**Appendix F**

**Title V Operating Permits White Paper Number 2**

March 5, 1996

[MEMORANDUM]{.underline}

SUBJECT: White Paper Number 2 for Improved Implementation of The Part 70
Operating Permits Program

FROM: Lydia N. Wegman, Deputy Director /s/

> Office of Air Quality Planning and Standards (MD-10)

TO: Director, Office of Ecosystem Protection, Region I

Director, Environmental Planning and Protection

Division, Region II

Director, Air, Radiation and Toxics Division,

Region III

Director, Air, Pesticides and Toxics Management

Division, Region IV

Director, Air and Radiation Division, Region V

Director, Multimedia Planning and Permitting Division,

Region VI

Director, Air, RCRA and TSCA Division, Region VII

Assistant Regional Administrator, Office of Pollution

Prevention, State and Tribal Assistance, Region VIII

Director, Air and Toxics Division, Region IX

Director, Office of Air, Region X

Please find attached White Paper Number 2 for improved implementation of
part 70 operating permits programs. This guidance is intended to enable
State and local agencies to take further steps to reduce the complexity
and preparation costs of part 70 permit applications and of the part 70
permits themselves. It is intended to supplement, not obviate, the
guidance provided in EPA\'s \"White Paper for Streamlined Development of
part 70 Permit Applications\" (July 10, 1995). This guidance is
consistent with and furthers the goals of the Presidential initiatives
to streamline and reinvent government.

The attached guidance is divided into five sections as follows:

> II\. A. Streamlining Multiple Applicable Requirements On The Same
> Emissions Unit(s).
>
> II\. B. Development Of Applications And Permits For Outdated SIP
> Requirements.
>
> II\. C. Treatment Of Insignificant Emissions Units.
>
> II\. D. Use Of Major Source And Applicable Requirement Stipulation.
>
> II\. E. Referencing Of Existing Information In Part 70 Permit
> Applications And Permits.

Streamlining will lead to substantial reductions in permitting burdens
and improved part 70 implementation by allowing for the first time
multiple applicable emissions limits and work practices expressed in
different forms and averaging times to be reduced to a single set of
requirements (which can be an alternative to all those requirements
being subsumed). It will also allow various monitoring, recordkeeping,
and reporting requirements that are not critical to assuring compliance
with the streamlined (most stringent) limit to be subsumed in the
permit. Any such streamlining must provide that compliance with the
streamlined limit would assure compliance with all applicable
requirements. In addition, substantial reductions in burden are expected
to result from the reduced confusion and cost where locally adopted
rules differ from the EPA-approved State implementation plan, the
streamlined treatment of insignificant emissions units, the use of
stipulations by sources as to which regulations apply, and the cross
referencing rather than repetition of certain existing information.

There is an immediate need for the implementation of this guidance. A
large number of sources have filed complete part 70 applications, and
increasing numbers of these submittals are being processed for permit
issuance. I strongly encourage you to work with your States to effect
near-term use of this guidance.

Substantial contributions to this White Paper have come from the
California Title V Implementation Working Group. I want to thank you and
your staff for your support and Region IX in particular for their
leadership and considerable efforts in developing and completing this
paper. I invite your suggestions on what additional guidance is needed
to improve further the initial implementation of title V. If you should
have any questions regarding the attached guidance, please contact
Michael Trutna at (919) 541-5345, Ginger Vagenas of Region IX at (415)
744-1252, or Roger Powell at (919) 541-5331.

Attachment

cc: M. Trutna (MD-12)

G. Vagenas (Region IX)

R. Powell (MD-12)

A. Schwartz (2344)

WHITE PAPER NUMBER 2 FOR IMPROVED IMPLEMENTATION

OF THE PART 70 OPERATING PERMITS PROGRAM

U.S. ENVIRONMENTAL PROTECTION AGENCY

OFFICE OF AIR QUALITY PLANNING AND STANDARDS

March 5, 1996

Contacts: Michael A. Trutna (919) 541-5345

Ginger Vagenas (415) 744-1252

Roger Powell (919) 541-5331

**WHITE PAPER NUMBER 2 FOR IMPROVED IMPLEMENTATION**

**OF THE PART 70 OPERATING PERMITS PROGRAM**

March 5, 1996

**I. OVERVIEW.**

This guidance is intended to enable State and local agencies to take
further steps to reduce the complexity and preparation costs of part 70
permit applications and of the part 70 permits themselves and to remove
unintended barriers and administrative costs. It is also intended to
build on and expand the guidance provided in the Environmental
Protection Agency\'s (EPA) \"White Paper for Streamlined Development of
Part 70 Permit Applications\" (July 10, 1995). White Paper Number 2
supplements, not obviates, the first White Paper. Both papers should be
consulted for guidance in improving the implementation of title V of the
Clean Air Act (Act) (i.e., part 70 operating permits programs). In
particular, White Paper Number 2 is designed to simplify the treatment
of overlapping regulatory requirements and insignificant emissions units
and to clarify the use of citations and incorporation by reference in
the part 70 permitting process. This effort is consistent with and
furthers the goals of the Presidential initiatives to streamline and
reinvent government.

