[Federal Register Volume 60, Number 188 (Thursday, September 28, 1995)]
[Proposed Rules]
[Pages 50166-50173]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-23967]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5300-3]


Clean Air Act Proposed Interim Approval Of Operating Permits 
Program; Washington

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed action and proposed notice of correction.

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SUMMARY: EPA is reproposing interim approval of one element of the 
State of Washington's title V air operating permits program. On 
November 9, 1994, EPA granted interim approval to Washington's 
operating permits program. 59 FR 55813 (November 9, 1994). One of the 
basis for granting Washington's program interim rather than full 
approval was that EPA determined that Washington's exemption for 
``insignificant emission units'' exceeded the exemption authorized for 
such units under the Clean Air Act. A coalition of industries filed a 
petition for review of EPA's decision to condition full approval on 
changes to Washington's treatment of insignificant emission units. Upon 
EPA's request for a voluntary remand, the Court remanded this interim 
approval issue to EPA for reconsideration. EPA continues to believe 
that Washington has impermissibly expanded the exemption for 
insignificant emission units, but for somewhat different reasons, and 
therefore again proposes to condition full approval of the Washington 
operating permits program on changes to Washington's treatment of 
insignificant emission units.
    EPA also proposes to approve a change to the jurisdiction of the 
Benton County Clean Air Authority.
    Finally, EPA is proposing to correct the date for expiration of the 
interim approval and the due date of the required submission addressing 
the interim approval issues.

DATES: Comments on this proposed action must be received in writing by 
October 30, 1995.

ADDRESSES: Written comments should be addressed to: David C. Bray, 
Permits Program Manager, U.S. Environmental Protection Agency, Region 
10, Air and Radiation Branch (AT-082), 1200 Sixth Avenue, Seattle, 
Washington 98101.
    Copies of the State's submittal and other information supporting 
this proposed action are available for inspection during normal 
business hours at the following location: U.S. Environmental Protection 
Agency, Region 10, Air & Radiation Branch (AT-082), 1200 Sixth Avenue, 
Seattle, Washington 98101.

FOR FURTHER INFORMATION CONTACT: David C. Bray, Permits Program 
Manager, Air and Radiation Branch (AT-082), U.S. Environmental 
Protection Agency, Region 10, Seattle, Washington, (206) 553-4253.

SUPPLEMENTARY INFORMATION

I. Background and Purpose

A. Introduction

    As required under title V of the 1990 Clean Air Act Amendments 
(sections 501-507 of the Clean Air Act (``the Act'')), EPA has 
promulgated rules which define the minimum elements of an approvable 
State operating permits program and the corresponding standards and 
procedures by which the EPA will approve, oversee, and withdraw 
approval of State operating permits programs (see 57 FR 32250 (July 

[[Page 50167]]
21, 1992)). These rules are codified at 40 Code of Federal Regulations 
(CFR) part 70. Title V requires States to develop, and submit to EPA, 
programs for issuing these operating permits to all major stationary 
sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. 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.

B. Previous Action on Washington's Program

    Washington submitted its operating permits program to EPA in 
November 1993. In August 1994, EPA proposed to grant interim approval 
to Washington's program and proposed to condition full approval on, 
among other things, revisions to Washington's regulations pertaining to 
the treatment of insignificant emission units (IEUs). See 59 FR 42552, 
42557-42558 (August 18, 1994). In proposing that Washington be required 
to revise its IEU regulations as a condition of full approval, EPA 
stated:

    Under 40 CFR 70.5(c), EPA may approve as part of a State program 
a list of insignificant activities and emissions levels which need 
not be included in permit applications. However, no activity for 
which there is an applicable requirement may be defined as 
insignificant.

    59 FR 42558. Several parties commented that Washington's IEU rules 
met the requirements of title V and part 70 and should therefore not be 
a basis for interim approval. These commenters disagreed with EPA's 
statement that no unit for which there is an applicable requirement 
could be defined as ``insignificant.'' The commenters further stated 
that such an interpretation would prevent Washington and most other 
States from granting any relief for insignificant emission units, which 
they argued is inconsistent with the intent of part 70, because it 
would subject all emissions, regardless of size and environmental 
impact to all part 70 requirements, including periodic monitoring, 
reporting, recordkeeping and compliance certification.
    After reviewing the comments, EPA determined that Washington's IEU 
rules did in fact exceed the exemption authorized under part 70 for 
IEUs and therefore conditioned full approval of Washington's program on 
certain specified changes to Washington's IEU rules and changes to four 
other aspects of Washington's operating permits program. In responding 
to these comments in the final interim approval action, EPA stated:

    EPA maintains, however, that Title V and the Part 70 rules 
preclude the exemption of emission units as ``insignificant'' when 
such units are subject to an applicable requirement. Section 504(a) 
of the Act requires that ``each permit issued under this title shall 
include enforceable emission limitations and standards, a schedule 
of compliance, a requirement that the permittee submit to the 
permitting authority, no less often than every 6 months, the results 
of any required monitoring, and such other conditions as are 
necessary to assure compliance with applicable requirements of the 
Act, including the requirements of the applicable implementation 
plan.'' (emphasis added). Section 70.6(a)(1) provides that each 
permit shall include ``emission limitations and standards, including 
those operational requirements and limitations that assure 
compliance with all applicable requirements at the time of permit 
issuance''. Furthermore, Sec. 70.6(c)(1) requires that each permit 
shall contain ``compliance, certification, testing, monitoring, 
reporting, and recordkeeping requirements sufficient to assure 
compliance with the terms and conditions of the permit.'' The fact 
that an emission unit may emit only small quantities of pollutants 
does not provide a basis to exempt it from the fundamental statutory 
requirement that the permit specifically include, and ensure 
compliance with, all applicable requirements.

