[Federal Register Volume 60, Number 127 (Monday, July 3, 1995)]
[Proposed Rules]
[Pages 34488-34493]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-16276]



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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Parts 52 and 70

[CA 147-2-7073; AD-FRL-5253-2]


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA proposes interim approval of the title V operating 
permits program submitted by the Mojave Desert Air Quality Management 
District (Mojave Desert, 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. There are nine deficiencies in 
Mojave Desert's program, as specified in the Technical Support Document 
and outlined below, that must be corrected before the program can be 
fully approved. EPA is also proposing to approve a revision to Mojave 
Desert'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 

[[Page 34489]]
is also proposing approval of Mojave Desert's synthetic minor 
regulations pursuant to section 112 of the Act. Today's action also 
proposes approval of Mojave Desert's mechanism for receiving straight 
delegation of section 112 standards.

DATES: Comments on these proposed actions must be received in writing 
by August 2, 1995.

ADDRESSES: Comments should be addressed to Sara Bartholomew, Mail Code 
A-5-2, U.S. Environmental Protection Agency, Region IX, Air & Toxics 
Division, 75 Hawthorne Street, San Francisco, CA 94105.
    Copies of the District's submittal and other supporting information 
used in developing the proposed interim approval are available for 
inspection during normal business hours at the following location: U.S. 
Environmental Protection Agency, Region IX, 75 Hawthorne Street, San 
Francisco, CA 94105.

FOR FURTHER INFORMATION CONTACT: Sara Bartholomew (telephone 415/744-
1170), 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

    As required under title V of the Clean Air Act (Act) as amended 
(1990), EPA has promulgated rules that 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 CFR part 70 (part 70). 
Title V requires states to develop, and submit to EPA, programs for 
issuing operating permits to all major stationary sources and to 
certain other sources.
    The Act requires that states develop and submit title V 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 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 an operating permit program meeting these criteria 
and approved into the SIP are considered federally enforceable. EPA has 
encouraged states to consider developing such programs in conjunction 
with title V operating permit programs for the purpose of creating 
federally enforceable limits on a source's potential to emit. This 
mechanism would enable sources to reduce their potential to emit to 
below the title V applicability thresholds and avoid being subject to 
title V. (See the guidance document entitled, ``Limitation of Potential 
to Emit with Respect to Title V Applicability Thresholds,'' dated 
September 18, 1992, from John Calcagni, Director of EPA's Air Quality 
Management Division.) On November 3, 1993, EPA announced in a guidance 
document entitled, ``Approaches to Creating Federally Enforceable 
Emissions Limits,'' signed by John S. Seitz, Director of EPA's Office 
of Air Quality Planning and Standards (OAQPS), that this mechanism 
could be extended to create federally enforceable limits for emissions 
of hazardous air pollutants (HAP) if the program were approved pursuant 
to section 112(l) of the Act.

II. Proposed Action and Implications

    This document focuses on specific elements of Mojave Desert's title 
V operating permits program submittal that must be corrected to meet 
the minimum requirements of 40 CFR part 70. The full program submittal, 
the Technical Support Document containing a detailed analysis of the 
full program, and other relevant materials are available as part of the 
public docket.

