[Federal Register Volume 60, Number 235 (Thursday, December 7, 1995)]
[Rules and Regulations]
[Pages 62753-62758]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29836]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5341-7]


Clean Air Act Interim Approval of Operating Permits Program; San 
Diego Air Pollution Control District, California

AGENCY: Environmental Protection Agency (EPA).

ACTION: Direct final rule.

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SUMMARY: The EPA is promulgating direct final interim approval of the 
title V operating permits program submitted by the California Air 
Resources Board, on behalf of the San Diego Air Pollution Control 
District (San Diego or District), for the purpose of complying with 
federal requirements for an approvable state program to issue operating 
permits to all major stationary sources and to certain other sources. 
In addition, today's action promulgates direct final approval of San 
Diego's mechanism for receiving delegation of section 112 standards as 
promulgated.

DATES: This direct final rule is effective on February 5, 1996 unless 
adverse or critical comments are received by January 8, 1996. If the 
effective date is delayed, a timely notice will be published in the 
Federal Register.

ADDRESSES: Copies of the District's submittal and other supporting 
information used in developing this direct final rule are available for 
public inspection (docket number CA SD-95-1-OPS) during normal business 
hours at the following location: Operating Permits Section (A-5-2), Air 
and Toxics Division, U.S. Environmental Protection Agency, Region IX, 
75 Hawthorne Street, San Francisco, CA 94105.

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

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    Title V of the 1990 Clean Air Act Amendments (sections 501-507 of 
the Clean Air Act (Act)), and implementing regulations at 40 Code of 
Federal Regulations (CFR) part 70 (part 70), require that states 
develop and submit operating permits programs to EPA by November 15, 
1993, and that EPA act to approve or disapprove each program within 1 
year after receiving the submittal. The EPA's program review occurs 
pursuant to section 502 of the Act and the part 70 regulations, which 
together outline criteria for approval or disapproval. Where a program 
substantially, but not fully, meets the requirements of part 70, EPA 
may grant the program interim approval for a period of up to 2 years. 
If EPA has not fully approved a program by 2 years 

[[Page 62754]]
after the November 15, 1993 date, or by the end of an interim program, 
it must establish and implement a federal program.
    The EPA is publishing this action without prior proposal because 
the Agency views this as a noncontroversial action and anticipates no 
adverse comments. However, in a separate document in this Federal 
Register publication, the EPA is proposing interim approval of the 
operating permit program submitted by San Diego should adverse or 
critical comments be filed.
    If EPA receives adverse or critical comments, this action will be 
withdrawn before the effective date by publishing a subsequent document 
that will withdraw the final action. All public comments received will 
then be addressed in a subsequent final rule based on this action 
serving as the proposed rule. The EPA will not institute a second 
comment period. Any parties interested in commenting on this action 
should do so at this time. If no such comments are received, the public 
is advised that this action will be effective on February 5, 1996.

B. Federal Oversight and Sanctions

    This interim approval, which may not be renewed, extends until 
February 9, 1998. During this interim approval period, San Diego is 
protected from sanctions, and EPA is not obligated to promulgate, 
administer and enforce a federal operating permits program in the 
District. Permits issued under a program with interim approval have 
full standing with respect to part 70, and the 1-year time period for 
submittal of permit applications by subject sources begins upon the 
effective date of this interim approval, as does the 3-year time period 
for processing the initial permit applications.
    If San Diego fails to submit a complete corrective program for full 
approval by August 7, 1997, EPA will start an 18-month clock for 
mandatory sanctions. If San Diego then fails to submit a corrective 
program that EPA finds complete before the expiration of that 18-month 
period, EPA will be required to apply one of the sanctions in section 
179(b) of the Act, which will remain in effect until EPA determines 
that San Diego has corrected the deficiency by submitting a complete 
corrective program. Moreover, if the Administrator finds a lack of good 
faith on the part of the District, both sanctions under section 179(b) 
will apply after the expiration of the 18-month period until the 
Administrator determines that San Diego has come into compliance. In 
any case, if, six months after application of the first sanction, the 
District still has not submitted a corrective program that EPA has 
found complete, a second sanction will be required.
    If EPA disapproves San Diego's complete corrective program, EPA 
will be required to apply one of the section 179(b) sanctions on the 
date 18 months after the effective date of the disapproval, unless 
prior to that date San Diego has submitted a revised program and EPA 
has determined that it corrected the deficiencies that prompted the 
disapproval. Moreover, if the Administrator finds a lack of good faith 
on the part of the District, both sanctions under section 179(b) shall 
apply after the expiration of the 18-month period until the 
Administrator determines that San Diego has come into compliance. In 
all cases, if, six months after EPA applies the first sanction, the 
District has not submitted a revised program that EPA has determined 
corrects the deficiencies, a second sanction is required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if San 
Diego has not timely submitted a complete corrective program or EPA has 
disapproved its submitted corrective program. Moreover, if EPA has not 
granted full approval to the District's program by the expiration of 
this interim approval and that expiration occurs after November 15, 
1995, EPA must promulgate, administer and enforce a federal permits 
program for San Diego upon interim approval expiration.

