[Federal Register Volume 61, Number 211 (Wednesday, October 30, 1996)]
[Rules and Regulations]
[Pages 55910-55924]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-27836]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5642-1]


Clean Air Act Final Interim Approval of Operating Permits 
Program; Arizona; Direct Final Interim Approval of Operating Permits 
Program; Pinal County Air Quality Control District, Arizona

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval; direct final interim approval.

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SUMMARY: The EPA is promulgating interim approval of the Operating 
Permits Program submitted by the State of Arizona, which comprises 
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 for an approvable state program to 
issue operating permits to all major stationary sources, and to certain 
other sources. The EPA is also taking direct final action to promulgate 
interim approval of specified portions of the Pinal County Operating 
Permits Program submitted by ADEQ on behalf of Pinal County on August 
15, 1995. These specified portions of the program reflect changes to 
the permitting regulation that was part of Pinal's original program 
submittal.

DATES: The final interim approval of the Arizona program is effective 
on November 29, 1996. The direct final interim approval of the 
specified portions of the Pinal County program as codified in paragraph 
(d)(2) of the Arizona entry of Appendix A to part 70, is effective on 
December 30, 1996 unless adverse or critical comments are received by 
November 29, 1996. If the effective date is delayed, a timely notice 
will be published in the Federal Register.

ADDRESSES: Copies of the State and county submittals and other 
supporting information used in developing the final interim approval 
and direct final interim approval are available for inspection (docket 
number AZ-95-1-OPS) 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

    Title V of the 1990 Clean Air Act Amendments (sections 501-507 of 
the Clean Air Act (``the Act'')), and implementing regulations at 40 
Code of Federal Regulations (CFR) Part 70 require that states develop 
and submit operating permits programs to EPA by November 15, 1993, and 
that EPA act to approve or disapprove each program within 1 year after 
receiving the submittal. The EPA's program review occurs pursuant to 
section 502 of the Act and the part 70 regulations, which together 
outline criteria for approval or disapproval. Where a program 
substantially, but not fully, meets the requirements of Part 70, EPA 
may grant the program interim approval for a period of up to 2 years. 
If EPA has not fully approved a program by 2 years after the November 
15, 1993 date, or by the end of an interim program, it must establish 
and implement a federal program. On July 1, 1996, EPA promulgated the 
part 71 regulations that govern EPA's implementation of a federal 
operating permits program in a state or tribal jurisdiction. See 61 FR 
34202. On July 31, 1996, EPA published a notice at 61 FR 39877 listing 
those states whose part 70 operating permits programs had not been 
approved by EPA and where a part 71 federal operating permit program 
was therefore effective. In that notice EPA stated that part 71 is 
effective in the State of Arizona. The EPA also stated its belief that 
it would promulgate interim approval of the Arizona part 70 program 
prior to the deadline for sources to submit permit applications under 
part 71. Today's action cancels the applicability of a part 71 federal 
operating permits program in Arizona in those areas under the 
jurisdiction of the State and county agencies. The part 71 application 
deadline contained in the July 31, 1996 notice is now superseded

[[Page 55911]]

by the State and county part 70 application deadlines.
    On July 13, 1995, EPA published a notice of proposed rulemaking 
(NPR) in which it proposed interim approval of the operating permits 
program for ADEQ, Maricopa, Pima, and Pinal. See 60 FR 36083. The NPR 
identified several deficiencies in the State and county programs and 
proposed that the Arizona agencies make specified changes to correct 
those deficiencies as a condition of full approval. The EPA received 
public comment on the proposal and is responding to most of those 
comments in this document. The EPA has addressed all of the comments 
received on the proposal in a separate ``Response to Comments'' 
document contained in the docket at the Regional Office. After 
considering the comments, EPA determined that some of the changes 
proposed in the NPR are not necessary. In this final interim approval, 
EPA has therefore modified the list of changes (``interim approval 
issues'') that was set forth in section II.B.1. of the NPR. The public 
comments that prompted EPA to modify the list are discussed below in 
II.B. along with other issues raised during the public comment period. 
In addition, ADEQ, on behalf of Pinal County, has submitted a revised 
operating permits program for Pinal. Some of the revisions to the list 
of interim approval issues for Pinal result from revisions to the Pinal 
program that the County made in response to EPA's NPR. These revisions 
to the Pinal program are also discussed in section II.B. of this 
rulemaking. Revisions to portions of the Pinal program that were not 
addressed by EPA's NPR are discussed in III.A. below. The EPA is taking 
direct final action to promulgate interim approval of these changes to 
the Pinal operating permits program.
    The EPA's NPR also proposed approval, under section 112(l), of the 
State and county programs for accepting delegation of section 112 
standards as promulgated. The EPA received public comment on this 
proposed action for the Pinal County program only, as is discussed 
below in II.B.
    In this document EPA is taking final action to promulgate interim 
approval of the operating permits programs for ADEQ, Maricopa, Pima, 
and Pinal. In this document EPA is also taking final action to approve, 
under section 112(l), these agencies' programs for accepting delegation 
of section 112 standards as promulgated. Finally, EPA is taking direct 
final action today to promulgate interim approval of specific changes 
to the Pinal County operating permits program.

II. Final Action and Implications

A. Analysis of State Submission

    The title V programs for ADEQ, Maricopa, Pima, and Pinal were 
submitted by ADEQ on November 15, 1993. 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. On 
July 13, 1995, EPA proposed interim approval of The Arizona State title 
V operating permits program in accordance with Sec. 70.4(d), on the 
basis that the program ``substantially meets'' part 70 requirements. 
Additional material submitted by the State and county agencies in 
response to EPA's NPR is referenced below in II.B. in the discussion of 
public comments.
    The analysis of the State submittal given in the July 13, 1995 
proposed action is supplemented by the discussion of public comments 
made on the NPR, including the discussion of the additional material 
submitted by the State and county agencies, and the resulting changes 
to the interim approval issues list. Otherwise, the analysis in the 
proposed document remains unchanged and will not be repeated in this 
final document. The program deficiencies identified in the proposed 
document have been modified as discussed below in II.B. The program 
deficiencies that remain, however, must be corrected for the State and 
counties to have fully approvable programs. These program deficiencies, 
or interim approval issues, are enumerated in II.C. below.

B. Public Comments and Responses

    The EPA received comments on the NPR for the Arizona program from 
fifteen interested parties. The majority of the comments are discussed 
below. Comments that are not addressed in this document are addressed 
in a separate ``Response to Comments'' document contained in the docket 
(AZ-95-1-OPS).
    Several commenters expressed a general concern that sources which 
have already submitted permit applications in accordance with the 
existing Arizona regulations should not be required to submit new 
applications due to program deficiencies identified by EPA in this 
document. The EPA is therefore clarifying that today's final interim 
approval of the Arizona program authorizes the State and county 
agencies to implement the interimly approved programs as the title V 
operating permits program for a period of two years. The EPA has 
identified certain deficiencies in the program that must be corrected 
by the end of this two year period but until that time, the agencies 
may implement the program in accordance with the interimly approved 
regulations cited in today's document. Therefore, sources that have 
submitted applications in accordance with these regulations need not 
reapply. The applications will not be deemed incomplete or returned for 
revision solely because the permit application relies upon the Arizona 
agencies' interimly approved regulations. If an applicant submitted a 
timely and complete application in accordance with these regulations, 
its application shield is not jeopardized by changes to the interimly 
approved regulations that the State or county agencies may make. Other 
comments on the July 13, 1995 proposal are discussed below.
1. Insignificant Activities
    Section 70.5(c) provides that states may develop as part of their 
program, and EPA may approve, a list of insignificant activities and 
emissions levels that need not be included in permit applications but 
that applications may not omit information needed to determine the 
applicability of, or to impose, any applicable requirement, or to 
evaluate appropriate fees. Several commenters disagreed with EPA's 
requirement in the NPR that all activities identified as insignificant 
by the Director of ADEQ must first be approved by EPA. The EPA proposed 
that in order to receive full approval, ADEQ must remove the provisions 
in its current title V regulation that gives the Director the 
discretion to identify activities as insignificant without prior EPA 
approval. These commenters argued that Sec. 70.5(c) provides only that 
EPA may approve a list of insignificant activities as part of a 
permitting authority's title V program and by including discretionary 
authority as one item on the list, ADEQ has met the requirements of 
Sec. 70.5(c). They also argued that nothing in Sec. 70.5(c) suggests 
that all insignificant activities must be submitted to EPA in the form 
of a rule and requiring so would unnecessarily limit the flexibility of 
states to identify new insignificant activities as they arise. The 
commenters also stated that EPA would have opportunity to review such 
newly designated insignificant activities when it receives permit 
applications

