay 
Area stated that 12 months is not sufficient time to both undergo the 
regulatory development process and prepare a section 112(l) equivalency 
package for approval of the District's regulation to be used in lieu of 
the federal section 112(g) rule.
    EPA has approved an 18-month transition period in other states and 
does not see a unique reason to limit the Bay Area to 12 months. 
Therefore, EPA will allow Bay Area 18 months from the date of EPA's 
final section 112(g) rule to develop and submit district regulations 
for the implementation of section 112(g). If the final section 112(g) 
rule, however, eliminates the transition period, Bay Area must follow 
the implementation time lines set out in that rulemaking.
2. Certification by a Responsible Official
    One commenter objected to EPA's statement, under program 
deficiencies, that any document submitted in conjunction with a title V 
permit must be certified by a responsible official. The commenter 
stated that part 70 specifies which documents must be certified and 
that requiring ``any document'' to be certified represents an overly 
strict interpretation of section 70.6(c)(1).
    EPA disagrees that the requirement to certify ``any document'' 
required by the permit is either redundant or unwarranted. The use of 
the term ``any document'' is necessary to ensure that all documents 
required to be certified under part 70 will be certified. Including the 
language in section 70.6(c)(1) should not create any additional burden 
than if the documents were all specifically listed. As the Bay Area's 
program is currently written, only semiannual reports and annual 
compliance certifications need to be certified by a responsible 
official. The Bay Area's program fails to specify certification of 
other required documents such as progress reports associated with a 
compliance schedule (section 70.6(c)(4)) or prompt reports of permit 
deviations (section 70.6(a)(3)(iii)(B)). Adding a requirement 
consistent with section 70.6(c)(1) would correct such omissions.
    On a related note, EPA believes that, in one respect, the language 
suggested [[Page 32608]] in the November 29, 1994 Federal Register 
proposal may have been an overly inclusive interpretation of section 
70.6(c)(1). Section 70.6(c)(1) reads, ``Any document (including 
reports) required by a part 70 permit shall contain a certification by 
a responsible official * * *'' While the commenter focused on the words 
``any document,'' EPA believes that the overly inclusive language in 
the proposed interim approval is the reference to any document 
submitted ``in conjunction with'' a permit. Therefore, Bay Area may 
substitute the phrase ``required by,'' rather than ``in conjunction 
with,'' when correcting the above deficiency.
3. Insignificant Activities
    Two commenters responded to EPA's identification of deficiencies 
regarding Bay Area's insignificant activities list and significance 
thresholds. The commenters raised several points, the first being that 
EPA's recommended insignificance levels would impose unnecessary 
administrative burdens.
    EPA does not agree that the cut-off levels proposed in the November 
29, 1994 notice of 2 tons per year (tpy) for criteria pollutants and 
the lesser of 1000 pounds per year or the section 112(g) de minimis 
levels for hazardous air pollutants (HAP) would create an unreasonable 
administrative burden. Insignificant activities are relevant only 
during the initial application phase when the source has to determine 
what information must be included in its permit application. Regardless 
of the list of insignificant activities or the cut-off emissions 
levels, the source may not omit from its application any information 
that is necessary to determine applicability, impose an applicable 
requirement, or assess fees (section 70.5(c)).
    EPA also disagrees that the requirement to describe emissions from 
activities not qualifying as insignificant is overly burdensome. First, 
sources can use reliable emissions factors rather than extensive 
testing and monitoring. Second, the source descriptions required by 
section 70.5(c)(3)(ii) need only include sufficient detail to determine 
fees and the applicability of requirements of the Act. Finally, in many 
cases, smaller units can be aggregated and described in general terms 
if such an approach would not interfere with determining whether and 
how an applicable requirement applies at a source.
    A second point raised in comment was that the redesignation of Bay 
Area to attainment status for ozone justifies a higher insignificance 
threshold for criteria pollutants. EPA agrees that emissions cut-offs 
for insignificant activities should be based on area-specific 
circumstances and analysis. The proposed notice recommended a 2 tpy 
cut-off for criteria pollutants for the Bay Area because of the large 
number of sources and emissions in the District, the high population 
density, and the distinct relationship between regulatory compliance 
and air quality improvement in the Bay Area. While EPA is open to 
evaluating alternative emissions cut-offs, such a proposal must clearly 
demonstrate that the higher level of emissions are insignificant for 
the Bay Area.
    An industry commenter also requested that EPA accept Bay Area's 
categorical permit exemption list as its list of insignificant 
activities. While part 70 allows state and local agencies to submit a 
list of insignificant activities and emissions levels for approval, 
this list must be accompanied by selection criteria that will assure 
insignificance with respect to federal applicable requirements 
(sections 70.4(b)(2) and 70.5(c)). The fact that the District has a 
preexisting exemption list does not constitute sufficient justification 
of insignificance. Because Bay Area has not provided EPA with 
justification for each categorical exemption, EPA does not have 
adequate information on which to evaluate the activities.
    A fourth point raised in response to EPA's recommended 
insignificance thresholds was the suggestion that a single emissions 
cut-off be used to define insignificant activities for HAP-emitting 
sources. The commenter suggested that a single threshold would be more 
appropriate than the section 112(g) de minimis values since the Act 
uses a broad 10 tpy applicability threshold.
    EPA recommended using the proposed section 112(g) de minimis levels 
because they define what EPA, through research and science, has 
determined to be significant enough to warrant review by the public and 
EPA on a facility-wide basis. EPA believes that the section 112(g) de 