Substantial contributions to this White Paper have come from the
California Title V Implementation Working Group (Working Group). The
California Air Resources Board and several California air districts and
industries which (together with EPA) make up the Working Group have
decades of experience with operating permits. These operating permits
programs are generally just one component of air programs that, in many
districts, also include local emissions standards (often with associated
recordkeeping and reporting requirements), monitoring requirements,
inspections, source testing, and new source review (NSR). The EPA has
found the insights and recommendations of the Working Group extremely
useful in integrating these various requirements using the part 70
permitting process. While much of the guidance contained herein
addresses situations arising in California, it is available for use
nationwide.

This guidance is divided into five sections and two attachments which
are generally summarized as follows (the reader is, however, referred to
the applicable main sections of the guidance for more detailed
information):

> Section II. A. Streamlining Multiple Applicable Requirements On The
> Same Emissions Unit(s).
>
> The EPA and States have developed different and often overlapping
> applicable requirements governing the same emissions units to serve
> the purposes of different air programs. As a result, emissions units
> at a stationary source may be subject to several parallel sets of
> requirements. This can result in some of the requirements being
> redundant and unnecessary as a practical matter, even though the
> requirements still legally apply to the source. In cases where
> compliance with a single set of requirements effectively assures
> compliance with all requirements, compliance with all elements of each
> of the overlapping requirements may be unnecessary and could
> needlessly consume resources. For example, a source could be subject
> to overlapping standards that result in two or more different
> emissions limits for the same pollutant and two or more source
> monitoring requirements for instrumentation, recordkeeping, and
> reporting.
>
> Today\'s guidance describes how a source may propose streamlining to
> distill or \"streamline\" multiple overlapping requirements into one
> set that will assure compliance with all requirements. According to
> the guidance, multiple emissions limits may be streamlined into one
> limit if that limit is at least as stringent as the most stringent
> limit. (Limitations that apply to the streamlining of acid rain
> requirements are described in the main section of this guidance.) If
> no one requirement is unambiguously more stringent than the others,
> the applicant may synthesize the conditions of all the applicable
> requirements into a single new permit term that will assure compliance
> with all requirements. The streamlined monitoring, recordkeeping, and
> reporting requirements would generally be those associated with the
> most stringent emissions limit, providing they would assure compliance
> to the same extent as any subsumed monitoring. Thus, monitoring,
> recordkeeping, or reporting to determine compliance with subsumed
> limits would not be required where the source implements the
> streamlined approach.
>
> It is important to emphasize that while streamlining may be initiated
> by either the applicant or the permitting authority, it can only be
> implemented where the permit applicant consents to its use.
>
> Section II. B. Development Of Applications And Permits For Outdated
> SIP Requirements.
>
> Historically, long periods of time have been required to review and
> approve (or disapprove) SIP revisions. The EPA has undertaken a number
> of reforms to its SIP approval process and is continuing to make
> significant progress in reducing the amount of time required for
> taking action on SIP revisions. Despite the progress we have made to
> date, there are many local rules now pending EPA review and approval
> for inclusion in the SIP. The gap between the approved SIP and the
> State rules is of concern because States and local agencies enforce
> their current rules (which are usually more stringent than the
> approved SIP rules) and often, as a practical matter, no longer
> enforce the superseded and outdated rules in the SIP. On the other
> hand, EPA only recognizes and can only enforce the SIP-approved rules.
> This situation can cause confusion and uncertainty because some
> sources are effectively subject to two different versions of the same
> rules. Part 70\'s application, certification, and permit content
> requirements highlight this longstanding concern.
>
> The most problematic situation arising from the gap between the
> approved SIP and the State rules is where a technology-forcing rule
> that has been approved into the SIP is found by the State to be
> impossible to meet. Under these circumstances, the State would
> generally adopt a relaxation of this rule and submit it to EPA as a
> SIP revision. Until EPA is able to take action on the submitted
> relaxation, sources remain subject to a rule that is impossible to
> meet.
>
> This section of the guidance largely addresses the problem by
> authorizing permitting authorities and their sources to base permit
> applications on State and local rules that have been submitted for SIP
> approval, rather than on the potentially obsolete approved SIP
> provisions that they would replace. Such reliance on pending State and
> local rules is proper when the permitting authority has concluded that
> the pending rule will probably be approved, or when the source
> believes it can show that the pending rule is more stringent than the
> rule it would replace. However, if the pending rule is not more
> stringent than the rule it would replace, the permit cannot be issued
> until the pending rule is approved.
>
> Section II. C. Treatment Of Insignificant Emissions Units.
>
> This section provides for the streamlined treatment of generally
> applicable requirements that apply to \"insignificant\" emissions
> units (IEU\'s). It is intended to address current concerns that
> resources will be unnecessarily consumed by matters of trivial
> environmental importance.
>
> The guidance clarifies that the permitting authority has broad
> discretion to tailor the permit application and permit for small
> equipment and activities as long as compliance with Federal
> requirements is assured. For both the permit application and the
> permit, information on IEU\'s may be generically grouped and listed
> without emissions estimates, unless emissions estimates are needed for
> another purpose such as determining the amount of permit fees that are
> calculated using total source emissions. This approach would utilize
> standard permit conditions with minimal or no reference to any
> specific emissions unit or activity, provided that the scope of the
> requirement and its enforcement are clear.
>
> The EPA also believes that for IEU\'s, a responsible official\'s
> initial compliance certification may be based on available information
> and the latest cycle of required information.
>
> The guidance further provides that the permitting authority can use
> broad discretion in determining the nature of any required periodic
> monitoring. The EPA\'s policy on IEU\'s is based on the belief that
> these emissions points are typically associated with inconsequential
> environmental impacts.
>
> Section II. D. Use Of Major Source And Applicable Requirement
> Stipulation.
>
> There have been concerns expressed that extensive new emissions data
> would be needed to verify major source status or the applicability of
> Federal requirements. White Paper Number 2 clarifies that for
> applicability purposes, a source familiar to the permitting authority
> may simply stipulate in its application that it is major or that
> Federal requirements apply as specified in the application. The paper
> clarifies that there is no need to prepare and submit extensive
> information about the source that \"proves\" it is subject to any
> requirements that it stipulates are applicable. This does not affect
> the requirement to provide information that is otherwise required by
> part 70.
>
> Section II. E. Referencing Of Existing Information In Part 70 Permit
> Applications And Permits.
>
> Concerns have been raised that a source must re-prepare and resubmit
> information that is readily available, or that the permitting
> authority already has, to complete part 70 permit applications. In
> addition, similar concerns have been voiced regarding the large and
> potentially unnecessary burden of developing permits which repeat
> rather than reference certain types of regulatory requirements that
> apply to the source (e.g., monitoring and testing protocols). The
> guidance clarifies that, in general, the permitting authority may
> allow information to be cited or cross-referenced in both permits and
> applications if the information is current and readily available to
> the permitting agency and to the public. The citations and references
> must be clear and unambiguous and be enforceable from a practical
> standpoint. After permits specify which emissions limits apply to
> identified emissions units, cross-referencing can be authorized for
> other requirements (e.g., monitoring, recordkeeping, and reporting).