[[Page 55912]]

identifying such activities. Several commenters also cited the 
discussion in EPA's July 10, 1995 ``White Paper for Streamlined 
Development of Part 70 Permit Applications'' (``White Paper'') of 
trivial activities. They argued that the discretion allowed permitting 
authorities by EPA to list additional items as trivial should also be 
extended to insignificant activities.
    The EPA's reading of Sec. 70.5(c) is that EPA must approve as part 
of a state's title V program any activities the state considers to be 
insignificant. The EPA's ``White Paper'' also states that activities 
that are not clearly trivial ``still need to be approved by EPA before 
being added to State lists of insignificant activities.'' The EPA 
therefore does not agree that the reasons offered by the commenters are 
adequate to support full approval of the State rule provision discussed 
here. However, EPA does believe this provision is fully approvable for 
the reasons discussed in the following paragraph.
    ADEQ's rule clearly states that certain activities may be 
considered insignificant only if the emissions unit ``is not otherwise 
subject to any applicable requirement.'' (Arizona Administrative Code 
(AAC) R18-2-101(54)) AAC R18-2-304(E)(7) requires that all 
insignificant activities be listed in the permit application. This goes 
beyond the Sec. 70.5(c) requirement that ``for insignificant activities 
which are exempted because of size or production rate, a list of such 
insignificant activities must be included in the application.'' The 
preamble to the final part 70 rule clarifies the distinction. It 
discusses a boiler that is insignificant because it is below a 
specified size as an example of an insignificant activity that is 
exempted because of size and would be required by Sec. 70.5(c) to be 
listed in the application. It goes on to state that for insignificant 
activities ``which apply to an entire category of activities, such as 
space heaters, the application need not contain any information on the 
activity.'' [57 FR 32273, July 21, 1992] ADEQ does not distinguish its 
insignificant activities in this way and instead requires that all 
insignificant activities be listed in the application. The ``White 
Paper'' generally provides that sources need only submit detailed 
emissions information on emissions units as necessary to determine the 
applicability of requirements, to verify compliance, and to compute 
permit fees. The EPA believes that ADEQ's handling of insignificant 
activities is consistent with this discussion. By requiring all 
insignificant activities to be listed, ADEQ provides that information 
on all emission units will be included in the application. Any units 
that are subject to applicable requirements may not be considered 
insignificant and the source must provide more detailed information for 
those units. It therefore is appropriate that the Director of ADEQ may 
allow activities other than those on the list submitted as part of its 
title V program to be merely listed in the application. Because these 
activities would be listed in the application, ADEQ and EPA would have 
an opportunity to review the list and request additional information if 
they believed the activity did not qualify as insignificant.
    Regarding the proposal that ADEQ submit a demonstration to EPA that 
the specific activities listed in R18-2-101(54)(a-i) are truly 
insignificant, EPA has further evaluated the activities on this list 
and found that they do qualify for treatment as insignificant in the 
title V application because their exclusion is not likely to interfere 
with determining or imposing applicable requirements in the State or 
with the determination of fees. Therefore, no further demonstration is 
necessary.
    The EPA is therefore revising its proposal regarding insignificant 
activities. The EPA is eliminating ADEQ's interim approval issue 
regarding insignificant activities and finds that the provisions in 
ADEQ rules regarding insignificant activities are fully approvable.
    In the July 13, 1995 proposal, EPA stated that Pinal County's 200 
pound per year insignificant activity threshold may not be appropriate 
for units emitting hazardous air pollutants (HAP) and proposed that in 
order to receive full approval Pinal must demonstrate that this 
threshold level is insignificant compared to the level of HAP emissions 
from units required to be permitted. The EPA also proposed that Pinal 
demonstrate that the insignificant activities specifically listed in 
its program are truly insignificant. Pinal County commented that they 
have no objection to adopting lower thresholds for HAPs (such as 
Sec. 112(g) de minimis levels) that EPA may set by rule but that they 
should not be required to submit a demonstration that their listed 
activities are truly insignificant until EPA establishes by rule what 
qualifies as insignificant.
    The EPA has further evaluated the activities specifically listed by 
Pinal in its definition of ``insignificant activity'' and determined 
that they are acceptable because their exclusion is not likely to 
interfere with determining or imposing applicable requirements in the 
County or with the determination of fees. The EPA has also reevaluated 
its proposal regarding Pinal's emissions threshold definition of 
``insignificant activity'' in light of the ``White Paper'' guidance on 
permit applications. Pinal's rule (PCR Sec. 3-1-050(E)) provides that 
title V applications need not contain emissions data regarding 
insignificant activities but that all insignificant activities must be 
listed in the application. Pinal's definition of ``insignificant 
activity'' excludes any activities subject to an applicable requirement 
(PCR Sec. 1-3-140(74a)). As discussed above regarding ADEQ's 
insignificant activity provisions, EPA believes that this approach is 
consistent with the ``White Paper'' guidance. Pinal is assuring that 
information on all emission units will be included in the application 
by requiring insignificant activities to be listed and that more 
detailed information, including emissions information, will be provided 
for those units subject to applicable requirements. The EPA believes 
that the 200 pound per year threshold used to define insignificant 
activities in Pinal's regulation is appropriate for the County given 
these other provisions in the rule. The EPA is, therefore, eliminating 
the proposed interim approval issue regarding Pinal's insignificant 
activities and finds that these provisions are fully approvable.
    The EPA did not receive any comments specific to its proposal 
regarding Pima's insignificant activities provision. Pima's rule (PGC 
Sec. 17.12.160(E)(7)) provides that emission units that do not emit 
more than 2.4 pounds per day of VOC or 5.5 pounds per day on any other 
regulated air pollutant must be listed in the application but the 
application need not provide detailed information on these units. The 
EPA stated in its proposal its concern that the emissions thresholds 
may not be acceptable for defining insignificant activities for HAP. 
The EPA also stated in the proposal that Pima must restrict such 
insignificant emission units to those that are not likely to be subject 
to an applicable requirement. The EPA now believes that if Pima adds 
the restriction that emissions units that are subject to any unit-
specific applicable requirements may not be eligible for treatment as 
insignificant, then the County's treatment of insignificant emission 
units will be consistent with the ``White Paper'' guidance as discussed 
above regarding the ADEQ and Pinal insignificant activity provisions. 
With the ``applicable requirement'' restriction, and the requirement 
that all insignificant emission units be listed in the application, EPA 
believes that the

[[Page 55913]]