minimis levels would more easily allow the permitting authority to 
verify independently the applicability of requirements and should serve 
as an upper bound on which activities may be excluded from permit 
applications. The same result may be achieved, however, with a single 
cut-off of 1000 pounds per year if the threshold is accompanied by a 
caveat that activities and emissions necessary for determining the 
applicability of, or imposing an applicable requirement on, the source 
may not be omitted from the permit application.
    A fifth comment regarding insignificant activities was Bay Area's 
objection to adding an ``applicable requirement gatekeeper'' that 
excludes activities subject to an applicable requirement from 
classification as insignificant. Bay Area asserted that the applicable 
requirement gatekeeper for insignificant activities is too stringent 
since some state implementation plans (SIPs) contain requirements such 
as opacity limits that would generally apply to all activities at the 
facility regardless of size.
    EPA understands Bay Area's concerns and believes that the 
applicable requirement gatekeeper can be added to Bay Area's program 
without nullifying the usefulness of insignificant activities. EPA 
recognizes that certain requirements approved into the SIP, such as 
opacity standards, are applicable not to specific emissions units, but 
instead to the facility as a whole. Therefore, the presence of an 
applicable opacity limit does not mean that every emissions unit at the 
facility must be described in the application since the applicability 
of the requirement is clear.
4. Notice to the Public and Affected States
    Bay Area disagreed with the public and affected state notice 
deficiencies identified by EPA in the proposed interim approval notice. 
First, Bay Area objected to revising its program to include affected 
state notice provisions for Native American tribes since there is not 
currently a potentially affected tribe that is eligible for treatment 
as a state.
    EPA is concerned about Bay Area's proposal to delay adoption of 
affected state notice provisions until tribes apply for state status. 
Although the federal rule that will enable tribes to apply for 
treatment as states has not yet been finalized, and there are no tribes 
currently eligible for treatment as a state under the Act, EPA believes 
that the likelihood of Native American tribes qualifying as affected 
states under part 70 is great and that Bay Area will ultimately need to 
revise its rule to address this outcome. Nonetheless, as an alternative 
to up-front adoption of affected state notice provisions, EPA will 
accept a commitment from Bay Area to: (1) initiate rule revisions upon 
notification from EPA that an affected tribe has applied for state 
status, and (2) provide affected state notice to tribes upon their 
filing for state status, that is, prior to the District's adoption of 
affected state notice rules. Second, Bay Area also objected to adding 
the phrase ``by other means if necessary to assure adequate notice to 
the affected public'' [[Page 32609]] to the District's public notice 
procedures. Bay Area claimed that its existing public notice procedures 
already assure adequate notice to the affected public.
    EPA acknowledges that the Bay Area has an extensive public notice 
process and that it is adequate in most circumstances. However, EPA 
also realizes that the United States, in general, and the Bay Area, in 
particular, consist of diverse communities with varying ties to the 
publications used for public notification. EPA proposed adding the 
phrase ``by other means if necessary to assure adequate notice to the 
affected public * * * '' to Bay Area's public notice provisions to give 
Bay Area the legal authority to expand its notification procedures if 
notice under existing procedures is ever inadequate. The additional 
language is not intended to require the Bay Area to expand its routine 
notification procedures, but rather to allow the District to take extra 
steps when circumstances dictate.
5. Alternative Emission Limits
    Bay Area believes that EPA's concerns regarding alternative 
emission limits can be handled on a permit-by-permit basis rather than 
by revising the District's Manual of Procedures (MOP). Bay Area's MOP 
states that alternative emission control plans issued pursuant to 
District Regulation 8 may be incorporated into title V permits. In the 
proposed interim approval notice, EPA stated that the permit may 
contain an alternative emission limit only if it has been approved into 
Bay Area's SIP. The MOP provides no assurance that an alternative 
emission control plan in District Regulation 8 is SIP-approved before 
it is incorporated into a title V permit. In response, Bay Area 
commented that if the alternative emission control plan in District 
Regulation 8 has been approved into the SIP, it will become part of the 
federally enforceable portion of the permit; if it has not been 
approved into the SIP, it will become part of the state-only portion of 
the permit.
    EPA finds this permit-by-permit approach acceptable. However, the 
current language in the MOP does not distinguish between alternative 
emission control plans in District Regulation 8 that have been approved 
into the SIP and alternative emission control plans in Regulation 8 
that have not been approved into the SIP. Therefore, in order to 
correct this deficiency, the District must add a provision to the MOP 
(section 4.1) stating that only alternative emission control plans that 
have been approved into the SIP may be incorporated into the federally 
enforceable portion of the permit.
6. Emissions Trading
    Bay Area commented that the emissions trading provisions of section 
70.6(a)(10) should not be required for the Bay Area since the 
District's new source review program prohibits emissions increases at a 
facility without a case-by-case approval. EPA does not support Bay 
Area's position on this matter. Bay Area must include a provision 
consistent with section 70.6(a)(10) to ensure that the District can 
implement mandatory trading opportunities that may arise in specific 
federal requirements.
7. Particulate Matter (PM) Issues
    The National Stone Association raised several issues regarding PM 
that were not relevant to EPA's proposed interim approval of Bay Area's 
operating permits program. Therefore, EPA is addressing these comments 
in the Response to Comments Document (located in the docket at the 
Regional Office) and not in this final interim approval notice.

