[Federal Register Volume 60, Number 134 (Thursday, July 13, 1995)]
[Proposed Rules]
[Pages 36083-36093]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-17208]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5258-6]


Clean Air Act Proposed Interim Approval of the Operating Permits 
Program; Arizona Department of Environmental Quality, Maricopa County 
Environmental Services Department, Pima County Department of 
Environmental Quality, Pinal County Air Quality Control District, 
Arizona

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 State of Arizona, comprised of 
programs from the Arizona Department of Environmental Quality (ADEQ), 
the Maricopa County Environmental Services Department, (Maricopa), the 
Pima County Department of Environmental Quality (Pima), and the Pinal 
County Air Quality Control District (Pinal) 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.

DATES: Comments on this proposed action must be received in writing by 
August 14, 1995.

ADDRESSES: Comments should be addressed to Regina Spindler, Mail Code 
A-5-2, U.S. Environmental Protection Agency, Region IX, Air and Toxics 
Division, 75 Hawthorne Street, San Francisco, CA 94105.
    Copies of the State and county submittals 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: Regina Spindler (telephone: 415/744-
1251), Mail Code A-5-2, U.S. Environmental Protection Agency, Region 
IX, Air and 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 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 these 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.

II. Proposed Action and Implications

A. Analysis of State Submission

    The analysis contained in this notice focuses on specific elements 
of the Arizona State and county agencies' title V operating permits 
program that must be corrected to meet the minimum requirements of 40 
CFR part 70. The full program submittals, the Technical Support 
Documents (TSD), which contain a detailed analysis of the submittals, 
and other relevant materials are available for inspection as part of 
the public dockets. The dockets may be viewed during regular business 
hours at the address listed above.
1. Title V Program Support Materials
    The Arizona title V operating permits program was submitted on 
November 15, 1993 by the Arizona Department of Environmental Quality. 
The Director of ADEQ, the State Governor's designee, requested approval 
of Arizona's title V operating permits program, comprised of programs 
from ADEQ, Maricopa, Pima, and Pinal to provide coverage for the entire 
geographic area of the State of Arizona, excluding lands located within 
the exterior boundaries of Indian Reservations. Additional material was 
submitted by ADEQ on March 14, 1994; May 17, 1994; March 20, 1995; and 
May 4, 1995. Additional information was submitted by Maricopa on 
December 15, 1993; January 13, 1994; March 9, 1994; and March 21, 1995. 
Additional information was submitted by Pima on December 15, 1993; 
January 27, 1994; April 6, 1994; and April 8, 1994. On Pinal's behalf, 
ADEQ submitted a revision to Pinal's program on August 16, 1994. The 
programs that comprise the Arizona program all meet the requirements of 
section 70.4 for program submittal, including a program description, 
permitting program documentation, the legal opinion of the Attorney 
General and the attorneys of the county air pollution control agencies, 
and fully adopted implementing and supporting regulations. An 
implementation agreement is currently being developed between EPA and 
each of the Arizona agencies. 

[[Page 36084]]

2. Title V Operating Permit Regulations and Program Implementation
    The permitting rules/regulations submitted by the Arizona State and 
county agencies are very similar. Therefore, the discussion below is 
applicable to all four programs. The ADEQ regulations adopted or 
revised on October 8, 1993 to implement title V include Article 1; 
Article 3, excluding sections R18-2-311 through R18-2-314, R18-2-316, 
and R18-2-332; Article 5; and Appendix 1; of Chapter 2 of Title 18 of 
the Arizona Administrative Code (AAC). Maricopa's title V regulations, 
adopted or revised on November 15, 1993, include Rules 100, 110, and 
120 of Regulation I; Rule 200, except sections 305, 306, 407, and 408, 
Rules 210, 230, and 280 of Regulation II; Rule 370 of Regulation III; 
Rule 400 of Regulation IV; and Appendix B of the Maricopa Air Pollution 
Control Regulations (MAPC Regulations). Pima's title V regulations, 
adopted or revised on September 28, 1993 include Chapter 17.04; Chapter 
17.12, except sections 17.12.030, 040, 050, 060, 070, 360, Article IV, 
and Article V; Article IX of Chapter 17.16; Chapter 17.20; Chapter 
17.24; and Chapter 17.28 of Title 17 of the Pima County Code (PCC). 
Pinal's title V regulations adopted or revised on November 3, 1993 
include Article 3 of Chapter 1; Articles 1, 2, 4, 5, 6, and 7 of 
Chapter 3; Article 1 of Chapter 7; Article 1 of Chapter 8; Article 1, 
Sections 9-1-070 and 9-1-080 of Chapter 9; and Appendix A of the Pinal 
County Code of Regulations (PCR).
    The regulations of the Arizona State and county agencies 
substantially meet the requirements of 40 CFR part 70, Secs. 70.2 and 
70.3 for applicability; Secs. 70.4, 70.5, and 70.6 for permit content, 
including operational flexibility; Sec. 70.7 for public participation 
and minor permit modifications; Sec. 70.5 for criteria that define 
insignificant activities; Sec. 70.5 for complete application forms; and 
Sec. 70.11 for enforcement authority. Although the regulations 
substantially meet part 70 requirements, there are several deficiencies 
in each program that are outlined under section II.B. below as interim 
approval issues and further described in the Technical Support 
Documents.
    The Arizona State and county permitting programs combine the 
requirements for operating permits and construction permits. Sources 
that modify or construct must first obtain a permit that contains both 
preconstruction and operating requirements. Existing sources must apply 
for an operating permit. Therefore, there is one set of procedures that 
apply to the issuance of these integrated preconstruction/operating 
permits. In addition, the programs address permitting requirements for 
two classes of permits. ADEQ distinguishes between Class I and Class II 
permits, Maricopa and Pima between Title V and non-Title V permits, and 
Pinal between Class A and Class B permits. ADEQ's Class I permits and 
Maricopa's Title V permits are required only for major sources, acid 
rain sources, solid waste incinerators, and any other sources in a 
source category designated by EPA to obtain title V permits. Pima 
County and Pinal County require major sources, acid rain sources, solid 
waste incinerators, any other sources in a source category designated 
by EPA, and any sources subject to an NSPS or NESHAP requirement under 
sections 111 and 112, respectively (including non-major sources), to 
obtain a Title V permit (Pima) or Class A permit (Pinal). This interim 
approval addresses only the elements of the Arizona program that 
pertain to operating permit program requirements for part 70 sources. 
The EPA action under part 70 will not apply to the State and county 
operating permit programs for non-part 70 sources or to State and 
county preconstruction review programs. This interim approval applies 
only to that part of the program that provides for the issuance of 
Class I operating permits (in ADEQ), Title V operating permits (in 
Maricopa and Pima), and Class A operating permits (in Pinal).
    a. Excess Emissions Provisions. ADEQ's regulations (R18-2-310) 
provide sources with an affirmative defense to an enforcement action 
taken for excess emission violations that occur during startup, shut 
down, unavoidable breakdown of process or control equipment, an upset 
of operations, or if greater or more extended excess emissions would 
result unless scheduled maintenance is performed, provided the source 
takes certain steps. Fully approvable part 70 programs may only allow 
for an affirmative defense for violations that are the result of an 
emergency as defined in Sec. 70.6. Therefore, in order to receive full 
approval of its program, ADEQ must limit its excess emissions provision 
in R18-2-310 by clarifying that it is not applicable to part 70 
sources. Maricopa, Pima, and Pinal did not submit excess emissions 
provisions as part of their title V programs, though similar provisions 
may exist in county regulations. Because Arizona State law requires 
county regulations for permitting sources to be identical to the 
regulations developed by ADEQ (see Arizona Revised Statutes (ARS) 
section 49-480(B)), EPA expects that, if county regulations contain 
such provisions, the county agencies will amend them to conform to ADEQ 
regulations, and include the condition that such provisions may not 
apply to part 70 sources.
    b. 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 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, relying instead on a case-by-case 
determination of appropriate levels based on the particular 
circumstances of part 70 program under review.
    ADEQ's definition of ``insignificant activity'' (R18-2-101(54)) 
includes a list of activities as well as a provision for the Director 
to determine, without EPA approval, that other activities are 
insignificant. The definition prohibits any activity that is subject to 
an applicable requirement from being considered insignificant and 
requires all insignificant activities to be listed in the permit 
application. ADEQ did not provide EPA with criteria used to develop the 
list of activities or with information on the level of emissions of the 
listed activities. In addition, ADEQ's definition does not provide for 
prior EPA approval of any other (unlisted) activity or emission level 
that the Director considers insignificant, as required by part 70. 
Therefore, EPA cannot propose full approval of ADEQ's definition as the 
basis for determining insignificant activities.
    MAPC Regulation II, Rule 200, Section 303.3(c) contains the list of 
activities that are exempt from part 70 permitting. The applicants must 
list these activities in permit applications but need not provide 
emissions data (per Regulation II, Rule 210, Section 301.5(g)). 
Maricopa did not provide EPA with criteria used to develop the list of 