A. Analysis of State Submission

1. Title V Support Materials
    Mojave Desert's title V program was submitted by the California Air 
Resources Board (CARB) on November 24, 1993 and found by EPA to be 
incomplete, due to the lack of Federal Operating Permit regulations. 
Mojave resubmitted its program on March 10, 1995 and it was found to be 
complete on May 11, 1995. The Governor's letter requesting source 
category-limited interim approval, California enabling legislation, and 
Attorney General's legal opinion were submitted by CARB for all 
districts in California and therefore were not included separately in 
Mojave Desert's submittal. The Mojave Desert submission does contain a 
complete program description, District implementing and supporting 
regulations, and all other program documentation required by Sec. 70.4. 
An implementation agreement between Mojave Desert and EPA is currently 
being developed.
2. Title V Operating Permit Regulations and Program Implementation
    The Mojave Desert's title V regulations were adopted on December 
21, 1994. They consist of Regulation XII (Federal Operating Permits). 
The District also submitted supporting materials including the 
following rules: Rule 219 (Equipment Not Requiring a Permit, adopted 
December 21, 1994), 221 (Federal Operating Permit Requirement, adopted 
November 23, 1994), 301 (Permit Fees, adopted July 9, 1976, amended 
October 23, 1994), 312 (Fees for Federal Operating Permits, adopted 
December 21, 1994), and 430 (Breakdown Provisions, adopted May 7, 1976, 
amended December 21, 1994). These regulations ``substantially meet'' 
the requirements of 40 CFR part 70, Sec. 70.2 and Sec. 70.3 for 
applicability; Sec. 70.4, Sec. 70.5, and Sec. 70.6 for permit content, 
including operational flexibility; Sec. 70.7 for public participation 
and minor permit modifications; Sec. 70.5 for complete application 
forms; and Sec. 70.11 for enforcement authority. Although the 
regulations substantially meet part 70 requirements, nine program 
deficiencies outlined below are interim approval issues. Recommended 
changes are detailed further in the Technical Support Document.
    Variances--Mojave Desert has authority under State and local law to 
issue a variance from State and local requirements. Sections 42350 et 
seq. of the California Health and Safety Code and District Regulation 
1, sections 431-433 allow the District to grant relief from enforcement 
action for permit violations. The EPA regards these 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 or local 
law, such as the variance provisions referred to, that are inconsistent 
with the Act. 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 


[[Page 34490]]
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 modification 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.''
    Insignificant Activities--Section 70.4(b)(2) requires states to 
include in their part 70 programs any criteria used to determine 
insignificant activities or emission levels for the purpose 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, relying instead on a case-by-case 
determination of appropriate levels based on the particular 
circumstances of the part 70 program under review.
    In Rule 219 (Equipment Not Requiring a Permit) Mojave Desert 
provided both threshold emissions levels and a list of specific 
equipment which would not require a permit. This rule also clearly 
states that equipment need not be listed in a permit application for a 
federal operating permit if it falls below the threshold, is on the 
list of equipment in the rule, is not subject to an applicable 
requirement, and is not included in the equipment list solely due to 
size or production rate. The only weakness in these gatekeepers is that 
the word ``and'' is missing between sections (B)(1)(b) and (c), and 
(B)(1)(c) and (d) of Rule 219. Adding ``and'' in these two places would 
clarify that all of the four gatekeepers must apply for equipment to be 
exempt, not just one. These corrections must be made in order to 
receive full approval.
    Rule 219 set the threshold criteria for equipment to be exempt from 