B. Final Action

1. Title V Operating Permits Program
    The EPA is promulgating interim approval of Bay Area's title V 
operating permits program as submitted on November 16, 1993 and amended 
on October 27, 1994. Bay Area must make the following changes to 
receive full approval:
    (1) Provide a demonstration that each activity on Bay Area's 
insignificant activities list (See p. II-3 of program description, 2-6-
405.4, and list in Appendix B.) is truly insignificant and is not 
likely to be subject to an applicable requirement. Alternatively, the 
District may establish emissions level cut-offs, in which activities 
emitting below the cut-offs would qualify as insignificant. In the 
latter case, the District must demonstrate that the cut-off emissions 
levels are insignificant compared to the level of emissions from and 
type of units that are required to be permitted or subject to 
applicable requirements. In addition, Bay Area must revise Regulation 
2, Rule 6 to state that activities needed to determine the 
applicability of, or impose applicable requirements on, the facility 
may not qualify as insignificant activities. (Secs. 70.5(c) and 
70.4(b)(2))
    (2) Include a term consistent with the part 70 definition of 
``applicable requirement,'' and use that term consistently in rules 2-
6-409.1, 2-6-409.2 and throughout the regulation. As currently written, 
Bay Area's regulation requires that ``all federal * * * air quality 
requirements'' be incorporated into permits (2-6-409.1); yet, the term 
is never defined. Bay Area's program does define ``applicable 
requirement'' (2-6-202), but the definition deviates from the part 70 
definition and includes non-federally enforceable District and State 
requirements. Bay Area's definition of ``federally enforceable'' (2-6-
207) appears to address the federal definition of ``applicable 
requirement''; however, it does not include the entire list of 
applicable requirements, and it is not clearly used in the permit 
content section of Regulation 2-6.
    (3) Rule 2-6-409 must be revised to require that permit terms and 
conditions assure compliance with all applicable requirements 
(Sec. 70.7(a)(1)(iv)) and that permits contain emission limitations and 
standards (Sec. 70.6(a)(1)) and compliance certification requirements 
(Sec. 70.6(c)(1)) that assure compliance with all applicable 
requirements. As Regulation 2-6 is currently written, the District's 
title V permits only have to include requirements for testing, 
monitoring, reporting, and recordkeeping sufficient to assure 
compliance with the terms and conditions of the permit and the 
applicable requirements themselves. (2-6-409.1 and 2-6-409.2)
    (4) Require that certifications by the responsible official 
affirmatively state that they are based on truth, accuracy, and 
completeness and that they are based on information and belief formed 
after reasonable inquiry. Bay Area must revise 2-6-405.9, 2-6-502, MOP 
(4.5 and 4.7), and any other certification provisions to ensure that 
both elements are explicitly required. (Sec. 70.5(d))
    (5) Revise Regulation 2-6 to define and require notice to, affected 
states. Alternatively, Bay Area may make a commitment to: (1) Initiate 
rule revisions upon being notified by EPA of an application by an 
affected tribe for state status, and (2) provide affected state notice 
to tribes upon their filing for state status (i.e., prior to Bay Area's 
adopting affected state notice rules).
    (6) Eliminate the phrase ``but not limited to'' from the definition 
of ``administrative permit amendment'' (2-6-201). Only changes 
identified in the rule and approved as part of Bay Area's program may 
be processed as administrative amendments. (Sec. 70.7(d)(1)(vi))
    (7) Revise 2-6-404.3 to limit the universe of significant permit 
modification applications due 12 months after commencing operations to 
only those applications for revisions pursuant to section 112(g) and 
title I, [[Page 32610]] parts C and D of the Act that are not 
prohibited by an existing part 70 permit. Except in the above 
circumstances, a source is not allowed to operate the proposed change 
until the permitting authority has revised the source's part 70 permit. 
(Sec. 70.5(a)(1)(ii))
    (8) In minor permit modification procedures, eliminate the extended 
review period (2-6-414.2) that is inconsistent with 2-6-410.2 and 
Sec. 70.7(e)(2)(iv). This extension inappropriately lengthens the time 