[[Page 36085]]
activities, information on the level of emissions from the activities, 
nor with a demonstration that these activities are not likely to be 
subject to an applicable requirement. Therefore, EPA cannot propose 
full approval of the list as the basis for determining insignificant 
activities.
    Pima's regulation (Sec. 17.12.160.E.7) provides that emission units 
that do not emit more than 2.4 lbs/day of VOC or 5.5 lbs/day of any 
other regulated air pollutant are considered insignificant but must be 
listed in the application. The EPA believes, as discussed below, that 
these levels are acceptable for defining insignificant activities with 
regard to units that emit criteria pollutants, provided no such unit is 
subject to an applicable requirement. The EPA believes, however, that 
these levels may not be acceptable for units that emit hazardous air 
pollutants. Pima did not provide EPA with a demonstration that these 
emission levels are insignificant compared to the level of hazardous 
air pollutant emissions from units that are required to be permitted 
activities nor with a demonstration that these activities are not 
likely to be subject to an applicable requirement. Therefore, EPA 
cannot propose full approval of these levels as the basis for 
determining hazardous air pollutant-emitting insignificant activities.
    Pinal's definition of insignificant activities (Sec. 1-3-
140(74)(a)) provides that activities that account for less than 1% of 
the source's total existing emissions of criteria air pollutants or 
less than 200 pounds per year of regulated air pollutants, whichever is 
less, are insignificant. The definition also includes a list of 
activities that are considered insignificant regardless of emission 
rates. Pinal prohibits activities that are subject to any applicable 
requirement from being considered insignificant and all insignificant 
activities must be listed in the application. EPA believes that the 200 
pound per year emission level is acceptable for defining insignificant 
activities for units that emit criteria pollutants, but may not be 
adequate for units that emit hazardous air pollutants whose section 
112(g) deminimis values are below this level (see discussion below). 
Pinal did not provide EPA with a demonstration that this emission level 
would be sufficient to define all hazardous air pollutant-emitting 
insignificant activities. Neither did Pinal provide EPA with criteria 
used to develop its list of insignificant activities or information on 
the level of emissions from these activities. Therefore, EPA cannot 
propose full approval of Pinal's definition as the basis for 
determining insignificant activities.
    For other state 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 HAPs and other toxics (40 CFR 52.21(b)(23)(i)). 
The EPA believes that these levels are sufficiently below applicability 
thresholds for many applicable requirements to assure that no unit 
potentially subject to an applicable requirement is left off a title V 
application and are consistent with current permitting thresholds in 
Arizona. The EPA is requesting comment on the appropriateness of these 
emission levels for determining insignificant activities in Arizona. 
This request for comment is not intended to restrict the ability of the 
state or county agencies to propose and EPA to approve other emission 
levels if the agencies demonstrate 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.
    c. Definition of Title I Modification. The permitting regulations 
for the Arizona State and county agencies do not contain definitions of 
``title I modification.'' ADEQ and Pinal, however, have indicated in 
their program descriptions and response-to-comments documents that they 
do not interpret ``title I modification'' to include changes reviewed 
under a minor source preconstruction review program (``minor NSR 
changes''). Maricopa did not address its interpretation of this term 
and Pima has stated, in a letter from David M. Esposito, Director of 
the Pima County Department of Environmental Quality, dated April 6, 
1994, that Pima considers permit revisions requested by minor sources 
subject to preconstruction review requirements to be modifications 
under title I of the Act.
    In an August 29, 1994 rulemaking proposal, EPA explained its view 
that the better reading of ``title I modifications'' includes minor 
NSR. However, the Agency solicited public comment on whether the phrase 
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. (59 FR 44572, 44573). This would 
include State preconstruction review programs approved by EPA as part 
of the State Implementation Plan under section 110(a)(2)(C) of the 
Clean Air Act.
    The August 29, 1994 action proposed to, among other things, allow 
State programs with a more narrow definition of ``title I 
modifications'' to receive interim approval (59 FR 44572). 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 has not yet taken final action on the August 29, 1994 
proposal. However, in response to public comment on that proposal, the 
Agency has concluded that the definition of ``title I modifications'' 
is best interpreted as not including changes reviewed under minor NSR 
programs or changes that trigger the application of a pre-1990 NESHAP 
requirement. This decision was noted in a June 20, 1995 letter from 
Mary D. Nichols, EPA Assistant Administrator for Air and Radiation, to 
Congressman John D. Dingell, and will be included in a supplemental 
rulemaking proposal that will be published this summer. Thus, the ADEQ, 
Maricopa, and Pinal programs' definition of ``title I modification'' 
can be considered fully consistent with part 70. Because nothing in 
part 70 bars a State from considering minor NSR to be a title I 
modification, Pima's intent to consider permit revisions requested by 
minor sources subject to preconstruction review requirements to be 
title I modifications is also fully consistent with part 70.
    d. Conditional Orders. ADEQ has authority under ARS sections 49-437 
through 49-441 to a grant a conditional order that allows a source to 
vary from any provision of ARS Title 49, Chapter 3, Article 2, any rule 
adopted pursuant to Article 2, or any requirement of a permit issued 
pursuant to Article 2. The county agencies also have authority, under 
ARS sections 49-491 through 49-495, to grant conditional orders to vary 
from rules and permit conditions.
    The EPA regards these State and county conditional order 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 law. The EPA has no authority to approve provisions of state law, 
such as the conditional order 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 