II. Direct Final Action and Implications

A. Analysis of State Submission

    The analysis contained in this notice focuses on specific elements 
of San Diego's title V operating permits program that must be corrected 
to meet the minimum requirements of part 70. The full program 
submittal; the Technical Support Document (TSD), which contains a 
detailed analysis of the submittal; and other relevant materials are 
available for inspection as part of the public docket (CA-SD-95-1-OPS). 
The docket may be viewed during regular business hours at the address 
listed above.
1. Support Materials
    San Diego's title V program was submitted by the California Air 
Resources Board (CARB) on April 22, 1994 and found to be complete on 
June 9, 1994. On April 4, 1995, the District amended the regulatory 
portion of its submittal. On October 10, 1995, EPA received from CARB, 
on behalf of the District, a revised fee program and an updated program 
description. Enabling legislation for the State of California and the 
Attorney General's legal opinion were submitted by CARB for all 
districts in California and therefore were not included separately in 
San Diego's submittal. The San Diego submission does contain a 
Governor's letter requesting source category-limited interim approval, 
District implementing and supporting regulations, and all other program 
documentation required by section 70.4. An implementation agreement is 
currently being developed between San Diego and EPA.
2. Regulations and Program Implementation
    San Diego's title V implementing regulation, District Regulation 
XIV, was first adopted on January 18, 1994. After preliminary review of 
Regulation XIV, EPA identified numerous regulatory deficiencies and 
communicated the potential disapproval issues to San Diego in letters 
dated September 6, 1994 and December 13, 1994. In response, San Diego 
revised Regulation XIV. The amended regulation was adopted on March 7, 
1995 and submitted to EPA by CARB, on behalf of the District, on April 
4, 1995. San Diego's program description was also revised to reflect 
the changes made to Regulation XIV. EPA is therefore evaluating and 
acting on the March 7, 1995 version of Regulation XIV.
    San Diego's title V implementing regulations substantially meet the 
requirements of 40 CFR part 70, sections 70.2 and 70.3 for 
applicability; sections 70.4, 70.5, and 70.6 for permit content, 
including operational flexibility; section 70.7 for public 
participation and permit modifications; section 70.5 for criteria that 
define insignificant activities; section 70.5 for complete application 
forms; and section 70.11 for enforcement authority. Although the 
regulations substantially meet part 70 requirements, there are a few 
deficiencies in the program that are outlined under section II.B.1. 
below as interim approval issues and further described in the TSD.
a. Insignificant Activities
    Section 70.5(c) 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. Section 70.5(c) also 
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 
70.4(b)(2) requires states to include in their part 70 