59 FR 55814. EPA therefore required Washington, as a condition of full 
approval, to:

    (5) Revise WAC 173-401-530(2) to define an emission unit as 
insignificant only if it is subject to no federally enforceable 
applicable requirement and delete the last sentence in WAC 173-401-
200(16) (``These units and activities are exempt from permit program 
requirements except as provided in WAC 173-401-530.'').

59 FR 55818. On January 9, 1995, the Washington States Petroleum 
Association, Northwest Pulp & Paper Association, Aluminum Company of 
America, Columbia Aluminum Corporation, Intalco Aluminum Corporation, 
Kaiser Aluminum & Chemical Corporation and Vanalco Inc. (collectively, 
``Petitioners'') filed a petition with the United States Court of 
Appeals for the Ninth Circuit seeking review of the conditions in EPA's 
final interim approval of Washington's operating permits program. 
Western States Petroleum Association, et al v. EPA, et al, No. 95-70034 
(9th Cir., Jan. 6, 1995). In their petition and subsequent brief, 
Petitioners claimed that EPA had exceeded its authority in requiring 
Washington to revise its IEU rules as a condition of full approval and 
that this condition was arbitrary, capricious, an abuse of discretion 
and not otherwise in accordance with the law. Petitioners' brief 
clarified that Petitioners were challenging only EPA's requirement that 
Washington revise its IEU rules to obtain full approval and did not 
challenge any of the four other conditions for full approval. The State 
of Washington filed a brief as intervenor in the matter.
    In reviewing the issue, EPA determined Petitioners and the State of 
Washington had raised a substantial question concerning EPA's 
interpretation of the IEU provisions of part 70 and the specific 
regulatory revisions EPA had ordered the State to make to its IEU rules 
as a condition of full approval. EPA therefore moved the Court on May 
23, 1995, to vacate and remand to EPA those portions of EPA's final 
interim approval of Washington's operating permits program concerning 
IEUs, specifically, Condition 5 of EPA's conditions for full approval 
of Washington's operating permits program as described in the November 
9, 1994 Federal Register. 59 FR 55818. The Court granted EPA's motion 
on July 7, 1995, thereby vacating Condition 5 of EPA's conditions for 
full approval of the Washington program and remanding Condition 5 to 
EPA for reconsideration and amended decision.
    Following the Court's order, EPA has again reviewed the part 70 
regulations and Washington IEU provisions. EPA now believes that it was 
overly broad in stating that title V and part 70 preclude the 
designation of emission units as ``insignificant'' if such units are 
subject to a federally-enforceable applicable requirement and in 
requiring Washington to change its regulations to allow the designation 
of an emission unit as insignificant only if it is not subject to a 
federally-enforceable applicable requirement. As discussed below, EPA 
believes there are circumstances in which an emission unit or activity 
can be defined as ``insignificant'' under a State operating permits 
program, even if it is subject to an applicable requirement. However, a 
title V application must still contain information needed to determine 
the applicability of or to impose any applicable requirement or any 
required fee and a title V permit must still meet the requirements of 
Sec. 70.6 for all emission units, including IEUs, subject 

[[Page 50168]]
to applicable requirements. EPA therefore continues to believe that the 
Washington IEU provisions extend the exemption for IEUs beyond the 
limited exemption authorized by part 70. Accordingly, EPA is again 
proposing that full approval of the Washington operating permits 
program be conditioned on changes to Washington's treatment of IEUs.

II. Discussion

A. Proposed Interim Approval of Washington IEU Regulations

1. Part 70 Requirements for Insignificant Emission Units
    EPA's regulations for operating permits programs authorize States 
to establish provisions for IEUs. Specifically, 40 CFR 70.5(c) states:

    The Administrator may approve as part of a State program a list 
of insignificant activities and emissions levels which need not be 
included in permit applications. However, for insignificant 
activities which are exempted because of size or production rate, a 
list of such insignificant activities must be included in the 
application. An application may not omit information needed to 
determine the applicability of, or to impose, any applicable 
requirement, or to evaluate the fee amount required under the 
schedule approved pursuant to Sec. 70.9 of this part.

    In addition, Sec. 70.5(c)(3)(i) states:

    A permit application shall describe all emissions of regulated 
air pollutants emitted from any emissions unit, except where such 
units are exempted under this paragraph (c) of this section. The 
permitting authority shall require additional information related to 
the emissions of air pollutants sufficient to verify which 
requirements are applicable to the source, and other information 
necessary to collect any permit fees owed under the fee schedule 
approved pursuant to Sec. 70.9(b) of this part.