Attachment A provides guidance on using the part 70 permit process to
establish alternative test methods, while Attachment B provides example
SIP language that could be used by both part 70 and non-part 70 sources
to establish alternative requirements without the need for a prior
source-specific SIP revision. This guidance should be particularly
useful to those seeking greater certainty or to establish alternative
test methods to those now approved by EPA. **\[Note that Sections III.
and beyond in Attachment B are currently in draft form.\]**

Streamlining will lead to substantial reductions in permitting burdens
by allowing for the first time multiple applicable emissions limits and
work practices expressed in different forms and averaging times to be
reduced to a single set of requirements. It will also lower current
burden levels by allowing various monitoring, recordkeeping, and
reporting requirements that are not critical to assuring compliance with
the streamlined (most stringent) limit to be subsumed in the permit. In
addition, substantial reductions in burden are expected to result from
the reduced confusion and cost where locally adopted rules differ from
the EPA-approved SIP, the streamlined treatment of insignificant
emissions units, and the use of stipulations and the cross-referencing
rather than repetition of certain existing information in part 70
applications and permits.

The EPA believes that the guidance contained herein may be implemented
by permitting authorities and sources without revisions to part 70
programs, unless a provision is specifically prohibited by State
regulations. In some situations, EPA will be proceeding in parallel to
issue clarifying rules. The EPA strongly encourages States to allow
sources to take advantage of the streamlining opportunities provided in
this guidance. The Agency also suggests the permitting authority develop
information about permits issued with successful streamlining and make
it available to other similar sources to help avoid repetitive costs.

Sources are advised to consult with their permitting authority to
understand how the policies of this White Paper will be implemented. In
several situations (particularly those where sources have already filed
complete applications), permitting authorities may choose to propose
streamlining options and, if mutually agreeable, work with the source to
support a draft permit containing a streamlined limit. Where EPA is the
permitting authority pursuant to part 71 regulations, the Agency will
implement both White Papers to the extent possible and promote similar
implementation where EPA delegates responsibility for the part 71
program to a State.

The policies set out in this paper are intended solely as guidance, do
not represent final Agency action, and cannot be relied upon to create
any rights enforceable by any party.

**II. ADDITIONAL GUIDANCE ON STREAMLINED DEVELOPMENT OF PART 70 PERMITS
AND APPLICATIONS.**

**A. Streamlining Multiple Applicable Requirements**[^1] **On The Same
Emissions Unit(s).**[^2]

1\. Issue.