emissions thresholds described above are appropriate for Pima County. 
The EPA is therefore modifying the proposed interim approval issue 
accordingly. (See II.C.1.c.3 below.)
    Maricopa County's Regulation II, Rule 210, section 301.5(g) allows 
that emissions information for activities included in an extensive list 
(MAPC Regulation II, Rule 200, section 303.3(c)) need not be included 
in applications though the activities themselves must be listed in the 
application. The EPA proposed that Maricopa be required to submit a 
demonstration that the activities are truly insignificant and not 
likely to be subject to an applicable requirement. Alternately, EPA 
proposed that Maricopa restrict the exemptions to activities that are 
less than County-established emission levels and that are not likely to 
be subject to an applicable requirement. The EPA believes that there 
are items on Maricopa's list that could emit significant amounts of 
pollutants and/or that could be subject to non-general applicable 
requirements. Maricopa County Environmental Services Department was the 
only commenter that addressed EPA's proposal on Maricopa's 
insignificant activities provision. Maricopa responded that they agree 
to provide EPA with a demonstration that the activities are truly 
insignificant and not likely to be subject to an applicable requirement 
and also to revise Rule 200 to include emissions and/or operation 
limits for the activities as necessary. The EPA is requiring, 
therefore, that for full approval Maricopa must demonstrate that the 
activities on its list are insignificant. It must revise the list to 
ensure that nothing on the list will be subject to a unit-specific 
requirement. In some cases, this may require removing some items from 
the list completely. Another option is to add emissions cut-offs or 
size limitations to items on the list to ensure that the listed 
activities are below any applicability thresholds for applicable 
requirements.
    Several commenters took exception to EPA's proposal that one way to 
identify insignificant activities is to set emissions limits. The 
commenters argue that this contradicts both the purpose of establishing 
insignificant activities and the ``White Paper.'' They contend that 
establishing an emissions cutoff for insignificant activities would 
require sources to quantify and document the level of emissions from 
insignificant activities in an effort to show that they do indeed 
qualify as insignificant. This emissions quantification, they argue, is 
exactly what the concept of insignificant activities and the ``White 
Paper'' discussion of application content intended to avoid. The 
purpose of the insignificant activities exclusion, they say, is to 
relieve sources from the obligation to develop and submit detailed 
information about activities that are not relevant to determining fees 
or the applicability of CAA requirements. The commenters also cite the 
``White Paper'' discussion which says that emissions estimates should 
not be required when they serve no useful purpose.
    While EPA is not requiring that states set an emissions level 
cutoff to define insignificant activities, the agency maintains that it 
is acceptable to do so as long as such levels are insignificant 
compared to the level of emissions from units that are subject to 
applicable requirements. The EPA also believes that where a state's 
list of insignificant activities contains activities that may be 
significant if emitting above a certain level, then imposing an 
emissions cap on the list will ensure that the activities are truly 
insignificant. As to the comment that emissions cutoffs defeat the 
purpose of an exemption, EPA notes that Pima and Pinal Counties chose 
to define insignificant activities in this way. The EPA's proposal 
merely expressed the concern that the chosen levels may be too high. As 
discussed above, EPA now believes the emissions thresholds set by Pima 
and Pinal to be acceptable in their jurisdictions given the other 
conditions placed on emissions units to be treated as insignificant in 
these counties.
2. Excess Emissions
    Numerous parties commented on EPA's proposal to require ADEQ to 
clarify that its excess emissions affirmative defense provision does 
not apply to part 70 sources. They challenged EPA's authority to assert 
that part 70 programs may not contain an affirmative defense for excess 
emissions beyond that provided in section 70.6(g) for emergency 
situations and cited section 70.6(g)(5) which provides that the 
emergency affirmative defense ``is in addition to any emergency or 
upset provision contained in any applicable requirement.'' They contend 
that ADEQ's excess emissions provision is necessary because part 70 
sources will have unavoidable excess emissions for purely technological 
reasons and not emergencies as described in section 70.6(g). Many 
sources, they argue, are unable to maintain emissions below applicable 
emissions limits during startup and shutdown events as well as during 
malfunctions. They also cite EPA's recognition of this situation in 
many NSPS regulations which provide that emission limits do not apply 
during periods of startup, shutdown, and malfunction. The commenters 
also pointed out that the purpose of title V is not to impose new 
substantive requirements but to set forth all requirements that apply 
to a source in a single document. They assert that establishing the 
emergency provision of section 70.6(g) as the only defense for 
violations would increase the stringency of EPA's NSPS regulations and 
Arizona State rules. By prohibiting an affirmative defense that has 
been in Arizona regulations for many years, they argue, EPA will create 
new standards for sources. The commenters also referred to EPA's 
September 22, 1986 proposal to approve the ADEQ excess emissions 
provision as part of the SIP. They argued that if EPA had finalized its 
action on this rule then there would be no question as to its 
applicability to part 70 sources.
    The EPA agrees that it is not the purpose of title V to create any 
new substantive requirements for sources but rather to assure source 
compliance with federal applicable requirements. The EPA's proposal to 
not fully approve a provision that would allow sources an affirmative 
defense to noncompliance with federal applicable requirements is fully 
consistent with this purpose. The EPA does recognize that there are 
times when it is technologically infeasible for sources to comply with 
applicable emissions limits. This rationale was behind the promulgation 
of the 70.6(g) affirmative defense. Moreover, where EPA, in 
promulgating individual standards, has found that it is necessary to 
provide relief from compliance during such periods, it has done so. 
Several NSPS and recently promulgated NESHAP allow, as commenters 
noted, that standards apply at all times except periods of startup, 
shutdown, and malfunction. Similarly, a state could, within a specific 
source category rule approved into the SIP, provide such relief where 
appropriate.
    The section 70.6(g)(5) provision which recognizes upset provisions 
``in addition'' to the Sec. 70.6(g) emergency defense is intended to 
confirm that startup, shutdown, and malfunction provisions contained in 
specific federal applicable requirements will continue to have effect 
once those requirements are incorporated into part 70 permits. Section 
70.6(g)(5) does not imply that affirmative defenses may be established 
beyond those found in the applicable requirements or in Sec. 70.6(g). 
AAC R18-2-310 (Rule 310) is broader that Sec. 70.6(g), and moreover 
would provide a defense to noncompliance with federal applicable 
requirements where the applicable requirement itself requires

[[Page 55914]]

compliance. By approving such a provision, EPA would be granting 
authority to the State to change applicable requirements through title 
V beyond what Sec. 70.6(g) specifically allows.
    The EPA is not increasing the stringency of the Arizona SIP rules 
by not approving Rule 310 into the State's title V program. Because 
Rule 310 has never been approved into the SIP, the provisions of Rule 
310 have never been part of these federal applicable requirements. 
Regardless of whether such provisions have existed as a matter of 
Arizona State law, they have never had legal effect as a matter of 
federal law. It follows that Arizona's SIP rules will be no more 
stringent when incorporated into the title V permit. Similarly, because 
Rule 310 never applied to NSPS and other federal standards, they will 
be no more stringent after incorporation into the title V permit. As 
section 70.6(g)(5) confirms, any exemptions or defenses included in 
these federal requirements will still be available once the 
requirements are incorporated into the title V permit, along with the 
emergency defense allowed by Sec. 70.6(g).
    As to the comments regarding EPA's 1986 proposed approval of 
Arizona's excess emissions provision, EPA did not finalize its action 
on the excess emissions rule and therefore this rule is not part of the 
SIP and does not affect any federally enforceable applicable 
requirement. The EPA has informed ADEQ that it would not approve such a 
broadly applicable rule into the SIP because it is inconsistent with 
EPA's policy on excess emissions. See EPA's ``Policy on Excess 
Emissions During Startup, Shutdown, Maintenance, and Malfunctions'' 
from Kathleen Bennett dated September 28, 1982 and as revised on 
February 15, 1983.
    The EPA maintains that a fully approvable part 70 program must not 
provide for an affirmative defense to violations beyond that provided 
by the section 70.6(g) emergency provision. AAC R18-2-310 is therefore 
not fully approvable because it is a more broadly applicable provision 
than the section 70.6(g) emergency defense. Rather than being limited 
to emergencies, it applies during startup, shutdown, malfunction, and 
scheduled maintenance. It is also available as a defense to violations 
of all standards while section 70.6(g) applies only to technology-based 
standards. For full approval, ADEQ must correct these deficiencies such 
that its rule is consistent with section 70.6(g) (see II.C.1.a.5 
below). During the interim approval period, however, ADEQ may implement 
its title V program according to the regulations receiving interim 
approval in today's action, including the AAC R18-2-310 excess 
emissions affirmative defense provision.
3. Criminal Affirmative Defense/Material Permit Conditions
    The EPA received a number of comments regarding the affirmative 
defense to criminal prosecution for violation of emission and opacity 
requirements and the revisions to the regulatory definitions of 
material permit condition EPA proposed in sections II.B.1.a.9., 
II.B.1.b.3, II.B.1.c.8, and II.B.1.d.9. of the NPR. ADEQ and a number 
of industry commenters opposed EPA's proposed revisions. ADEQ's 
comments explained that the types of permit conditions which EPA had 
proposed to add to the regulatory definition are already covered by 
existing statutory provisions. After reviewing these provisions 
(Arizona Revised Statutes (ARS) Secs. 49-464(C), (G), (J), and (U)), 
EPA defers to the State's interpretation of the statute and is 
therefore removing the requirements to revise the definition of 
material permit condition in the State and county regulations. The EPA 
is, however, finalizing the requirement that ADEQ clarify that a 
material permit condition may be contained in a permit or permit 
revision issued by the Control Officer of a county agency as well as by 
the Director of ADEQ. (See II.C.1.a.6 below.)
    One commenter felt that the State regulatory definition of material 
permit condition was also deficient in that it covers only those 
emission limits imposed to avoid classification as a major source or 
modification or to avoid triggering other requirements. Such 
requirements are commonly referred to as synthetic minor restrictions. 
While these limits can be federally enforceable, they are not required 
under the federal CAA in the same way that other emission limits are 
because they are opted into by the source voluntarily to avoid other 
requirements. Thus, ADEQ included such limits in the definition of 
material permit condition to fill a perceived gap. However, as ADEQ 
pointed out in its comment letter, the criminal violation of emission 
limits in general is specifically covered by ARS Sec. 49-464(C). ARS 
Sec. 49-464(G) makes it clear that emissions limit violations are to be 
addressed under subsection (C). The commenter also argued that R18-2-
331(B) incorporates the excess emissions defense which EPA has cited as 
an interim approval issue. The EPA disagrees with this analysis. This 
provision does not provide a defense; rather it decreases the available 
criminal charge from a felony to a misdemeanor in a narrowly proscribed 
set of circumstances.
4. Public Notice
    ADEQ, the Arizona Chamber of Commerce, and the Arizona Mining 
Association (AMA) disagreed with EPA's proposal to require revision of 
the Arizona agencies' rules to allow for providing ``notice by other 
means if necessary to assure adequate notice to the affected public.'' 
All three parties contend that the public notice provisions in the 
State and county rules go well beyond the minimum federal requirements 
and will allow for more than adequate notice to the affected public. 
AMA also argued that the addition of a vague and indefinite requirement 
for additional notice could lead to litigation claiming that issued 
permits are invalid because public notice was inadequate. While EPA 
recognizes that the State and county notice provisions are quite 
extensive, there may be certain instances when the agencies must use 
alternative means not specifically provided for in their rules to reach 
a particular community or group of people that may be affected by a 
permitting action. On July 22, 1996, the Office of the Attorney General 
of Arizona submitted a supplement to the Attorney General's opinion in 
response to EPA's proposal on this matter. This supplement cites ARS 
49-104(B)(3) which gives ADEQ the power to ``utilize any medium of 
communication, publication and exhibition in disseminating information, 
advertising, and publicity in any field of its purposes, objectives and 
duties.'' This, in the Attorney General's opinion, gives ADEQ the power 
to provide notice by any means as necessary to assure adequate notice 
to the affected public. The EPA is deferring to the Attorney General's 
opinion, and is therefore eliminating the interim approval issue 
regarding the public notice provision (see II.B.1.a.8 of the NPR) 
identified in the proposed interim approval of ADEQ's program.
    Neither the Attorney General's Office, nor the county attorney's 
offices, submitted a statement citing a provision in State or county 
law that gives similar broad authority to the counties. Maricopa stated 
in its comment letter on the proposed interim approval and also in a 
letter from the County Attorney submitted on August 5, 1996 that its 
rule was revised in February, 1995 to authorize notice by other means 
necessary to assure adequate notice. Pinal County revised its rules to 
add such a provision to its public notice procedures (Pinal County Code 
of