    Although both of these provisions authorize a State permitting 
program to grant certain relief for IEUs in its permit application, 
both provisions also require that the source submit sufficient 
information for the permitting authority to be able to verify the 
requirements applicable to the source and to collect appropriate permit 
fees. Where information about an IEU is necessary to determine the 
applicability of, or to impose in the permit, an applicable 
requirement, then the permit application must contain sufficient 
information to make that determination. Similarly, if the approved fee 
schedule imposes fees based on all emissions from a source, including 
emissions from IEUs, and requires the fee amount to be determined in 
the permit application, then the application must include emissions 
information for IEUs.
    In addition, a title V permit must contain all requirements 
applicable to the source, including those requirements applicable to 
IEUs. Section 504(a) of the Act requires that ``each permit issued 
under this title shall include enforceable emission limitations and 
standards, a schedule of compliance, a requirement that the permittee 
submit to the permitting authority, no less often than every 6 months, 
the results of any required monitoring, and such other conditions as 
are necessary to assure compliance with applicable requirements of (the 
Act), including the requirements of the applicable implementation 
plan.'' (emphasis added). Section 70.6(a)(1) provides that each permit 
shall include ``emission limitations and standards, including those 
operational requirements and limitations that assure compliance with 
all applicable requirements at the time of permit issuance.'' 
Furthermore, Sec. 70.6(c)(1) requires that each permit shall contain 
``compliance, certification, testing, monitoring, reporting, and 
recordkeeping requirements sufficient to assure compliance with the 
terms and conditions of the permit.'' The fact that an emission unit 
may emit only small quantities of pollutants does not provide a basis 
for exempting it from the fundamental statutory requirement that the 
permit specifically include, and ensure compliance with, all applicable 
requirements.
    As such, EPA interprets part 70 as allowing States to substantially 
reduce the burden of information required in permit applications for 
IEUs, but requiring that sufficient information still be provided in 
the application to determine the applicability of, and to impose in the 
permit, all applicable requirements that apply to IEUs. EPA also 
interprets part 70 as requiring a title V permit to contain all 
applicable requirements for all emission units, even for IEUs.
    This means that some of the information required by 
Secs. 70.5(c)(3) through (9) (Standard application form and required 
information) may need to be included in the permit application for IEUs 
in order for the permitting authority to draft an adequate operating 
permit. As an example, where an IEU is not in compliance with an 
applicable requirement at the time of permit issuance, the permit 
application would need to contain a compliance plan, including a 
compliance schedule, for achieving compliance with the applicable 
requirement. As another example, if a source has some IEUs within a 
category that are subject to an applicable requirement and some within 
that same category that are not subject to that applicable requirement 
because the applicability criteria for the applicable requirement are 
different from the applicability criteria for IEUs, the permit 
application would generally be required to include sufficient 
information on the IEUs for the permitting authority to determine which 
units are subject to the applicable requirement and to include that 
applicable requirement in the permit for the subject IEUs. EPA believes 
that part 70 would also authorize EPA to approve a State program that 
requires a permit application to simply list the applicable 
requirements that apply to IEUs generally, rather than requiring the 
permit application to explicitly identify which IEUs are subject to 
which applicable requirements. The State would then issue a permit 
imposing the applicable requirements in the permit, but not 
specifically identifying which IEUs are subject to those applicable 
requirements. In such a case, however, EPA believes that 40 CFR 70.6(f) 
would not authorize the State to grant a permit shield to IEUs because 
there would have been no determination in the permitting process that 
certain IEUs were or were not subject to certain applicable 
requirements.
2. Washington Requirements for Insignificant Emission Units
    a. Definition of ``insignificant activities'' and ``insignificant 
emission units'' under the Washington program. WAC 173-401-200(16) 
defines an ``insignificant activity'' or an ``insignificant emission 
unit'' as any activity or emission unit located at a title V source 
which qualifies as insignificant under the criteria listed in WAC 173-
401-530. Section 173-401-530(1) authorizes activities and emission 
units to be considered insignificant if (a) actual emissions of all 
regulated pollutants from the unit or activity are less than the 
emission thresholds established in WAC 173-401-530(4); (b) the activity 
or emission unit is listed in WAC 173-401-532 as ``categorically 
exempt''; (c) the activity or emission unit is listed in WAC 173-401-
533 and is considered insignificant based on size or production rate; 
or (d) the activity or emission unit generates only fugitive emissions, 
which are subject to no applicable requirement other than generally 
applicable requirements of the Washington state implementation plan 
(SIP).
    Although WAC 173-401-200(16) and WAC 173-401-530 meet the 
requirements of part 70 for designating 