Can multiple redundant or conflicting requirements (emissions limits,
monitoring, recordkeeping, reporting requirements) on the same emissions
unit(s) be streamlined into a single set of understandable and
enforceable permit conditions? May an applicant propose to minimize or
consolidate applicable requirements? May a permitting authority develop
such a proposal? How would a permit application with a streamlining
proposal satisfy compliance certification requirements?

2\. Guidance.

A source, at its option, may propose in its application to streamline
multiple applicable requirements into a single set of permit terms and
conditions[^3]streamlining occurring in the future.. The overall
objective would be to determine the set of permit terms and conditions
that will assure compliance with all applicable requirements for an
emissions point or group of emissions points so as to eliminate
redundant or conflicting requirements. Otherwise applicable requirements
that are subsumed in the streamlined requirements could then be
identified in a permit shield. The process would be carried out in
conjunction with the submittal and review of a part 70 permit
application, as an addendum to an application, or as an application for
a significant revision to the part 70 permit (unless EPA in its
revisions to part 70 authorizes permitting authorities to use a less
extensive permit revision process). The EPA plans to revise part 70 to
provide that the compliance certification required with initial
application submittals may be based on the proposed streamlined
applicable requirement where there is sufficient source compliance
information on which to base such a certification.

The permitting authority, at its option, may evaluate multiple
applicable requirements for a source category and predetermine an
acceptable streamlining approach. Such evaluations should be made
readily available to applicants. It is up to the applicant, however, to
request in its application that such streamlined requirements be
contained in the part 70 permit. Where streamlining would be of mutual
interest, the permitting authority and the source could work together
during the permit development stage to establish a basis for a
streamlined limit prior to the issuance of a draft permit. This
cooperative activity must result in a record consistent with this
guidance which supports the draft permit containing the streamlined
requirement. The approach might be particularly useful where a source
has already submitted a complete part 70 permit application and the
permitting authority does not want to require the source to submit a
formal amendment to its application. Any streamlining demonstration must
be promptly submitted to EPA upon its availability and in advance of
draft permit issuance unless EPA has previously agreed with the
permitting authority not to require it (e.g., the proposed streamlining
is of a simple and/or familiar type with no new concerns).

In addition, general permits could be useful to allow the transfer of
streamlined requirements from the first source to be covered by them to
other similar sources or emissions units. The information development
and review conducted as part of streamlining for an individual source
can be used by the permitting authority to generate a general permit for
similar sources or portions of sources. If a general permit were used,
EPA and public review beyond that needed to issue the general permit
would not be necessary when sources subsequently applied for the
streamlined permit conditions established under the general permit. Even
where a general permit is not issued, the availability of information
obtained from the streamlining of one source may be useful as a model
for future streamlining actions involving other similar sources.

Streamlined permit terms should be covered by a permit shield. The
permit shield will result in an essential degree of certainty by
providing that when the source complies with the streamlined
requirement, the source will be considered to be in compliance with all
of the applicable requirements subsumed under the streamlined
requirement. Where the program does not now provide for a permit shield,
the permit containing streamlined requirements should clarify this
understanding (See section II.A.3. discussion). Permitting authorities
without provisions for permit shields are encouraged to add a permit
shield provision at the first opportunity, if they wish to realize fully
the benefits of streamlining.

Sources that opt for the streamlining of applicable requirements must
demonstrate the adequacy of their proposed streamlined requirements. The
following principles should govern their streamlining demonstrations:

> a\. The most stringent of multiple applicable emissions limitations
> for a specific regulated air pollutant on a particular emissions unit
> must be determined taking into account[^4]^,^[^5]:

o Emissions limitation formats (emissions limits indifferent forms must
be converted to a common format and/or units of measure or a correlation
established among different formats prior to comparisons);

o Effective dates of compliance (to the extent different);

o Transfer or collection efficiencies (to the extent relevant);

o Averaging times[^6]; and

o Test methods prescribed in the applicable requirements[^7].

Limitations for specific pollutants can be subsumed by limitations on
classes of pollutants providing the applicant can show that the
streamlined limit will regulate the same set of pollutants to the same
extent as the underlying applicable requirements. For example, a
volatile organic compound (VOC) limitation could effectively subsume an
organic hazardous air pollutant (HAP) limitation for a constituent such
as hexane, provided the VOC limit is at least as stringent as the hexane
limitation. Where a single VOC limit subsumes multiple HAP limits, the
permit must be written to assure that each of the subsumed limits will
not be exceeded. However, a limit for a single or limited number of
compounds cannot be used to subsume a limit for a broader class (e.g., a
hexane limit for a VOC limit) because this would effectively deregulate
any of the class that are not covered by the more limited group.