[[Page 55915]]

Regulations (PCR) Sec. 3-1-107(C)(3)) and Pima has also added such a 
provision to its rules. Pinal submitted its revised rules, including 
the revised section 3-1-107(C)(3), as a revision to its title V program 
submittal on August 15, 1995 and therefore EPA is eliminating the 
interim approval issue for Pinal's program related to public notice 
(see II.B.1.d.8. of EPA's July 13, 1995 proposal) such that Pinal's 
public notice procedures are now fully approvable. Maricopa and Pima 
have not submitted their revised rules as revisions to their title V 
programs and thus EPA must finalize action on the Maricopa and Pima 
public notice provisions as proposed (see II.C.1.b.11 and II.C.1.c.6 
below). The EPA recognizes, however, that once Maricopa and Pima submit 
their revised rules for approval under title V, the public notice 
provisions regarding notice by other means necessary to assure adequate 
notice will be fully approvable.
5. Public Access to Records
    The Arizona Center for Law in the Public Interest (ACLPI) commented 
that the Arizona State program does not meet the Clean Air Act 
requirement (Sec. 7661a(b)(8)) that state permit programs include the 
authority and procedures to make available to the public any permit 
application, compliance plan, permit, and monitoring or compliance 
report. ACLPI argues that ARS Sec. 49-432 allows a source to declare a 
wide variety of information confidential, and therefore unavailable to 
the public, upon submittal to the permitting authority. ACLPI argues 
further that the burden is on the permitting authority to demonstrate 
in court that the information does not qualify as confidential and that 
there is no avenue of redress for a citizen if the permitting authority 
chooses not to contest a claim of confidentiality.
    The Attorney General's opinion submitted as part of the State 
program addresses public access to permit information. The Attorney 
General states that AAC R18-2-305(A) provides that all permits, 
including all elements required to be in the permit pursuant to AAC 
R18-2-306, shall be made available to the public and that no permit may 
be issued unless the information required by AAC R18-2-306 is present 
in the permit. The Attorney General goes on to state that the Director 
of ADEQ has 30 days to determine whether the information satisfies the 
requirements for trade secret or competitive position pursuant to ARS 
Sec. 49-432(C)(1) and if the Director decides that the material does 
not satisfy these requirements, he may direct the Attorney General's 
office to seek a court order authorizing disclosure. The Attorney 
General further asserts that the ``burden of proof in a court 
proceeding is on the party asserting the affirmative of an issue, the 
claimant. The statute in question shifts the burden of proceeding but 
does not shift the burden of proof.'' He also states that if the 
Director disagrees with a permit applicant's assertion of 
confidentiality, the permit application is incomplete until the 
disagreement is resolved.
    The regulations clarify this interpretation. AAC R18-2-305(B) 
requires that any notice of confidentiality submitted pursuant to ARS 
Sec. 49-432(C) must contain sufficient supporting information to allow 
the Director to evaluate whether such information satisfies the 
requirements related to trade secrets or how the information, if 
disclosed, is likely to cause substantial harm to competitive position. 
AAC R18-2-305(C) further provides that the Director shall make a 
determination as to whether the information satisfies the requirements 
for trade secret or competitive position and notify the applicant. Only 
if the Director agrees that the applicant's notice satisfies the 
statutory requirements will the Director attach a notice to the 
applicant's file that certain information is confidential.
    The EPA defers to the opinion of the Attorney General that 
Arizona's confidentiality provisions will not interfere with the 
public's access to information intended to be public under title V. If 
EPA finds, however, that Arizona is routinely withholding information 
that EPA would release to the public under federal confidentiality 
provisions, EPA will revisit this portion of the program approval. The 
EPA also notes that AAC R18-2-304(F) requires a source that is applying 
for a title V permit and has submitted information under a claim of 
confidentiality to submit a copy of that information directly to EPA. 
The release of this information to the public by EPA would be governed 
by federal confidentiality provisions under Sec. 114(c) of the Act.
6. Exemption of Agricultural Activities
    ACLPI commented that the Arizona program exempts from permitting 
``agricultural vehicles or agricultural equipment used in normal farm 
operations'' (ARS Sec. 49-426.01) and that title V does not allow for 
such an exemption. ACLPI further commented that ADEQ's regulatory 
definition of ``agricultural equipment used in normal farm operations'' 
as not including equipment that would require a title V permit could be 
readily challenged by farm interests as not reflecting the plain 
language of the statute.
    The Attorney General's Opinion submitted as part of ADEQ's title V 
program states that in granting ``agricultural equipment used in normal 
farm operations'' an exemption from the permitting requirement, the 
``legislature sought in no way to exempt any major sources.'' The 
opinion goes on to state that AAC R18-2-302(C)(3) clarifies this point 
by providing that ``agricultural equipment used in normal farm 
operations'' does not include equipment that requires a permit under 
title V or is subject to a standard under 40 CFR parts 60 or 61. The 
EPA defers to the opinion of the Attorney General regarding this issue. 
However, if, as ACLPI suggests, a successful legal challenge to the 
regulation occurs, EPA will revisit this portion of the program 
approval.
7. Deadline for Permit Applications
    ACLPI commented that ADEQ's rules do not require all sources to 
submit applications within 12 months of EPA approval of the State's 
program. ACLPI references AAC R18-2-303(E) which provides that permit 
applications that were determined to be complete prior to the effective 
date of ADEQ's rules shall be deemed complete for title V purposes and 
that the Director shall include a compliance schedule in the source's 
permit for submitting a title V application according to the newly 
effective rules. ACLPI argues that because there is no time limit on 
the compliance schedule it could go beyond the title V statutory 
requirement. ACLPI also commented that there is no deadline for Class 
II sources (non-title V) to submit permit applications other than 180 
days from a written request from the Director.
    AAC R18-2-303(E) allows that permits issued to sources whose 
applications were deemed complete prior to the effective date of ADEQ's 
rules shall contain a schedule of compliance for submitting an 
application to address the additional elements that were not included 
in the original application. The EPA considers this a reasonable 
approach since sources that submitted applications prior to the rule's 
effective date prepared the application pursuant to ADEQ's permit 
application requirements in effect before the new rules were adopted. 
AAC R18-2-303(B) contains a schedule by which existing sources 
requiring a Class I permit (title V permit) must submit permit 
applications. The last date that any source requiring a Class I permit

[[Page 55916]]