[[Page 50169]]
IEUs,1 the Washington program contains unacceptably broad 
exemptions from permit program requirements. WAC 173-401-200(16) 
provides that activities and units deemed insignificant under WAC 173-
401-530 are exempt from Washington's permit program requirements, 
except as provided in WAC 173-401-530. As discussed in more detail 
below, WAC 173-401-530 does not include all of the requirements of part 
70 which are necessary to comply with the provisions of Sec. 70.5 
regarding permit applications and Sec. 70.6 regarding permit content 
for those IEUs which are subject to applicable requirements. It also 
appears to exempt IEUs in determining whether a source is even subject 
to Washington's operating permits program. WAC 173-401-532 and 173-401-
533 also state that IEUs are ``exempt from this chapter [WAC 173-
401].'' 1a

    \1\ It is important to distinguish EPA's concept of 
``insignificant activities and emission levels'' as envisioned in 
section 70.5(c) and Washington's definition of ``insignificant 
activity'' and ``insignificant emission unit'' in WAC 173-401-
200(16) and WAC 173-401-530. Section 70.5(c) allows State programs 
to include a list of ``insignificant activities'' and 
``insignificant emission levels'' which are based solely on 
classification by source category and/or emission rates. The 
Washington definition utilizes a similar approach but further 
restricts ``insignificant activities'' and ``insignificant emission 
units'' to those activities and units that are subject only to 
generally applicable requirements of the Washington SIP and no any 
other federally enforceable applicable requirements.
    \1a\ For purposes of this action, ``IEU'' refers to activities 
and emissions units that are defined as insignificant under WAC 173-
401-200(16) and 173 401-530, when used in discussing the Washington 
program, and refers to the generic concept under part 70, when used 
in discussing the requirements of part 70.
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    WAC 173-401-530(2)(a) does limit the exemption of WAC 173-401-
200(16) by providing that no activity or emission unit subject to a 
federally enforceable applicable requirement (other than generally 
applicable requirements of the Washington SIP) shall qualify as 
insignificant. Nonetheless, EPA believes that the Washington program 
impermissibly exempts from many of the permit content requirements, 
certain permit application requirements, and possibly even 
applicability determinations those IEUs that are subject to federally 
enforceable generally applicable requirements of the Washington SIP, 
but no other federally enforceable applicable requirements. Thus, 
although the Washington regulations comply with part 70 regarding the 
designation of IEUs, they do not comply with the requirements for the 
treatment of IEUs.
    b. Permit content. As stated above, WAC 173-401-200(16) exempts 
IEUs from Washington's ``permit program requirements except as provided 
in WAC 173-401-530.'' IEUs are therefore exempt from all of the permit 
content requirements in WAC 173-401-600 through 650.2 In addition, 
WAC 173-401-530(2)(c) specifically (and redundantly) exempts IEUs from 
the testing, monitoring, reporting and recordkeeping requirements of 
WAC 173-401-615 and WAC 173-401-630(1) except where generally 
applicable requirements of the Washington SIP specifically impose such 
requirements, and WAC 173-401-530(2)(d) specifically (and again 
redundantly) exempts IEUs from the compliance certification 
requirements of WAC 173-401-630(5). Finally, WAC 173-401-532 and -533, 
which contain the lists of IEUs, specifically state that IEUs are 
``exempt from this chapter (WAC 173-401).'' In place of those 
requirements, WAC 173-401-530(2)(b) simply requires the permit 
application to list and the permit to contain all generally applicable 
requirements that apply to IEUs.

    \2\ These include WAC 173-401-600 (Permit content); 173-401-610 
(Permit duration); WAC 173-401-615 (Monitoring and related 
recordkeeping and reporting requirements); WAC 173-401-620 (Standard 
terms and conditions); WAC 173-401-625 (Federally enforceable 
requirements); 173-401-630 (Compliance requirements); 173-401-635 
(Temporary sources); 173-401-640 (Permit shield); 173-401-645 
(Emergency provision); 173-401-650 (Operational flexibility).
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    Nothing in part 70 authorizes a State to omit from a title V permit 
applicable requirements or the elements of a title V permit specified 
in section 40 CFR 70.6. Although the Washington regulations ensure that 
all applicable requirements will be included in a title V permit, WAC 
173-401-200(16) exempts IEUs from all of the required title V permit 
elements except for the generally applicable requirements of the 
Washington SIP. In other words, a title V permit would not be required 
to contain any elements required by Sec. 70.6 for IEUs other than the 
generally applicable requirements themselves. Thus, a title V permit in 
Washington would not be required to include ``gapfilling'' testing, 
monitoring, recordkeeping and reporting requirements for IEUs, as 
required by 40 CFR 70.6(a)(3)(i), (ii) and (iii); compliance 
certification, testing, monitoring, reporting and recordkeeping 
requirements sufficient to assure compliance with the generally 
applicable requirements for subject IEUs, as required by 40 CFR 
70.6(c)(1); compliance certification for IEUs, as required by 40 CFR 
70.6(c)(5); and, for IEUs not in compliance, a compliance schedule and 
progress reports, as required by 40 CFR 70.6(c)(3) and (4).
    For example, where a source had an IEU that was subject only to a 
generally applicable requirement in the Washington SIP, the title V 
permit would be required to contain only those permit provisions 
required by Secs. 70.6(a)(1), 70.6(a)(3)(i)(A), 70.6(a)(3)(ii) and 
70.6(a)(3)(iii) that are generally applicable requirements themselves. 
Washington would not be required to ``gapfill'' any testing or 
monitoring requirements for IEUs subject to applicable requirements 
which did not contain their own testing or monitoring methods, as 
required by Sec. 70.6(a)(3)(i)(B). Washington would also not be 
required to include in permits compliance and compliance certification 
requirements for IEUs subject to applicable requirements, as required 
by Sec. 70.6(c)(1) and (5). For these reasons, EPA believes that the 
Washington provisions for IEUs do not fully meet the requirements of 
Sec. 70.6 with respect to the treatment of IEUs subject to applicable 
requirements.
    c. Permit applications. The Washington program meets the 
requirements of 40 CFR 70.5 (Permit Applications), including the 
requirement of Sec. 70.5(c) that an application may not omit 
information needed to determine the applicability of, or to impose, any 
applicable requirement or evaluate any required fee, with respect to 
all emissions units except for IEUs. See WAC 173-401-500 (Permit 
application), -510 (Permit application forms), and -520 
(Certification). The definition of ``insignificant activity'' and 
``insignificant emission unit'' in WAC 173-401-200(16), however, 
exempts IEUs from all of these requirements, except those contained in 
WAC 173-401-530. Furthermore, WAC 173-401-532(1) exempts categorically 
exempt units and activities from permit applications entirely and WAC 
173-401-533(1) exempts emission units and activities deemed 
insignificant based on size or production rate from all permit 
application requirements except a requirement to include a list of such 
units and activities in the permit application. In place of the permit 
application requirements that apply to all other emission units at 
title V sources in Washington, WAC 173-401-530(2)(b) simply requires 
that the permit application list all generally applicable requirements 
that apply to insignificant emission units or activities at the source 
and, as stated above, WAC 173-401-530(1) requires that the permit 
application contain a list of IEUs which 