a federal operating permit as 10% of the applicable threshold for 
determination of a major source, or 5 tons per year of any regulated 
air pollutant (whichever is less), and for HAP any de minimus level, 
any significance level, or 0.5 tons per year (whichever is less). For 
other state and district programs, EPA has proposed to accept, as 
sufficient for full approval, emission levels for insignificant 
activities of 2 tons per year for criteria pollutants and the lesser of 
1000 pounds per year, section 112(g) de minimis levels, or other title 
I significant modification levels for HAP and other toxics (40 CFR 
52.21(b)(23)(i)). EPA believes that these levels are sufficiently below 
the applicability thresholds of many applicable requirements to assure 
that no unit potentially subject to an applicable requirement is left 
off a title V application.
    Mojave Desert did not describe the criteria used to determine the 
insignificant activities or emission levels outlined in Rule 219. In 
addition, Mojave's threshold levels as described above are higher than 
those EPA has proposed to accept. Because of this, EPA is requesting 
comment on the appropriateness of these emission levels for determining 
insignificant activities in Mojave Desert. This request for comment is 
not intended to restrict the ability of other states and districts to 
propose, and EPA to approve, different emission levels if the state or 
district demonstrates that such alternative emission levels are 
insignificant compared to the level of emissions from and types of 
units that are permitted or subject to applicable requirements.
3. Title V Permit Fee Demonstration
    Section 502(b)(3) of the Act requires that each permitting 
authority collect fees sufficient to cover all reasonable direct and 
indirect costs required to develop and administer its title V operating 
permits program. Each title V program submittal must contain either a 
detailed demonstration of fee adequacy or a demonstration that 
aggregate fees collected from title V sources meet or exceed $25 per 
ton of emissions per year (adjusted from 1989 by the Consumer Price 
Index (CPI)). The $25 per ton amount is presumed, for program approval, 
to be sufficient to cover all reasonable program costs and is thus 
referred to as the ``presumptive minimum.'' See Sec. 70.9(b)(2)(i).
    Mojave Desert has opted to make a presumptive minimum fee 
demonstration. Mojave Desert's existing fee schedule (Element 7) 
requires title V facilities to pay an amount equivalent to $48.76 per 
ton in annual operating fees. This amount meets EPA's presumptive 
minimum (CPI adjusted). The $48.76 per ton amount is based on a 
calculation of 1993/94 fee revenues per ton of emissions plus a 
supplemental title V fee of 14.3% that covers the additional costs 
posed by title V. Mojave Desert will maintain an accounting system and 
is prepared to increase fees, as needed, to reflect actual program 
implementation costs.
4. Provisions Implementing the Requirements of Other Titles of the Act
    a. Section 112--Mojave Desert 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 regulatory provisions defining ``applicable requirements'' and 
``federally enforceable'' and mandating that all federal air quality 
requirements must be incorporated into permits. EPA has determined that 
this legal authority is sufficient to allow Mojave Desert to issue 
permits that assure compliance with all section 112 requirements. For 
further discussion, please refer to the Technical Support Document 
accompanying this action and the April 13, 1993 guidance memorandum 
entitled, ``Title V Program Approval Criteria for Section 112 
Activities,'' signed by John Seitz.
    b. Title IV--Mojave Desert is submitting proposed Rule 1210 (Acid 
Rain Provisions of Federal Operating Permits) to its Board in June, 
1995, which incorporates the pertinent provisions of part 72, either by 
reference or in specific language in the rule. EPA interprets 
``pertinent provisions'' to include all provisions necessary for the 
permitting of affected sources.

