[Federal Register Volume 61, Number 236 (Friday, December 6, 1996)]
[Rules and Regulations]
[Pages 64622-64635]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-31121]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5657-5]


Clean Air Act Final Interim Approval of Operating Permits 
Program, State of Idaho; Clean Air Act Proposed Delegation of National 
Emission Standards for Hazardous Air Pollutants as They Apply to Title 
V Sources and Approval of Streamlined Mechanism for Future Delegations, 
State of Idaho

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval and delegation.

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SUMMARY: EPA is promulgating final interim approval of the Operating 
Permits Program submitted by the Idaho Division of Environmental 
Quality (IDEQ) 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. EPA is also 
promulgating final interim approval of IDEQ's request for delegation of 
authority to implement and enforce State-adopted hazardous air 
pollutant regulations, which adopt by reference the Federal National 
Emission Standards for Hazardous Air Pollutants (NESHAP) contained 
within 40 CFR parts 61 and 63 as in effect on April 1, 1994, as these 
regulations apply to sources that are required to obtain a Federal 
operating permit. EPA is also approving a mechanism for Idaho to 
receive delegation of future NESHAP standards that the State adopts by 
reference into State law.

EFFECTIVE DATE: January 6, 1997.

ADDRESSES: Copies of the State's submittal and other supporting 
information used in developing the final interim approval are available 
for inspection during normal business hours at the following location: 
U.S. Environmental Protection Agency, Region 10, 1200 Sixth Avenue, 
Seattle, Washington.

FOR FURTHER INFORMATION CONTACT: Elizabeth Waddell, 1200 Sixth Avenue, 
OAQ-107, Seattle, WA 98101, (206) 553-4303.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

1. Title V
    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 October 27, 1995, EPA proposed disapproval of Idaho's title V 
operating permits program because of deficiencies in the State's 
provisions for excess emissions and administrative amendments. In the 
alternative, EPA proposed interim approval of Idaho's program provided 
Idaho revised its regulations to address these deficiencies and 
submitted the revisions to EPA before final action on Idaho's 
submittal. See 60 FR 54990. EPA received a single letter of public 
comment which addressed sources located on Tribal lands and Idaho's 
insignificant activities list. On January 12, 1996, Idaho submitted 
program revisions addressing EPA's two proposed grounds for 
disapproving Idaho's program.
    On June 17, 1996, EPA reproposed action on two aspects of Idaho's 
title V program. 61 FR 30570. First, EPA proposed that one of the four 
deficiencies EPA initially noted in the October 27, 1996, Federal 
Register in Idaho's general permitting regulations be eliminated as an 
interim approval issue. 61 FR 30571. Second, EPA identified additional 
reasons it believed that the audit immunity provisions of the Idaho 
Environmental Audit Protection Act 1, Idaho Code 9-801 to 9-811, 
required interim rather than full approval and proposed that Idaho also 
be required to revise or address the audit privilege provisions of the 
Idaho Audit Act as a condition of full approval. 61 FR 30571-30573. EPA 
did not address the single comment it received on the October 27, 1995, 
proposal or the effect of the State's revisions to its title V program 
on the two disapproval issues because neither the comment nor the 
State's program revisions involved the two title V issues on which EPA 
reproposed action in the June 17, 1996, Federal Register document.
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    \1\ In the October 27, 1995, and June 17, 1996, Federal Register 
notices, EPA referred to the legislation as the ``Idaho 
Environmental Audit Statute.'' The comments submitted by IDEQ and 
the Idaho Attorney General refer to the legislation as the ``Idaho 
Environmental Audit Protection Act,'' shortened to the ``Idaho Audit 
Act.'' EPA will refer to this legislation by the latter title in 
this notice.
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2. Section 112
    Section 112(l) of the Clean Air Act authorizes EPA to approve State 
air toxic programs or rules that operate in place of the Federal air 
toxic program or rules. The Federal air toxic program implements the 
requirements found in section 112 of the Act pertaining to the 
regulation of hazardous air pollutants. Approval of an air toxic 
program is granted by EPA if the Agency finds that: (1) The State 
program is ``no less stringent'' than the corresponding Federal program 
or rule, (2) the State has adequate authority and resources to 
implement the program, (3) the schedule for implementation and 
compliance is sufficiently expeditious, and (4) the program is 
otherwise in compliance with Federal guidance. Once approval is 
granted, the air toxic program can be implemented and enforced by State 
or local agencies, as well as EPA.
    On September 15, 1995, Idaho requested delegation of authority to 
implement and enforce specific NESHAP regulations in 40 CFR parts 61 
and 63 that Idaho had adopted as a matter of Idaho law on April 1, 
1994. On December 14, 1995, Idaho also requested approval of its 
mechanism for receiving automatic delegation of future NESHAP standards 
as promulgated. In the June 17, 1996, limited reproposal on Idaho's 
title V submittal, EPA also proposed interim approval of Idaho's 
request for delegation under section 112(l) and requested public 
comment on this action. Additionally, EPA proposed approval of a 
mechanism for Idaho to receive delegation of the NESHAP standard which 
the State may adopt by reference into State law in the future. See 61 
FR 30570.
    Idaho received numerous comments on the June 17, 1996, reproposal, 
all addressing Idaho's title V submittal and all except for one 
addressing the Idaho

[[Page 64623]]

Audit Act. None of the comments addressed EPA's proposed action under 
section 112(l). In this document, EPA is taking final action to 
promulgate interim approval of the operating permits program for the 
State of Idaho, to delegate the NESHAPs as adopted by Idaho as they 
apply to title V sources and as in effect on April 1, 1994 2, and 
to approve a streamlined mechanism for future NESHAP delegations. EPA 
is also responding to comments received on the October 27, 1995, 
proposal and the June 17, 1996, reproposal.
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    \2\ With the exception of the radionuclide NESHAP regulations in 
40 CFR part 61, subparts B, H, I, Q, R, T, and W.
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II. Final Action and Implications

A. Analysis of Idaho's Title V Submission and Response to Public 
Comments

1. Changes to Idaho's Regulations
    Through an emergency rulemaking effective November 20, 1995, the 
Idaho Division of Environmental Quality (IDEQ) repealed all of the 
excess emission provisions in its title V regulations (IDAPA 
16.01.01.326 through .332) except for IDAPA 16.01.01.332, which 
provides an affirmative defense comparable to that provided in part 70 
for violations of technology-based emission limits due to an 
``emergency.'' See 40 CFR 70.6(g). These revisions adequately address 
EPA's concerns that Idaho's excess emissions program for title V 
sources did not assure compliance with all applicable requirements. 
Idaho also made revisions to the excess emissions provisions that apply 
to all sources in Idaho. See IDAPA 16.01.01.130 through .136. EPA will 
review these changes as a revision to Idaho's State Implementation 
Plan, which has been submitted to EPA for approval.
    The emergency rulemaking also made revisions to Idaho's permit to 
construct procedures applicable to title V sources. See IDAPA 
16.01.01.209. These revisions ensure that the terms of preconstruction 
permits incorporated into title V permits by administrative amendment 
will contain compliance requirements substantially equivalent to the 
requirements of a title V permit and adequately address the proposed 
grounds for disapproval identified by EPA in the October 27, 1995, 
Federal Register document.
    IDEQ has made two other revisions to its title V permitting 
regulations, neither of which affect the approvability of Idaho's title 
V program. First, Idaho extended the deadline for the submission of 
title V permit applications for sources existing on May 1, 1994, from 
January 1, 1996, to June 1, 1996. See IDAPA 16.01.01.313.01.a. This 
date will still ensure that all permit applications are submitted 
within 12 months of when a source becomes subject to Idaho's title V 
program, as required by 40 CFR 70.5(a)(1). Second, Idaho has made minor 
revisions to the regulation specifying the information required in a 
permit application. See IDAPA 16.01.01.314. These changes do not affect 
the approvability of Idaho's permit application requirements.
2. Response to Public Comment
    EPA received a single public comment on the October 27, 1995, 
Federal Register document. The commenter disagreed with EPA's proposed 
decisions regarding the geographic scope of the proposed approval and 
insignificant activities. EPA received numerous comments on the June 
17, 1996, reproposal. One commenter stated generally that it supports 
full approval of the Idaho title V program, but did not explain why it 
believed Idaho was entitled to full rather than interim approval. EPA 
continues to believe that interim approval is appropriate for the 
reasons set forth in the October 27, 1995, proposal (60 FR 54990), the 
June 17, 1996, reproposal (61 FR 30570) and this document. All other 
comments on the June 17, 1996, reproposal addressed the Idaho Audit 
Act.
    a. Geographic Scope of Idaho Program--Tribal Lands. EPA proposed to 
exclude from the Idaho title V program title V sources located within 
the exterior boundaries of Indian Reservations in Idaho 3 because 
the State did not establish that it had authority to issue permits to 
and enforce permits against such sources. The commenter expressed 
concern over the complexity of the jurisdiction issue and that EPA's 
proposal might cause hardships to sources on Indian Reservations, but 
did not elaborate on what these hardships might be. EPA continues to 
believe that the State of Idaho has not made a sufficient showing to 
obtain title V approval for sources located within Indian Country in 
Idaho and, therefore, is taking final action to exclude such sources 
from the scope of this interim approval.
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    \3\ Although the October 27, 1995, Federal Register notice used 
the term ``within the exterior boundaries of Indian Reservations,'' 
EPA's position is that State's generally do not have civil 
jurisdiction within ``Indian Country,'' as defined in 18 USC 1151.
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    To obtain title V program approval, a State must demonstrate that 
it has adequate authority to issue permits and to assure compliance by 
all sources required to have permits under title V with each applicable 
requirement under the Act. See Section 502(b)(5) of the Act; 40 CFR 
70.4(b)(3)(i). The authority must include:


    A legal opinion from the Attorney General from the State or the 
attorney for those State, local, or interstate air pollution control 
agencies that have independent counsel, stating that the laws of the 
State, locality, or interstate compact provide adequate authority to 
carry out all aspects of the program. This statement shall include 
citations to the specific sta[tut]es, administrative regulations, 
and, where appropriate, judicial decisions that demonstrate adequate 
authority.