[[Page 50170]]
are so designated based on size or production rate.
    As discussed in Section II.A.1 above, EPA believes that part 70 
would authorize a State to require an applicant to simply list the 
applicable requirements that apply to IEUs, rather than requiring the 
applicant to specifically indicate which IEUs are subject to which 
applicable requirements, provided the permit shield does not extend to 
IEUs. In this respect, EPA believes that this aspect of Washington's 
approach to IEU's is acceptable because WAC 173-401-530(3) specifically 
states that the permit shield does not extend to IEUs designated under 
the Washington rules. The Washington regulations fail to satisfy the 
requirements of part 70 with respect to permit application requirements 
in several other respects, however. For example, the Washington program 
exempts sources from the requirement of 40 CFR 70.5(a)(2) and (d) that 
a responsible official certify the truth, accuracy and completeness of 
the provisions in the permit application that relate to IEUs. In 
addition, WAC 173-401-500(7), which contains criteria for determining 
when an application is complete, appears to contain an impermissible 
exemption for IEUs. That section defines an application as complete 
when it contains, among other things, ``the required information for 
each emission unit (other than insignificant emission units) at the 
facility.'' WAC 173-401-500(7)(a). This provision appears to define an 
application as complete even if it fails to include the information 
required by WAC 173-401-510(1) and (2)(c)(i) that would be necessary to 
determine the applicability of, or to impose, any applicable 
requirement or fee for IEUs. It would also define a permit application 
as complete even if it failed to include the information regarding IEUs 
required by WAC 173-401-530.
    Although Washington does not appear to have intended to exclude 
IEUs from all of the requirements of WAC 173-401-501, -510, and -520, 
EPA believes that this is the clear effect of the exclusions contained 
in WAC 173-401-200(16) and 173-401-500(7)(a). EPA therefore believes 
that the provisions for permit applications in the Washington operating 
permits regulations do not fully meet the requirements of Sec. 70.5 
with respect to IEUs.3