[[Page 62755]]
programs any criteria used to determine insignificant activities or 
emission levels for the purpose of determining complete applications. 
Under part 70, a state must request and EPA may approve as part of that 
state's program any activity or emission level that the state wishes to 
consider insignificant. Part 70, however, does not establish 
appropriate emission levels for insignificant activities, relying 
instead on a case-by-case determination of appropriate levels based on 
the particular circumstances of the part 70 program under review.
    San Diego submitted an extensive list of insignificant activities 
that the District determined to be insignificant based on having 
``relatively low potential to emit'' (Regulation XIV, Appendix A). 
While the potential to emit criterion is an acceptable mechanism for 
identifying insignificant units, the District did not provide emissions 
level cut-offs for many of the listed units. For instance, Regulation 
XIV, Appendix A(p)(17) exempts most refrigeration units regardless of 
size. Such units, if they have a charge rate of 50 pounds or more of a 
Class I or II ozone-depleting compound, would be subject to applicable 
requirements and could not be considered insignificant. EPA believes 
that in order to have fully approvable insignificant activities 
provisions, the listed units should not confuse the regulated 
community's obligation to provide all information needed to determine 
the applicability of, or to impose, any applicable requirement.
    For interim approval, EPA is relying on several rules in Regulation 
XIV that affect the scope and usage of insignificant activities. 
Specifically, Rule 1401(a) ensures that the District's permit exemption 
rule, Rule 11, will not interfere with title V applicability 
determinations. Similarly, Rule 1401(b)(4) ensures that emissions from 
insignificant units will be included in all title V applicability 
determinations. In addition, Rules 1411, 1414(f)(1), 1414(f)(3)(iii) 
(A)&(B), 1414(f)(4) and the application ``Completeness Criteria'' 
guidance document require the permit application to include all 
information necessary to determine whether and how an applicable 
requirement applies at a source, regardless if a unit qualifies as 
insignificant. Finally, Rules 1401(b)(4) and 1401(c)(24) prohibit 
activities that are subject to an applicable requirement (other than 
two specified generic facility-wide requirements) from qualifying as an 
insignificant activity. For full approval, San Diego must revise its 
list of insignificant activities for title V permitting as discussed in 
section II.B.1.5. of this notice.
b. Variances
    San Diego's Hearing Board has the authority to issue variances from 
requirements imposed by State and local law. See California Health and 
Safety Code sections 42350 et seq. In the legal opinion submitted for 
California operating permit programs, California's Attorney General 
states that ``[t]he variance process is not part of the Title V 
permitting process and does not affect federal enforcement for 
violations of the requirements set forth in a Title V permit.'' 
(Emphasis in original.)
    EPA regards the State and District variance provisions as wholly 
external to the program submitted for approval under part 70, and 
consequently, is not taking action on those provisions of State and 
local law. EPA has no authority to approve provisions of state or local 
law, such as the variance provisions referred to, that are inconsistent 
with the Act. EPA does not recognize the ability of a permitting 
authority to grant relief from the duty to comply with a federally 
enforceable part 70 permit, except where such relief is granted through 
procedures allowed by part 70. A part 70 permit may be issued or 
revised (consistent with part 70 permitting procedures) to incorporate 
those terms of a variance that are consistent with applicable 
requirements. A part 70 permit may also incorporate, via part 70 permit 
issuance or modification procedures, the schedule of compliance set 
forth in a variance. However, EPA reserves the right to pursue 
enforcement of applicable requirements notwithstanding the existence of 
a compliance schedule in a permit to operate. This is consistent with 
40 CFR Sec. 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.''
c. Reporting of Permit Deviations
    Part 70 requires prompt reporting of deviations from permit 
requirements, and San Diego has not defined ``prompt'' in its program. 
Section 70.6(a)(3)(iii)(B) requires the permitting authority to define 
prompt in relation to the degree and type of deviations likely to occur 
and the applicable requirements. Although the 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 section 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 contain sufficiently 
prompt reporting of deviations.
d. Temporary Authorization
    San Diego's title V regulation provides for the issuance of a 
``temporary authorization'' which allows a source to operate without an 
operating permit. Temporary authorizations are not required by part 70, 
but they exist in San Diego's title V program in order to maintain 
consistency with the District's existing local permitting program. San 
Diego structured its temporary authorization mechanism to ensure that 
the issuance of temporary authorizations would not interfere with any 
of the requirements established under part 70. Specifically, temporary 
authorizations may only be issued to sources that have met the 
requirements of section 112(g) or the preconstruction permitting 
requirements under parts C or D of title I; i.e., the same scope of 
sources that do not have to submit applications for title V permits or 
title V permit modifications until 12 months after commencing operation 
(section 70.5(a)(1)(ii)). Furthermore, possession of a temporary 
authorization does not affect a source's obligation to submit a title V 
permit application, and the temporary authorization expires on the date 
that a complete title V permit application is due.
e. Enhanced New Source Review
    San Diego's title V permit program provides for enhanced 
preconstruction review, an optional process that allows sources to 
satisfy both new source review and title V permit modification 
requirements at the same time. Any modification processed pursuant to 
San Diego's enhanced preconstruction review procedures may be 
incorporated into the title V permit as an administrative permit 
amendment. These enhanced procedures obviate the need to undergo two 
application, public notice, and permit issuance/revision processes for 
the same change. 