40 CFR 70.4(b)(3). Thus, the Act requires States to support their title 
V program submittals with a specific showing of adequate legal 
authority over all regulated sources, including sources located on 
lands within Indian Country.
    In its title V program submittal, Idaho made no attempt either to 
claim or to show authority over sources located within Indian Country. 
Indeed, the State clarified on April 5, 1995, that its submittal ``was 
not an attempt to address jurisdictional issues over tribal lands.'' 
Furthermore, the Shoshone-Bannock Tribes and the Kootenai Tribe of 
Idaho wrote to EPA on April 11, 1995, and March 22, 1995, respectively, 
asserting that the State had ``not demonstrate[d] authority to 
institute an air permitting program on reservations as is required 
under title V of the Act.'' Accordingly, EPA concludes that Idaho has 
not demonstrated authority to regulate title V sources in Indian 
Country and, therefore, does not grant program approval to the State 
for these sources.
    b. Insignificant activities. The commenter also disagreed with 
EPA's proposal to grant interim rather than full approval to Idaho's 
insignificant activities list. The commenter referred to the EPA 
guidance document entitled White Paper for Streamlined Development of 
Part 70 Permit Applications, from Lydia N. Wegman, Deputy Director, 
Office of Air Quality Planning and Standards, to the Air Division 
Directors (July 10, 1995), as supporting the development of 
insignificant activities lists. The commenter believes that EPA should 
encourage IDEQ to develop the proper regulatory guidance to go with 
Idaho's list and that such guidance would give Idaho and the regulated 
community further time to evaluate the list and to propose any changes 
that may be warranted.
    EPA agrees with the commenter and fully intended this outcome by 
granting

[[Page 64624]]

Idaho interim approval of its program for insignificant activities. By 
granting Idaho interim approval on this issue, Idaho will have 18 
months to submit changes that address EPA's concerns. In the interim, 
IDEQ and the regulated community may use the lists as currently 
promulgated by the State. This time period will allow Idaho and the 
regulated community the time that the commenter requests to develop 
guidance and evaluate and revise the list as required by EPA as a 
condition of full approval. Accordingly, EPA will continue to require 
that Idaho address the issues identified in Section II.A.6. below as a 
condition of full approval.
    c. Idaho Audit Act. In the June 17, 1996, Federal Register document 
reproposing action on Idaho's title V program, EPA explained in great 
detail why EPA believed that the Idaho Audit Act impermissibly 
interfered with the enforcement requirements of title V and part 70 and 
thus posed a bar to full approval. EPA received four comment letters 
strongly opposing EPA's proposal with respect to the Idaho Audit Act. 
These included comments jointly submitted by IDEQ and the Idaho 
Attorney General's Office; comments submitted by the Idaho Association 
of Commerce & Industry, which represents members of the Idaho business 
community; and comments from two law firms representing nationwide 
trade organizations and industries. EPA also received three comment 
letters from environmental and public interest organizations agreeing 
with EPA that the Idaho Audit Act was inconsistent with the enforcement 
requirements of title V and part 70 and urged interim approval or 
disapproval.\4\
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    \4\ EPA has recently received a copy of rules promulgated by 
IDEQ under the Idaho Audit Act. See IDAPA 16.01.10.000-018. EPA does 
not believe that these rules remedy the problems identified with the 
Idaho Audit Act in the June 17, 1996, Federal Register notice and 
this notice. EPA notes with concern, however, the provision of IDAPA 
16.01.10.015.03(b) which defines a violation disclosed within 60 
days after discovery through an environmental audit as a violation 
disclosed in a ``timely manner'' and thus entitled to immunity. EPA 
is concerned that this lengthy time period would not require prompt 
reporting of violations involving a potential of imminent and 
substantial endangerment as a condition of immunity.
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    i. Comments that the Idaho Audit Act does not pose a bar to full 
title V approval. (A) Effect of the Idaho Audit Act on Idaho's 
enforcement authority. The commenters opposing EPA's action with 
respect to the Idaho Audit Act raise numerous issues. As an initial 
matter, several of the commenters stated that nothing in the Clean Air 
Act or part 70 contains a prohibition against State audit protection 
and/or immunity laws or precludes a State from determining that 
criminal or civil prosecution is inappropriate in certain defined 
situations, such as those specified in the Idaho Audit Act.
    Section 502(b)(5)(E) of the Clean Air Act lays out the minimum 
enforcement authorities which Congress required a State to have in 
order to secure Federal approval to implement and enforce a title V 
operating permits program. That section requires, as a condition of 
Federal approval, that a State have adequate authority to issue permits 
and assure compliance; to terminate or revoke such permits for cause; 
and to enforce permits, permit fee requirements, and the requirement to 
obtain a permit, including authority to recover civil penalties of at 
least $10,000 per day for each violation and to provide appropriate 
criminal penalties. The part 70 implementing regulations, at 40 CFR 
70.11, elaborate upon those authorities. Part 70 requires a State to 
have authority to issue emergency orders and seek injunctive relief (40 
CFR 70.11(a) (1) and (2)) and to assess civil and criminal penalties in 
a maximum amount of not less than $10,000 per day per violation (40 CFR 
70.11(a)(3)). Although neither title V nor part 70 expressly prohibits 
State audit privilege and/or immunity laws, the analysis in the June 
17, 1996, Federal Register document shows how the Idaho Audit Act 
interferes with the requirements for civil and criminal penalty 
authority set forth in title V and the part 70 implementing regulations 
so as to preclude full approval of Idaho's operating permits program. 
For example, as EPA explained in the June 17, 1996, Federal Register 
document, the immunity provisions of the Idaho Audit Act alter and in 
fact eliminate the State's authority to recover any civil or criminal 
penalties under the circumstances identified in the Idaho Audit Act. 
See 61 FR 30571-30573. The immunity provision of the Idaho Audit Act 
bars prosecution of intentional and knowing violations that would 
otherwise be a basis for criminal liability unless the source has 
previously and repeatedly violated the same requirements within the 
past three years. Moreover, the provisions of the Idaho Audit Act 
preventing the compelled disclosure of environmental audit reports 
prevents the State from obtaining potentially important information on 
whether a violation was knowing or whether a violation has been 
corrected. If the State, by virtue of such laws, surrenders its ability 
to thoroughly investigate potential violations or its discretion to 
take appropriate enforcement action in the face of violations, then the 
State's fundamental enforcement authority is compromised. EPA believes 
that this is the case with the Idaho Audit Act.
    In a similar vein, the commenters argue that the State of Idaho has 
the general authorities enumerated in section 502(b)(5)(E) of the Clean 
Air Act and 40 CFR 70.11 to enforce permits, permit fee requirements 
and the requirement to obtain a permit and to recover civil and 
criminal penalties in a maximum amount of not less than $10,000 per day 
of violation, and that nothing in the text of section 502(b)(5)(E) of 
the Act or the part 70 regulations authorizes EPA to consider the 
effect of State laws of general applicability on a State's title V 
civil and criminal enforcement authorities. The commenters further 
argue that the logical corollary of EPA's proposed action with respect 
to the Idaho Audit Act is that every State procedural and evidentiary 
rule must be evaluated and amended whenever EPA believes that it could 
in some fashion, directly or indirectly, interfere with environmental 
enforcement.
    Laws of general applicability are an appropriate subject for EPA 
review as is evident from the language of the part 70 regulations 
themselves. The regulations require that a State applying for a title V 
operating permits program include copies of ``all applicable State or 
local statutes and regulations including those governing State 
administrative procedures that either authorize the part 70 program or 
restrict its implementation.'' 40 CFR 70.4(b)(2) (emphasis added). The 
regulations also require a legal opinion from the State Attorney 
General asserting that the laws of the State provide adequate authority 
to carry out ``all aspects of the program.'' 40 CFR 70.4(b)(3). It is 
certainly EPA's expectation that, in issuing such a legal opinion, the 
Attorney General is certifying that no State laws, even laws of general 
applicability or laws of evidence, interfere with the State's authority 
to administer and enforce the title V program. See 59 FR 47105, 47108 
(September 14, 1994) (requiring Oregon to revise or clarify meaning of 
criminal statute appearing to limit criminal liability of corporations 
as a condition of full title V approval); 59 FR 61820, 61825 (December 
2, 1994) (accepting Oregon Attorney General's opinion regarding effect 
of statute).\5\
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    \5\ One commenter argues that section 116 of the Clean Air Act 
bars EPA from seeking to preempt State audit privilege and/or 
immunity laws. Section 116 states that, subject to limited 
exceptions, nothing in the Clean Air Act shall preclude or deny the 
right of any State to adopt or enforce emissions standards or 
limitations or requirements respecting the control or abatement of 
air pollution ``except where such emission standard or limitation is 
less stringent than required by the Clean Air Act.'' Such an 
interpretation would mean that EPA has no authority to disapprove 
any State enforcement provisions as a condition of title V approval. 
Section 502(b)(5)(E), which requires EPA to promulgate minimum 
enforcement authorities required for approval of a State title V 
program, clearly belies such an argument.

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[[Page 64625]]