    \3\ In this regard, EPA believes its proposed interim approval 
of Washington's IEU provisions is consistent with EPA action in 
other title V program approvals. For example, in requiring Illinois 
to revise its IEU provisions as a condition of full approval, EPA 
stated that the Illinois program would impermissibly allow a permit 
application to omit information needed to determine the 
applicability of, or to impose, applicable requirements on IEUs. See 
60 FR 12478 (March 7, 1995).
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    d. Applicability determinations. Because WAC 173-401-530 does not 
specifically require emissions from IEUs to be included in 
applicability determinations, the exemption contained in the definition 
of IEU could be interpreted to allow emissions from IEUs to be excluded 
from the determination of whether a source is a major source under WAC 
173-401-200(17) and (32) and thus subject to Washington's operating 
permits program in the first instance. In other words, the requirement 
to include emissions from IEUs in determining whether a source is a 
major source is a permit program requirement from which IEUs appear to 
be exempted under WAC 173-401-200(16). Nothing in title V or part 70 
suggests that emissions from IEUs can be ignored in determining whether 
a source is a title V source. See 40 CFR 70.2 (Definition of ``major 
source''; 40 CFR 70.3 (Applicability). Although EPA does not believe 
that Washington intended that emissions from IEUs be excluded in 
applicability determinations, EPA is concerned that Washington's IEU 
regulations could be interpreted to have that effect.
3. Implementation Concerns
    During the public comment period on EPA's initial interim approval 
of the Washington program, commenters expressed concern that permit 
applications would have to describe emissions from all units and 
responsible officials would be required to conduct extensive due 
diligence efforts in order to certify the compliance of emission units 
that emit very small quantities of pollutants. These parties argued 
that this was an unreasonable regulatory burden that would result in 
excessive paperwork and would likely decrease the ability of permitting 
agencies to effectively enforce title V permits. The Petitioners and 
the State echoed these concerns in their challenge of EPA's interim 
approval action before the Ninth Circuit Court of Appeals.
    Such program implementation concerns should be reduced now that EPA 
has clarified that emission units subject to applicable requirements 
may be defined as ``insignificant,'' provided that the application 
contains sufficient information to determine the applicability of, and 
to impose in the permit, all applicable requirements and fees that 
apply to IEUs and that the permit contains all applicable requirements 
for all emission units, even IEUs. In addition, part 70 allows States 
flexibility in tailoring the quality of information required in the 
permit application and the rigor of compliance requirements in the 
permit to the type of emission unit and applicable requirement in 
question. See White Paper for Streamlined Development of Part 70 Permit 
Applications, from Lydia Wegman, Deputy Director of EPA's Office of Air 
Quality Planning and Standards, to EPA Regional Air Directors (July 10, 
1995). For example, the requirement to include in a permit application 
information necessary to determine the applicability of an applicable 
requirement does not necessarily require an applicant to describe or 
quantify emissions of regulated pollutants. Units subject to an 
applicable requirement can be identified as a class along with the 
applicable requirement (e.g. valves and flanges subject to a leak 
detection and repair requirement). Furthermore, the requirement to 
include in a permit compliance certification, testing, monitoring, 
reporting, and recordkeeping sufficient to assure compliance with the 
terms and conditions of the permit does not require the permit to 
impose the same level of rigor with respect to small emission units 
that do not require extensive testing or monitoring in order to 
determine compliance with the applicable requirements as it does with 
respect to large emission units.
    The State of Oregon, which received interim approval of its 
operating permit program effective January 3, 1995,4 59 FR 61820 
(Dec. 2, 1994) has already issued several final title V operating 
permits. The Oregon program provides an example of how a State can meet 
the requirements of part 70 for IEUs and still successfully implement 
an operating permit program. The Oregon program defines certain 
activities as ``insignificant,'' based either on the amount of 
emissions or the activity itself. See OAR 340-28-110(5), (15), and 
(50). The program requires that a permit application contain a list of 
all categorically insignificant activities and an estimate of all 
emissions of regulated air pollutants from those activities which are 
designated insignificant because of nonexempt insignificant mixture 
usage or aggregate insignificant emissions. See OAR 340-28-2120(3)(e). 
The Oregon program, however, prohibits the omission of information 
needed to determine the applicability of, or to impose, an applicable 
requirement, or to evaluate a required 

[[Page 50171]]
fee, see OAR 340-28-2120(3), and does not allow the exemption of IEUs 
from the permit content requirements of Oregon's program, see OAR 340-
28-2130.

    \4\ Oregon's insignificant emissions unit provisions received 
full approval.
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    Permits issued by the State of Oregon have included generally 
applicable requirements contained in the Oregon State Implementation 
Plan (A final title V permit that has been issued by Oregon is in the 
docket). Permits contain provisions requiring sources to monitor IEUs 
subject to applicable requirements, for example, by estimating 
emissions once every five years and conducting semi-annual compliance 
inspections of IEUs, the results of which are recorded in a company 
log. Permits also contain a chart of test methods and procedures for 
determining compliance with generally applicable requirements. In 
short, by using standard permit terms to address compliance 
certification, testing, monitoring, recordkeeping and reporting 
requirements for common generally applicable requirements that apply to 
IEUs, the State of Oregon appears to have minimized the burden of 
ensuring that a permit meets the requirements of Sec. 70.6.
4. Proposed Interim Approval
    In summary, EPA continues to believe that the Washington program 
does not fully meet the requirements of title V and part 70 with 
respect to IEUs. Specifically, Washington's definition of 
``insignificant activity'' and ``insignificant emission unit'' in WAC 
173-401-200(16) exempts such activities and units from all of the 
permit program requirements of WAC 173-401 except those requirements 
contained in WAC 173-401-530. WAC 173-401-530, however, does not ensure 
that all of the necessary provisions of Secs. 70.5 and 70.6 are met for 
those IEUs which are subject to applicable requirements and does not 
ensure that emissions from IEUs must be included in determining whether 
a source is even subject to Washington's operating permits program.
    EPA does not believe, however, that the deficiencies in the 
Washington program with respect to IEUs warrant disapproval of the 
Washington program. Section 502(g) of the Act and 40 CFR 70.4(d) 
authorize EPA to grant interim approval to a State operating permits 
program if the program substantially meets the requirements of part 70, 
but does not qualify for full approval. Although Sec. 70.4(d)(3)(ii) 
requires a program to have adequate authority to issue permits that 
assure compliance with all of the requirements of title V and part 70 
in order to receive interim approval, EPA believes that the 
deficiencies in Washington's program with respect to IEUs are 
sufficiently narrow to qualify for interim approval. Specifically, WAC 
173-401-530(2)(a) limits the exemption for IEUs to just those emission 
units and activities that are subject to no other federally enforceable 
applicable requirements than generally applicable requirements of the 
Washington SIP. Emission units or activities, regardless of size, 
emission rate, or category, which are subject to any other federally 
enforceable requirement do not qualify as IEUs and as such, do not 
qualify for the exemption from the permit application and permit 
content requirements provided by WAC 173-401-200(16) and WAC 173-401-
530. Only IEUs subject solely to the generally applicable requirements 
of the SIP are exempted under the Washington program from many of the 
requirements for permit applications and permit content, and those 
exemptions would be limited to just those generally applicable 
requirements. As such, the Washington program meets the requirements of 
part 70 for most emission units and activities and EPA therefore 
proposes to grant interim approval to the Washington operating permits 
programs with respect to the IEU provisions.