> b\. Work practice requirements must be treated as follows:

o [Supporting An Emissions Limit]{.underline}. A work practice
requirement directly supporting an emissions limit (i.e., applying to
the same emissions point(s) covered by the emissions limit) is
considered inseparable from the emissions limit for the purposes of
streamlining emissions limits. The proposed streamlined emissions limit
must include its directly supporting work practices, but need not
include any work practice standards that are associated with and
directly support the subsumed limit(s);

o [Not Supporting An Emissions Limit]{.underline}. Similar work practice
requirements which apply to the same emissions or emissions point but
which do not directly support an emissions limit may be streamlined
(e.g., different leak detection and repair (LDAR[^8]) programs). The
streamlined work practice requirement may be composed of
provisions/elements (e.g., frequency of inspection, recordkeeping) from
one or more of the similar work practice requirements, provided that the
resulting composite work practice requirement has the same base
elements/provisions as the subsumed work practice requirements (e.g. has
a frequency of inspection or has recordkeeping if the subsumed work
practice requirements have these elements/provisions).

Multiple work practice requirements which apply to different emissions
or emissions points cannot be streamlined.

> c\. Monitoring, reporting, and recordkeeping requirements should not
> be used to determine the relative stringency of the applicable
> requirements to which they are applicable.
>
> d\. Where the preceding guidance does not allow sufficient
> streamlining or where it is difficult to determine a single most
> stringent applicable emissions limit by comparing all the applicable
> emissions limits with each other, sources may perform any or all the
> following activities to justify additional or different streamlining:

o Construct an alternative or hybrid emissions limit[^9] that is at
least as stringent as any applicable requirement;

o Use a previously \"State-only\" requirement as the streamlined
requirement when it is at least as stringent as any applicable Federal
requirement it would subsume (this requirement would then become a
federally-enforceable condition in the part 70 permit);

o Use a more accurate and precise test method than the one applicable
(see footnote number 7) to eliminate doubt in the stringency
determination; or

o Conduct detailed correlations to prove the relative stringency of each
applicable requirement.

> e\. The monitoring, recordkeeping, and reporting requirements
> associated with the most stringent emissions requirement are presumed
> appropriate for use with the streamlined emissions limit, unless
> reliance on that monitoring would diminish the ability to assure
> compliance with the streamlined requirements.^1^[^10] To evaluate this
> presumption, compare whether the monitoring proposed would assure
> compliance with the streamlined limit to the same extent as would the
> monitoring applicable to each subsumed limit. If not, and if the
> monitoring associated with the subsumed limit is also relevant to and
> technically feasible for the streamlined limit, then monitoring
> associated with a subsumed limit (or other qualifying
> monitoring^1^[^11]flexibility granted by the SIP and any delegation of
> authority from EPA (where section 111/112 standards are involved).)
> would be included in the permit.^1^[^12] The recordkeeping and
> reporting associated with the selected monitoring approach may be
> presumed to be appropriate for use with the streamlined
> limit^1^[^13]^,1^[^14]^,1^[^15].
>
> f\. Permitting authorities must include citations to any subsumed
> requirements in the permit\'s specification of the origin and
> authority of permit conditions. In addition, the part 70 permit must
> include any additional terms and conditions as necessary to assure
> compliance with the streamlined requirement. In all instances, the
> proposed permit terms and conditions must be enforceable as a
> practical matter.

3\. Process.

Streamlining may be accomplished through an applicant proposing to
streamline multiple requirements applicable to a source, the permitting
authority developing streamlining options for sources or source
categories that would be subsequently accepted at the election of
permittees, or the applicant working in agreement with the permitting
authority after filing an initial complete application. The first six of
the following actions wuld be taken by the source or, as appropriate, by
the permitting authority. The level of effort to complete these actions
will depend on the relative complexity of the streamlining situation.
The permitting authority would then perform steps seven and eight.