    Several commenters also argued that the Idaho Audit Act does not 
interfere with the enforcement requirements of title V because it is 
qualified in a number of important respects. The commenters note in 
particular that the Idaho Audit Act, like most other State audit 
privilege and/or immunity legislation, does not offer immunity or 
protection from disclosure for information required by law to be 
collected, developed, reported or otherwise made available to a 
government agency. See Idaho Code 9-805, 9-807, 9-809(5). One commenter 
stated that the Idaho Audit Act covers ``almost every conceivable 
disclosure affected by a Title V Clean Air Act permit * * * In fact, it 
is difficult to conceive of a situation under a Title V program in 
which there was not a specific permit condition to make the disclosure 
voluntary.''
    EPA noted in the June 17, 1996, Federal Register document that the 
Idaho Audit Act does contain provisions which narrow its scope, and 
noted particularly the provisions which exclude from the scope of the 
immunity and protection from disclosure information that is required to 
be collected, developed, or reported under State or Federal law. 61 FR 
60572-73. Therefore, EPA agrees with the commenters that in many cases 
disclosure of a violation discovered during an audit would not be 
considered ``voluntary'' and thus would not be entitled to immunity 
under the Idaho Audit Act. Similarly, EPA agrees that in many cases the 
information necessary to bring an enforcement action will be 
information that a facility is required to collect, develop, report, or 
otherwise make available to the government and therefore not subject to 
the protection from disclosure provided by the Idaho Audit Act. At 
least one other State has issued an opinion stating that its audit 
immunity statute does not apply to title V sources because the statute 
does not apply to violations that are required to be reported by the 
source and because of the extensive monitoring, recordkeeping, and 
reporting requirements of that State's title V operating program. See 
61 FR 42224-42225 (August 14, 1996) (proposed interim approval of New 
Hampshire title V program); 61 FR 51370 (October 2, 1996) (final 
interim approval of New Hampshire title V program). It is not clear, 
however, as a matter of Idaho law, that all evidence of violations of 
title V permits and permit requirements would be required to be 
reported to the State of Idaho under its title V regulations, thus 
excluding such violations from the immunity of Idaho Code 9-809 and 
from the prohibition against compelled disclosure of Idaho Code 9-804. 
The Idaho Attorney General's Office has not provided EPA with such an 
opinion, and EPA must therefore infer that there could be violations at 
a title V source discovered through an environmental audit that would 
be entitled to immunity or protection against compelled disclosure 
under the Idaho Audit Act. Therefore, the concerns raised by EPA in the 
June 17, 1996, Federal Register document remain.
    The commenters also take issue with EPA's interpretation of the 
title V and part 70 requirements for enforcement authority, as 
evidenced in the April 5, 1996, memorandum entitled ``Effect of Audit 
Immunity/Privilege Laws on States' Ability to Enforce Title V 
Requirements'' (hereinafter, the ``April 5 Title V Memorandum'') and 
the June 17, 1996, Federal Register document reproposing action on the 
Idaho title V program. The commenters argue that EPA's interpretation 
and application of the title V enforcement requirements improperly 
interferes with the States' role as independent sovereigns, improperly 
divests States of their primary responsibility for implementing and 
enforcing the Clean Air Act, and conflicts with the Clinton 
Administration's stated policy to allow States to experiment with 
alternative approaches to achieve environmental protection. The 
commenters further argue that the determination of the Idaho 
legislature that criminal or civil penalties are inappropriate under 
the circumstances set forth in the Idaho Audit Act is within the 
statutory boundaries and flexibility provided by the Clean Air Act. The 
commenters continue that the immunity provisions of the Idaho Audit Act 
reflect the Idaho legislature's judgment as to the ``appropriate'' 
penalty for companies that voluntarily disclose and correct instances 
of environmental noncompliance and reflect a reasonable allocation of 
the State's enforcement resources.
    EPA agrees that, in enacting the Clean Air Act, Congress believed 
that States and local governments should have the primary 
responsibility for controlling air pollution at its source. See Section 
101(a)(3) of the Clean Air Act. EPA also agrees with the commenters 
that the States are to be given broad flexibility to select alternative 
means to achieve the minimum Federal requirements established in the 
Act by Congress and by EPA in the part 70 regulations and fully 
supports State experimentation to achieve greater compliance with 
environmental laws. Such flexibility and experimentation, however, must 
be, as the commenters' acknowledge, within the bounds of the statutes 
enacted by Congress and the implementing regulations promulgated by 
EPA. It cannot cancel out the requirement that States must meet some 
minimum Federal requirements as a condition of Federal approval of 
their programs.
    In the case of the Clean Air Act operating permits program, those 
minimum Federal requirements are set forth in title V and the part 70 
regulations. It is these requirements that EPA is insisting that the 
State of Idaho meet as a condition of full approval of its title V 
program. In short, EPA does not believe that the Idaho title V program 
is within the statutory boundaries established by Congress or the 
flexibility provided by the Clean Air Act because the Idaho Audit Act 
would limit the enforcement authority Congress and EPA required States 
to have as a condition of Federal approval.
    Moreover, the commenters' argument that the Idaho Audit Act governs 
areas of law traditionally committed to States in their role as 
independent sovereigns--if taken to its logical conclusion--would mean 
that a State could not be required to have any civil or criminal 
penalty authority to get full title V approval. It is an argument that 
goes to the validity of section 502(b)(5)(E) and 40 CFR 70.11 
themselves and therefore is untimely in this context. As stated above, 
Congress through title V, and EPA through the part 70 implementing 
regulations, required States to satisfy certain minimum requirements 
for enforcement authority as a condition of Federal approval of a Clean 
Air Act operating permits program. By conditioning full approval of the 
Idaho title V program on changes to the Idaho Audit Act or a 
demonstration by the State satisfactory to EPA that the Idaho Audit Act 
does not interfere with the enforcement requirements of title V, EPA is 
simply seeking to assure that Idaho has the required enforcement 
authorities before receiving Federal approval of its program. Cf. 
Commonwealth of Virginia v. Browner, 80 F.3d 869, 880 (4th Cir. 1996) 
(in rejecting Virginia's argument that requiring State to change its 
judicial standing rules as a condition of title V

[[Page 64626]]

approval violated State's sovereignty, the Court stated: ``Even 
assuming arguendo the accuracy of Virginia's assertion that its 
standing rules are within the core of its sovereignty, we find no 
constitutional violation because federal law `may, indeed, be designed 
to induce state action in areas that would otherwise be beyond 
Congress' regulatory authority,' '' citing FERC v. Mississippi, 456 
U.S. 742, 766 (1982)).
    The commenters also assert that EPA's use of its title V program 
approval authority to ``force'' States to modify their audit privilege 
and/or immunity legislation is contrary to Congress' general expression 
of intent against the automatic use of audit reports for enforcement of 
the Clean Air Act, as expressed in the Joint Explanatory Statement of 
the Conference Committee Report for the 1990 Amendments. S. Conf. Rep. 
101-952, 101st Cong. 2d Sess. 335, 348 (Oct. 26, 1990), reprinted in 
Legislative History at 941-42, 955, 1798. The commenters further assert 
that Idaho's decision to provide qualified audit immunity is consistent 
with that Congressional intent.
    As an initial matter, EPA disagrees that it is using the title V 
approval process to ``force'' States to modify their audit legislation. 
Instead, as stated above, EPA is simply analyzing to what extent the 
audit privilege and/or immunity laws of a particular State compromise 
the enforcement authorities required by Congress in title V, as 
interpreted by EPA through the part 70 regulations, as a condition of 
Federal approval of the State's operating permits program.
    With respect to the issue of Congress' intent, the language from 
the Conference Report cited by the commenters does not clearly express 
a desire that audit reports not be used for enforcement of the Clean 
Air Act requirements. Rather, the text expresses some general support 
for the concept of auditing and a desire that the criminal penalties of 
section 113(c) ``should not be applied in a situation where a person, 
acting in good faith, promptly reports the results of an audit and 
promptly acts to correct any deviation. Knowledge gained by an 
individual solely in conducting an audit or while attempting to correct 
deficiencies identified in an audit or the audit report should not 
ordinarily form the basis for intent which results in criminal 
penalties.'' (emphasis added). The legislative history merely indicates 
that the circumstances involving violations discovered through an audit 
report and voluntarily disclosed by a company will generally not meet 
the requirements for criminal liability. Importantly, Congress did not 
in any way suggest that a company which self-disclosed violations 
discovered through an environmental audit should be immune from civil 
penalties. In any case, when Congress amended the Clean Air Act in 
1990, there were no audit privilege and/or immunity laws on the books 
in any State. Any legislative history on auditing and enforcement from 
that period must be read in light of that reality. EPA does not believe 
Congress intended that the growth of environmental auditing--in itself 
a laudable goal fully supported by EPA--come at the expense of the 
enforcement of environmental laws.\6\ If Congress had wished to give 
special status to self-disclosed violations detected during an 
environmental compliance audit or to prohibit the use for general 
enforcement purposes of audits conducted under the Clean Air Act and 
EPA approved programs, Congress could have done so in the language of 
the 1990 amendments. If anything, the legislative history of the Act is 
evidence of Congress' intent that such incentives for audits should be 
a basis for the exercise of prosecutorial discretion, and not a 
legislative grant of immunity or protection from disclosure.
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    \6\ That distinction is also reflected in ``Incentives for Self-
Policing; Discovery, Disclosure, Correction and Preventions of 
Violations,'' 60 FR 66706 (December 22, 1995) (hereinafter, ``EPA's 
Self-Disclosure Policy''), which offers significant incentives for 
businesses to audit and self-disclose violations, while at the same 
time retaining safeguards to ensure the protection of public health 
and the environment.
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    The commenters also argue that Congress intended to vest the States 
with discretion in enforcing title V permit requirements and that the 
part 70 regulations merely provide that penalties assessed under a 
title V program must be ``appropriate'' to the violation. Nothing 
requires a State to obtain a penalty for every violation or prohibits a 
State from rewarding good actors who identify, disclose, and correct 
violations, the commenters continue.
    EPA agrees that a State is not required to collect a penalty for 
every violation and is not precluded from using its discretion to 
reward companies that conduct environmental audits and disclose and 
correct any violations discovered through such an audit. EPA disagrees, 
however, that the only inquiry for title V approval is whether a State 
has authority to assess ``appropriate'' penalties. The part 70 
regulations first state that civil and criminal fines must be 
recoverable ``in a maximum amount of not less than $10,000 per day per 
violation.'' 40 CFR 70.11(a)(3)(i)-(iii) (emphasis added).\7\ Section 
70.11(c) then provides that ``[a] civil penalty or criminal fine 
assessed, sought, or agreed upon by the permitting authority under 
paragraph (a)(3) of this section shall be appropriate to the 
violation.'' (emphasis added). By interpreting title V and part 70 to 
require only that States have authority to assess ``appropriate'' 
penalties, the commenters are reading out of the regulations the 
independent requirement that States have the authority to assess civil 
and criminal penalties in a maximum amount of not less than $10,000 per 
day per violation. Read together, 40 CFR 70.11(a)(3) and 70.11(c) 
require that a State have authority to assess a civil or criminal 
penalty of up to $10,000 per day per violation and that, in addition, 
the penalty assessed in any particular case be ``appropriate'' to the 
violation at issue. Thus, EPA agrees with the commenters that it is 
within Idaho's discretion to impose a penalty less than the statutory 
maximum if a lesser penalty is appropriate under the facts and 
circumstances of a particular case or to determine that criminal or 
civil prosecution is inappropriate under the facts and circumstances of 
a particular case so long as the State has the authority to assess 
penalties for each day of violation. The legislative history cited by 
the commenters in support of their position is, in fact, consistent 
with EPA's position on this issue. See Legislative History at 5815 
(``states are not going to be required to impose these minimum fines of 
$10,000 for permit violations. Instead, the bill is revised to make 
clear that states shall ensure that they have the authority to impose 
this. It is not mandated, it is authority.'') (emphasis added).
---------------------------------------------------------------------------

    \7\ One commenter appears to assert that a State need only have 
the authority to assess ``appropriate'' criminal penalties. In doing 
so, the commenter ignores the clear language of the part 70 
regulations. Section 502(b)(5)(E) requires States to have authority 
to ``recover civil penalties in a maximum amount of not less than 
$10,000 per day for each violation, and provide appropriate criminal 
penalties.'' In promulgating part 70, EPA determined that to provide 
``appropriate criminal penalties'' for purposes of title V approval, 
a State must have authority to issue criminal penalties in a maximum 
amount of not less than $10,000 per day per violation. See 40 CFR 
70.11(a)(3) (ii) and (iii). If the commenter believes that the 
enforcement authorities enumerated in the part 70 regulations, 
including the requirement for criminal penalty authority of up to 
$10,000 per day per violation, are excessive or in any way 
inconsistent with the statutory authorities, the commenter should 
have challenged the part 70 regulations at the time of promulgation 
in 1992.
---------------------------------------------------------------------------