[[Page 36086]]
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 conditional order 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 conditional order. 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.''
    The State and county agencies in Arizona have limited the 
conditional order provisions in the State statute through regulation. 
ADEQ regulations (R18-2-328(A)) provide that a conditional order may be 
granted only for non-federally enforceable conditions of a permit and 
that issuance of the conditional order may not constitute a violation 
of the Act. Maricopa (Rule 120, Section 401) and Pima (Section 
17.28.100(A)) limit issuance of conditional orders in the same way and 
in addition state that the Control Officer may only grant a conditional 
order if she/he finds that the source is not a title V source. Pinal 
(section 3-4-420(A)) provides that no person holding a part 70 permit 
shall be eligible for a conditional order; however, Pinal must also 
ensure that the Control Officer may not grant a conditional order that 
allows a source to vary from the requirement to obtain a part 70 
permit. This is listed below in Section II.B. as an interim approval 
issue for Pinal. While provisions of the State and county rules 
sufficiently limit issuance of conditional orders (with the exception 
noted for Pinal), there are additional changes that should be made to 
the rules. As discussed above, no conditional orders will be issued 
that allow a source to vary from federally enforceable conditions of a 
permit, and in the counties, conditional orders will not be issued to 
title V sources. Therefore, there is no need to submit conditional 
orders to EPA for review, as provided for in the State and county 
(except Pima) regulations (ADEQ: R18-2-328(E)(5)(b), Maricopa: Rule 
120, Section 405.5(b), Pinal: Section 3-4-450(D)(2)). The EPA 
recommends removing these provisions.
    e. ``Prompt'' Reporting of Deviations. The part 70 operating 
permits regulation requires prompt reporting of deviations from permit 
requirements. Section 70.6(a)(3)(iii)(B) requires the permitting 
authority to define prompt in relation to the degree and type of 
deviation likely to occur and the applicable requirements. Although 
state and county permit program regulations should define prompt for 
purposes of administrative efficiency and clarity, an acceptable 
alternative is to define prompt in each individual permit. The EPA 
believes that prompt should generally be defined as requiring reporting 
within two to ten days of the deviation. Two to ten days is sufficient 
time in most cases to protect public health and safety as well as to 
provide a forewarning of potential problems. For sources with a low 
level of excess emissions, a longer time period may be acceptable. 
However, prompt reporting must be more frequent than the semiannual 
reporting requirement, given this is a distinct reporting obligation 
under Sec. 70.6(a)(3)(iii)(A). Where ``prompt'' is defined in the 
individual permit but not in the program regulations, EPA may veto 
permits that do not require sufficiently prompt reporting of 
deviations. Maricopa, Pima, and Pinal have not defined ``prompt'' in 
their programs with respect to reporting of deviations. ADEQ has 
defined ``prompt'' as within 2 working days of the time when the 
deviation occurred (R18-2-306(A)(5)(b)).
    f. Off-Permit Provisions. The Arizona agencies have chosen to 
combine the requirements for operational flexibility as provided for in 
Sec. 70.4(b)(12) and off-permit processing of changes as provided for 
in Sec. 70.4(b)(14) such that one set of provisions in the State and 
county permitting regulations governs both procedures. (See AAC 
Sec. R18-2-317, MAPC Regulation II, Rule 210, Sec. 403, PCC 
Sec. 17.12.230, PCR Sec. 3-2-180.) While the regulations are not 
structured exactly as in part 70, EPA finds that these provisions 
satisfy the requirements of both Sec. 70.4(b)(12) and Sec. 70.4(b)(14).
3. Legislative Criminal Enforcement Provisions
    Two provisions of Arizona's criminal enforcement authorities 
initially caused some concern with EPA reviewers. The first of these is 
the affirmative defense contained in A.R.S. Sec. 49-464(Q) and Sec. 49-
514(P), which applies only to violations of emissions and opacity 
limits. This section provides an affirmative defense to a criminal 
prosecution if the violation is reported within 24 hours, and followed 
with a written notification within 72 hours which confirms the 
violation and identifies the corrective measures taken to control and 
minimize emissions until compliance is achieved. While the requisite 
intent for a criminal prosecution would usually be lacking in such an 
instance, EPA was concerned that a situation could arise where the 
provision could be used to avoid prosecution for an intentional 
violation.
    In response to EPA's concerns, the Arizona Attorney General's 
office has explained that this provision has no impact on the Attorney 
General's ability to prosecute violations of any other requirement and 
that in appropriate instances violators will be charged with 
alternative violations under the statute. The Attorney General's office 
has also pointed out that under the State's enforcement policy an order 
of abatement would be issued following receipt of notification under 
Sec. 49-464(D), meaning that a repeat violation would not be protected 
by the affirmative defense. See letter dated May 4, 1995 from David W. 
Ronald, Chief, Environmental Crimes Unit, Arizona Attorney General's 
Office, to Carol M. Browner, Administrator, EPA.
    EPA's second concern was that Arizona's criminal penalty provisions 
are not precisely the same as those specified in Sec. 70.11. Rather 
than the $10,000 per day per violation set forth in 
Sec. 70.11(a)(3)(ii) and (iii), the Arizona Attorney General may seek 
$1,000,000 per offense against an enterprise, and $150,000 per offense 
against an individual. However, EPA believes that the maximum penalties 
which could be obtained in a state criminal prosecution would be 
roughly equivalent to those available under federal law.
    Each of these concerns has been resolved to EPA's satisfaction and 
will not affect EPA's approval of the program. EPA notes that Arizona, 
in addition to authority for criminal fines, has authority to seek 
prison terms for criminal violations of permit terms, an authority not 
required under Sec. 70.11. In light of this, and in light of the 
limited nature of the affirmative defense provided in Sec. 49-464(D), 
EPA believes that Arizona's criminal enforcement authority is 
substantially equivalent to that required by Sec. 70.11. In addition, 
EPA will monitor each of these issues and may revisit them in the 
future if actual criminal practice under the program does not reflect 
the resolutions discussed above.
4. Permit Fee Demonstration
    Section 502(b)(3) of the Act requires that each permitting 
authority collect 