[[Page 62756]]

f. Applicability
    EPA found during its review of the San Diego title V program that 
the District's applicability provisions are consistent with part 70 and 
fully approvable, but that there is atypical language which warrants a 
brief discussion in this notice. First, the requirement to count 
fugitive hazardous air pollutant emissions in major source 
determinations is contained in the definition of ``potential to emit'' 
rather than the definition of ``major stationary source.'' The term 
``potential to emit'' is used to define ``major stationary source.'' 
(See Regulation XIV, Rules 1401(c)(25) and (36).)
    Second, a broad applicability exemption for all non-major 
stationary sources (Rule 1401(b)(1)) appears at first glance to be in 
conflict with the part 70 requirement to permit non-major affected 
sources and solid waste incineration units subject to section 129(e) of 
the Act (section 70.3(b)). However, San Diego's regulation provides 
that the applicability exemptions in Rule 1401(b)(1) apply only when 
referenced in the applicability section (Rule 1401(a)(2) and (3)); 
i.e., to non-major sources subject to sections 111 or 112 of the Act. 
(See Regulation XIV, Rule 1401(a)(2-4).) San Diego's program 
description confirms this reading (section III.B.1.b., p.2). In any 
case, if EPA completes a rulemaking that would require a non-major 
source to obtain a title V permit, the non-major stationary source 
exemption would not apply for that source (Rule 1401(b)(1)).
g. Federally Mandated New Source Review
    In order to have an approvable title V program, permits must assure 
compliance with all federal applicable requirements. The part 70 
definition of ``applicable requirement'' includes ``any term or 
condition of any preconstruction permits issued pursuant to regulations 
approved or promulgated through rulemaking under title I, including 
parts C or D, of the Act;'' (section 70.2, definition of ``applicable 
requirement,'' subsection (2)) i.e., major and minor new source review 
and prevention of significant deterioration requirements.
    Rather than citing parts C or D of title I, San Diego's definition 
of ``federally enforceable requirement'' states that requirements 
imposed by ``federally mandated new source review'' or prevention of 
significant deterioration regulations are applicable requirements. The 
use of the term ``federally mandated new source review'' is unclear. 
Under San Diego's definition, ``federally mandated new source review'' 
is linked to ``emission thresholds specified in federal law or in the 
approved State Implementation Plan (SIP).'' (See Regulation XIV, Rule 
1401(c)(19).) The District has a SIP-approved minor new source review 
program that is triggered by any emissions increase, which could be 
construed as an emissions threshold of zero, and therefore all NSR, 
major and minor, is federally mandated. (See Regulation II, Rule 
10(a).) Yet, San Diego has contended that minor NSR is not always 
federally mandated, leaving the term ``federally mandated new source 
review'' subject to conflicting interpretations.
    The District must revise either the definition of ``federally 
mandated new source review'' or the definition of ``federally 
enforceable requirement'' to clearly include minor new source review as 
an applicable requirement under title V. However, San Diego's program 
is approvable for an interim period because the District's approved SIP 
contains a minor new source review program, and San Diego's definition 
of ``federally enforceable requirement'' also includes ``[a]ny standard 
or other requirement provided for in the State Implementation Plan'' 
(Regulation XIV, Rule 1401(c)(18)(i)). Rules 10 and 21 of San Diego's 
portion of the California SIP constitute the District's minor (and 
major) NSR program. (See June 22, 1994 letter from Richard Smith, San 