that the source can operate under new conditions without a formal 
permit revision.
    (9) Revise 2-6-412.1 to include notice ``by other means if 
necessary to assure adequate notice to the affected public.'' 
(Sec. 70.7(h)(1))
    (10) Add a provision to the Manual of Procedures (section 4.1) 
stating that only alternative emission control plans that have been 
approved into the SIP may be incorporated into the federally 
enforceable portion of the permit. (Sec. 70.6(a)(1)(iii))
    (11) Add emissions trading provisions consistent with 
Sec. 70.6(a)(10), which requires that trading must be allowed where an 
applicable requirement provides for trading increases and decreases 
without a case-by-case approval.
    (12) Add a requirement to Regulation 2-6 that any document required 
by a part 70 permit must be certified by a responsible official. 
(Sec. 70.6(c)(1))
    (13) Revise 2-6-224 and 2-6-409.10 to specify that all progress 
reports must include: (1) Dates when activities, milestones, or 
compliance required in the schedule of compliance were achieved; and 
(2) an explanation of why any dates in the schedule of compliance were 
not or will not be met and any preventive or corrective measures 
adopted. (Sec. 70.6(c)(4) (i) and (ii))
    (14) Revise section 4.5 of the MOP and add a provision to 2-6-409 
to require that compliance certifications be submitted more frequently 
than annually if specified in an underlying applicable requirement. 
(Sec. 70.6(c)(4))
    (15) Bay Area has indicated in its program description that it 
intends to process new units that do not affect any federally 
enforceable permit condition ``off-permit'' (Section II, p. 21 and 
Staff Report, pp. 3-4). However, Regulation 2-6 does not include any of 
the off-permit provisions required by Secs. 70.4(b) (14) and (15). The 
part 70 off-permit provisions provide several safeguards such as notice 
to EPA and recordkeeping requirements that must be incorporated into 
Bay Area's program. In order to receive full approval in this regard, 
Bay Area may submit a letter revising its program description to 
indicate that it will not process new units ``off-permit'' or it may 
revise its rule to include the part 70 off-permit provisions.
    (16) Revise 2-6-222 defining ``regulated air pollutant'' to be 
consistent with the federal definition (Sec. 70.2) and include 
pollutants subject to any requirement established under section 112 of 
the Act, including sections 112 (g), (j), and (r).
    (17) In addition to the District-specific issues arising from Bay 
Area's program submittal and locally adopted regulations, California 
state law currently exempts agricultural production sources from permit 
requirements. In order for this program to receive full approval (and 
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.
    The scope of the Bay Area's part 70 program approved in this notice 
applies to all part 70 sources (as defined in the approved program) 
within the Bay Area, California, 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 Act; see also 59 FR 43956, 43962 (Aug. 25, 
1994); 58 FR 54364 (Oct. 21, 1993).
    This interim approval, which may not be renewed, extends until July 
23, 1997. During this interim approval period, the Bay Area is 
protected from sanctions, and EPA is not obligated to promulgate, 
administer and enforce a federal operating permits program in the Bay 
Area. Permits issued under a program with interim approval have full 
standing with respect to part 70, and the 1-year time period for 
submittal of permit applications by subject sources begins upon the 
effective date of this interim approval, as does the 3-year time period 
for processing the initial permit applications.
    If the Bay Area fails to submit a complete corrective program for 
full approval by January 23, 1997, EPA will start an 18-month clock for 
mandatory sanctions. If the Bay Area then fails to submit a corrective 
program that EPA finds complete before the expiration of that 18-month 
period, EPA will be required to apply one of the sanctions in section 
179(b) of the Act, which will remain in effect until EPA determines 
that the Bay Area has corrected the deficiency by submitting a complete 
corrective program. Moreover, if the Administrator finds a lack of good 
faith on the part of the Bay Area, both sanctions under section 179(b) 
will apply after the expiration of the 18-month period until the 