[[Page 36087]]
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 per year 
(adjusted annually based on the Consumer Price Index (CPI), relative to 
1989 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,'' (Sec. 70.9(b)(2)(i)).
    ADEQ, Maricopa, Pima, and Pinal have all adopted fee rules that 
require sources to pay annual fees that result in collection of an 
amount that is above the CPI-adjusted presumptive minimum value. 
Effective January 1, 1994, ADEQ charges each title V source an annual 
emission-based fee of $33.00 per ton. This rate will be adjusted each 
year on January 1 to reflect the increase by which the CPI for the most 
recent year exceeds the CPI for 1989. Maricopa requires each title V 
source to pay an annual emission fee equal to $31.00 per ton, adjusted 
each year, beginning January 1, 1995, to reflect the increase by which 
the CPI for the most recent year exceeds the CPI for 1993. Pima charges 
title V sources an annual emission fee of $33.00 per ton adjusted 
annually relative to the 1993 CPI. Pinal requires title V sources to 
pay annual base, emission, and inspection fees that together amount to 
$33.94 per ton. These fees will be adjusted each year based on a cost 
accounting analysis or on the change in the CPI. The Arizona State and 
county agencies charge additional application fees, inspection fees, 
permit revision processing fees, fees applicable to certain activities 
and operation of specific pieces of equipment, and fees representing 
actual cost of services. ADEQ estimates total annual revenues of $3.4 
million. Maricopa estimates total annual revenues of $2.7 million. Pima 
estimates annual title V revenues of $400,000. Pinal's annual revenue 
from title V sources will be $233,000. The State and county agencies 
developed their fee rules based on a workload analysis and cost 
estimation. For additional information, see the TSD for each agency.
5. Provisions Implementing the Requirements of Other Titles of the Act
    a. Authority and Commitments for section 112 Implementation. The 
Arizona State and county agencies have demonstrated in their title V 
program submittals adequate legal authority to implement and enforce 
all section 112 applicable requirements through the title V permit. 
This legal authority is contained in the State of Arizona enabling 
legislation and in regulatory provisions defining ``applicable 
requirements'' and requiring each permit to include limitations that 
assure compliance with all such applicable requirements. The Arizona 
agencies have supplemented this legal authority with a commitment in 
their submitted programs to adopt any future standards and regulations 
related to section 112 in a timely manner as they are promulgated by 
EPA. The EPA regards this commitment as an acknowledgement by the 
Arizona agencies of their obligation to obtain further regulatory 
authority as needed to issue permits that implement and enforce the 
requirements of section 112. The EPA has determined that the Arizona 
agencies' legal authority and commitments are sufficient to allow these 
agencies to issue permits that assure compliance with all section 112 
requirements. For further discussion, please refer to the Technical 
Support Documents 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. Implementation of Section 112(g). The EPA has published an 
interpretive notice in the Federal Register regarding section 112(g) of 
the Act (60 FR 8333; February 14, 1995). The interpretive notice 
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), ADEQ, Maricopa, Pima, and 
Pinal must be able to implement section 112(g) during the period 
between promulgation of the federal section 112(g) rule and adoption of 
implementing State and county regulations.
    Implementation of section 112(g) during this transition period 
requires that the State and county agencies have an available mechanism 
for establishing federally enforceable HAP emission limits or other 
conditions from the effective date of the section 112(g) rule until the 
State and county agencies adopt rules specifically designed to 
implement section 112(g). ADEQ, Maricopa, Pima, and Pinal require that 
any source that modifies must obtain a permit or permit revision prior 
to commencing construction. All of the Arizona agency programs are 
integrated programs; that is, the permit that is issued to a new or 
modifying source prior to its construction will contain all 
preconstruction review requirements and all operating requirements. 
Integrated (preconstruction/operating) permits issued to major sources 
must meet all procedural requirements of part 70, including public and 
EPA review, and are therefore part 70 permits. In Arizona, sources 
subject to section 112(g) (new or modified major sources of hazardous 
air pollutants) will be issued a part 70 permit prior to construction. 
The source will then have federally enforceable limits on HAP emissions 
in compliance with section 112(g). Once EPA promulgates a final 112(g) 
rule, ADEQ, Maricopa, Pima, and Pinal will act expeditiously to adopt 
regulations consistent with the 112(g) regulations.
    c. Authority and Commitments for Title IV Implementation. ADEQ 
committed in a letter from Ed Fox, Director, dated March 14, 1994 to 
acquire by January 1, 1995 the necessary regulatory authority to 
administer an acid rain program and to make regulatory revisions as 
necessary to accommodate federal revisions and additions. On August 1, 
1994, ADEQ adopted 40 CFR part 72 by reference into AAC R18-2-333. 
Maricopa made a similar commitment in a letter from Louis A. Schmitt, 
Control Officer, dated March 9, 1994. Maricopa adopted 40 CFR part 72 
by reference into MAPC Regulation III, Rule 371 on February 15, 1995. 
David M. Esposito, Director for Pima submitted an acid rain commitment 
letter on January 27, 1994. Pima has begun its rulemaking process and 
expects to complete adoption of part 72 by October, 1995. Pinal has 
adopted the part 72 acid rain regulations by reference into PCR Chapter 
3, Article 6 and also included in its program description a commitment 
to submit any additional required information by January 1, 1995.

B. Proposed Interim Approval and Implications

    The EPA is proposing to grant interim approval to the operating 
permits programs submitted by ADEQ on the behalf of itself, Maricopa, 
Pima, and Pinal on November 15, 1993 and supplemented by ADEQ on March 
14, 1994; May 17, 1994; March 20, 1995; and May 4, 1995; by Maricopa on 
December 15, 1993; January 13, 1994; March 9, 1994; and March 21, 1995; 
by Pima on December 15, 1993; January 27, 1994; April 6, 1994; and 
April 8, 1994; and by ADEQ on Pinal's behalf on 

[[Page 36088]]
August 16, 1994. If EPA were to finalize the proposed interim 
approvals, they would extend for two years following the effective date 
of final interim approval, and could not be renewed. During the interim 
approval period, ADEQ, Maricopa, Pima, and Pinal would be protected 
from sanctions, and EPA would not be obligated to promulgate, 
administer and enforce a federal permits program for the State or 
counties. 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 interim approval, as does the 3-year time period for 
processing the initial permit applications.
    Following final interim approval, if the State or county agencies 
failed 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. If the State or 
counties 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 State or 
counties 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 State or counties, both sanctions under 
section 179(b) would apply after the expiration of the 18-month period 
until the Administrator determined that the State or counties had come 
into compliance. In any case, if, six months after application of the 
first sanction, the State or counties 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 
State or counties 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 
State or counties 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 State or counties, both sanctions under section 
179(b) would apply after the expiration of the 18-month period until 
the Administrator determined that the State or counties had come into 
compliance. In all cases, if, six months after EPA applied the first 
sanction, the State or counties 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 state or 
county 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 state or county 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 county upon interim approval 
expiration.
1. Title V Operating Permits Program
    a. Arizona Department of Environmental Quality. If EPA finalizes 
this interim approval, ADEQ must make the following changes, or changes 
that have the same effect, to receive full approval:
    (1) AAC R18-2-101(54) contains ADEQ's definition of ``Insignificant 
activity.'' It includes a list of activities as well as a provision 
that the Director may determine, without EPA approval, other activities 
to be insignificant (Director's discretion). To receive full approval, 
ADEQ must delete section R18-2-101(54)(j), the Director's discretion 
provision, and provide a demonstration that the activities listed in 
R18-2-101(54)(a-i) are truly insignificant. Alternatively, ADEQ may 
restrict the exemptions to activities that emit less than ADEQ-
established emission levels and retain the provision that activities 
that are subject to an applicable requirement shall not be considered 
insignificant. ADEQ should establish separate emission levels for HAPs 
and for other regulated pollutants and demonstrate that these emission 
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. (Sec. 70.5(c), Sec. 70.4(b)(2))
    (2) Revise AAC R18-2-101(61) to require that all fugitive emissions 
of hazardous air pollutants at a source be considered in determining 
whether the source is major for purposes of section 112 of the CAA.
    (3) Revise AAC R18-2-304(C) to include an application deadline for 
existing sources that become subject to obtaining a Class I permit 
after the initial phase-in of the program. One example is a synthetic 
minor source that is not initially required to obtain a Class I permit 
but later removes federally enforceable limits on its potential 
emissions such that it becomes a major source, but is not required to 
go through the preconstruction review process. This application 
deadline must be 12 months from when the source becomes subject to the 
program (meets Class I permit applicability criteria). 
(Sec. 70.5(a)(1)(i))
    (4) Section 70.6(a)(8) requires that title V permits contain a 
provision that ``no permit revision shall be required under any 
approved economic incentives, marketable permits, emissions trading and 
other similar programs or processes for changes that are provided for 
in the permit.'' AAC R18-2-306(A)(10) includes this exact provision but 
also includes a sentence that negates this provision. ADEQ must either 
delete the negating sentence:

    This provision shall not apply to emissions trading between 
sources as provided in the applicable implementation plan.

or revise this sentence as follows:

    This provision shall not apply to emissions trading between 
sources [as provided] if such trading is prohibited in the 
applicable implementation plan.

(Sec. 70.6(a)(8))
    (5) Section 70.4(b)(12) provides that sources are allowed to make 
changes within a permitted facility without requiring a permit 
revision, if the changes are not modifications under any provision of 
title I of the Act and the changes do not exceed the emissions 
allowable under the permit. Specifically, Sec. 70.4(b)(12)(iii) 
provides that if a permit applicant requests it, the permitting 
authority shall issue a permit allowing for the trading of emissions 
increases and decreases in the permitted facility solely for the 
purpose of complying with a federally-enforceable emissions cap, 
established in the permit independent of otherwise applicable 
requirements. AAC R18-2-306(A)(14) provides for such permit conditions 
but does not restrict the allowable changes to those that are not 
modifications under title I of the Act and those that do not exceed the 
emissions allowable under the permit. ADEQ must revise AAC R18-2-
306(A)(14) to clarify that changes made under this provision may not be 
modifications under any provision of title I of the Act and may not 
exceed emissions allowable under the permit.
    (6) Revise AAC R18-2-310 to clarify that this provision does not 
apply to part 70 sources. This provision provides sources with an 
affirmative defense to an enforcement action taken for excess emissions 
violations that occur during 

[[Page 36089]]
startup, shutdown, unavoidable breakdown of process or control 
equipment, an upset of operations, or if greater or more extended 
excess emissions would result unless scheduled maintenance is 
performed, provided the source takes certain steps. Fully approvable 
part 70 programs may only allow for an affirmative defense for 
violations which are the result of an emergency as defined in 
Sec. 70.6.
    (7) Revise AAC R18-2-322 to include a provision that if a timely 
and complete application for a permit renewal is submitted then one of 
the following will occur (Sec. 70.4(b)(10)):
    (a) The permit shall not expire until the renewal permit has been 
issued or denied; or
    (b) All terms and conditions of the permit shall remain in effect 
until the renewal permit has been issued or denied.
    (8) Revise AAC R18-2-330(C) to include a provision for giving 
public notice ``by other means if necessary to assure adequate notice 
to the affected public.'' (Sec. 70.7(h)(1))
    (9) As discussed in II.A.3. above, A.R.S. Sec. 49-464(Q) and 
Sec. 49-514(P) provide an affirmative defense to a criminal prosecution 
for violations of emission and opacity limits if the violation is 
promptly reported and corrective measures are taken to control and 
minimize emissions until compliance is achieved. So that ADEQ may 
charge violators with alternative violations in appropriate instances 
as discussed in II.A.3., it must revise the definition of ``Material 
Permit Condition'' in AAC R18-2-331 as follows:
    (a) Revise R18-2-331(A)(1) to provide that ``the condition is in a 
permit or permit revision issued by the Director or the Control Officer 
after the effective date of this Section.''
    (b) Delete the requirement in R18-2-331(A)(2) that the condition 
must be identified within the permit as a material permit condition.
    (c) Revise R18-2-331(A)(3)(c) to provide that a material permit 
condition includes a ``requirement for the installation, operation, 
maintenance, or certification of a monitoring device.''
    (d) Revise R18-2-331(A)(3)(e) to provide that a material permit 
condition includes a ``requirement for the operation or maintenance of 
air pollution control equipment.''
    (e) Revise R18-2-331(A)(3) to include the following:
    i. A requirement for or prohibition on the use of a particular fuel 
or fuels, including a requirement for fuel consumption;
    ii. A requirement to meet an operational limit, including, but not 
limited to, hours of operation, throughput, production rates, or limits 
or specifications for raw materials;
    iii. A requirement to comply with a work practice standard that is 
intended to reduce emissions (e.g., covering solvents, wetting unpaved 
roads).
    (10) Revise AAC R18-2-331(A)(3) to include fee and filing 
requirements in the definition of ``Material Permit Condition.'' 
Section 70.11(a)(3)(ii) requires that criminal fines shall be 
recoverable against any person who knowingly violates any fee or filing 
requirement. A.R.S. Sec. 464(L)(3) provides for criminal enforcement of 
a violation of fee or filing requirements due to criminal negligence 
only. A.R.S. Sec. 464(G) provides for criminal enforcement of a knowing 
violation of a ``material permit condition'' as defined by the Director 
by rule. Thus, defining ``Material Permit Condition'' to include fee 
and filing requirements will give ADEQ the authority to bring criminal 
charges for knowing violations of fee and filing requirements.
    (11) Revise AAC R18-2-504, which contains public notice procedures 
for the issuance of general permits, to include requirements that ADEQ 
shall:
    (a) Provide notice by other means if necessary to assure adequate 
notice to the affected public. (Sec. 70.7(h)(1))
    (b) Provide notice of any public hearing, including the time and 
place of the hearing, at least 30 days in advance of the hearing. 
(Sec. 70.7(h)(4))
    (c) Provide for keeping a record of the commenters and of the 
issues raised during the public participation process. 
(Sec. 70.7(h)(5))
    (d) Provide a copy of the final general permit to EPA. 
(Sec. 70.8(a)(1))
    b. Maricopa County Environmental Management and Transportation 
Agency, Division of Air Pollution Control. If EPA finalizes this 
interim approval, Maricopa must make the following changes, or changes 
that have the same effect, to receive full approval:
    (1) Delete the following language from MAPC Regulation I, Rule 100, 
section 224:

    Properties shall not be considered contiguous if they are 
connected only by property upon which is located equipment utilized 
solely in transmission of electrical energy.