    Several commenters stated that section 113(e) of the Clean Air Act 
only sets forth penalty factors that EPA or a Federal court must 
consider in imposing

[[Page 64627]]

civil penalties for noncompliance with the Act, that it has no bearing 
on EPA's authority to approve or disapprove State title V programs, and 
that nothing in section 113, title V, or part 70 authorizes EPA to 
condition approval of a State's title V permit program on the State's 
ability to consider penalty factors comparable to those set out in 
section 113(e). The commenters further assert that, although section 
113(e) is inapplicable, section 113(a) authorizes EPA in certain 
defined circumstances to take appropriate action, namely, filing an 
action against a facility where EPA believes the State's response was 
inadequate. This back-up authority, and not wholesale invalidation of a 
State's title V permits program, the commenters continue, is EPA's tool 
for ensuring to its own satisfaction that State audit legislation does 
not allow egregious Clean Air Act violations to go unsanctioned. In any 
event, the commenters assert, the Idaho Audit Act does take the section 
113(e) factors into account.
    EPA agrees that the purpose of section 113(e) is, as the commenters 
assert, to set forth factors which EPA and the Federal courts must 
consider in assessing civil penalties under the Clean Air Act. EPA 
believes, however, that the section 113(e) factors can also serve as 
guidance in determining what civil penalty authority is minimally 
necessary in a State title V program.
    In order for a State to have the authority to assess penalties that 
are ``appropriate'' to the violation in any particular case as required 
by 40 CFR 70.11(c), a State must have, in addition to the authority to 
assess a penalty of at least $10,000 per day per violation, the 
authority to consider mitigating or aggravating factors. In enacting 
section 113(e), Congress set forth factors it believed EPA and Federal 
judicial and administrative courts should consider in determining an 
appropriate penalty under the specific facts and circumstances before 
it. Although EPA believes that the factors enumerated by Congress in 
section 113(e) are the most fundamental, EPA believes that States may 
consider other factors as well. To the extent that a State has 
surrendered its ability to consider factors such as those set forth in 
section 113(e), EPA believes that a State does not have adequate 
authority, on a case-by-case basis, to collect penalties that are 
``appropriate'' to the violation, as required by 40 CFR 70.11(c).
    Industry commenters argue that, because the section 113(e) factors 
do not apply to State programs, it must follow that Congress did not 
prescribe factors a State must apply in assessing ``appropriate'' 
penalties under title V, and that a State must therefore be given full 
approval as long as it possesses ``appropriate'' enforcement authority. 
There are two flaws in this reasoning. The commenters misunderstand the 
purpose of EPA's reference to section 113(e). As explained above, the 
question for EPA at the program approval stage is not how the State 
will exercise its enforcement discretion to assess penalties in any 
particular case. Rather, it is whether the State has sufficient 
authority to assess appropriate penalties in every case. Before 
granting full approval to a title V program, EPA must ensure, first, 
that the State has the general authority to assess penalties up to the 
amounts specified in section 70.11. EPA must also ensure that the State 
has authority to consider factors similar to those in section 113(e) 
such that the penalty actually assessed in any case may be appropriate 
to the violation. Because the immunity provisions of the Idaho Audit 
Act preclude the State from considering the factors set forth in 
section 113(e) or any other factors in determining an ``appropriate'' 
penalty in cases in which the source has disclosed and corrected 
violations discovered in an environmental audit, Idaho lacks this 
authority.
    EPA also disagrees with the commenters' assertion that EPA's sole 
remedy where EPA believes a State does not have adequate enforcement 
authority is to take its own enforcement actions to address violations 
in that State. Although EPA does file Federal actions where the State 
fails to take enforcement action or where State action is inadequate to 
address a particular violation, before approving a State title V 
program EPA must also ensure that the State has demonstrated the 
capacity to administer and fully enforce a delegated program as 
required by law and regulation. If Federal action were the only remedy 
for situations in which a State does not possess adequate enforcement 
authority, there would have been no need for Congress to direct EPA to 
promulgate rules setting forth minimum enforcement requirements for 
Federal approval of a State operating permits program. See 59 FR 61825 
(rejecting similar comment in acting on Oregon's title V program).
    Finally, EPA disagrees with the commenters' contention that the 
Idaho Audit Act does give consideration to the penalty factors set 
forth in section 113(e). As EPA stated in the June 17, 1996, Federal 
Register document and has reiterated above, the immunity provisions of 
the Idaho Audit Act prevent the State from considering all but one of 
the factors set forth in section 113(e) of the Clean Air Act. For 
example, the Idaho Audit Act precludes the assessment of civil 
penalties for violations voluntarily disclosed in an environmental 
audit even if the violations resulted in serious harm or risk of harm 
to the public or the environment or resulted in substantial economic 
benefit to the violator. To the extent the Idaho Audit Act prevents 
consideration of these factors, EPA believes that Idaho has surrendered 
its authority to assess appropriate penalties as required by section 
502(b)(5)(E) of the Clean Air Act and 40 CFR 70.11. See 61 FR 30572.
    Several commenters stated that EPA's approach on State audit 
privilege and/or immunity laws is bad policy and not supported by 
empirical evidence. The commenters expressed strong support for 
environmental auditing as a means of obtaining compliance with 
increasingly complex environmental requirements. These commenters argue 
that EPA's reaction against such audit statutes is a ``knee-jerk'' 
reaction that ignores the potentially huge benefits that these laws 
offer. EPA has wrongly concluded, the commenters continue, that the 
existence of a limited and qualified affirmative defense to penalties 
for violations discovered through environmental audits and protection 
for information in audit reports weakens Idaho's authority to enforce 
the law or to ensure compliance and that the evidence to date, both in 
Idaho and in other States with such laws, shows in fact that audit 
privilege and/or immunity legislation encourages self-correction and 
increased compliance. At the same time, the commenters argue, EPA has 
not cited any specific instance in which the Idaho Audit Act or some 
other State audit privilege and/or immunity law has compromised or 
inhibited enforcement of the Clean Air Act or a title V permit 
program.8
---------------------------------------------------------------------------

    \8\ One commenter noted that private industry has been in the 
forefront of environmental auditing, and that governmental agencies 
that are also subject to environmental regulation have in some 
instances lagged behind in implementing auditing programs. This 
commenter went on to express concern that EPA has used the title V 
approval process as a mechanism to limit environmental auditing when 
Federal and State agencies are not conducting environmental audits. 
EPA agrees that private industry has played an important role in the 
development and implementation of environmental auditing programs 
and that government entities should follow the example of many 
private industries in conducting environmental audits.
---------------------------------------------------------------------------

    EPA has expressed strong support for incentives which encourage 
responsible companies to audit to prevent noncompliance and to disclose 
and correct any violations that do occur. See, e.g., EPA's Self-
Disclosure Policy.

[[Page 64628]]

The issue involved in this Federal Register action, however, is not 
whether environmental auditing is good or bad policy. Rather, the issue 
is whether the Idaho Audit Act, in offering immunity and protection 
against compelled disclosure to companies conducting environmental 
audits, so deprives the State of its authority to take enforcement 
action for violations of title V requirements that the State does not 
have the necessary authority required for full title V approval.
    Moreover, EPA believes that it is premature at this point to expect 
significant empirical evidence to document whether environmental audit 
privilege and/or immunity laws enhance or impede environmental 
compliance. Most of the State audit statutes, such as Idaho Audit Act, 
are little more than one year old and only a few States have issued 
permits under approved title V programs. In any event, EPA is aware of 
at least one on-going environmental enforcement action in a State with 
an audit privilege and/or immunity law in which the audit privilege 
appears to be interfering with prosecutors' efforts to obtain and 
utilize certain evidence.9
---------------------------------------------------------------------------

    \9\ The confidentiality prerequisites that attach to all on-
going enforcement actions prevent the Agency from revealing 
additional details at this time.
---------------------------------------------------------------------------

    The commenters go on to argue that the reasoning set forth in the 
April 5 Title V Memorandum and the June 17, 1996, Federal Register 
document could have far-reaching and unintended effects on the 
relationship between EPA and States in the implementation of the Clean 
Air Act and other environmental laws such as approvals of State 
Implementation Plans and State programs under the Clean Water Act and 
Resource Conservation and Recovery Act.
    EPA agrees that the rationale behind the April 5 Title V Memorandum 
and EPA's action on the Idaho title V program has implications for 
other Federal programs delegated to the States. Because of that, the 
Agency has for some months been analyzing the effects of State audit 
privilege and/or immunity laws on enforcement authorities under the 
Clean Water Act, the Resource Conservation and Recovery Act, and other 
statutes. The rationale behind the April 5 Title V Memorandum and EPA's 
action on the Idaho title V program as it relates to the Idaho Audit 
Act, however, is dictated not by political or policy considerations, 
but rather by statutes and regulations that were finalized after public 
notice and comment.
    Several commenters also stated that EPA's proposed interim approval 
of Idaho's program based on the Idaho Audit Act is inconsistent with 
existing EPA and Department of Justice enforcement policies, which 
reflect the appropriateness of limiting enforcement discretion. The 
commenters point to ``Factors in Decisions on Criminal Prosecutions for 
Environmental Violations in the Context of Significant Voluntary 
Compliance or Disclosure Efforts by the Violator,'' DOJ, July 1, 1991; 
``The Exercise of Investigative Discretion,'' EPA, January 12, 1994; 
``Policy on Flexible State Enforcement Responses to Small Community 
Violations'' EPA, November 1995 (``EPA Policy on Small Communities'') 
10; ``Policy on Compliance Incentives for Small Businesses,'' EPA, 
May 1996; and EPA's Self-Disclosure Policy.
---------------------------------------------------------------------------

    \10\ One commenter describes EPA's ``Policy on Flexible State 
Enforcement Responses to Small Community Violations'' (hereinafter, 
``EPA's Policy on Small Community Violations'') as one that 
``encourages states to give small communities an unqualified waiver 
of civil penalties--regardless of any economic benefit or the 
seriousness of the violation--as an incentive to compliance.'' EPA 
disagrees with this characterization. Although the policy does 
encourage States to provide small communities an incentive to 
request compliance assistance by waiving all or part of a penalty 
under certain circumstances, it does not encourage States to give 
small communities ``an unqualified waiver of civil penalties,'' as 
the commenter asserts. For example, the EPA Policy on Small 
Community Violations is directed at a very narrowly defined class of 
potential violators--non profit, government entities with fewer than 
2,500 residents that are unable to satisfy all applicable 
environmental mandates without the State's compliance assistance. 
The policy directs States to assess a small community's good faith 
and compliance status before granting any relief from penalties and 
identifies a number of factors that a State should consider in 
determining whether relief from civil penalties is appropriate in 
the particular circumstances. Contrary to the commenter's assertion, 
EPA's Policy on Small Community Violations does direct a State to 
consider the seriousness of the violation. See EPA's Policy on Small 
Community Violations, page 4. Although the policy does not direct 
the State to consider economic benefit in determining the 
appropriate enforcement response, the policy is available only to 
those small communities that are financially unable to satisfy all 
applicable environmental mandates without the State's compliance 
assistance.
---------------------------------------------------------------------------