could submit its complete application was May 1, 1995, well in advance 
of EPA's statutory deadline. The EPA considers AAC R18-2-303(B) to be 
the permit application deadline for all Class I sources, regardless of 
whether that source had submitted an application prior to the effective 
date of the ADEQ rules.
    Regarding the application deadline for Class II operating permits, 
as these are state-only enforceable permits and not title V permits, 
they need not meet the requirements of title V.
    The EPA's NPR did identify a deficiency with the application 
deadline as applied to certain existing sources that are not Class I 
sources during the initial phase of the program but that later become 
Class I sources after obtaining Class II permits. The EPA's proposal 
included a requirement that ADEQ revise its regulation to include an 
application deadline (12 months from becoming subject) for existing 
sources that become Class I sources after initial permit issuance is 
complete. One example is a source with a Class II permit that removes 
operational limits such that it is no longer nonmajor. ADEQ's 
regulation contains a specific schedule for existing Class I sources to 
submit permit applications and does not contain a general requirement 
that all Class I sources submit applications within one year of 
becoming subject to Class I permit requirements. ADEQ argued in its 
comment letter that any existing source that makes a facility change or 
seeks to remove limits on its potential to emit such that it qualifies 
for a Class I permit is required to obtain a significant revision to 
its existing permit, or under AAC R18-2-302, if not previously 
regulated, a new Class I permit. The EPA agrees that the regulation 
requires a significant permit revision or new Class I permit prior to 
making the change in such cases but significant permit revisions 
normally address only the portion of the source and permit that is 
being modified and for any source obtaining its initial Class I permit, 
the entire permit must be subject to the full Class I permit issuance 
procedures including public comment and EPA review. ADEQ's regulation 
does not clearly provide that this would occur in the instances 
discussed above. The EPA has, therefore, finalized the interim approval 
identifying this as a deficiency that must be corrected but has 
clarified that the rule must be revised to ensure that an entire source 
is issued a permit under the Class I permitting procedures (see 
II.C.1.a.2 below).
    The EPA also proposed requiring revisions to the county regulations 
to clarify that all existing title V sources must submit title V permit 
applications within 12 months of EPA's approval of the Arizona program 
and all sources that become subject after the program is approved must 
apply within 12 months of becoming a title V source. Maricopa and Pinal 
counties submitted comments that they intend to revise the rules 
accordingly. No parties commented on this proposed requirement for 
Pima. The EPA is therefore finalizing its action regarding the 
application deadline issue as proposed for Maricopa, Pima, and Pinal 
counties (see II.C.1.b.5, II.C.1.c.2, and II.C.1.d.5 below).
8. Conditional Orders
    ACLPI commented that it believes Arizona's conditional order 
provisions are inconsistent with title V. ADEQ has authority under ARS 
Sec. 49-437 through Sec. 49-441 to 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 have 
similar authority under ARS Sec. 49-491 through Sec. 49-495. In the 
NPR, EPA stated that it considers such conditional order provisions as 
wholly external to the program submitted for approval under part 70. In 
that proposal, EPA also described how the State and county regulations 
limit the applicability of the conditional order provisions. ADEQ 
provides that conditional orders may only apply to non-federally 
enforceable conditions of a permit and that issuance of a conditional 
order may not constitute a violation of the Act. The county regulations 
all provide that conditional orders may not be granted to part 70 
sources. (Please see the July 13, 1995 NPR for more detail.) In 
consideration of the regulatory limitations placed on the issuance of 
conditional orders and the fact that EPA considers the statutory 
provisions to be external to the title V program, EPA believes it does 
have authority to approve Arizona's program without further regard to 
the conditional order provisions than was expressed in the NPR.
    The EPA did propose that Pinal modify its conditional order 
provisions in PCR Sec. 3-4-420 to provide that a conditional order may 
not be granted to vary from the requirement to obtain a title V permit. 
Pinal submitted a comment that it acknowledges the need for this 
correction. The EPA is finalizing this interim approval issue as 
proposed (see II.C.1.d.8 below).
9. Permit Renewal Provisions
    The EPA proposed that the State and counties revise their 
regulations, in accordance with Sec. 70.4(b)(10), to include a 
provision that a source's permit not expire until a renewed permit is 
issued or denied or, alternately, provide that the terms and conditions 
of the source's existing permit remain in effect until the permit 
renewal action is final. ADEQ informed EPA in its comment letter that 
ARS Sec. 41-1064 provides that an existing permit does not expire until 
the issuing agency has acted on the application for renewal. The EPA 
agrees that this statutory provision satisfies the requirement of 
Sec. 70.4(b)(10) for all the Arizona agencies and has eliminated the 
proposed interim approval issues regarding permit renewal accordingly 
(see II.B.1.a.7, II.B.1.b.8, II.B.1.c.6, and II.B.1.d.7 of the NPR). 
The EPA recognizes in this final interim approval action that Pinal 
County has clarified in its revised title V regulation under section 3-
1-089 that any source relying on a timely and complete application as 
authority to operate after expiration of a permit must comply with the 
terms of the expired permit.
10. Fines for Fee and Filing Violations
    As discussed in II.B.1.a.10, II.B.1.b.4, II.B.1.c.9, and 
II.B.1.d.10 of the NPR, EPA believed that ADEQ and the counties needed 
to revise their regulations to provide for adequate criminal penalties 
for knowing violations of fee and filing requirements. This proposal 
was based on EPA's evaluation of Arizona's statute, specifically ARS 
Sec. 49-464(L)(3) and Sec. 49-514(L)(3), which provide for criminal 
enforcement of fee and filing requirements due to criminal negligence 
only, which carries lower penalties than knowing violations.
    ADEQ's comment stated that the ``criminal negligence'' standard 
covers knowing violations and that penalties associated with such 
violations are $20,000 maximum for each violation. The Arizona Attorney 
General's Office submitted a clarifying statement on July 22, 1996 
citing ARS Sec. 13-202(C) as providing that if ``criminal negligence 
suffices to establish an element of an offense, that element also is 
established if a person acts intentionally, knowingly or recklessly * * 
* '' The statement went on to say that ARS Sec. 49-464(L)(3), 
therefore, already imposes criminal fines for knowing violations of fee 
or filing requirements and that the fine imposed may be up to $20,000 
per violation for an enterprise (see ARS Sec. 13-803). Because the 
penalty

[[Page 55917]]

applicable to individuals is lower, and not adequate for title V 
purposes, it is important to establish that all permits are issued to 
enterprises. ARS Sec. 13-105(12) defines an enterprise to include any 
corporation, association, labor union or other legal entity. The July 
22, 1996 Attorney General's statement assured that air permits are 
issued only to enterprises because AAC Sec. R18-2-304(B) provides that 
all air permits be issued only to businesses. Given that ARS Sec. 49-
480(B) requires that county permitting procedures be identical to ADEQ 
title V permitting procedures, EPA assumes that county title V permits 
may be issued only to businesses. The EPA is deferring to the Attorney 
General's interpretation of the relevant Arizona statutory and 
regulatory provisions as assurance that the State and county agencies 
have adequate enforcement authority for violations of fee and filing 
requirements and is therefore eliminating the interim approval issues 
regarding such authority as proposed in the NPR.
11. General Permit Public Notice Procedures
    The EPA proposed that ADEQ and the counties revise their general 
permit public notice provisions to ensure that they contain all of the 
part 70 public notice requirements. Article 5 [general permit 
requirements] of ADEQ's rule provides that ``unless otherwise stated, 
the provisions of Article 3 [individual permit requirements] shall 
apply to general permits.'' The EPA is concerned, however, that because 
Article 5 contains specific public notice provisions and these 
provisions state that ``this section applies to issuance, revision or 
renewal of a general permit,'' that these would supersede the public 
notice provisions of Article 3. The Article 5 provisions do not contain 
all of the public notice requirements of part 70. The Attorney 
General's July 19, 1996 addendum clarified that in his opinion all 
public notice and hearing provisions contained in Article 3 of 
Regulation 18 of Chapter 2 of the AAC apply to general permits issued 
pursuant to Article 5. The EPA is deferring to the Attorney General's 
opinion and is therefore eliminating the interim approval issue for 
ADEQ as proposed in II.B.1.a.11 of its July 13, 1995 NPR.
    Pinal County commented that following the County's regulatory 
revisions of February 22, 1995, PCR Sec. 3-5-500, which contained 
public notice procedures for the issuance of general permits, has been 
repealed. The County rules, which were submitted as a title V program 
revision on August 15, 1995, no longer provide for local issuance of 
general permits. The EPA has eliminated the interim approval issue 
related to public notice for general permit issuance as proposed in 
II.B.1.d.12 of the July 13, 1995 NPR.
    Maricopa and Pima provisions for general permit public notice are 
the same as the provisions in ADEQ's regulations. Because ARS Sec. 49-
480(B) requires county permitting procedures to be identical to 
procedures used by ADEQ, EPA assumes that the counties will interpret 
their regulations in the same way as the Attorney General has 
interpreted ADEQ's general permit public notice provisions. The EPA is 
therefore eliminating the interim approval issues for Maricopa and Pima 
as proposed in II.B.1.b.15 and II.B.1.c.10 of the NPR.
12. Title I Modification
    In the NPR, EPA discussed its position that the definition of 
``title I modification'' is best interpreted as not including changes 
reviewed under minor NSR programs or changes that trigger the 
application of a pre-1990 NESHAP requirement. The EPA stated that it 
considers the definitions of ``title I modification'' in the ADEQ, 
Maricopa, and Pinal programs, which are consistent with this 
interpretation, to be fully consistent with part 70. The EPA also found 
Pima's interpretation of ``title I modification'', which included minor 
source preconstruction review changes, to be consistent with part 70 
since nothing in part 70 bars a state from considering minor NSR to be 
a title I modification.
    Several commenters stated that they agree with EPA's interpretation 
that ``title I modification'' does not include minor NSR. The 
commenters also objected to EPA's approval of the Pima County 
interpretation of ``title I modification'' on the grounds that it is 
inconsistent with EPA's interpretation and also because it is contrary 
to Arizona State law which requires that county agencies have identical 
title V permit issuance procedures to ADEQ. On August 14, 1995, Pima 
County submitted a letter to EPA dated August 11, 1995, in which Pima's 
Director, David Esposito, informs EPA that in order to conform with 
these requirements of state law, Pima now interprets ``title I 
modification'' not to include changes reviewed under a minor source 
preconstruction review program, consistent with ADEQ's interpretation. 
The EPA recognizes this revised interpretation as the Pima County 
definition of ``title I modification'' being acted on today and finds 
that it is fully consistent with part 70.
    Pinal County also submitted a comment suggesting a clarification of 
EPA's statement in the proposal that Pinal does not interpret ``title I 
modification'' to include changes reviewed under a minor source 
preconstruction review program. Pinal believes it is more accurate to 
state that: ``At least to the extent that a change does not trigger any 
additional applicable requirements, and merely requires new monitoring 
and recordkeeping requirements rather than modification of existing 
provisions, Pinal does not interpret `title I modification' to include 
changes eligible for approval as `off-permit' revisions under Sec. 3-2-
180 or minor permit revisions under Sec. 3-2-190.'' Pinal went on to 
state that in general, changes at an existing source, including the 
addition of new emissions units, that do not involve ``significant'' 
increases in emission levels and do not trigger or violate applicable 
requirements may be processed as an ``off-permit'' revision or minor 
permit revision.
13. Applicability of the Pinal County Program
    In the NPR, EPA indicated that in addition to major sources, 
affected sources, and solid waste incinerators, Pinal requires nonmajor 
sources subject to a standard under section 111 or section 112 to 
obtain a title V permit. Pinal County submitted a comment that while 
this statement accurately reflects the program as originally submitted 
on November 15, 1993 and amended on August 18, 1994, that on February 
22, 1995, the County adopted revised rules that allow nonmajor sources 
regulated under sections 111 or 112 to defer or be exempted from the 
title V permit requirement to the extent allowed by the Administrator. 
See PCR Sec. 3-1-040(B)(1) (b) and (c). Pinal submitted these revised 
regulations on August 15, 1995. The approach taken in Pinal's revised 
program is clearly consistent with part 70, represents the norm among 
State part 70 programs, and so would not have presented an issue at 
proposal had it been a feature of the originally submitted program. The 
EPA is therefore finalizing its interim approval of Pinal's program 
with this understanding of the applicability of the program.
    This change in the applicability of Pinal's program affects EPA's 
approval under section 112(l) of Pinal's program for accepting 
delegation of section 112 standards as promulgated. The EPA stated in 
the NPR that requirements for approval under 40 CFR 70.4(b) encompass 
the section 112(l)(5)