This language, which is part of the definition of a stationary source, 
is not consistent with the stationary source definition in Sec. 70.2.
    (2) Revise MAPC Regulation I, Rule 100, Sec. 251.2 to clarify that 
fugitive emissions of hazardous air pollutants must be considered in 
determining whether the source is major for purposes of both the 10 ton 
per year and 25 ton per year major source thresholds. The phrase 
``including any major source of fugitive emissions'' in the submitted 
Sec. 251.2 appears to modify only the 25 ton per year threshold. This 
phrase could also imply that fugitives are included in the potential to 
emit determination only if the source emits major amounts of fugitive 
emissions. The EPA expects, however, that Maricopa will implement this 
provision consistent with the EPA policy that all fugitive emissions of 
hazardous air pollutants at a source must be considered in determining 
whether the source is major for purposes of section 112 of the CAA.
    (3) A.R.S. Sec. 49-514(G) provides for criminal enforcement of a 
knowing violation of a ``material permit condition'' as defined by the 
Director of ADEQ by rule. Maricopa is therefore required to use ADEQ's 
definition of ``Material Permit Condition.'' For this reason and the 
reasons discussed above in II.A.3. and II.B.1.a.(9), revise MAPC 
Regulation I, Rule 100, section 253 in the same way as required for 
ADEQ in II.B.1.a.(9).
    (4) For the same reasons discussed above in II.A.B.1.a.(10) and 
II.A.B.1.b.(3), revise MAPC Regulation I, Rule 100, section 253.1(c) to 
include fee and filing requirements in the definition of ``Material 
Permit Condition.'' Section 70.11(a)(3)(ii) requires that criminal 
fines shall be recoverable against any person who knowingly violates 
any fee or filing requirement. A.R.S. Sec. 514(L)(3) provides for 
criminal enforcement of a violation of fee or filing requirements due 
to criminal negligence only. A.R.S. Sec. 514(G) provides for criminal 
enforcement of a knowing violation of a ``material permit condition'' 
as defined by the Director by rule. Thus, defining ``Material Permit 
Condition'' to include fee and filing requirements will give Maricopa 
the authority to bring criminal charges for knowing violations of fee 
and filing requirements.
    (5) Revise MAPC Regulation I, Rule 100, section 505 to clarify that 
for Title V sources, records of all required monitoring data and 
support information must be retained for a period of five years, as 
provided in Regulation II, Rule 210, section 302.1(d)(2). 
(Sec. 70.6(a)(3)(ii)(B))
    (6) Revise MAPC Regulation I, Rule 100, section 506 to clarify that 
for Title V sources, all permits, including all elements of permit 
content specified in Rule 210, section 302, shall be available to the 
public, as provided in Regulation 

[[Page 36090]]
II, Rule 200, section 411.1. (Sec. 70.4(b)(3)(viii))
    (7) Revise MAPC Regulation II, Rule 200, section 312.2 to define 
when sources become ``subject to the requirements of Title V.'' A 
source becomes subject to the requirements of title V on the date that 
EPA approves the County's program and when the source meets the 
applicability requirements as provided in section 302 of Rule 200. In 
addition, revise section 312.5 to require that existing sources that do 
not hold a valid installation or operating permit must submit an 
application within 12 months of becoming subject to the requirements of 
title V.
    (8) Revise MAPC Regulation II, Rule 200, section 403 to include a 
provision that if a timely and complete application for a permit 
renewal is submitted then one of the following will occur 
(Sec. 70.4(b)(10)):
    (a) The permit shall not expire until the renewal permit has been 
issued or denied; or
    (b) All terms and conditions of the permit shall remain in effect 
until the renewal permit has been issued or denied.
    (9) MAPC Regulation II, Rule 200, section 303.3(c) contains the 
list of activities that are exempt from part 70 permitting. The 
applicants must list these activities in permit applications but need 
not provide emissions data (per Regulation II, Rule 210, section 
301.5(g)). To receive full approval Maricopa must provide a 
demonstration that the activities listed in Rule 200, Section 303.3(c) 
are truly insignificant and are not likely to be subject to an 
applicable requirement. Alternatively, Maricopa may restrict the 
exemptions to activities that are not likely to be subject to an 
applicable requirement and that emit less than County-established 
emission levels. Maricopa should establish separate emission levels for 
HAPs and for other regulated pollutants and demonstrate that these 
emission 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. (Sec. 70.5(c), Sec. 70.4(b)(2))
    (10) For the reason explained above in II.B.1.a.(4), revise MAPC 
Regulation II, Rule 210, Section 302.1(j) by either deleting the 
following sentence:

    This provision shall not apply to emissions trading between 
sources as provided in the applicable implementation plan.

or by revising this sentence as follows:

    This provision shall not apply to emissions trading between 
sources if such trading is prohibited in the applicable 
implementation plan.

(Sec. 70.6(a)(8))
    (11) For the reason explained above in II.B.1.a.(5), revise MAPC 
Regulation II, Rule 210, Section 302.1(n) to clarify that changes made 
under this provision may not be modifications under any provision of 
title I of the Act and may not exceed emissions allowable under the 
permit. In addition, revise this provision to require the notice 
required by sections 403.4 and 403.5 to also describe how the increases 
and decreases in emissions will comply with the terms and conditions of 
the permit. (Sec. 70.4(b)(12))
    (12) Delete the provision of MAPC Regulation II, Rule 210, section 
404.1(e) that provides for equipment removal that does not result in an 
increase in emissions to be processed as an administrative permit 
amendment. Removal of certain equipment, even if it does not result in 
an increase in emissions, may require processing as a significant 
permit revision. One example is removal of monitoring equipment, which 
part 70 clearly requires to be processed as a significant permit 
revision. (Sec. 70.7(d), Sec. 70.7(e)(4))
    (13) Delete the following language from the criteria for minor 
permit revisions in MAPC Regulation I, Rule 210, section 405.1(c):

    * * * other than a determination of RACT pursuant to Rule 241, 
Section 302 of these rules, * * *