Diego Air Pollution Control District, to Ron Friesen, California Air 
Resources Board.) Since Rules 10 and 21 are in San Diego's SIP, the 
requirement to obtain, and the specific conditions of, a minor NSR 
permit are federally enforceable.
    EPA has discussed this interim approach with San Diego, and the 
District agrees that SIP-approved Rules 10 and 21 provide for a 
federally enforceable minor NSR program. However, EPA and San Diego 
disagree about whether Rule 21 extends federal enforceability to all 
terms and conditions of minor NSR permits. EPA believes that, until San 
Diego's SIP is revised to state otherwise, Rule 21 makes all terms and 
conditions of minor NSR permits federally enforceable. San Diego 
believes that minor NSR permit terms that do not originate from the SIP 
or other federal law or regulations are not made federally enforceable 
by Rule 21. As an interim solution until San Diego's SIP is revised or 
this disagreement is resolved, the District has agreed to designate in 
the part 70 permit certain minor NSR permit terms as ``District-only 
minor NSR'' and stipulate that those terms so listed will be reviewed 
and, as necessary, be deleted, revised, or incorporated as federally-
enforceable terms of the part 70 permit on or before a specified 
deadline (not later than the renewal of the permit).
3. Permit Fee Demonstration
    Section 502(b)(3) of the Act requires that each permitting 
authority collect fees sufficient to cover all reasonable direct and 
indirect costs required to develop and administer its title V operating 
permits program. Each title V program submittal must contain either a 
detailed demonstration of fee adequacy or a demonstration that 
aggregate fees collected from title V sources meet or exceed $25 per 
ton 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'' (40 CFR 
70.9(b)(2)(i)).
    San Diego has opted to make a presumptive minimum fee 
demonstration. The District's fees are based on the actual direct and 
indirect costs of evaluating and issuing a title V permit. In addition 
to employing a cost recovery approach, the District will charge an 
initial title V permit application fee of $2,200 per permitted source 
(Rule 40, Section (s)). San Diego estimates an average implementation 
cost, and hence fees, of $320,000 per year for the first 5 years of the 
program. The presumptive minimum is calculated at $309,300 per year by 
multiplying an estimated 10,000 tons of pollutants emitted each year in 
San Diego by the CPI adjusted presumptive dollar amount of $30.93. San 
Diego will therefore be collecting fees in an amount that exceeds the 
presumptive minimum.
4. Provisions Implementing the Requirements of Other Titles of the Act
a. Authority and Commitments for Section 112 Implementation
    San Diego has demonstrated in its title V program submittal 
adequate legal authority to implement and enforce all section 112 
requirements through the title V permit. This legal authority is 
contained in the State of California enabling legislation and in 
regulatory provisions defining federal ``applicable requirements'' and 
requiring each permit to incorporate conditions that assure compliance 
with all applicable requirements. EPA has determined that this legal 
authority is sufficient to allow San Diego to issue permits that assure 
compliance with all section 112 requirements. For further discussion, 
please refer to the TSD accompanying 

[[Page 62757]]
this action and the April 13, 1993 guidance memorandum entitled, 
``Title V Program Approval Criteria for Section 112 Activities,'' 
signed by John Seitz.
b. Authority for Title IV Implementation
    On March 7, 1995, San Diego incorporated by reference part 72, the 
federal acid rain permitting regulations. The incorporation by 
reference was codified in Rule 1412 of Regulation XIV and submitted to 
EPA on April 4, 1995.