B. Proposal for and Implications of Interim Approval

1. Title V Operating Permits Program
    a. Proposed Interim Approval--The EPA is proposing to grant interim 
approval to the operating permits program submitted by CARB on behalf 
of Mojave Desert on March 10, 1995. Following interim approval, Mojave 
Desert must make the following changes to receive full approval:
    (1) Revise Rule 1203(G)(3)(g), which prohibits the permit shield 
from applying to Administrative Permit Amendments and Significant 
Permit Modifications, to include a reference to 

[[Page 34491]]
Minor Permit Modifications as well. The permit shield cannot apply to 
Minor Permit Modifications, and the rule must state this clearly. See 
Sec. 70.7(e)(2)(vi).
    (2) Add a provision for sending the final permit to EPA, as 
required by Sec. 70.8(a)(1). Mojave's Rule 1203(B)(1)(c) only provides 
for sending the proposed permit to EPA.
    (3) Adopt Rule 1210 (Acid Rain Provisions of Federal Operating 
Permits).
    (4) Rule 1206(A)(1)(i) must amend the provision that no reopening 
is required if the effective date of the additional applicable 
requirement is later than the date on which the permit is due to 
expire. If the original permit or any of its terms and conditions are 
extended pursuant to Sec. 70.4(b)(10), the permit must be reopened to 
include a new applicable requirement, and a statement must be made to 
this effect in Mojave's rule (Sec. 70.7(f)(1)(i)).
    (5) Clarify in Rule 1203(G)(3)(B) that the permit shield shall not 
limit liability for violations which occurred prior to or at the time 
of the issuance of the federal operating permit, by adding the 
underlined words. This is important to clarify that violations which 
are continuing at the time of permit issuance will not be shielded 
against.
    (6) Lower the cutoff levels for criteria pollutants in Rule 219 
(Equipment not Requiring a Permit) or, alternatively, demonstrate that 
Mojave Desert's levels are insignificant compared to the level of 
emissions from and types of units that are required to be permitted or 
are subject to applicable requirements.
    (7) Add ``and'' at the end of sections (b) and (c) in Rule 
219(B)(2), in order to clarify that the four gatekeepers must all apply 
in order for equipment to be exempt from getting a federal operating 
permit.
    (8) Add to Rule 1203(D)(1)(e)(i) a reference to the requirement for 
the clear identification of all deviations with respect to reporting 
(Sec. 70.6(a)(3)(iii)(A)).
    (9) Add to Rule 1203(D)(1)(e)(ii) a reference to the requirement to 
specify the probable cause and corrective actions or preventive 
measures taken with regard to reporting a deviation 
(Sec. 70.6(a)(3)(iii)(B)).
    b. Legislative Source Category-Limited Interim Approval Issue--In 
addition to the District-specific issues arising from Mojave Desert's 
program submittal and locally adopted regulations, California State law 
currently exempts agricultural production sources from permit 
requirements. Because of this exemption, California programs are only 
eligible for source category-limited interim approval. 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.
    c. Implications of Interim Approval--The above described program 
and legislative deficiencies must be corrected before Mojave Desert can 
receive full program approval. For additional information, please refer 
to the Technical Support Document, which contains a detailed analysis 
of Mojave Desert's operating permits program, and California's enabling 
legislation.
    Interim approval, which may not be renewed, would extend for a 
period of 2 years. During the interim approval period, the District 
would be protected from sanctions, and EPA would not be obligated to 
promulgate a federal permits program in the Mojave Desert. Permits 
issued under a program with interim approval would have full standing 
with respect to part 70, and the 1-year time period for submittal of 
permit applications by subject sources would begin upon EPA's final 
rulemaking granting interim approval, as would the 3-year time period 
for processing initial permit applications.
    Following final interim approval, if Mojave Desert should fail to 
submit a complete corrective program for full approval by the date 6 
months before expiration of the interim approval, EPA would start an 
18-month clock for mandatory sanctions. Then, if Mojave Desert should 
fail 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 corrected the deficiency 
by submitting a complete corrective program. If, six months after 
application of the first sanction, the Mojave Desert 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 Mojave 
Desert'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 submitted a revised program and EPA determined that it 
corrected the deficiencies that prompted the disapproval. Again, if, 
six months after EPA applied the first sanction, Mojave Desert had not 
submitted a revised program that EPA determined corrected the 
deficiencies, 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 state or district has not 
submitted a timely and complete corrective program or EPA has 
disapproved a submitted corrective program. Moreover, if EPA has not 
granted full approval to a state or 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 state or district upon interim approval expiration.
2. Section 112(g) Implementation
    EPA has decided that it is not reasonable to expect the states and 
districts to implement section 112(g) before a rule is issued. EPA 
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 112(g) 
applicability prior to EPA's issuing the final 112(g) rule. The notice 
states that major source modifications, constructions, and 
reconstructions will not be subject to 112(g) requirements until the 
final rule is promulgated. EPA expects to issue the 112(g) final rule 
in September 1995.
    The 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 and Districts 
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), Mojave Desert 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.
    For this reason, EPA is proposing to approve the use of Mojave 
Desert's preconstruction review programs as a mechanism to implement 
section 112(g) during the transition period between promulgation of the 
section 112(g) rule and adoption by the nineteen districts of rules 
specifically designed to implement section 112(g). However, since 
approval is intended solely to confirm that Mojave Desert 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. The EPA is 