B. Jurisdiction of the Benton County Clean Air Authority

    On April 12, 1995, the Director of the State of Washington 
Department of Ecology submitted a revision to the State of Washington 
title V operating permits program, specifically, a change in the 
jurisdiction of the Benton-Franklin Counties Clean Air Authority. The 
submittal explained that on January 1, 1995 the Benton-Franklin 
Counties Clean Air Authority became the Benton County Clean Air 
Authority, returning jurisdiction for title V permitting and 
enforcement over sources in Franklin County to the Washington 
Department of Ecology as a matter of State law.
    EPA has reviewed this revision to the Washington title V operating 
permits program and does not believe that the proposed change in the 
permitting authority for title V sources in Franklin County impacts the 
approvability of the operating permits programs submitted by the Benton 
County Clean Air Authority program or the Washington Department of 
Ecology. Therefore, EPA proposes to approve this revision to the 
Washington title V operating permits program.

C. Correction to Interim Approval Expiration Dates

    EPA granted interim approval to the Washington title V operating 
permits program on November 9, 1994, which action became effective on 
December 9, 1994. See 59 FR 55813. Section 502(g) of the Act provides 
that an interim approval shall expire on a date set by the 
Administrator not later than 2 years after such approval. The Federal 
Register notice stated, however, that the interim approval of the 
Washington program would expire on November 9, 1996, which is 2 years 
from the date of publication of the notice, and not, as EPA intended, 2 
years from the effective date of the notice, or December 9, 1996. The 
notice also set May 9, 1996 as the submittal date for a corrective 
program, which is only 17 months after the effective date of the 
interim approval, rather than June 9, 1996, which is 18 months after 
the effective date. EPA is therefore by this notice proposing to 
correct the dates in 40 CFR part 70, Appendix A for expiration of the 
interim approval of the Washington State title V operating permits 
program from November 9, 1996 to December 9, 1996, and proposing to 
correct the date by which the State must submit a corrective program 
from May 9, 1996 to June 9, 1996.

III. Proposed Action and Implications

A. Proposed Action

    EPA is proposing to require that the State of Washington change its 
regulations addressing IEUs to conform to the requirements of part 70 
as a condition of full approval of the operating permits program 
submitted by the State of Washington on November 16, 1993. If 
promulgated, the State must make the following revisions to its IEU 
provisions to receive full approval:

    (5) Revise WAC 173-401-200(16) (Definition of ``insignificant 
activity'' and ``insignificant emission unit''), WAC 173-401-500 
(Permit applications), WAC 173-401-510 (Permit application form), 
WAC 173-401-530 (Insignificant emission units), WAC 173-401-532 
(Categorically exempt insignificant emission units) and WAC 173-401-
533 (Units and activities defined as insignificant on the basis of 
size or production rate) to ensure that emissions from IEUs are not 
exempted from applicability determinations; that permit applications 
contain a list of all IEUs which are exempted because of size or 
production rate; that permit applications contain all information 
needed to determine the applicability of or to impose any applicable 
requirement or required fee; and that permits contain all applicable 
requirements and meet all permit content requirements of 40 CFR 70.6 
for all emission units, even for IEUs.

    This proposed requirement replaces Condition 5 under the heading 
``Ecology'' in Section II.B. of EPA's November 9, 1994, Federal 
Register notice granting final interim approval of 

[[Page 50172]]
the Washington operating permits program. See 59 FR 55818. Note that 
this proposal in no way affects the changes necessary to address all 
other interim approval issues identified in the November 9, 1994 
Federal Register notice. In other words, as a condition of full 
approval, Washington must also correct the four other deficiencies in 
its program identified in the November 9, 1994, notice and the other 
Washington permitting authorities must correct all deficiencies in 
their respective programs identified in the November 9, 1994, notice. 
See 59 FR 55818-55819.
    EPA is also proposing to approve as a program revision the transfer 
of title V permitting and enforcement authority for sources in Franklin 
County to the Washington Department of Ecology.
    Finally, EPA is proposing to correct the expiration dates in 
Appendix A for the interim approval of the Washington State and local 
operating permits programs as well as the date by which the State is 
required to submit a corrective program.