B. Proposed Interim Approval and Implications

1. Title V Operating Permits Program
    The EPA is promulgating direct final interim approval to the 
operating permits program submitted by the California Air Resources 
Board, on behalf of the San Diego Air Pollution Control District, on 
April 22, 1994 and amended on April 4, 1995 and October 10, 1995. Areas 
in which San Diego's program is deficient and requires corrective 
action prior to full approval are as follows:
    (1) California State law currently exempts agricultural production 
sources from permit requirements. CARB has requested source category-
limited interim approval for all California districts. In order for San 
Diego's program to receive full approval (and to avoid a disapproval 
upon the expiration of this interim approval), the California 
Legislature must revise the Health and Safety Code to eliminate the 
exemption of agricultural production sources from the requirement to 
obtain a permit.
    (2) Part 70 requires that any significant change in monitoring 
permit terms or conditions be processed as a significant permit 
modification. Rule 1401(c)(43), definition of ``Significant Permit 
Modification,'' must be revised accordingly. (See section 70.7(e)(4).)
    (3) San Diego's treatment of affected state notification is unclear 
in the program submittal. Part 70 requires that air permitting 
authorities provide notice to all affected states of all proposed 
permits, minor and significant permit modifications, and renewals 
(section 70.8(b)(1)). The term ``affected state'' is defined in section 
70.2 as a contiguous state whose air quality may be affected or a state 
within 50 miles of a permitted source. EPA is also undergoing a 
rulemaking action that will allow Native American lands to be treated 
as a state. (See 59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 
21, 1993).)
    San Diego's program does not define ``affected state,'' and it does 
not specify any affected state notification procedures. It does 
provide, however, the requirement to notify affected states in the case 
of minor or significant permit modifications. In addition, San Diego 
has indicated that it currently has cooperative permitting agreements 
with Native American tribes.
    EPA is not concerned about the notice deficiencies with respect to 
states that border California because of San Diego's coastal location. 
On the other hand, in order to receive full approval on this issue, San 
Diego's program must ensure that Native American tribes will be 
adequately notified and consulted once such tribes apply for treatment 
as affected states. If San Diego's existing cooperative permitting 
practices meet the affected state notification requirements set out in 
section 70.8(b), the District may submit them to EPA for incorporation 
into its title V program to satisfy the affected state notice 
requirements. As an alternative to up-front adoption of affected state 
notice provisions or incorporation of existing practices, EPA will 
accept a commitment from San Diego to: (1) Initiate rule revisions upon 
notification from EPA that an affected tribe has applied for state 
status; and (2) provide affected state notice to tribes upon a tribe's 
filing for state status, that is, prior to the District's adoption of 
affected state notice rules.
    (4) Revise Rule 1410(h)(7), paragraph 2 to require permit reopening 
procedures for any inactive status permit that is modified to reflect 
new applicable requirements upon being converted to active status if 
there are 3 years or more remaining on the term of its 5-year permit. 
(See section 70.7(f)(1)(i).)
    (5) Remove any activities from the District's list of insignificant 
activities that are subject to a unit-specific applicable requirement 
and adjust/add size cut-offs to ensure that the listed activities are 
truly insignificant. (See sections 70.4(b)(2) and 70.5(c).)
    (6) Remove the reference to Rules 1401 (j) and (k) in Rule 1401(i). 
This reference to minor and significant permit modifications in the 
provisions for administrative permit amendments could be read to be 
inconsistent with the definition of ``significant permit modification'' 
(Rule 1401(c)(43)), which correctly defaults unspecified changes to the 
significant permit modification process. In addition, the phrase 
``These shall include the following'' in the administrative permit 
amendment section (Rule 1410(i)) creates ambiguity about whether the 
list of administrative permit amendments is exhaustive or open ended. 
Because part 70, section 70.7(d)(vi) requires that administrative 
permit amendments be specifically approved as part of the title V 
program, the word ``include'' in the above phrase must also be removed.
    (7) The District must revise either the definition of ``federally 
mandated new source review'' or the definition of ``federally 
enforceable requirement'' to clearly include minor new source review as 
an applicable requirement under title V.
    This interim approval, which may not be renewed, extends for a 
period of up to two years. During the interim approval period, San 
Diego is protected from sanctions for failure to have a program, and 
EPA is not obligated to promulgate a federal permits program in the 
District. Permits issued under a program with interim approval have 
full standing with respect to part 70, and the one-year time period for 
submittal of permit applications by subject sources begins upon interim 
approval, as does the three-year time period for processing the initial 
permit applications.
    The scope of San Diego's part 70 program that EPA is acting on in 
this notice applies to all part 70 sources (as defined in the approved 
program) within San Diego's jurisdiction. The approved program does not 
apply to any part 70 sources over which an Indian tribe has 
jurisdiction. See, e.g., 59 FR 55813, 55815-18 (Nov. 9, 1994). The term 
``Indian tribe'' is defined under the Act as ``any Indian tribe, band, 
nation, or other organized group or community, including any Alaska 
Native village, which is federally recognized as eligible for the 
special programs and services provided by the United States to Indians 
because of their status as Indians.'' See section 302(r) of the CAA; 
see also 59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 54364 (Oct. 21, 
1993).
2. State Preconstruction Permit Program Implementing 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) that postpones the effective date of section 112(g) until after 
EPA has promulgated a rule addressing that provision. The interpretive 
notice also 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), San 
Diego must be able to implement section 112(g) during the period 
between promulgation of the 