Administrator determines that the Bay Area has come into compliance. In 
any case, if, six months after application of the first sanction, the 
Bay Area still has not submitted a corrective program that EPA has 
found complete, a second sanction will be required.
    If EPA disapproves the Bay Area's complete corrective program, EPA 
will be required to apply one of the section 179(b) sanctions on the 
date 18 months after the effective date of the disapproval, unless 
prior to that date the Bay Area has submitted a revised program and EPA 
has determined that it corrected the deficiencies that prompted the 
disapproval. Moreover, if the Administrator finds a lack of good faith 
on the part of the Bay Area, both sanctions under section 179(b) shall 
apply after the expiration of the 18-month period until the 
Administrator determines that the Bay Area has come into compliance. In 
all cases, if, six months after EPA applies the first sanction, the Bay 
Area has not submitted a revised program that EPA has determined 
corrects the deficiencies, a second sanction is required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if the Bay 
Area has not submitted a timely and complete corrective program or EPA 
has disapproved its submitted corrective program. Moreover, if EPA has 
not granted full approval to the Bay Area program by the expiration of 
this interim approval and that expiration occurs after November 15, 
1995, EPA must promulgate, administer and enforce a federal permits 
program for the Bay Area upon interim approval expiration.
2. District Preconstruction Permit Program Implementing Section 112(g)
    EPA is approving the use of Bay Area's preconstruction review 
program found in Regulation 2, Rule 2 as a mechanism to implement 
section 112(g) during the transition period between promulgation of 
EPA's section 112(g) rule and adoption by the Bay Area of rules 
specifically designed to implement section 112(g). EPA is limiting the 
[[Page 32611]] duration of this approval to 18 months following 
promulgation by EPA of the section 112(g) rule.
3. Program for Delegation of Section 112 Standards as Promulgated
    Requirements for part 70 program approval, specified in 40 CFR 
section 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, EPA is also promulgating 
approval under section 112(l)(5) and 40 CFR section 63.91 of Bay Area's 
program for receiving delegation of section 112 standards that are 
unchanged from the federal standards as promulgated. This program for 
delegations applies to both existing and future standards but is 
limited to sources covered by the part 70 program.
4. State Operating Permit Program for Synthetic Minors
    EPA is promulgating full approval of Bay Area's synthetic minor 
operating permit program submitted to EPA by the California Air 
Resources Board, on behalf of the Bay Area, on February 28, 1994 
(supplemented April 29, 1994). The synthetic minor operating permit 
program is being approved into Bay Area's SIP pursuant to part 52 and 
the five approval criteria set out in the June 28, 1989 Federal 
Register document (54 FR 27282). EPA is also promulgating full approval 
pursuant to section 112(l)(5) of the Act so that HAP emission limits in 
synthetic minor operating permits may be deemed federally enforceable.
    Bay Area has already begun to issue permits containing voluntarily 
accepted limits pursuant to the District's synthetic minor regulations. 
If the District followed its own procedures, each of those permits was 
subject to public notice and prior EPA review. Therefore, EPA will 
consider all operating permits issued pursuant to Bay Area's synthetic 
minor regulations being approved in today's notice to be federally 
enforceable with the promulgation of this approval provided that Bay 
Area submit any permits that it wishes to make federally enforceable to 
EPA, accompanied by documentation that the procedures approved today 
have been followed. EPA will expeditiously review any individual 
permits so submitted to ensure their conformity to the program 
requirements. (See 57 FR 59931.)
    Nothing in this action should be construed as permitting or 
allowing or establishing a precedent for any future implementation 
plan. Each request for revision to the state implementation plan shall 
be considered separately in light of specific technical, economic, and 
environmental factors and in relation to relevant statutory and 
regulatory requirements.