B. Effective Date of Interim Approval

    If EPA were to finalize this proposed interim approval, it will not 
change the time period for the initial interim approval, which is 
December 9, 1996. During this ongoing interim approval period, the 
State is protected from sanctions for failure to have a program, and 
EPA is not obligated to promulgate, administer and enforce a Federal 
permits program for the State of Washington. Permits issued under the 
Washington program have full standing with respect to part 70. In 
addition, the 1-year deadline for submittal of permit applications by 
subject sources and the 3-year time period for processing the initial 
permit applications began upon the effective date of interim approval, 
which in this case was December 9, 1994.
    If the State of Washington were to fail to submit a complete 
corrective program for full approval by the date 6 months before 
expiration of the interim approval (by June 9, 1996) EPA would start an 
18-month clock for mandatory sanctions. If the State of Washington were 
then to fail to submit a complete corrective program 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 of Washington had corrected 
the deficiency by submitting a complete corrective program. Moreover, 
if the Administrator were to find a lack of good faith on the part of 
the State of Washington both sanctions under section 179(b) would apply 
after the expiration of the 18-month period until the Administrator 
determined that the State of Washington had come into compliance. In 
any case, if, 6 months after application of the first sanction, the 
State of Washington still had not submitted a corrective program that 
EPA found complete, a second sanction would be required.
    If, following expiration of final interim approval, EPA were to 
disapprove the State of Washington'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 State of Washington 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 of Washington both sanctions 
under section 179(b) would apply after the expiration of the 18-month 
period until the Administrator determined that the State of Washington 
had come into compliance. In all cases, if, 6 months after EPA applied 
the first sanction, the State of Washington 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 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 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 upon expiration of interim approval.

IV. Administrative Requirements

A. Request for Public Comments

    EPA is requesting comments on two issues addressed in this notice, 
specifically, (1) conditioning full approval of the Washington 
operating permits program on changes to Washington's regulations 
addressing insignificant emission units; and (2) approving a change to 
the jurisdiction of the Benton County Clean Air Authority. All other 
aspects of EPA's interim approval of Washington's operating permits 
program, as discussed in 59 FR 42552, including all other conditions on 
full approval of Washington's operating permit programs, remain 
unchanged by this proposal and are not open for public comment. 
Correction of the expiration date of the final interim approval of 
Washington's operating permits program and the date by which Washington 
must submit a corrective program are being made as an administrative 
correction and is not open for public comment.
    Copies of the State's submittal and other information relied upon 
for this proposed action and notice 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 October 30, 1995.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    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 proposed 
action does not impose any new requirements, it does not have a 
significant impact on a substantial number of small entities.

D. Unfunded Mandates

    Under Section 202 of the Unfunded Mandates Reform Act of 1995, 
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 action proposed today does not include 
a Federal mandate that may result in estimated costs of $100 million or 
more 

[[Page 50173]]
to either State, local, or tribal governments in the aggregate, or to 
the private sector. This Federal action approves pre-existing 
requirements under State or local law, and imposes no new Federal 
requirements. Accordingly, no additional costs to State, local, or 
tribal governments, or to the private sector, result from this action.

List of Subjects in 40 CFR Part 70

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

    Dated: September 14, 1995.
Chuck Clarke,
Regional Administrator.

    Part 70, chapter I, title 40 of the Code of Federal Regulations is 
proposed to be amended as follows:
PART 70--[AMENDED]
    21. The authority citation for part 70 continues to read as 
follows:

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

    2. Part 70 is proposed to be amended by revising the Washington 
paragraph of Appendix A to read as follows:

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

* * * * *

Washington

    (a) Department of Ecology (Ecology): submitted on November 1, 
1993; effective on December 9, 1994; interim approval expires 
December 9, 1996.
    (b) Energy Facility Site Evaluation Council (EFSEC): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (c) Benton County Clean Air Authority (BCCAA): submitted on 
November 1, 1993 and amended on September 29, 1994 and April 12, 
1995; effective on December 9, 1994; interim approval expires 
December 9, 1996.
    (d) Northwest Air Pollution Authority (NWAPA): submitted on 
November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (e) Olympic Air Pollution Control Authority (OAPCA): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (f) Puget Sound Air Pollution Control Agency (PSAPCA): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (g) Southwest Air Pollution Control Authority (SWAPCA): 
submitted on November 1, 1993; effective on December 9, 1994; 
interim approval expires December 9, 1996.
    (h) Spokane County Air Pollution Control Authority (SCAPCA): 
submitted on November 1, 1993; effective on December 9, 1994; 
interim approval expires December 9, 1996.
    (i) Yakima County Clean Air Authority (YCCAA): submitted on 
November 1, 1993 and amended on September 29, 1994; effective on 
December 9, 1994; interim approval expires December 9, 1996.
* * * * *
[FR Doc. 95-23967 Filed 9-27-95; 8:45 am]
BILLING CODE 6560-50-P