This language is included in the rule as an exception to the 
prohibition against allowing case-by-case determinations to be 
processed as minor permit revisions. The definition of RACT in section 
272 of Rule 100 states that ``RACT for a particular facility, other 
than a facility subject to Regulation III, is determined on a case-by-
case basis * * *'' Rule 241 is not in Regulation III, so RACT 
determinations made pursuant to this rule are done so on a case-by-case 
basis. Excepting RACT determinations from the prohibition against 
processing case-by-case determinations through the minor permit 
revision process violates the requirement of section 
70.7(e)(2)(i)(A)(3).
    (14) Revise Regulation II, Rule 210, Section 408 to include a 
provision for giving public notice ``by other means if necessary to 
assure adequate notice to the affected public.'' (Sec. 70.7(h)(1))
    (15) Revise MAPC Regulation II, Rule 230, Section 304, which 
contains public notice procedures for the issuance of general permits, 
to include requirements that Maricopa shall:
    (a) Provide notice by other means if necessary to assure adequate 
notice to the affected public. (Sec. 70.7(h)(1))
    (b) Provide notice of any public hearing, including the time and 
place of the hearing, at least 30 days in advance of the hearing. 
(Sec. 70.7(h)(4))
    (c) Provide for keeping a record of the commenters and of the 
issues raised during the public participation process. 
(Sec. 70.7(h)(5))
    (d) Provide a copy of the final general permit to EPA. 
(Sec. 70.8(a)(1))
    c. Pima County Department of Environmental Quality. If EPA 
finalizes this interim approval, Pima must make the following changes, 
or changes that have the same effect, to receive full approval:
    (1) Revise PCC Sec. 17.04.340(133)(b)(i), the definition of major 
source, to clarify that fugitive emissions of hazardous air pollutants 
must be considered in determining whether the source is major for 
purposes of both the 10 ton per year and 25 ton per year major source 
thresholds. The current definition appears to require inclusion of 
fugitive emissions only when determining applicability according to the 
10 ton per year major source threshold.
    (2) Revise PCC Sec. 17.12.150(B) and Sec. 17.12.150(G)(1) to 
clarify when a source becomes subject to obtaining title V permits. A 
source becomes subject to obtaining a title V permit on the date that 
EPA approves the County's program and when the source meets the 
applicability requirements as provided in Sec. 17.12.140(B)(1).
    (3) PCC Sec. 17.12.160(E)(7) contains emission levels that define 
which emission units are exempt from part 70 permitting. The applicants 
must list activities that emit below these levels in the permit 
applications but need not provide detailed information or data 
regarding these units. To receive full approval, Pima must demonstrate 
that these emission levels are insignificant compared to the level of 
hazardous air pollutant emissions from units that are required to be 
permitted or subject to applicable requirements or establish separate 
insignificant emission levels for HAPs and use the current emission 
levels in Sec. 17.12.160(E)(7) to define insignificant activities for 
criteria pollutant-emitting units only. Pima must also restrict the 
exemptions to activities that are not likely to be subject to an 
applicable requirement . (See discussion in II.A.2.b. above.) 
(Sec. 70.5(c), Sec. 70.4(b)(2))
    (4) For the same reason discussed above in II.B.1.a.(4), revise PCC 
Sec. 17.12.180(A)(10) by either deleting the following sentence:


[[Page 36091]]

    This provision shall not apply to emissions trading between 
sources as provided in the applicable implementation plan.

or by revising this sentence as follows:

    This provision shall not apply to emissions trading between 
sources if such trading is prohibited in the applicable 
implementation plan.

(Sec. 70.6(a)(8))
    (5) For the same reason discussed above in II.B.1.a.(5), revise PCC 
Sec. 17.12.180(A)(14) to clarify that changes made under this provision 
may not be modifications under any provision of title I of the Act and 
may not exceed emissions allowable under the permit. (Sec. 70.4(b)(12))
    (6) Revise PCC Sec. 17.12.280 to include a provision that if a 
timely and complete application for a permit renewal is submitted then 
one of the following will occur (Sec. 70.4(b)(10)):
    (a) The permit shall not expire until the renewal permit has been 
issued or denied; or
    (b) All terms and conditions of the permit shall remain in effect 
until the renewal permit has been issued or denied.
    (7) Revise PCC Sec. 17.12.340 to include a provision for giving 
public notice ``by other means if necessary to assure adequate notice 
to the affected public.'' (Sec. 70.7(h)(1))
    (8) A.R.S. Sec. 49-514(G) provides for criminal enforcement of a 
knowing violation of a ``material permit condition'' as defined by the 
Director of ADEQ by rule. Pima is therefore required to use ADEQ's 
definition of ``Material Permit Condition.'' For this reason and the 
reasons discussed above in II.A.3. and II.B.1.a.(9), revise PCC 
Sec. 17.12.350 in the same way as required for ADEQ in II.B.1.a.(9).
    (9) For the same reasons discussed above in II.B.1.a.(10) and 
II.B.1.c.(8), revise PCC Sec. 17.12.350(A)(3) to include fee and filing 
requirements in the definition of ``Material Permit Condition.'' 
Section 70.11(a)(3)(ii) requires that criminal fines shall be 
recoverable against any person who knowingly violates any fee or filing 
requirement. A.R.S. Sec. 514(L)(3) provides for criminal enforcement of 
a violation of fee or filing requirements due to criminal negligence 
only. A.R.S. Sec. 514(G) provides for criminal enforcement of a knowing 
violation of a ``material permit condition'' as defined by the Director 
by rule. Thus, defining ``Material Permit Condition'' to include fee 
and filing requirements will give Pima the authority to bring criminal 
charges for knowing violations of fee and filing requirements. 
(Sec. 70.11(a)(3)(ii))
    (10) Revise PCC Sec. 17.12.400, which contains public notice 
procedures for the issuance of general permits, to include requirements 
that Pima shall:
    (a) Provide notice by other means if necessary to assure adequate 
notice to the affected public. (Sec. 70.7(h)(1))
    (b) Provide notice of any public hearing, including the time and 
place of the hearing, at least 30 days in advance of the hearing. 
(Sec. 70.7(h)(4))
    (c) Provide for keeping a record of the commenters and of the 
issues raised during the public participation process. 
(Sec. 70.7(h)(5))
    (d) Provide a copy of the final general permit to EPA. 
(Sec. 70.8(a)(1))
    d. Pinal County Air Quality Control District. If EPA finalizes this 
interim approval, Pinal must make the following changes, or changes 
that have the same effect, to receive full approval:
    (1) PCR Sec. 1-3-140(74a)(b) contains Pinal's definition of 
``Insignificant activity.'' It includes an emissions threshold that 
defines which units or activities would be exempt from permitting. The 
EPA considers this level to be acceptable for most pollutants but a 
lower threshold may be appropriate for certain hazardous air 
pollutants. The definition also contains a list of activities that are 
considered insignificant and exempt from permitting regardless of their 
level of emissions. To receive full approval, Pinal must demonstrate 
that the 200 pound per year emission threshold is insignificant 
compared to the level of hazardous air pollutant emissions from units 
that are required to be permitted activities and provide a 
demonstration that the activities listed in Sec. 1-3-140(74a)(b)(i-ix) 
are truly insignificant. Alternatively, Pinal may restrict exemptions 
to activities that emit less than County-established emission levels 
and retain the provision that activities that are subject to an 
applicable requirement shall not be considered insignificant. Pinal 
should establish separate emission levels for HAPs and for other 
regulated pollutants and demonstrate that these emission 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. (Sec. 70.5(c), Sec. 70.4(b)(2))
    (2) Revise PCR Sec. 1-3-140(79)(b) to require that all fugitive 
emissions of hazardous air pollutants at a source be considered in 
determining whether the source is major for purposes of section 112 of 
the CAA. Revise PCR Sec. 1-3-140(79)(c) to provide that fugitive 
emissions of a stationary source shall not be considered in determining 
whether it is a major stationary source for the purposes of section 
302(j) of the Act, unless the source belongs to one of the categories 
of stationary sources listed in section 70.2 under the definition of 
``Major source,'' paragraph 2, items (i) to (xxvii).
    (3) Revise PCR Sec. 3-1-040(C)(1) to require that the motor 
vehicles, agricultural vehicles, and fuel burning equipment that are 
exempt from permitting shall not be exempt if they are subject to any 
applicable requirements. (70.5(c))
    (4) Revise PCR Sec. 3-1-045(G)(1) to require sources requiring 
Class A permits to submit a permit application no later than 12 months 
after the date the Administrator approves the District program. Revise 
PCR Sec. 3-1-050(C) to include an application deadline for existing 
sources that become subject to obtaining a Class A permit after the 
initial phase-in of the program. One example is a synthetic minor 
source that is not initially required to obtain a Class I permit but 
later removes federally enforceable limits on its potential emissions 
such that it becomes a major source, but is not required to go through 
the preconstruction review process. This application deadline must be 
12 months from when the source becomes subject to the program (meets 
Class A permit applicability criteria). (Sec. 70.5(a)(1)(i))
    (5) For the reason discussed above in II.B.1.a.(4), revise PCR 
Sec. 3-1-081(A)(10) by either deleting the following sentence:

    This provision shall not apply to emissions trading between 
sources as provided in the applicable implementation plan.

or by revising this sentence as follows:

    This provision shall not apply to emissions trading between 
sources if such trading is prohibited in the applicable 
implementation plan.

(Sec. 70.6(a)(8))
    (6) For the reason discussed above in II.B.1.a.(5), revise PCR 
Sec. 3-1-081(A)(14) to clarify that changes made under this provision 
may not be modifications under any provision of title I of the Act and 
may not exceed emissions allowable under the permit. In addition, 
revise this provision to require that the permit terms and conditions 
shall provide for notice that conforms to section 3-2-180 (D) and (E) 
and that describes how the increases and decreases in emissions will 
comply with the terms and conditions of the permit. (Sec. 70.4(b)(12))
    (7) Revise PCR Sec. 3-1-089 to include a provision that if a timely 
and complete application for a permit renewal is submitted then one of 
the following will occur (Sec. 70.4(b)(10)): 

[[Page 36092]]

    (a) The permit shall not expire until the renewal permit has been 
issued or denied; or
    (b) All terms and conditions of the permit shall remain in effect 
until the renewal permit has been issued or denied.
    (8) Revise PCR Sec. 3-1-107(C) to include a provision for giving 
public notice ``by other means if necessary to assure adequate notice 
to the affected public.'' (Sec. 70.7(h)(1))
    (9) A.R.S. Sec. 49-514(G) provides for criminal enforcement of a 
knowing violation of a ``material permit condition'' as defined by the 
Director of ADEQ by rule. Pinal is therefore required to use ADEQ's 
definition of ``Material Permit Condition.'' For this reason and the 
reasons discussed above in II.A.3. and II.B.1.a.(9), revise PCR Sec. 3-
1-109 in the same way as required for ADEQ in II.B.1.a.(9).
    (10) For the same reasons discussed above in II.A.B.1.a.(10) and 
II.A.B.1.d.(9), revise PCR Sec. 3-1-109(A)(3) to include fee and filing 
requirements in the definition of ``Material Permit Condition.'' 
Section 70.11(a)(3)(ii) requires that criminal fines shall be 
recoverable against any person who knowingly violates any fee or filing 
requirement. A.R.S. Sec. 514(L)(3) provides for criminal enforcement of 
a violation of fee or filing requirements due to criminal negligence 
only. A.R.S. Sec. 514(G) provides for criminal enforcement of a knowing 
violation of a ``material permit condition'' as defined by the Director 
by rule. Thus, defining ``Material Permit Condition'' to include fee 
and filing requirements will give Pinal the authority to bring criminal 
charges for knowing violations of fee and filing requirements.
    (11) Revise PCR Sec. 3-4-420 to provide that a conditional order 
that allows a source to vary from the requirement to obtain a Class A 
permit may not be granted to any source that meets the Class A permit 
applicability criteria pursuant to PCR Sec. 3-1-040.
    (12) Revise PCR Sec. 3-5-500, which contains public notice 
procedures for the issuance of general permits, to include requirements 
that Pinal shall:
    (a) Provide notice by other means if necessary to assure adequate 
notice to the affected public. (Sec. 70.7(h)(1))
    (b) Provide notice of any public hearing, including the time and 
place of the hearing, at least 30 days in advance of the hearing. 
(Sec. 70.7(h)(4))
    (c) Provide for keeping a record of the commenters and of the 
issues raised during the public participation process. 
(Sec. 70.7(h)(5))
    (d) Provide a copy of the final general permit to EPA. 
(Sec. 70.8(a)(1))
2. 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 state and county programs 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under part 70. Therefore, EPA is also proposing to grant approval under 
section 112(l)(5) and 40 CFR 63.91 of ADEQ's, Maricopa's, Pima's, and 
Pinal's programs for receiving delegation of section 112 standards that 
are unchanged from the federal standards as promulgated and that apply 
to sources covered by the part 70 program.
    Because Pima and Pinal require all sources (including nonmajor 
sources) subject to a requirement under section 112 of the Act to 
obtain a part 70 permit, the proposed approval of Pima's and Pinal's 
program for delegation extends to section 112 standards as applicable 
to all sources. ADEQ and Maricopa will not issue part 70 permits to 
nonmajor sources subject to a section 112 standard (unless such sources 
are designated by EPA to obtain a permit) but these agencies submitted 
addenda to their title V programs in which they specifically requested 
approval under section 112(l) of a program for delegation of unchanged 
section 112 standards applicable to non-part 70 sources. (See letter 
from Nancy Wrona, Director, Air Quality Division, ADEQ to David 
Howekamp, Director, Air and Toxics Division, EPA Region IX, dated March 
20, 1995. See letter from David Ludwig, Acting Director, Maricopa 
County Environmental Services Department, to David Howekamp, dated 
March 21, 1995.) Therefore, today's proposed approval under section 
112(l) of ADEQ's and Maricopa's program for delegation extends to non-
part 70 sources as well as part 70 sources.
    ADEQ, Maricopa, Pima, and Pinal have informed EPA that each intends 
to obtain the regulatory authority necessary to accept delegation of 
section 112 standards by incorporating section 112 standards into State 
and county codes of regulations by reference to the federal 
regulations. The details of this delegation mechanism will be set forth 
in a Memorandum of Agreement between each Arizona agency and EPA, 
expected to be completed prior to approval of each agency's section 
112(l) program for straight delegations. This program applies to both 
existing and future standards.

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 and county submittals 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 14, 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 Act

    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.
    The EPA has determined that the proposed interim 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 

[[Page 36093]]
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, 
and Reporting and recordkeeping requirements.

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

    Dated: July 5, 1995.
Felicia Marcus,
Regional Administrator.
[FR Doc. 95-17208 Filed 7-12-95; 8:45 am]
BILLING CODE 6560-50-P