    There is an important distinction between the policies cited by the 
commenters, which adopt an ``enforcement discretion'' approach, and the 
Idaho Audit Act. EPA and the Department of Justice have announced 
policies guiding the exercise of their enforcement discretion under 
certain narrowly defined circumstances, while preserving the underlying 
statutory and regulatory authority. State audit privilege and/or 
immunity laws, such as the Idaho Audit Act, by contrast, constrain 
enforcement discretion as a matter of law, impermissibly surrendering 
the underlying statutory and regulatory enforcement authorities 
required for Federal approval of State programs.
    Several commenters stated that EPA's proposed action on the Idaho 
program is inconsistent with several previous title V approvals where 
audit privilege and/or immunity legislation has not posed a bar to full 
approval. As examples of previous title V approvals which the 
commenters believe are inconsistent with EPA's proposed action on the 
Idaho program, as it relates to the Idaho Audit Act, the commenters 
point to EPA's action on the Oregon, Kansas, and Colorado title V 
programs. Relying on the recent Ninth Circuit decision in Western 
States Petroleum Association v. EPA, 87 F.3d 280 (9th Cir. 1996) 
(``WSPA''), the commenters state that, where EPA is departing from a 
prior course of action, more is required of the Agency than conclusory 
statements concerning the potential impact of the Idaho Audit Act on 
the State's title V enforcement authority. Instead, the commenters 
argue that EPA must provide a basis for deviating from its earlier 
approaches in Oregon, Kansas, and Colorado.
    As an initial matter, EPA notes its action on Idaho's title V 
program is consistent with its approach with respect to the Texas title 
V program, 61 FR 32693, 32696-32699 (June 25, 1996) (final interim 
approval), and the Michigan title V program. 61 FR 32391, 32394-32395 
(June 24, 1996) (proposed interim approval). Moreover, EPA has notified 
the States of Arizona, Florida and Ohio that audit privilege and/or 
immunity laws that these States have enacted, or were contemplating 
enacting, could interfere with the enforcement requirements of title V 
and part 70.
    With respect to the three programs cited by the commenters as 
inconsistent with EPA's proposed action on the Idaho program, EPA is 
still in the process of reviewing the audit privilege and/or immunity 
statutes in Oregon, Kansas, and Colorado, and their effects on the 
title V enforcement requirements in those States, in order to determine 
whether EPA acted inconsistently in approving those programs. If EPA 
determines that it acted inconsistently in acting on those programs, 
EPA intends to take appropriate action to follow the WSPA Court's 
mandate that EPA act consistently or explain any departures.
    Finally, the commenters challenge the April 5 Title V Memorandum 
itself arguing that the memorandum imposes requirements on EPA approval 
of a State

[[Page 64629]]

operating permits program in addition to those required by section 
502(b)(5)(E) of the Act and the part 70 rules. Because the April 5 
Title V Memorandum sets additional substantive and binding standards 
for approval of State title V operating permits programs not included 
in the part 70 regulations, the commenters continue, the memorandum is 
a rule disguised as guidance and must be promulgated in accordance with 
the Administrative Procedures Act. This requires, among other things, 
public notice and comment.
    EPA disagrees. The April 5 Title V Memorandum does not, as the 
commenters assert, ``purport to change fundamentally the requirements 
in section 70.11 by adding provisions that (1) effectively prohibit a 
state from adopting an audit protection or immunity law and (2) impose 
at least four new penalty criteria.'' Rather, the memorandum simply 
recounts and reiterates existing statutory and regulatory requirements 
for enforcement authority under the title V program and shows how audit 
privilege and/or immunity laws may prevent a State from meeting those 
requirements. It creates no new ``substantive and binding standards'' 
for approval of title V programs, and therefore is not subject to 
notice and comment rulemaking of the Administrative Procedures 
Act.11 Moreover, in explaining why the Idaho Audit Act precludes 
full approval, EPA is relying on the requirements of title V and part 
70 themselves, and not the April 5 Title V Memorandum. Moreover, EPA's 
application of the title V and part 70 enforcement requirements to the 
specific circumstances before EPA in the case of the Idaho Audit Act is 
subject to notice and comment rulemaking.12
---------------------------------------------------------------------------

    \11\ One commenter also stated that EPA expressly recognized in 
its earlier approval of the Oregon title V program that EPA would 
have to use rulemaking to modify its part 70 rules before EPA could 
prohibit States from adopting audit privilege and/or immunity laws. 
The commenter misstates the Agency's position. As an initial, the 
Oregon audit statute, Oregon Revised Statute 468.963, contains only 
an audit privilege and does not contain an immunity provision. In 
proposing interim approval of the Oregon title V program, EPA stated 
it was in the process of developing a national position regarding 
EPA approval of environmental programs in States that have 
environmental audit privileges, and that, therefore, EPA proposed to 
take no action on the Oregon audit provision in the context of the 
Oregon title V approval. EPA noted, moreover, that it might consider 
such a privilege grounds for withdrawing program approval under 40 
CFR 70.10(c) in the future if EPA later determined that the Oregon 
audit provision interfered with Oregon's enforcement 
responsibilities under title V and part 70. 59 FR 47105, 47106 
(September 14, 1994). During the public comment period on EPA's 
proposal, one commenter stated that EPA's suggestion that a State 
audit privilege could be grounds for interim approval or withdrawal 
was bad policy and that Oregon's audit privilege statute was 
consistent with the Clean Air Act. In addition to responding to the 
merits of the comment, EPA stated that the commenter's concerns were 
premature because, as the commenter acknowledged, EPA had not 
proposed to take any action on Oregon's environmental audit 
privilege statute in the context of final interim approval of the 
Oregon program. EPA further stated that any such concerns about 
EPA's position on the Oregon audit privilege statute would be 
properly made if EPA later proposed to withdraw Oregon's title V 
approval based on Oregon's audit privilege or if EPA ``revised part 
70 to prohibit environmental audit provisions such as Oregon's.'' 59 
FR 61820, 61824 (December 2, 1994). EPA did not say in that Federal 
Register document that a rulemaking would be required in order for 
the Agency to disapprove a title V program in a State with an 
environmental audit privilege and/or immunity statute.
    \12\ EPA also disagrees with one commenter's assertion that the 
Congressional review provisions of Subtitle E of the Small Business 
Regulatory Enforcement Fairness Act of 1996, P.L. 104-121 (SBREFA), 
require EPA to submit the April 5 Title V Memorandum to Congress. 
EPA does not believe that the April 5 Title V Memorandum is subject 
to Congressional review under SBREFA because it is not a rule and it 
does not substantially affect the rights or obligations of a 
nonagency party. Even if the Memorandum were subject to review, EPA 
has not relied on that Memorandum as a basis for this action, but 
has instead relied on the requirements of title V and part 70. 
Therefore, any procedural defect with respect to the April 5 Title V 
Memorandum is irrelevant to the legal sufficiency of this action.
---------------------------------------------------------------------------

    (B) Effect of the immunity provisions of the Idaho Audit Act on 
Idaho's ability to issue emergency orders and seek injunctive relief. 
In the June 17, 1996, Federal Register document, EPA expressed concern 
that the Idaho Audit Act could be interpreted to interfere with the 
State's authority to issue emergency orders and seek injunctive relief, 
as required by section 502(b)(5)(E) and 40 CFR 70.11(a) (1) and (2). 
First, EPA was concerned with the subsection of the immunity provision 
of the Idaho Audit Act stating:

    Except as specifically provided, this section does not affect 
any authority of an environmental agency to require remedial action 
through a consent order or action in district court or to abate an 
imminent hazard, associated with the information disclosed in any 
voluntary disclosure of an environmental violation.

Idaho Code 8-809(7). EPA queried what might be included within the 
``Except as specifically provided'' clause of that provision and 
whether the provision specifically authorizing persons to enter into 
voluntary settlements (Idaho Code section 9-809(4)) could be 
interpreted to mean that Idaho would be prevented from issuing a 
unilateral order or seeking a court order requiring an owner or 
operator to correct a violation on a specified schedule, at least where 
the violation did not involve an imminent hazard. 61 FR 30570, 30572.
    In the comments jointly submitted by IDEQ and the Idaho Attorney 
General, Idaho stated that no specific provision of the Idaho Audit Act 
affects the State's authority to issue emergency orders or seek 
injunctive relief and that these authorities are therefore 
uncompromised by the Idaho Audit Act. Several of the other commenters 
agreed with the Attorney General that the immunity provision of the 
Idaho Audit Act only prohibits the State from recovering civil and 
criminal penalties from an owner or operator who discovers violations 
during a voluntary audit and meets the other conditions of the law.
    EPA remains concerned regarding why the Idaho legislature included 
the ``Except as specifically provided'' clause in the provision 
affirming the State's continued ability to issue emergency orders and 
seek injunctive relief. EPA is willing to defer, however, to the 
opinion of the Idaho Attorney General's office that no provision of the 
Idaho Audit Act does specifically create an exception to the State's 
ability to issue emergency orders and seek injunctive relief. If, 
however, during program implementation, EPA determines that the Idaho 
Audit Act does compromise the State's authority to issue emergency 
orders and seek injunctive relief as required by title V and part 70, 
EPA will consider this grounds for withdrawing program approval in 
accordance with 40 CFR 70.10(c).
    Second, EPA expressed concern with the subsection of the immunity 
provision of the Idaho Audit Act stating that ``appropriate efforts to 
correct the noncompliance'' for purposes of immunity ``may be 
demonstrated by the submittal of a permit application or equivalent 
document within a reasonable time.'' Idaho Code 9-809(3). EPA was 
concerned that this subsection appeared to allow an owner or operator 
to continue an unlawful activity for which a permit was required 
without being subject to penalty or the State's emergency authority or 
injunctive relief.
    The comments submitted by the Idaho Attorney General do not address 
the effect of Idaho Code 9-809(3) on the State's ability to assess 
penalties against an owner or operator for the failure to obtain a 
permit. EPA therefore continues to believe that this issue must be 
addressed as a condition of full approval. See Section II.A.2.c.i.A 
above. The Idaho Attorney General did, however, directly address EPA's 
concern that Idaho Code 9-809(3) might also preclude the State from 
seeking an emergency order or injunctive relief against an owner or 
operator who had failed to obtain a permit. The Attorney General 
unequivocally stated that the Idaho Audit Act does not under any