> **Step One** - Provide a side-by-side comparison of all requirements
> included in the streamlining proposal that are currently applicable
> and effective for the specific emissions units of a source^1^[^16].
> Distinguish between requirements which are emissions and/or work
> practice standards, and monitoring and compliance demonstration
> provisions.
>
> **Step Two** - Determine the most stringent emissions and/or
> performance standard (or any hybrid or alternative limits as
> appropriate) consistent with the above streamlining principles and
> provide the documentation relied upon to make this determination. This
> process should be repeated for each emissions unit pollutant
> combination for which the applicant is proposing a streamlined
> requirement.
>
> **Step Three** - Propose one set of permit terms and conditions (i.e.,
> the streamlined requirements) to include the most stringent emissions
> limitations and/or standards, appropriate monitoring and its
> associated recordkeeping and reporting (see section II.A.2.e.), and
> such other conditions as are necessary to assure compliance with all
> applicable requirements.
>
> **Step Four** - Certify compliance (applicant only) with applicable
> requirements. The EPA is planning to revise its part 70 regulations to
> provide that a source may certify compliance with only the proposed
> streamlined limit. Until this is accomplished, EPA recommends that a
> source certifying compliance only with the streamlined limit indicate
> this in an attachment to the certification, so that it is clear that
> the certification is being made with respect to a set of terms and
> conditions that the source believes \"assure compliance\" with all
> applicable requirements. In any event, a source may only certify
> compliance with a streamlined limit if there is source compliance data
> on which to base such a certification. (Such data should be available
> where the streamlined requirement is itself an applicable requirement
> and may be available if the streamlined limit is an alternative limit,
> e.g., a previously State-only emissions limitation). If there is not,
> then certifications must instead be made relative to each of the
> applicable requirements judged to be less stringent and must be based
> on data otherwise required under them to make this point clear.
>
> **Step Five** - Develop a compliance schedule to implement any new
> monitoring/compliance approach relevant to the streamlined limit if
> the source is unable to comply with it upon permit issuance. The
> recordkeeping, monitoring, and reporting requirements of the
> applicable requirements being subsumed would continue to apply in the
> permit (as would the requirement for the source to operate in
> compliance with each of its emissions limits) until the new
> streamlined compliance approach becomes operative.
>
> **Step Six** - Indicate in the application submittal that streamlining
> of the listed applicable requirements under a permit shield (where
> available) is being proposed and propose the establishment of a permit
> shield which would state that compliance with the streamlined limit
> assures compliance with the listed applicable requirements. All
> emission and/or performance standards not subsumed by the streamlined
> requirements must be separately addressed in the part 70 permit
> application.
>
> **Step Seven** - Evaluate the adequacy of the proposal and its
> supporting documentation. The EPA recommends that the permitting
> authority communicate its findings to the applicant and provide
> reasonable opportunity for the applicant to accept the findings or
> propose a resolution of the differences before issuance of a draft
> permit for public review. Where the permitting authority determines
> that the streamlining proposal is inadequate, the source, to retain
> its application shield, must expeditiously resolve any problems
> identified by the permitting authority or update its prior application
> based on the individual applicable requirements previously proposed
> for streamlining.
>
> **Step Eight** - Note the use of this process in any required
> transmittal of a part 70 application, application summary, or revised
> application to EPA and include the streamlining demonstration and
> supporting documentation in the public record. When the source is
> required to provide a copy of the application (or summary) directly to
> EPA, it must note the proposed use of streamlining. A copy of the
> streamlining demonstration must be submitted promptly to EPA along
> with the required copy of the application or application summary
> (where a summary may be submitted to EPA in lieu of the entire part 70
> permit application) unless EPA has previously agreed with the
> permitting authority not to require it (e.g., the proposed
> streamlining is of a simple and/or familiar type with no new
> concerns).

4\. Enforcement.

All terms and conditions of a part 70 permit are enforceable by EPA and
citizens, unless certain terms are designated as being only State (or
locally) enforceable. In addition, a source violating a streamlined
emissions limitation in the part 70 permit may be subject to enforcement
action for violation of one (or more) of the subsumed applicable
emissions limits to the extent that a violation of the subsumed
emissions limit(s) is documented.

Upon receiving a part 70 permit, a source implementing the streamlined
approach would not be subject to an EPA enforcement action for any
failure to meet monitoring, recordkeeping, and reporting requirements
that are subsumed within the streamlined requirement and specified under
the permit shield. These requirements would no longer be independently
enforceable once the permit has been issued, provided that the source
attempts in good faith to implement the monitoring, recordkeeping, and
reporting requirements specified in the permit.

If subsequently the permitting authority or EPA determines that the
permit does not assure compliance with applicable requirements, the
permit will be reopened and revised.

5\. Discussion.

As sources subject to title V identify all applicable requirements for
inclusion in part 70 permit applications, they may find that multiple
applicable requirements affect the same pollutant or performance
parameter for a particular emissions unit. Likewise, the requirements of
federally-enforceable terms and conditions in preconstruction or
operating permits may overlap with the requirements of other
federally-enforceable rules and regulations.

In these instances, a source may be in compliance with the overall
emissions limit of each of the applicable requirements, but be required
to comply with a multitude of redundant or conflicting monitoring,
reporting, or recordkeeping requirements. For example, a source owner
faced with two emissions limits for the same pollutant at a specific
emissions point may be required to install separate monitoring
instrumentation and submit separate monitoring reports for each, even
though one monitor can effectively assure compliance with both emissions
limits. Furthermore, the recordkeeping and reporting associated with the
unnecessary instrumentation may create an administrative burden for both
the facility and the implementing agency without an associated gain in
compliance assurance. Prior to title V there has been no
federally-enforceable means to resolve this situation.

The EPA encourages permitting authorities to allow use by the permit
applicant of the part 70 permit issuance process to streamline multiple
applicable requirements to the extent the conditions of this policy can
be met. In this way, the part 70 process with its procedural safeguards
can be used to focus all concerned parties on providing for compliance
with a single set of permit terms that assure compliance with multiple
applicable requirements instead of maintaining the costs of multiple
sets of controls, monitoring, recordkeeping, and reporting approaches.

The legal basis for streamlining multiple applicable requirements relies
on section 504(a), which requires that title V permits contain emissions
limits/standards and other terms as needed to assure compliance with
applicable requirements. This section notably does not require
repetition of all terms and conditions of an applicable requirement when
another applicable requirement or part 70 permit condition (i.e.,
streamlined requirement) could be fashioned to otherwise assure
compliance with that applicable requirement.