[[Page 55918]]

requirements for approval of a program for delegation of section 112 
standards. Because Pinal's original program submittal included all 
sources subject to section 112 standards in the universe of sources 
subject to its title V permitting requirements, EPA's proposed approval 
of Pinal's program under section 112(l) extended to section 112 
standards as applicable to all sources. In cases where a permit program 
has chosen to defer or exempt certain sources subject to section 112 
requirements from the title V permitting requirement as allowed by EPA 
(e.g., nonmajor sources), approval under section 112(l) of the program 
for delegation extends to section 112 standards as applicable to only 
those sources that will receive title V permits. Pinal's program no 
longer applies to all sources subject to section 112 standards. On 
August 23, 1995, however, ADEQ submitted a separate request on behalf 
of Pinal for approval under section 112(l) of Pinal's program for 
seeking delegation of section 112 standards even insofar as they extend 
to sources that are deferred or exempted from the title V permit 
requirement under the Pinal program. (See letter from Donald 
Gabrielson, Pinal County Air Pollution Control Officer, to David 
Howekamp, Director, Air and Toxics Division, EPA Region IX, dated June 
8, 1995.) Pinal refers to this request in its comment letter. Pinal's 
request for approval under section 112(l) references the information 
contained in Pinal's original title V program submittal as a 
demonstration that Pinal meets the criteria under section 112(l)(5) and 
section 63.91 for approval of a delegation program. The EPA is 
therefore finalizing its approval under section 112(l) of Pinal's 
program for delegation of section 112 standards as they apply to all 
sources. See II.C.2 below.
14. Major Source Definition in Pinal Program
    In response to EPA's proposed interim approval issue regarding 
inclusion of HAP fugitive emissions in determining major source status 
(see II.B.1.d.2 of the NPR), Pinal commented that it has revised its 
definition of ``major source'' in PCR Sec. 1-3-140(79)(b) accordingly. 
This revision was included in the revised Pinal program submitted on 
August 15, 1995. The EPA believes that this provision requires further 
revision, however, to clarify that fugitive emissions must be included 
in determining whether the source is major for purposes of both the 10 
ton per year and 25 ton per year HAP major source thresholds. 
Currently, the phrase ``including any fugitive emissions of any such 
pollutants'' modifies only the 25 ton per year threshold. The EPA is 
modifying the interim approval issue to reflect this necessary 
clarification. See II.C.1.d.2 below.
    The EPA's NPR also required Pinal to revise its ``major source'' 
definition to provide that fugitive emissions shall not be considered 
in determining whether it is a major source for purposes of section 
302(j) of the Act unless the source belongs to one of the categories of 
sources listed in section 70.2 under the definition of ``Major 
source,'' paragraph 2, items (i) to (xxvii). Pinal commented that its 
revised program submittal addresses this issue. Pinal revised PCR 
Sec. 1-3-140(79)(c) to include a provision for defining when fugitive 
emissions must be included in determining a sources potential emissions 
for purposes of title V applicability. This provision includes the list 
of categories as discussed above except for the final item on the list, 
namely ``all other stationary source categories regulated by a standard 
promulgated under section 111 or 112 of the Act, but only with respect 
to those air pollutants that have been regulated for that category.'' 
Instead, Pinal's definition of major source states that fugitive 
emissions shall be considered in determining whether a source is major 
for purposes of Sec. 302(j) of the Act if the source is regulated by a 
standard promulgated as of August 7, 1980 under section 111 or section 
112 of the Act or if a section 111 or section 112 standard expressly 
requires inclusion of fugitive emissions in determining major source 
status (PCR Sec. 1-3-140(79)(c)(ii),(iii), and (iv)). This definition 
is not consistent with the current section 70.2 definition of ``major 
source'' and therefore is not fully approvable.
    In today's final interim approval action on the Pinal County 
program, EPA is requiring that for full approval Pinal must revise its 
definition of major source to provide that fugitive emissions must be 
included in determining if a source is major for purposes of section 
302(j) of the Act if that source belongs to a source category regulated 
by a standard promulgated under section 111 or section 112 of the Act, 
but only with respect to those pollutants that have been regulated for 
that category. See II.C.1.d.3 below. The EPA notes that it has proposed 
revisions to the major source definition with regard to the inclusion 
of fugitives in determining major source status. (See 59 FR 44527, 
August 29, 1994 and 60 FR 45565, August 31, 1995.) The EPA recognizes 
that Pinal may be required to revise its major source definition 
differently than described above should EPA finalize its proposed 
revisions to the major source definition prior to the date that Pinal 
must submit its revised program submittal.

C. Final Action

1. Title V Operating Permits Program
    The EPA is promulgating interim approval of the operating permits 
program submitted by the Arizona Department of Environmental Quality on 
behalf of itself, the Maricopa County Environmental Services 
Department, the Pima County Department of Environmental Quality, and 
the Pinal County Air Quality Control District on November 15, 1993 as 
supplemented by additional materials as referenced in II.A and II.B of 
this document. The EPA is also promulgating interim approval of the 
portions of the revised Pinal County operating permits program 
submitted on August 15, 1995 that address the program deficiencies and 
other issues discussed in EPA's July 13, 1995 proposed interim 
approval. These provisions include Sections 1-3-140(79)(b) and 1-3-
140(79)(c) of Article 3 of Chapter 1; Sections 3-1-040(B)(1), 3-1-
089(C), and 3-1-107(C)(3) of Article 1 of Chapter 3; and Section 3-5-
500 of Article 5 of Chapter 3 of the Pinal County Code of Regulations 
as adopted or revised on February 22, 1995. The remainder of the Pinal 
County revised program is addressed by the direct final action in 
section III of this document.
    As discussed in II.A.2 of the NPR, this interim approval does 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 State and county 
permit programs that provide 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).
    This interim approval, which may not be renewed, extends until 
November 30, 1998. During this interim approval period, ADEQ, Maricopa, 
Pima, and Pinal are protected from sanctions, and EPA is not obligated 
to promulgate, administer and enforce a Federal operating permits 
program in Arizona. Permits issued under a program with interim 
approval have full standing with respect to part 70, and the 1-year 
time period for submittal of permit applications by subject sources 
begins upon the effective date of this interim approval, as does the 3-
year time period for processing the initial permit applications.
    If the State or county agencies fail to submit a complete 
corrective program