[[Page 64630]]

circumstances alleviate the owner's or operator's responsibility to 
correct any violations identified in an audit or restrict the State's 
ability to take an action to abate any noncompliance. Other commenters 
agreed with this interpretation. EPA is willing to defer to the opinion 
of the Idaho Attorney General on this issue, subject to the 
qualification discussed above that EPA will closely monitor the impact 
of the Idaho Audit Act on the State's ability to issue emergency orders 
and obtain injunctive relief during program implementation.
    (C) Additional concerns regarding the effect of the disclosure 
provisions of the Idaho Audit Act on the State's enforcement authority. 
Several of the commenters, including IDEQ and the Idaho Attorney 
General, disagreed with EPA's statement that the Idaho Audit Act 
contains a privilege for environmental audit reports which 
impermissibly interferes with the enforcement requirements of title V 
and part 70. The commenters first take issue with EPA's 
characterization of Idaho Code 9-804 as a ``privilege'' for 
environmental audit reports arguing that in Idaho such a privilege on 
the disclosure of information in a judicial action can only be created 
by constitution, a statute implementing a constitutional right, or by 
rules of the Idaho Supreme Court. See Idaho Rules of Evidence, Rule 
501; Idaho Code 9-808. EPA has again reviewed Idaho Code 9-804 and, on 
further reflection, agrees that the Idaho statute does not create a 
true evidentiary privilege--that is, a privilege to refuse to disclose 
an environmental audit report in a judicial action. Rather, the statute 
prohibits any State agency from requiring an owner or operator to 
disclose the contents of an environmental audit report to the State 
agency.13 EPA accurately described the effect of the Idaho Audit 
Act in its June 17, 1996, Federal Register document, but incorrectly 
characterized it as a ``privilege.'' 14
---------------------------------------------------------------------------

    \13\ One commenter interprets Idaho Code 9-804 as not preventing 
the State from obtaining environmental audit reports, but only 
preventing the State from disclosing to the public environmental 
audit reports that are voluntarily disclosed to the State. EPA 
disagrees. Idaho Code 9-804 clearly prevents the State from 
requiring an owner or operator to disclose an environmental audit 
report to the State. Section 9-340 additionally prevents the State 
from disclosing to the public an environmental audit report that has 
been voluntarily provided by an owner or operator to the State.
    \14\ EPA notes that the Idaho legislature also used the term 
``privilege'' to describe the intent of the Idaho Audit Act. See 
Idaho Code 9-802(2) (``the legislature of the state of Idaho 
recognizes that an environmental audit privilege is necessary'').
---------------------------------------------------------------------------

    The commenters next assert that the Idaho Audit Act does not 
interfere with IDEQ's authority to seek or use an environmental audit 
report as evidence in a judicial action because the Idaho Audit Act 
does not create an evidentiary privilege. Although the Idaho Audit Act 
is a prohibition on the compelled disclosure of information and not a 
true evidentiary privilege, EPA still believes that the disclosure 
provisions of the Idaho Audit Act impermissibly interfere with the 
enforcement requirements of title V and part 70. The commenters do not 
controvert the basic fact that the Idaho Audit Act prevents a State 
agency, such as IDEQ, from requiring an owner or operator to produce an 
environmental audit report to the State agency under the State's 
general information gathering authority. Where an audit report produces 
evidence of noncompliance, the Idaho Audit Act would prevent the State 
from reviewing that evidence, short of filing an enforcement action in 
court, to determine whether the violation will be corrected and 
compliance assured. When a case is far enough advanced that litigation 
is necessary, little flexibility remains for assuring that compliance 
is achieved in a timely and efficient manner. Similarly, where an 
environmental audit reveals evidence of criminal intent on the part of 
managers or employees, Idaho would be barred from obtaining and using 
such information unless Idaho otherwise has sufficient information to 
first file an enforcement action in State court. Although, as the Idaho 
Attorney General points out, a source must voluntarily disclose the 
relevant portions of the audit report in order to obtain immunity from 
civil or criminal penalties, an owner or operator can elect not to 
disclose violations in an audit report in the hopes that the violations 
will not otherwise come to the attention of the State agency. 
Similarly, a facility could elect to disclose the fact of a violation, 
but not the related evidence of whether the violation was intentional. 
The decision of whether to disclose all or any part of an environmental 
audit report to the State rests solely with the owner or operator. EPA 
therefore believes that, although the Idaho Audit Act does not create a 
true evidentiary privilege, it still so interferes with the State's 
information gathering authority as to deprive the State from obtaining 
appropriate criminal penalties and assuring compliance with the Clean 
Air Act, as required by section 502(b)(5)(E) of the Act and 40 CFR 
70.11.
    One commenter also stated that adequate title V enforcement 
authority cannot depend on access to voluntarily prepared audit 
reports. If such were the case, the commenter reasoned, State 
regulators would necessarily lack adequate enforcement authority over 
those entities which do not conduct audits voluntarily.
    EPA agrees that access to voluntarily prepared audit reports is not 
per se a prerequisite for adequate enforcement authority for title V 
approval. However, such access is important if the report exists and it 
contains information on criminal intent or whether the violation has 
been promptly corrected. The lack of such access can adversely affect 
the adequacy of enforcement authority, at least with respect to the 
ability to enforce against criminal violations and to verify 
compliance.
    One commenter also stated that State audit protection legislation 
does not inhibit whistle blowers but instead merely prohibits 
unauthorized disclosure of an audit report because whistle blowers are 
free to disclose any ``non-audit'' information to support their 
allegations without fear of violating the laws.
    As an initial matter, EPA notes that this concern is irrelevant in 
EPA's action on Idaho's title V program. To EPA's knowledge, neither 
the Idaho Audit Act nor any other provision of Idaho law specifically 
restricts the information that a whistle blower may disclose to a State 
agency, and EPA therefore did not raise this as a concern in proposing 
action on Idaho's title V program.
    The commenter appears to be responding to an issue discussed in the 
April 5 Title V Memorandum. In that memorandum, EPA expressed concern 
with State audit privilege and/or immunity statutes that impose special 
sanctions upon persons who disclose privileged information. See April 5 
Title V Memorandum, pp. 5-6. Although irrelevant to action on Idaho's 
title V program, EPA believes, as stated in the memorandum, that the 
Clean Air Act provision which gives explicit protection to whistle 
blowers makes no distinctions with respect to the source of the 
information relied upon by the whistle blower. EPA believes that it is 
inconsistent with section 322 of the Clean Air Act for States to remove 
audit reports from the universe of information which employees may rely 
upon in reporting violations to local or State authorities.
    ii. Comments that the Idaho Audit Act poses a bar to full title V 
approval. EPA received three comment letters from environmental and 
public interest groups agreeing with that the Idaho Audit Act is 
incompatible with the

[[Page 64631]]

enforcement requirements of title V and part 70. Several of these 
organizations also argued that the prohibition against the compelled 
disclosure of audit reports in the Idaho Audit Act ``is incompatible 
with the [Clean Air Act's] mandate for public participation in 
permitting.''
    EPA agrees that the prohibition against compelled disclosure 
contained in the Idaho Audit Act is an unfortunate hindrance to public 
access to potentially useful and important information affecting public 
health and the environment. EPA does not believe, however, that the 
Idaho statute interferes with the public access requirements of title V 
and part 70 (as opposed to the enforcement requirements) because, by 
its terms, the Idaho statute does not allow documents and other 
information which must be collected, developed, and reported pursuant 
to Federal and State law to be withheld from the State or the public. 
See Idaho Code 9-805. As noted in the October 27, 1995, Federal 
Register document proposing action on Idaho's title V program, EPA 
believes that Idaho's general statutory and regulatory confidentiality 
provisions allow far more information to be kept confidential from the 
public than is authorized under part 70 and section 114 of the Clean 
Air Act. See 60 FR 54999. EPA has required, as a condition of full 
approval, that Idaho revise these provisions or demonstrate to EPA's 
satisfaction that they meet the requirements of title V and part 70. 
EPA does not believe, however, that the Idaho Audit Act independently 
interferes with the title V requirements for public access to 
information.
    One commenter also stated that the Idaho Audit Act precludes 
interim approval and requires disapproval. Section 70.4(d)(3)(vii) 
states that to qualify for interim approval the State must have 
``authority to enforce permits, including the authority to assess 
penalties against sources that do not comply with their permits or with 
the requirement to obtain a permit.'' EPA believes that to qualify for 
interim approval a State must have basic authority to enforce permits 
and the requirement to obtain a permit, including the authority to 
assess penalties, during the interim approval period. EPA has stated, 
however, that interim approval can be appropriate, for example, even 
though a permitting authority does not have the authority to assess 
civil penalties at the full $10,000 per day per violation required by 
section 70.11(a)(3)(i) or does not have any criminal authority. See 
Memorandum from John S. Seitz, Director, Office of Air Quality Planning 
and Standards, to Regional Air Division Directors, entitled ``Interim 
Title V Approval Issues,'' dated August 2, 1993. Similarly, EPA has 
granted or proposed to grant interim approval to States that have 
affirmative defenses to liability that EPA believed exceeded the 
defenses allowed as a matter of Federal law, and thus must be revised 
as a condition of full approval, as long as the State has the general 
authority to assess civil penalties for violations. See 59 FR 61824-
61825 (conditioning full approval of Oregon's title V program on 
changes to or clarifications regarding the effect of Oregon's criminal 
bypass statute) 15; 61 FR 32394 (proposing to condition full 
approval of Michigan's title V program on revisions to or 
clarifications regarding the effect of its startup, shutdown, and 
malfunction provisions). EPA believes that the situation in Idaho is 
similar in that the State of Idaho does have authority to assess civil 
and criminal penalties for violations of title V permit requirements in 
many cases. The Idaho Audit Act creates a limited, although, EPA 
believes, impermissible, exception to that authority. If, during the 
interim approval period, Idaho's enforcement authority proves 
inadequate to address a particular violation, EPA always has concurrent 
authority to enforce permit terms and conditions and the requirement to 
obtain a permit. See section 113 of the Act (civil and criminal 
liability provisions under the Clean Air Act). EPA therefore does not 
believe that the Idaho Audit Act precludes interim approval.
---------------------------------------------------------------------------

    \15\ Oregon ultimately established to EPA's satisfaction that 
its affirmative defense to criminal liability for upsets and 
bypasses was consistent with Federal law and thus received full 
approval of its program. See 60 FR 50106, 50107 (September 28, 
1995).
---------------------------------------------------------------------------