Section 504(f) lends additional certainty to permit streamlining. It
specifically provides that the permitting authority may authorize that
compliance with the permit may be deemed to be compliance with the Act
provided that the permit includes all applicable requirements. Thus,
this section allows the permitting authority to issue a permit
containing a shield which protects a source against a claim that it is
violating any applicable requirements listed in the permit shield as
being subsumed under the streamlined requirement, provided that the
source meets the permit terms and conditions that implement the
streamlined requirement.

Part 70 is also receptive to the issuance of streamlined permits. It
contains parallel language to the statute for emissions limits and for
permit shields in §§ 70.6(a)(1) and (f). Although language in
§ 70.6(a)(3) may appear to restrict streamlining by requiring that all
\"applicable\" monitoring, recordkeeping, and reporting requirements be
placed in the permit, EPA did not intend for these provisions to
preclude streamlining. Instead, the Agency believes that the provisions
should be consistent with the flexibility for streamlining provided in
section 504(a) of the Act and in § 70.6(a)(1). To require otherwise
would be anomalous and could frustrate legitimate streamlining efforts.
The EPA intends to revise part 70 to reflect this understanding in a
future rulemaking.

Streamlining may be limited in cases where an applicable requirement
defines specific monitoring requirements as the exclusive means of
compliance with an applicable emissions limit. Some interpret these
cases to require that only one set of monitoring requirements may be
used to determine compliance and that only these requirements may appear
in the part 70 permit. The EPA believes instead that section 504(a)
supersedes any need for such exclusive monitoring, but nonetheless
recommends that States address any potential concerns by adopting
certain SIP language in the future. States that choose to revise their
existing SIP\'s to contain authorizing language to overcome any SIP
exclusivity problems may use the example language in Attachment B. The
EPA believes that similar flexibility should be provided to non-part 70
sources as well. To that end, Attachment B also provides a SIP process
(currently in draft form) which would allow similar flexibility for
non-part 70 sources.

With respect to NSR, States can process, in parallel with the part 70
permit issuance process, a revision to an existing NSR permit as
necessary to resolve any exclusivity concerns within existing NSR
permits (See first White Paper).

Currently the implementing regulations for section 112(l) at 40 CFR part
63, subpart E represent an additional constraint on the streamlining of
applicable requirements in part 70 permits but only where a State or
local agency has accepted a delegation of authority for a particular
maximum achievable control technology (MACT) standard by virtue of its
commitment to replace the Federal section 112 emissions standard with
the State\'s own standard or program during the part 70 permit issuance
process and using the procedures established in the Subpart E rule at
§ 63.94.. In § 63.94, EPA has specified the criteria for approving such
alternative limits and controls to meet an otherwise applicable section
112 requirement. These criteria must be satisfied to ensure that, after
a State accepts delegation under § 63.94, any change to the Federal rule
results in permit requirements that, among other things:

> o Reflect applicability criteria no less stringent than those in the
> otherwise applicable Federal standards or requirements;
>
> o Require levels of emissions control for each affected source and
> emissions point no less stringent than those contained in the Federal
> standards or requirements;
>
> o Require compliance and enforcement measures for each affected source
> and emissions point no less stringent than those in the Federal
> standards or requirements;
>
> o Express levels of control and compliance and enforcement measures in
> the same form and units of measure as the Federal standard or
> requirement for § 63.94 program substitutions;
>
> o Assure compliance by each affected source no later than would be
> required by the Federal standard or requirement.

Thus, when a State or local agency, after receiving § 63.94 delegation,
seeks to replace a Federal section 112 emissions standard with
requirements arising from its own air toxics standard or program (such
as a toxics NSR program) during the part 70 permit issuance process,
streamlining must take place by meeting both the criteria of § 63.94
and, except where contradictory, the criteria of this guidance. However,
because most States are planning to take straight delegation of Federal
emissions standards through subpart E procedures that do not rely on the
part 70 permit issuance process, the EPA believes that the subpart E
criteria for streamlining applicable requirements will be necessary only
in a minority of instances. In the majority of cases, where a State
takes delegation of a Federal standard (e.g., through straight
delegation), the applicable section 112 requirements could be
streamlined by following only the criteria outlined in section A.2.,
above. Where there are a large number of sources in the same category
subject to a MACT standard for which the State has a regulation with
equivalent requirements, EPA recommends that the State explore
delegation options under § 63.93 to best utilize available resources.

It should be noted that the current subpart E rule may be subject to
change as a result of pending litigation. Currently, EPA intends to
revise the rule within the parameters of the Court\'s decision to allow
greater flexibility for approving State air toxics standards and
programs and to minimize or remove (as appropriate) any constraint that
subpart E might impose on the streamlining of applicable requirements in
part 70 permits.

Finally, States are strongly encouraged to adopt regulatory provisions
allowing permitting authorities to grant the permit shield where they
cannot now do so. The permit shield is an effective means to clarify
that for applicable requirements listed as subsumed under the
streamlined requirements, compliance with the streamlined requirements
is deemed to also be compliance with the subsumed requirements. Such an
understanding is essential to support and defend the issuance of any
permit which provides for the streamlined treatment of multiple
applicable requirements.