[[Page 55919]]

for full approval by May 30, 1998, EPA will start an 18-month clock for 
mandatory sanctions. If the State or counties then fail to submit a 
corrective program that EPA finds complete before the expiration of 
that 18-month period, EPA will be required to apply one of the 
sanctions in section 179(b) of the Act, which will remain in effect 
until EPA determines that the State or counties have corrected the 
deficiency by submitting a complete corrective program. Moreover, if 
the Administrator finds a lack of good faith on the part of the State 
or counties, both sanctions under section 179(b) will 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 have not submitted a corrective program that EPA has 
found complete, a second sanction will be required.
    If EPA disapproves the ADEQ, Maricopa, Pima or Pinal complete 
corrective program, EPA will be required to apply one of the section 
179(b) sanctions on the date 18 months after the effective date of the 
disapproval, unless prior to that date the State or county agency 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 State or 
county agency, both sanctions under section 179(b) shall apply after 
the expiration of the 18-month period until the Administrator 
determines that the State or county agency has come into compliance. In 
all cases, if, six months after EPA applies the first sanction, the 
State or counties have not submitted a revised program that EPA has 
determined corrects the deficiencies, a second sanction is required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if the 
State or counties have 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 Arizona State or 
county agency program by the expiration of this interim approval, EPA 
must promulgate, administer and enforce a Federal permits program for 
the State or counties upon interim approval expiration.
    Areas in which the Arizona program is deficient and requires 
corrective action prior to full approval are as follows:
    a. Arizona Department of Environmental Quality. ADEQ must make the 
following changes, or changes that have the same effect, to receive 
full approval:
    (1) Revise AAC R18-2-101(61)(b) 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 current rule modifies 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 ADEQ 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.
    (2) Revise AAC R18 to clarify that, when an existing source obtains 
a significant permit revision to revise its permit from a Class II 
permit to a Class I permit, the entire permit, and not just the portion 
being revised, must be issued in accordance with part 70 permit 
application, content, and issuance requirements, including requirements 
for public, affected state, and EPA review.
    (3) 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))
    (4) 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, section 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.
    (5) Revise AAC R18-2-310 to be consistent with the section 70.6(g) 
provision for an emergency affirmative defense. Part 70 programs may 
only provide for an affirmative defense to actions brought for 
noncompliance with technology-based emission limits when such 
noncompliance is due to an emergency situation.
    (6) Revise AAC R18-2-331(A)(1) to provide under the definition of 
``material permit condition'' 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. Maricopa County Environmental Services Department. 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 section 
70.2.
    (2) Revise MAPC Regulation I, Rule 100, section 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 modifies only the 25 ton per year threshold. This phrase 
could also imply that fugitives are included in the potential to emit 
determination only if

[[Page 55920]]

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) 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))
    (4) 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 II, Rule 200, section 411.1. 
(Sec. 70.4(b)(3)(viii))
    (5) 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 from the 
effective date of EPA's approval of the County's program 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.
    (6) Provide a demonstration that the activities listed in MAPC 
Regulation II, Rule 200, Section 303.3(c) are insignificant. Remove 
from the list any activities that are subject to a unit-specific 
applicable requirement. Another option is to add emissions cut-offs or 
size limitations to ensure that the listed activities are below any 
applicability thresholds for applicable requirements. (Sec. 70.5(c), 
Sec. 70.4(b)(2))
    (7) For the reason explained above in II.C.1.a.(3), 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 [as provided] if such trading is prohibited in the 
applicable implementation plan.''

    (Sec. 70.6(a)(8))
    (8) For the reason explained above in II.C.1.a.(4), 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))
    (9) 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. Equipment removal, even if it does not result in an increase 
in emissions, is not similar to the types of changes that EPA has 
included in the part 70 definition of ``administrative permit 
amendment.'' In some cases removal of equipment, such as monitoring 
equipment, will require processing as a significant permit revision. In 
other situations removal of equipment may qualify for processing as a 
minor permit revision or possibly for treatment under the operational 
flexibility provisions. (Sec. 70.7(d), Sec. 70.7(e)(4))
    (10) 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).
    (11) 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))
    c. Pima County Department of Environmental Quality. Pima must make 
the following changes, or changes that have the same effect, to receive 
full approval:
    (1) Revise the definition of major source in PCC 
Sec. 17.04.340(133)(b)(i) 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 from the effective 
date of EPA's approval of the County's program when the source meets 
the applicability requirements as provided in section 17.12.140(B)(1).
    (3) Revise PCC Sec. 17.12.160(E)(7) to provide that only emissions 
units that are not subject to unit-specific applicable requirements may 
qualify for treatment as insignificant emissions units.
    (4) For the same reason discussed above in II.C.1.a.(3), revise PCC 
Sec. 17.12.180(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 [as provided] if such trading is prohibited in the 
applicable implementation plan.''

    (Sec. 70.6(a)(8))
    (5) For the same reason discussed above in II.C.1.a.(4), 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. 17.12.340 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))
    d. Pinal County Air Quality Control District. Pinal must make the 
following changes, or changes that have the same effect, to receive 
full approval:
    (1) Revise PCR Sec. 1-3-140(79)(b)(i) 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 HAP major source thresholds. The phrase ``including 
any fugitive emissions of any such pollutants'' in the current rule

[[Page 55921]]

modifies only the 25 ton per year threshold. The EPA expects, however, 
that Pinal 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.
    (2) Revise PCR Sec. 1-3-140(79)(c) to delete sections 79(c)(ii), 
(iii), and (iv) and to add the following to the list of sources that 
must include fugitive emissions when determining major source status as 
defined in section 302(j) of the Act:

    ``The source belongs to a category regulated by a standard 
promulgated under section 111 or 112 of the Act, but only with 
respect to those air pollutants that have been regulated for that 
category.''

    (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(F)(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 A 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.C.1.a.(3), 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 [as provided] if such trading is prohibited in the 
applicable implementation plan.''

    (Sec. 70.6(a)(8))
    (6) For the reason discussed above in II.C.1.a.(4), 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. 3-4-420 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.
    The scope of the part 70 programs approved in this document applies 
to all part 70 sources (as defined in the approved program) within the 
State of Arizona, except any sources of air pollution over which an 
Indian Tribe has jurisdiction. See, e.g., 59 FR 55813, 55815-18 (Nov. 
9, 1994). The term ``Indian Tribe'' is defined under the Act as ``any 
Indian tribe, band, nation, or other organized group or community, 
including any Alaska Native village, which is Federally recognized as 
eligible for the special programs and services provided by the United 
States to Indians because of their status as Indians.'' See section 
302(r) of the CAA; see also 59 FR 43956, 43962 (Aug. 25, 1994); 58 FR 
54364 (Oct. 21, 1993).
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 promulgating approval under 
section 112(l)(5) and 40 CFR section 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.
    As discussed in the NPR, because Pima's approved program requires 
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 program for delegation extends to section 112 
standards as applicable to all sources. ADEQ, Maricopa, and Pinal 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 discussion in II.B.2 of the NPR and in II.B.13 of 
this document.) Therefore, today's proposed approval under section 
112(l) of ADEQ's, Maricopa's, and Pinal's program for delegation 
extends to non-part 70 sources as well as part 70 sources.

III. Direct Final Action on Revised Pinal County Program

A. Analysis of County Submission

    ADEQ, on behalf of Pinal County, submitted a revised title V permit 
program for Pinal County on August 15, 1995. The revised program 
submittal consisted of a revised County code of regulations adopted by 
the Pinal County Board of Supervisors on February 22, 1995 and a 
supplemental County Attorney's legal Opinion. The other program 
elements submitted on November 15, 1993 and subsequent dates as noted 
in the proposed interim approval are considered part of this revised 
program except where the revised regulation or supplemental County 
Attorney's opinion change or replace those program elements. In some 
cases, the County revised its regulations to correct deficiencies or 
address other issues identified by EPA in its July 13, 1995 proposed 
interim approval. The EPA has discussed such changes in II.B above and 
taken final action on those program revisions in II.C above. The 
discussion that follows and the direct final interim approval action 
being taken today apply to changes to the regulation that are relevant 
to implementation of the title V operating permits program that were 
not addressed in the final interim approval action in section II of 
this document.
    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 
specified portions of the operating permit program submitted by Pinal 
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

[[Page 55922]]