III. Administrative Requirements

A. Docket

    Copies of Bay Area's submittal and other information relied upon 
for the final interim approval, including the three public comment 
letters received and reviewed by EPA on the proposal, are contained in 
docket number CA-BA-94-1-OPS maintained at the EPA Regional Office. The 
docket is an organized and complete file of all the information 
submitted to, or otherwise considered by, EPA in the development of 
this final interim approval. The docket is available for public 
inspection at the location listed under the ADDRESSES section of this 
document.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    The EPA's actions under sections 502, 110, and 112 of the Act do 
not create any new requirements, but simply address operating permit 
programs submitted to satisfy the requirements of 40 CFR part 70. 
Because these actions do not impose any new requirements, they do 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

40 CFR Part 52

    Air pollution control, Carbon monoxide, Hydrocarbons, Incorporation 
by reference, Intergovernmental relations, Lead, Nitrogen dioxide, 
Ozone, Particulate matter, Sulfur oxides, Volatile organic compounds.

40 CFR Part 70

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

    Note: Incorporation by reference of the State Implementation 
Plan for the State of California was approved by the Director of the 
Federal Register on July 1, 1982.

    Dated: May 25, 1995.
David P. Howekamp,
Acting Regional Administrator.
    Chapter I, title 40 of the Code of Federal Regulations is amended 
as follows:

PART 52--[AMENDED]

    1. The authority citation for part 52 continues to read as follows:

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

Subpart F--California

    2. Section 52.220 is amended by adding paragraphs (c) (217) and 
(218) to read as follows:


Sec. 52.220  Identification of plan.

* * * * *
    (c) * * *
    (217) New and amended regulations for the following APCDs were 
submitted on February 28, 1994, by the Governor's designee.
    (i) Incorporation by reference.
    (A) Bay Area Air Quality Management District.
    (1) Amended Regulation 2, Rule 1, Sections 102, 129, 204, 213, 214, 
215, 216, 217, 218, 219, 302, 408, 411 adopted November 3, 1993; and 
New Regulation 2, Rule 6, Sections 206, 207, 210, 212, 213, 214, 218, 
222, 230, 231, [[Page 32612]] 301, 311, 401, 402, 403, 404, 420, 421, 
422, 602 adopted November 3, 1993.
    (218) New and amended regulations for the Bay Area Air Quality 
Management District were submitted on April 29, 1994 by the Governor's 
designee.
    (i) Incorporation by reference.
    (A) New Regulation 2, Rule 6, Sections 310 and 423 adopted November 
3, 1993.
* * * * *

PART 70--[AMENDED]

    1. The authority citation for part 70 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

    2. Appendix A to part 70 is amended by adding paragraph (b) to the 
entry for California to read as follows:

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

* * * * *
    (b) Bay Area Air Quality Management District: submitted on November 
16, 1993 and amended on October 27, 1994; interim approval effective on 
July 24, 1995, interim approval expires July 23, 1997.
* * * * *
[FR Doc. 95-15038 Filed 6-22-95; 8:45 am]
BILLING CODE 6560-50-P