    Two commenters did not urge disapproval, but instead commented 
that, because the Idaho Audit Act contains a sunset provision by which 
it expires at the end of 1997, the Idaho legislature must address 
renewal of the law in its next regular session at the beginning of 
1997. The commenters therefore argue that EPA should not grant Idaho 
the full two-year interim approval period in which to address this 
issue, but should instead give Idaho only until April 15, 1997, which 
is presumably the date by which the commenters believe the 1997 
legislative session will have concluded. Although EPA does have the 
authority to allow States less than two years to correct interim 
approval issues, EPA has thus far allowed all States the full two years 
within which to address the initial interim approval issues. EPA 
believes that Idaho should receive the same benefits as other 
permitting authorities in having the full two years to respond to this 
initial interim approval issue. EPA has identified 27 other interim 
approval issues that the State of Idaho must address during the two 
year interim approval period and proposed to give Idaho the full two 
years to address these other issues. EPA received no other comments on 
this proposal. Even if Idaho could address the interim approval issue 
relating to the Idaho Audit Act in less than two years, EPA believes 
that having the same interim approval period for all of the 28 
identified interim approval issues will lessen the administrative 
burden on the State.
    iii. Summary. In summary, based on the opinion of the Idaho 
Attorney General, EPA is satisfied that the immunity provisions of the 
Idaho Audit Act do not compromise the State's ability to issue 
emergency orders and seek injunctive relief to assure compliance with 
title V requirements. EPA will closely monitor the Idaho title V 
program during implementation to assure that this is the case. If, 
during program implementation, EPA determines that the Idaho Audit Act 
does compromise the State's authority to issue emergency orders and 
seek injunctive relief as required by title V and part 70, EPA will 
consider this grounds for withdrawing program approval in accordance 
with 40 CFR 70.10(c).
    EPA continues to believe, however, that the immunity provisions as 
well as the disclosure provisions of the Idaho Audit Act impermissibly 
interfere with the enforcement authorities required for full title V 
approval. Accordingly, Idaho must revise both the immunity and 
disclosure provisions of the Idaho Audit Act, Idaho Code title 9, 
chapter 8, to ensure that it does not interfere with the requirements 
of section 502(b)(E)(5) of the Clean Air Act and 40 CFR 70.11 
identified in the June 17, 1996, Federal Register document and this 
notice for adequate authority to pursue civil and criminal penalties 
and otherwise assure compliance. Alternatively, Idaho must demonstrate 
to EPA's satisfaction, through an Attorney General's opinion that these 
required enforcement authorities are not impaired by the Idaho Audit 
Act.

B. Section 112(l) Submittal

    There were no comments on EPA's proposed delegation of the NESHAPs 
as adopted by Idaho and as they apply to title V sources and EPA's 
proposed

[[Page 64632]]

approval of a streamlined mechanism for future NESHAP delegations.

III. Final Action

A. Title V

    EPA is promulgating final interim approval of the operating permits 
program submitted by Idaho on January 20, 1995, and supplemented on 
July 14, 1995, September 15, 1995, and January 12, 1996. The State must 
make the following changes to receive full approval:
1. Applicability
    Idaho must demonstrate to EPA's satisfaction by the end of the 
interim approval period that its program covers all sources required to 
be permitted under part 70. EPA has proposed a change to the part 70 
rules that would make the definition of ``major source'' in 40 CFR 70.2 
consistent with the August 7, 1980, limitation in the Idaho rule. See 
59 FR 44460, 44527 (August 29, 1994). However, EPA has not yet taken 
final action on that proposed change. If EPA finalizes its proposed 
revision to the definition of ``major source'' before the end of 
Idaho's interim approval period, Idaho will not be required to revise 
its definition of ``major facility'' to delete the ``August 7, 1980'' 
limitation. In any case, however, Idaho must revise the reference to 
``fugitive emissions'' in IDAPA 16.01.01.008.14.h.iii to refer instead 
to any ``air pollutant'' and must otherwise make any changes needed to 
demonstrate that its program covers all required sources.
2. Temporarily Exempt Sources
    Idaho must demonstrate to EPA's satisfaction that the application 
and permitting deadlines for Phase II sources and sources with solid 
waste incineration units meet the requirements of part 70.
3. New Sources
    Idaho must demonstrate to EPA's satisfaction that all sources in 
Idaho applying for a title V permit for the first time are required to 
submit a permit application within 12 months after becoming subject to 
title V.
4. Option To Obtain Permit
    Idaho must demonstrate to EPA's satisfaction that it has the 
authority required by 40 CFR 70.3(b)(3).
5. Fugitive Emissions
    Idaho must address the requirement of 40 CFR 70.3(d) that fugitive 
emissions from title V sources be included in permit applications and 
permits in the same manner as stack emissions regardless of whether the 
source category in question is included in the list of sources 
contained in the definition of major source.
6. Insignificant Activities
    Idaho must define by regulation or guidance the terms used in IDAPA 
16.01.01.317, provide documentation that the units and activities are 
appropriate for inclusion as insignificant, assure that all activities 
that are insignificant based on size or production rate be listed in 
each permit, and remove any director's discretion provision that would 
allow the State to determine that an activity not previously reviewed 
by EPA is insignificant (except for clearly trivial activities).
7. Permit Content
    Idaho must eliminate the qualification in IDAPA 16.01.01.322.01 and 
16.01.01.322.03 that requires inclusion of only those requirements that 
are ``identified in the application'' at the time of permit issuance 
because this restriction impermissibly relieves the permitting 
authority from including in a permit applicable requirements that are 
not identified in a permit application. Alternatively, Idaho must 
otherwise demonstrate to EPA's satisfaction that it has the authority 
to include in a title V permit all applicable requirements consistent 
with 40 CFR 70.6.
8. Exemption From Applicable Requirements
    Idaho must eliminate the provision in IDAPA 16.01.01.325.01.c that 
allows Idaho to exempt sources from otherwise applicable requirements 
or, alternatively, must demonstrate to EPA's satisfaction that this 
provision is consistent with the requirements of part 70.
9. Emissions Trading
    Idaho must demonstrate that its emissions trading provisions meet 
the requirements of 40 CFR 70.4(b)(12)(iii) and 40 CFR 70.6(a)(8). EPA 
also recommends that the requirement of IDAPA 16.01.01.322.05 that a 
company contemporaneously record in a company log a change from one 
trading scenario to another should be specifically referred to in the 
list of requirements a source must meet in IDAPA 16.01.01.383.03 in 
order to make a ``Type II'' permit deviation.
10. Alternative Emission Limits
    Idaho must demonstrate to EPA's satisfaction that its operating 
permit program meets the requirement of 40 CFR 70.6(a)(1)(iii) that a 
permit with an allowable alternative emission limit contain provisions 
to ensure that any resulting emissions limit has been demonstrated to 
be quantifiable, accountable, enforceable and based on replicable 
procedures.
11. Reporting of Permit Deviations
    Consistent with 40 CFR 70.6(a)(3)(iii)(B), the Idaho program must 
be revised to require prompt reporting of deviations from all permit 
requirements, not just those deviations attributable to startup, 
shutdown, scheduled maintenance, upset, or breakdown.16
---------------------------------------------------------------------------

    \16\ The Idaho regulations use the term ``permit deviation'' to 
refer to certain changes authorized by the permit flexibility 
provisions contained in 40 CFR 70.6(9) and (10) and section 
502(b)(10) of the Act. See IDAPA 16.01.01.383. The part 70 
regulations use the term ``permit deviation'' to refer to permit 
violations. See 40 CFR 70.6(a)(3)(iii)(B). This notice uses the term 
``permit deviation'' in the same way as the part 70 regulations.
---------------------------------------------------------------------------

12. Acid Rain Provisions
    Idaho must demonstrate to EPA's satisfaction that its program 
includes the provision of 40 CFR 70.6(a)(4)(i) that no permit revision 
is required for increases in emissions that are authorized by 
allowances acquired pursuant to the acid rain program, provided that 
such increases do not require a permit revision under any other 
applicable requirement.
13. State-Only Enforceable Requirements
    Idaho must demonstrate to EPA's satisfaction that its regulations 
define ``State Only'' requirements in a manner consistent with the 
provisions of 40 CFR 70.6(b)(2), namely, that no requirement that is 
required under the Act or under any of its applicable requirements may 
be ``State Only.''
14. General Permits
    Idaho must revise its regulations authorizing general permits to be 
consistent with 40 CFR 70.6(d), including provisions that: (a) Require 
the permitting authority to grant the conditions and terms of a general 
permit to sources that qualify; (b) require specialized general permit 
applications to meet the requirements of title V; and (c) govern 
enforcement actions for operation without a permit if the source is 
later determined not to qualify for the conditions and terms of the 
general permit. As discussed above, EPA now believes that IDAPA 
16.01.01.335.05, which provides that the issuance of authorization to 
operate under a general operating permit is a final agency action for 
purposes of administrative and judicial review, is consistent with the 
requirements of 40 CFR 70.6(d)(2) and