[[Page 62758]]
federal section 112(g) rule and adoption of implementing State 
regulations.
    For this reason, EPA is approving the use of San Diego's 
preconstruction review program as a mechanism to implement section 
112(g) during the transition period between promulgation of the section 
112(g) rule and adoption by San Diego of rules specifically designed to 
implement section 112(g). However, since the sole purpose of this 
approval is to confirm that the District has a mechanism to implement 
section 112(g) during the transition period, the approval itself will 
be without effect if EPA decides in the final section 112(g) rule that 
there will be no transition period. The EPA is limiting the duration of 
this approval to 18 months following promulgation by EPA of the section 
112(g) rule.
3. Program for Delegation of Section 112 Standards as Promulgated
    Requirements for approval, specified in 40 CFR section 70.4(b), 
encompass section 112(l)(5) requirements for approval of a program for 
delegation of section 112 standards as promulgated by EPA as they apply 
to part 70 sources. Section 112(l)(5) requires that a state's program 
contain adequate authorities, adequate resources for implementation, 
and an expeditious compliance schedule, which are also requirements 
under part 70. Therefore, EPA is also promulgating approval under 
section 112(l)(5) and 40 CFR part 63.91 of San Diego's program for 
receiving delegation of section 112 standards that are unchanged from 
federal standards as promulgated. California Health and Safety Code 
section 39658 provides for automatic adoption by CARB of section 112 
standards upon promulgation by EPA. Section 39666 of the Health and 
Safety Code requires that districts then implement and enforce these 
standards. Thus, when section 112 standards are automatically adopted 
pursuant to section 39658, San Diego will have the authority necessary 
to accept delegation of these standards without further regulatory 
action by the District. The details of this mechanism and the means for 
finalizing delegation of standards will be set forth in an 
implementation agreement between San Diego and EPA. This program 
applies to both existing and future standards but is limited to sources 
covered by the part 70 program.

III. Administrative Requirements

A. Docket

    Copies of San Diego's submittal and other information relied upon 
for this direct final action is contained in docket number CA-SD-95-1-
OPS maintained at the EPA Regional Office. The docket is an organized 
and complete file of all the information submitted to, or otherwise 
considered by, EPA in the development of this direct final rulemaking. 
The docket is available for public inspection at the location listed 
under the ADDRESSES  section of this document.

B. 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.

C. Unfunded Mandates

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

D. Executive Order 12866

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

List of Subjects in 40 CFR Part 70

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

    Dated: November 8, 1995.
Felicia Marcus,
Regional Administrator.

    Part 70, title 40 of the Code of Federal Regulations is amended as 
follows:

PART 70--[AMENDED]

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

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

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

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

* * * * *
    The following district program was submitted by the California Air 
Resources Board on behalf of:
    (x) San Diego Air Pollution Control District: submitted on April 
22, 1994 and amended on April 4, 1995 and October 10, 1995; approval 
effective on February 5, 1996, unless adverse or critical comments are 
received by January 8, 1996.
* * * * *
[FR Doc. 95-29836 Filed 12-06-95; 8:45 am]
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