[[Page 34492]]
limiting the duration of its approval of the use of preconstruction 
programs to implement 112(g) to 12 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 
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 Mojave 
Desert's program for receiving delegation of section 112 standards that 
are unchanged from the federal standards as promulgated. California 
Health and Safety Code section 39658 provides for automatic adoption by 
CARB of section 112 standards upon promulgation by EPA. Section 39666 
of the Health and Safety Code requires that districts then implement 
and enforce these standards. Thus, when section 112 standards are 
automatically adopted pursuant to section 39658, Mojave Desert will 
have the authority necessary to accept delegation of these standards 
without further regulatory action by the District. The details of this 
mechanism and the means for finalizing delegation of standards will be 
set forth in a Memorandum of Agreement between Mojave Desert and EPA, 
expected to be completed prior to approval of Mojave Desert'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.
4. State Operating Permit Program for Synthetic Minors
    On March 31, 1995, CARB submitted for approval into the Mojave 
Desert's portion of the California State Implementation Plan (SIP) a 
local operating permit program designed to create federally enforceable 
limits on a source's potential to emit. This District program is 
referred to as a synthetic minor operating permit program, and it 
consists of regulations that will be integrated with the District's 
existing, non-federally enforceable, operating permit program. Such 
programs are also referred to as federally enforceable state operating 
permit (FESOP) programs. This synthetic minor or FESOP mechanism will 
allow sources to reduce their potential to emit to below the title V 
applicability thresholds and avoid being subject to title V.
    Mojave Desert's synthetic minor regulations were adopted on 
November 23, 1994 and codified in District Regulation XII, Rule 221 
(Federal Operating Permit Requirement). EPA found the initial SIP 
submittal complete on May 25, 1995.
    The five criteria for approving a state operating permit program 
into a SIP were set forth in the June 28, 1989 Federal Register notice 
(54 FR 27282): (1) The program must be submitted to and approved by 
EPA; (2) the program must impose a legal obligation on the operating 
permit holders to comply with the terms and conditions of the permit, 
and permits that do not conform with the June 28, 1989 criteria shall 
be deemed not federally enforceable; (3) the program must contain terms 
and conditions that are at least as stringent as any requirements 
contained in the SIP or enforceable under the SIP or any other section 
112 or other Clean Air Act standard or requirement; (4) permits issued 
under the program must contain conditions that are permanent, 
quantifiable, and enforceable as a practical matter; and (5) permits 
issued under the program must be subject to public participation.
    Permits issued under an approved program are federally enforceable 
and may be used to limit the potential to emit of sources of criteria 
pollutants. Mojave Desert's synthetic minor provisions of Regulation 
XII, Rule 221 meet the June 28, 1989 criteria by ensuring that the 
limits will be permanent, quantifiable, and practically enforceable and 
by providing adequate notice and comment to EPA and the public. Please 
refer to the Technical Support Document for a thorough analysis of the 
June 28, 1989 criteria as applied to the Mojave Desert's synthetic 
minor program.
    EPA is proposing to approve pursuant to part 52 and the approval 
criteria specified in the June 28, 1989 Federal Register notice the 
following regulation that was submitted to create the synthetic minor 
operating permit program: Rule 221 (Federal Operating Permit 
Requirement).
    On March 10, 1995, in its title V program submittal under 
``Addendum: Federal Clean Air Act Section 112(l) Authority Request 
Letter,'' CARB requested approval of Mojave Desert's synthetic minor 
program, consisting of the rules specified above, under section 112(l) 
of the Act for the purpose of creating federally enforceable 
limitations on the potential to emit of hazardous air pollutants (HAP). 
The separate request for approval under section 112(l) is necessary 
because the proposed SIP approval discussed above only provides a 
mechanism for controlling criteria pollutants. While federally 
enforceable limits on criteria pollutants (i.e., VOC's or PM-10) may 
have the incidental effect of limiting certain HAP listed pursuant to 
section 112(b) 1, section 112 of the Act provides the underlying 
authority for controlling HAP emissions that are not criteria 
pollutants. As a legal matter, no additional program approval by EPA is 
required in order for these criteria pollutant limits to be recognized 
as federally enforceable.