[[Page 64633]]

no revisions to this provision are required.
15. Operational Flexibility
    Idaho must address to EPA's satisfaction the requirement in 40 CFR 
70.4(b)(12) that the permitting authority attach a copy of the notice 
of a permitted operational change to the relevant permit.
16. Off-Permit Provisions
    Idaho must revise its regulations to require a source to record an 
off-permit change in a log at the facility on the same day that the 
change is made.
17. Permit Renewals
    Idaho must revise its regulations to ensure that an application for 
a permit renewal will not be considered timely if it is filed more than 
18 months before permit expiration.
18. Completeness Determination
    Idaho must revise its regulations to ensure that applications will 
be deemed complete within 60 days of receipt for all sources, or 
establish to EPA's satisfaction that no sources will in fact fall 
within the exception of IDAPA 16.01.01.361.02.a.ii.
19. Administrative Amendments
    Idaho must delete from the list of changes in IDAPA 
16.01.01.384.01.a that may be accomplished by administrative amendment 
the following categories: compliance orders (IDAPA 
16.01.01.384.01.a.vi) and applicable consent orders, judicial consent 
decrees, judicial orders, administrative orders, settlement agreements, 
and judgments (IDAPA 16.01.01.384.01.a.vii).
20. Minor Permit Modifications
    Idaho must revise its rules to prohibit the issuance of any permit 
until after the earlier of expiration of EPA's 45-day review period or 
until EPA has notified the permitting authority that EPA will not 
object to issuance of the permit modification.
21. Group Processing of Minor Permit Modifications
    Idaho must delete the ``director's discretion'' provision of IDAPA 
16.01.01.385.07.b.iv or make a showing consistent with 40 CFR 
70.7(e)(3)(i)(B) for alternative thresholds. In addition, as with 
Idaho's procedures for minor modifications, Idaho must revise its rules 
to prohibit the issuance of any permit until after the earlier of 
expiration of EPA's 45-day review period or until EPA has notified the 
permitting authority that EPA will not object to issuance of the permit 
modification.
22. Reopenings
    Idaho must revise its regulations to require that the EPA notice 
contain no more information than that specified by 40 CFR 70.7(g)(1).
23. Public Participation
    Idaho must demonstrate to EPA's satisfaction that its restrictions 
on the release to the public of permits, permit applications, and other 
related information under its laws governing confidentiality do not 
exceed those allowed by 40 CFR 70.4.(b)(3)(viii) and section 114(c) of 
the Clean Air Act.
24. Permits for Solid Waste Incineration Units
    Idaho must ensure that no permit for a solid waste incineration 
unit may be issued by an agency, instrumentality, or person that is 
also responsible, in whole or in part, for the design and construction 
or operation of the unit.
25. Maximum Criminal Penalties
    Idaho must demonstrate to EPA's satisfaction that it has sufficient 
authority to recover criminal penalties in the maximum amount of not 
less than $10,000 per day per violation, as required by 40 CFR 
70.11(a)(3)(ii).
26. False Statements and Tampering
    Idaho must demonstrate to EPA's satisfaction that it has the 
criminal enforcement authorities required by 40 CFR 70.11(a)(3)(iii), 
which require that criminal fines be recoverable in a maximum amount of 
$10,000 per day per violation against any person who knowingly makes 
any false material statement, representation, or certification in any 
form, in any notice or report required by a permit, or who knowingly 
renders inaccurate any required monitoring device or method.
27. Environmental Audit Statute
    Idaho must revise both the immunity and disclosure provisions of 
the Idaho Audit Act, Idaho Code title 9, chapter 8, to ensure that they 
do not interfere with the requirements of section 502(b)(E)(5) of the 
Clean Air Act and 40 CFR 70.11 that EPA identified in the June 17, 
1996, Federal Register document and this notice for adequate authority 
to pursue civil and criminal penalties and otherwise assure compliance. 
Alternatively, Idaho must demonstrate to EPA's satisfaction through an 
Attorney General's opinion that these required enforcement authorities 
are not compromised by the Idaho Audit Act.
28. Correction of Typographical Errors and Cross-References
    Idaho must correct the following typographical errors and erroneous 
cross references:
    a. IDAPA 16.01.01.006.31: The reference in the definition of 
``emissions unit'' should be to 42 U.S.C. sections 7561 through 7561o 
rather than to 42 U.S.C. sections 7561 through 7561.
    b. IDAPA 16.01.01.008.05.f: The reference in subsection (f) to the 
definition of ``applicable requirement'' should be to 42 U.S.C. section 
7661c(b), rather than to section 7661a(b) (ie., to section 504(b) of 
the Clean Air Act rather than to section 502(b)).
    c. IDAPA 16.01.01.008.12: The reference to the general permit 
regulation in the definition of ``general permit'' should be to section 
335 (ie., IDAPA 16.01.01.335), rather than to section 322.
    d. IDAPA 16.01.01.008.14: The reference in the definition of 
``major facility'' to the definition of ``facility'' should be to 
section 006.35 (i.e., IDAPA 16.01.01.006.35), rather than to 006.34.
    e. IDAPA 16.01.01.322.10.1.i: The reference in the requirements for 
the initial compliance plan should be to ``a verifiable sequence of 
actions'' rather than to ``a variable sequence of actions.''
    f. IDAPA 16.01.01.384.01.a.vi: The reference to compliance schedule 
in this subsection should be to section 322.12.d (i.e., IDAPA 
16.01.01.322.12.d), rather than to section 322.13.d.
    g. IDAPA 16.01.01.385.01.a.iv: The words ``of title I of the Clean 
Air Act'' or some other description of the type of provisions being 
referred to appears to have been omitted after the phrase ``as a 
modification under any provision.''
    h. IDAPA 16.01.01.387.02.a.iii: The word ``least'' appears to have 
been omitted from the phrase ``shall be sent at one (1) day.''
    The scope of the Idaho title V program approved in this notice 
applies to all title V sources (as defined in the approved program) 
within the State of Idaho except any sources within Indian Country.
    This interim approval, which may not be renewed, extends until 
January 6, 1999. During this interim approval period, Idaho is 
protected from sanctions, and EPA is not obligated to promulgate, 
administer, and enforce a Federal operating permits program in Idaho. 
Permits issued under a program with interim approval have full standing 
with respect to title V and part 70. In addition, the 1-year time 
period under State law for submittal of permit applications by subject 
sources and the 3-year time period for processing the

[[Page 64634]]

initial permit applications begin upon the effective date of this 
interim approval.
    If Idaho fails to submit a complete corrective program for full 
approval by July 6, 1998, EPA will start an 18-month clock for 
mandatory sanctions. If Idaho then fails to submit a corrective program 
that EPA finds complete before the expiration of that 18-month period, 
EPA will be required to apply one of the sanctions in section 179(b) of 
the Act, which will remain in effect until EPA determines that Idaho 
has corrected the deficiency by submitting a complete corrective 
program. Moreover, if the Administrator finds a lack of good faith on 
the part of Idaho, both sanctions under section 179(b) will apply after 
the expiration of the 18-month period until the Administrator 
determines that Idaho has come into compliance. In any case, if, six 
months after application of the first sanction, Idaho still has not 
submitted a corrective program that EPA has found complete, a second 
sanction will be required.
    If EPA disapproves Idaho's complete corrective program, EPA will be 
required to apply one of the section 179(b) sanctions on the date 18 
months after the effective date of the disapproval, unless prior to 
that date Idaho 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 Idaho, both sanctions under section 179(b) shall apply after the 
expiration of the 18-month period until the Administrator determines 
that Idaho has come into compliance. In all cases, if, six months after 
EPA applies the first sanction, Idaho has not submitted a revised 
program that EPA has determined corrects the deficiencies, a second 
sanction is required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the expiration of an interim approval period if Idaho 
has not timely submitted a complete corrective program or EPA has 
disapproved its submitted corrective program. Moreover, if EPA has not 
granted full approval to Idaho program by the expiration of this 
interim approval and that expiration occurs after November 15, 1995, 
EPA must promulgate, administer and enforce a Federal permits program 
for Idaho upon interim approval expiration.

B. Section 112(l)

    With this interim approval EPA is delegating Idaho the authority to 
implement and enforce 40 CFR part 61, subparts A, C, D, E, F, J, L 
through P, V, Y, BB, and FF, and 40 CFR part 63, subparts A, D, L, and 
M, as these rules apply to title V sources.17 EPA will retain 
implementation and enforcement authority for these rules as they apply 
to non-part 70 sources. EPA has reconsidered its proposed action to 
delegate the radionuclide NESHAP regulations found under 40 CFR part 61 
and has determined that Idaho does not have adequate resources to 
implement and enforce these regulations at present. In this respect, 
EPA is retaining authority to implement and enforce 40 CFR part 61 
subparts B, H, I, K, Q, R, T, and W as these regulations apply to all 
sources in Idaho.
---------------------------------------------------------------------------

    \17\ With the exception of the radionuclide NESHAP regulations 
found in part 61, subparts B, H, I, K, Q, R, T, and W.
---------------------------------------------------------------------------

    EPA is also granting approval under the authority of section 
112(l)(5) and 40 CFR 63.91 of a mechanism for receiving delegation of 
section 112 standards that are unchanged from the Federal standards, 
but only as these standards apply to title V sources (See section 
5.1.2.b of EPA's ``Interim Enabling Guidance for the Implementation of 
40 CFR Part 63,'' Subpart E, EPA-453/R-93-040, November 1993). Under 
this streamlined approach, once Idaho adopts a new or revised NESHAP 
standard into State law, Idaho will only need to send a letter of 
request to EPA requesting delegation for the NESHAP standard. EPA would 
in turn respond to this request by sending a letter back to the State 
delegating the appropriate NESHAP standards as requested. No further 
formal response from the State would be necessary at this point, and, 
if a negative response from the State is not received by EPA within 10 
days of this letter of delegation, the delegation would then become 
final. Notice of such delegations will periodically be published in the 
Federal Register.
    Because EPA has determined that Idaho's enforcement authorities do 
not meet the requirements of 40 CFR 70.11, EPA is promulgating interim, 
rather than full, approval of Idaho's request for delegation. In this 
respect, it is important to note that, although EPA is delegating 
authority to Idaho on an interim basis to enforce the NESHAP 
regulations as they apply to title V sources, EPA retains oversight 
authority for all sources subject to these Federal Clean Air Act 
requirements. EPA has the authority and responsibility to enforce the 
Federal regulations in those situations where the State is unable to do 
so or fails to do so.

III. Administrative Requirements

A. Docket

    Copies of the State's submittal and other information relied upon 
for the final interim approval, including the letters of public comment 
received and reviewed by EPA on the proposal, are contained in the 
Idaho title V docket maintained at the EPA Regional Office. The docket 
is an organized and complete file of all the information submitted to, 
or otherwise considered by, EPA in the development of this final 
action. The docket is available for public inspection at the location 
listed under the ADDRESSES section of this document.

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    EPA's actions under section 502 of the Act do not create any new 
requirements, but simply address operating permits programs submitted 
to satisfy the requirements of 40 CFR part 70. Similarly, NESHAP rule 
or program delegations approved under the authority of section 112(l) 
of the Act do not create any new requirements, but simply confer 
Federal authority for those requirements that Idaho is already 
imposing. Because this action does not impose any new requirements, EPA 
has determined it does not have a significant impact on a substantial 
number of small entities.

D. Unfunded Mandates Reform Act

    EPA has determined that the action promulgated today under section 
502 and section 112(l) of the Act 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.

E. Submission to Congress and the General Accounting Office

    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

[[Page 64635]]

today's Federal Register. This rule is not a ``major rule'' as defined 
by 5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 70

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

    Dated: November 21, 1996.
Chuck Clarke,
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 Idaho 
in alphabetical order to read as follows:

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

* * * * *

Idaho

    (a) Idaho Division of Environmental Quality: submitted on 
January 20, 1995, and supplemented on July 14, 1995, September 15, 
1995, and January 12, 1996; interim approval effective on January 6, 
1997; interim approval expires January 6, 1999.
    (b) Reserved.
* * * * *
[FR Doc. 96-31121 Filed 12-5-96; 8:45 am]
BILLING CODE 6560-50-P