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 December 30, 1996.
    Today's direct final action promulgates approval of specific 
changes to the Pinal County Code of Regulations adopted on February 22, 
1995 that are relevant to implementation and enforcement of the Pinal 
County title V operating permits program. The specific provisions of 
Pinal's title V regulations adopted or revised on February 22, 1995 
that are addressed by this direct final action are Sections 1-3-
140(1a), 140(16a), 140(44), 140(56), 140(58e), 140(59), 140(66), 
140(86), 140(89), and 140(146) of Article 3 of Chapter 1; Sections 3-1-
042, 045(C), 050(C)(4), 050(G), 080(A), 081(A)(5)(b), 081(A)(6), 
100(A), and 109 of Article 1 of Chapter 3; and Articles 5 and 7 of 
Chapter 3 of the Pinal County Code of Regulations (PCR). These 
regulations substantially meet the requirements of 40 CFR part 70, 
Secs. 70.2 and 70.3 for applicability; sections 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 
deficiencies in the program that are outlined under section III.C. 
below as interim approval issues and further described in the Technical 
Support Document.
    The analysis contained in this document focuses on the specific 
elements of the revised Pinal 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 (AZ-95-1-OPS). 
The docket may be viewed during regular business hours at the address 
listed above.
1. General Permits.
    Section 70.6(d) provides that permitting authorities may issue a 
general permit covering numerous similar sources. General permits must 
meet all requirements applicable to other part 70 permits and must 
specify the criteria that sources must meet to be covered under the 
general permit. Qualifying sources may then apply for coverage under 
the terms and conditions of the permit. Article 5 of Chapter 3 of the 
Pinal County regulations contain the provisions pertaining to general 
permits. Article 5 as submitted on November 15, 1993 provided that the 
Control Officer of Pinal County could issue a general permit for a 
class of facilities that had similar operations, similar emissions, and 
similar applicable requirements. Article 5 as amended by Pinal on 
February 22, 1995 and submitted to EPA on August 15, 1995 repeals the 
authority of the Control Officer to issue a general permit. Instead, 
the regulations provide for the District to administer general permits 
that are issued by ADEQ. Administration of general permits includes 
receiving applications from sources in the District that seek 
authorization to operate under a general permit; issuing, denying, or 
revoking such authorizations to operate under the permit; and enforcing 
the terms and conditions of the general permit.
    PCR Sec. 3-5-490 contains the requirements for applying for 
coverage under a general permit. There are several deficiencies in this 
portion of the rule that must be corrected before Pinal can receive 
full approval of its revised program. PCR Sec. 3-5-490(C) provides that 
an existing source that files a timely and complete application seeking 
coverage under a general permit either as a renewal of authorization 
under the general permit or as an alternative to renewing an individual 
part 70 permit may operate within the limitations set forth in its 
application until the District takes action on the application. This is 
inconsistent with the requirements of part 70 and with other provisions 
of Pinal's rules. Section 70.4(b)(10) requires that if a timely and 
complete application for a permit renewal is submitted but the state 
has failed to issue or deny the renewal permit before the end of the 
term of the previous permit then either: (1) The permit shall not 
expire until the renewal permit has been issued or denied; or (2) All 
terms and conditions of the permit shall remain in effect until the 
renewal permit has been issued or denied. PCR Sec. 3-1-089 requires 
that any source relying on a timely and complete application as 
authority to operate after expiration of the permit shall be legally 
bound to adhere to and conform to the terms of the expired permit. This 
provision is consistent with part 70. Pinal must revise PCR Sec. 3-5-
490(C) to be consistent with Sec. 70.4(b)(10) and EPA recommends that 
it be revised to be consistent with PCR Sec. 3-1-089.
    Section 490(C) also provides that if an existing source seeking 
coverage under a general permit as an alternative to renewing an 
individual permit is denied authorization to do so, that the source 
must apply for an individual permit within 180 days of being notified 
to do so but may continue to operate within the limitations of the 
general permit under which coverage was denied during that 180 day 
period. This also conflicts with Sec. 70.4(b)(10). Pinal must revise 
the rule to require that the source must continue to comply with the 
terms and conditions of its individual source permit. In addition, 
Pinal must revise section 490(C) to clarify, consistent with 
Sec. 70.7(d) and Sec. 70.4(b)(10), that notwithstanding the 180 day 
permit application deadline set by the District in its notification to 
the source, the source that was denied coverage under the general 
permit may not operate after the date that its individual permit 
expires unless it has submitted a timely and complete application to 
renew that individual permit in accordance with PCR Sec. 3-1-050(C)(2).
    PCR Sec. 3-5-550 includes provisions for the Control Officer to 
revoke a source's authorization to operate under a general permit and 
require that it obtain an individual source permit. PCR Sec. 3-5-550(C) 
provides that a source previously authorized to operate under a general 
permit may operate under the terms of the general permit until the 
earlier of the date of expiration of the general permit, the date it 
submits a complete application for an individual permit, or 180 days 
after receipt of the notice of termination of any general permit. This 
provision also requires the source to comply with the provisions of PCR 
Sec. 3-1-089, which requires that any source relying on a timely and 
complete application as authority to operate after a permit expires 
must comply with the terms of the expired permit. PCR Sec. 3-5-550(C) 
therefore contradicts itself. Pinal must revise the rule to clarify 
that if the Control Officer revokes the source's authorization to 
operate under a general permit then, if the source submits a timely and 
complete application for an individual source permit as required by the 
Control Officer, it may continue to operate under the terms of the 
general permit until the District issues or denies the individual 
source permit.

B. Direct Final Interim Approval and Implications

    The EPA is promulgating direct final interim approval of the 
following

[[Page 55923]]

provisions of the revised operating permits program submitted by the 
Arizona Department of Environmental Quality, on behalf of the Pinal 
County Air Quality Control District, on August 15, 1995: Sections 1-3-
140(1a), 140(16a), 140(44), 140(56), 140(58e), 140(59), 140(66), 
140(86), 140(89), and 140(146) of Article 3 of Chapter 1; Sections 3-1-
042, 045(C), 050(C)(4), 050(G), 080(A), 081(A)(5)(b), 081(A)(6), 
100(A), and 109 of Article 1 of Chapter 3; and Articles 5 and 7 of 
Chapter 3 of the Pinal County Code of Regulations (PCR).
    This direct final interim approval does not apply to the County 
operating permit program for non-part 70 sources or to the County 
preconstruction review program. This interim approval applies to the 
regulatory provisions cited above only as they apply to Class A 
operating permits.
    Areas in which Pinal's program is deficient and requires corrective 
action prior to full approval are as follows. Pinal must correct these 
deficiencies by November 30, 1998. This is the expiration date of the 
interim approval granted by EPA to the original program submitted by 
Pinal on November 15, 1993 as discussed above in II.C.1. The timeframes 
and conditions of this direct final interim approval action and for EPA 
oversight and sanctions are the same as discussed above in II.C.1.
    Pinal must make the following changes, or changes that have the 
same effect, to receive full approval:
    (1) Revise PCR Sec. 3-5-490(C) to provide that when an existing 
source that files a timely and complete application seeking coverage 
under a general permit either as a renewal of authorization under the 
general permit or as an alternative to renewing an individual part 70 
permit, that the source must continue to comply with the terms and 
conditions of the permit under which it is operating, even if that 
permit expires, until the District issues or denies the authorization 
to operate under the general permit.
    (2) Revise PCR Sec. 3-5-490(C) to require that if an existing 
source seeking coverage under a general permit as an alternative to 
renewing an individual permit is denied authorization to do so, that 
the source must continue to comply with the terms and conditions of its 
individual source permit. In addition, Pinal must revise Sec. 3-5-
490(C) to clarify that notwithstanding the 180 day permit application 
deadline set by the District in its notification to the source, the 
source that was denied coverage under the general permit may not 
operate after the date that its individual permit expires unless it has 
submitted a timely and complete application to renew that individual 
permit in accordance with PCR Sec. 3-1-050(C)(2).
    (3) Revise PCR Sec. 3-5-550(C) to clarify that if the Control 
Officer revokes the source's authorization to operate under a general 
permit then, if the source submits a timely and complete application 
for an individual source permit as required by the Control Officer, it 
may continue to operate under the terms of the general permit until the 
District issues or denies the individual source permit.

IV. Administrative Requirements

A. Docket

    Copies of the State and county submittals and other information 
relied upon for the final interim approval and direct final interim 
approval, including public comments on the proposal from 15 different 
parties, are contained in docket number AZ-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 final interim approval and direct final interim 
approval. 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.
    The 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. Small Business Regulatory Enforcement Fairness Act

    Under 5 U.S.C. 801(a)(1)(A) as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, EPA submitted a report 
containing this rule and other required information to the U.S. Senate, 
the U.S. House of Representatives and the Comptroller General of the 
General Accounting Office prior to publication of the rule in today's 
Federal Register. This rule is not a ``major rule'' as defined by 5 
U.S.C. 804(2).

E. Executive Order 12866

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

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: October 18, 1996.
John Wise,
Acting 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 the entry for Arizona 
in alphabetical order to read as follows:

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

* * * * *

Arizona

    (a) Arizona Department of Environmental Quality: submitted on 
November 15, 1993 and amended on March 14, 1994; May 17, 1994; March 
20, 1995; May 4, 1995; July 22, 1996; and August 12, 1996; interim 
approval effective on November 29, 1996; interim approval expires 
November 30, 1998.
    (b) Maricopa County Environmental Services Department: submitted 
on November 15, 1993 and amended on

[[Page 55924]]

December 15, 1993; January 13, 1994; March 9, 1994; and March 21, 
1995; July 22, 1996; and August 12, 1996; interim approval effective 
on November 29, 1996; interim approval expires November 30, 1998.
    (c) Pima County Department of Environmental Quality: submitted 
on November 15, 1993 and amended on December 15, 1993; January 27, 
1994; April 6, 1994; and April 8, 1994; August 14, 1995; July 22, 
1996; and August 12, 1996; interim approval effective on November 
29, 1996; interim approval expires November 30, 1998.
    (d) Pinal County Air Quality Control District:
    (1) submitted on November 15, 1993 and amended on August 16, 
1994; August 15, 1995; July 22, 1996; and August 12, 1996; interim 
approval effective on November 29, 1996; interim approval expires 
November 30, 1998.
    (2) revisions submitted on August 15, 1995; interim approval 
effective on December 30, 1996; interim approval expires November 
30, 1998.
* * * * *
[FR Doc. 96-27836 Filed 10-29-96; 8:45 am]
BILLING CODE 6560-50-P