    \1\ The EPA intends to issue guidance addressing the technical 
aspects of how these criteria pollutant limits may be recognized for 
purposes of limiting a source's potential to emit of HAP to below 
section 112 major source levels.
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    EPA has determined that the five approval criteria for approving 
FESOP programs into the SIP, as specified in the June 28, 1989 Federal 
Register notice, are also appropriate for evaluating and approving the 
programs under section 112(l). The June 28, 1989 notice does not 
address HAP because it was written prior to the 1990 amendments to 
section 112 (which injected the concept of major HAP sources versus 
non-major or area HAP sources into the permit) and not because it 
establishes requirements unique to criteria pollutants. Hence, the five 
criteria outlined above are applicable to FESOP approvals under section 
112(l).
    In addition to meeting the criteria in the June 28, 1989 notice, a 
FESOP program that will control HAP emissions must meet the statutory 
criteria for approval under section 112(l)(5). Section 112(l)(5) allows 
EPA to approve a program only if it: (1) Contains adequate authority to 
assure compliance with any section 112 standard or requirement; (2) 
provides for adequate resources; (3) provides for an expeditious 
schedule for assuring compliance with section 112 requirements; and (4) 
is otherwise likely to satisfy the objectives of the Act.
    The EPA plans to codify the approval criteria for programs limiting 
potential to emit of HAP in subpart E of part 63 (Subpart E), the 
regulations promulgated to implement section 112(l) of the Act. The EPA 
currently anticipates that these criteria, as they apply to FESOP 
programs controlling HAP, will mirror those set forth in the June 28, 
1989 notice, with the addition that the state's authority must extend 
to all HAP, instead of, or in addition to, VOC's and PM-10. The EPA 
currently anticipates that FESOP programs that are approved 

[[Page 34493]]
pursuant to section 112(l) prior to the Subpart E revisions will have 
had to meet these criteria, and hence, will not be subject to any 
further approval action.
    The EPA believes it has authority under section 112(l) to approve 
programs to limit potential to emit of HAP directly under section 
112(l) prior to this revision to Subpart E. Section 112(l)(5) requires 
EPA to disapprove programs that are inconsistent with guidance required 
to be issued under section 112(l)(2). This might be read to suggest 
that the ``guidance'' referred to in section 112(l)(2) was intended to 
be a binding rule. Even under this interpretation, the EPA does not 
believe that section 112(l) requires this rulemaking to be 
comprehensive. That is, it need not address all instances of approval 
under section 112(l). Given the severe timing problems posed by 
impending deadlines set forth in MACT standards and for submittal of 
title V applications, EPA believes it is reasonable to read section 
112(l) to allow for approval of programs to limit potential to emit 
prior to issuance of a rule specifically addressing this issue.
    EPA proposes approval of Mojave Desert's synthetic minor program 
pursuant to section 112(l) because the program meets all of the 
approval criteria specified in the June 28, 1989 Federal Register 
notice and in section 112(l)(5) of the Act. Please refer to the 
Technical Support Document for a complete discussion of how the June 
28, 1989 criteria are met by the Mojave Desert. Regarding the statutory 
criteria of section 112(l)(5) referred to above, the EPA believes 
Mojave Desert's synthetic minor program contains adequate authority to 
assure compliance with section 112 requirements since the third 
criterion of the June 28, 1989 notice is met: the program does not 
provide for waiving any section 112 requirement. Sources would still be 
required to meet section 112 requirements applicable to non-major 
sources. Furthermore, EPA believes that Mojave Desert's synthetic minor 
program provides for an expeditious schedule for assuring compliance 
because it allows a source to establish a voluntary limit on potential 
to emit and avoid being subject to a federal Clean Air Act requirement 
applicable on a particular date. Nothing in Mojave Desert's program 
would allow a source to avoid or delay compliance with a federal 
requirement if it fails to obtain the appropriate federally enforceable 
limit by the relevant deadline. Finally, Mojave Desert's synthetic 
minor program is consistent with the objectives of the section 112 
program because its purpose is to enable sources to obtain federally 
enforceable limits on potential to emit to avoid major source 
classification under section 112. The EPA believes this purpose is 
consistent with the overall intent of section 112, which is to decrease 
the amount of HAP being emitted; by committing to stay below a certain 
emission level for HAP, a source with a synthetic minor permit is 
achieving this goal.

III. Administrative Requirements

A. Request for Public Comments

    The EPA is requesting comments on all aspects of this proposed 
interim approval. Copies of Mojave Desert'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 August 2, 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 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 this action does not impose any new requirements, it does not 
have a significant impact on a substantial number of small entities.
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 proposed 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 proposed 
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

    Environmental protection, Air pollution control, Carbon monoxide, 
Hydrocarbons, 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, Reporting and recordkeeping requirements.

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

    Dated: June 23, 1995.
David P. Howekamp,
Acting Regional Administrator.
[FR Doc. 95-16276 Filed 6-30-95; 8:45 am]
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