If a permit shield is not available, a permittee can still be afforded
significant enforcement protection by an explicit agency finding that in
its judgment the streamlined permit term indeed provides for full
compliance with all the permit limits that is subsumes. In such a case,
it is imperative that the permit contain language that lists the
applicable requirements being subsumed into the streamlined requirement
and states that compliance with the streamlined requirement will be
deemed compliance with the listed requirements.

**B. Development Of Applications And Permits For Outdated SIP
Requirements.**

1\. Issue.

Can sources file part 70 permit applications on the basis of locally
adopted rules pending EPA SIP approval rather than the current SIP
requirements? Can sources certify their compliance status on the same
basis? Under what circumstances can permitting authorities issue and/or
later revise part 70 permits based on such locally adopted rules?

2\. Guidance.

a\. [General]{.underline}. In the first White Paper (section II.B.6.),
EPA described a mechanism for simplifying permits where a source is
subject to both a State adopted rule that is pending SIP approval and
the approved SIP version of that rule. Under that approach, the pending
SIP requirements would be incorporated into the State-only portion of
the permit and would become federally enforceable upon EPA approval of
the SIP. The EPA believes that in most instances, the approach described
in the first White Paper adequately addresses the described problem. In
some areas (most notably California), however, a sizable backlog of
pending SIP revisions exists, and a more far-reaching solution is
needed. In today\'s guidance, therefore, another approach that may be
used by EPA and permitting authorities to address this situation is
described.

Under this new alternative, the permitting authority may allow that
application completeness initially be based on locally adopted rules
including those which would relax current (i.e., federally-approved) SIP
requirements, provided that (1) the local rule has been submitted to EPA
as a SIP revision, and (2) the permitting authority reasonably believes
that the local rule (not the current SIP rule) will be the basis for the
part 70 permit.

Where the permitting authority or the source has demonstrated to EPA\'s
satisfaction^1^[^17] that the local rule is more stringent and therefore
assures compliance with the current SIP for all subject sources, a
permit application relying on the local rule may be deemed to be
complete and a permit containing the requirements of the local rule
rather than the current SIP could be issued for part 70 purposes. That
is, consistent with section 504(a) of the Act, the part 70 permit need
only contain emissions limits and other terms and conditions (i.e., the
more stringent local rule) as needed to assure compliance with the
applicable requirement (i.e., the current SIP regulation).

An EPA finding that a submitted rule assures compliance with the
approved SIP rule would be a preliminary indication of EPA\'s belief
that a part 70 permit incorporating the terms of the submitted rule
would also assure compliance with the approved SIP. Such a finding would
not equate to rulemaking, and so would not constitute a revision of the
SIP. Therefore, a preliminary finding would not necessarily ensure that
the proposed revision would ultimately be approved by EPA, nor would it
protect a source from enforcement of the approved SIP.^1^[^18] Further,
such a finding would not predetermine the outcome of the part 70 permit
proceeding. Reviewers would have the ability to evaluate any proposed
permit terms or conditions based on pending SIP revisions to determine
whether the permit assures compliance with applicable requirements,
i.e., the approved SIP. However, EPA believes that a finding of this
nature should provide the source and the permitting authority sufficient
assurance to proceed with the issuance of a permit that reflects the
terms of the submitted local rule rather than the approved SIP. Note
that a part 70 permit can be based on a local rule even if the local
rule is subsequently disapproved by EPA for SIP purposes (e.g., measure
is more stringent than the current SIP but fails to meet SIP
requirements for reasonably available control technology and/or to make
reasonable further progress), provided: (1) a permit based on the local
rule would assure compliance with all applicable requirements (including
the approved SIP); and (2) the permit meets all part 70 requirements.

Where the local rule submitted to EPA as a SIP revision represents a
relaxation of the current SIP requirement (e.g., the local rule would
replace an existing technology forcing rule that has been determined to
be unachievable in practice), a part 70 source may propose in its permit
application to base its permit on the local rule in anticipation of EPA
approval. However, a permit based on the local rule could not be issued
prior to EPA approval of the rule. This is because a permit based on the
relaxed requirements of the local rule could not assure compliance with
the more stringent applicable requirement (the approved SIP), as
required by section 504 of the Act. Similarly, a part 70 source may be
subject to pending SIP revisions that may tighten certain current SIP
obligations and relax others for sources in that source category. Here
again the permitting authority could allow initial application
completeness to be determined relying on the locally adopted rule, but
the permit could not be issued without the current SIP requirements
unless a source opted to demonstrate that the submitted rule represents,
for that specific source, a more stringent requirement than the current
SIP. In such a case, the part 70 permit could subsequently be issued for
that source on the basis of the local rule, since the permit terms would
assure compliance with the approved SIP.

b\. [Initial actions by EPA and permitting authorities]{.underline}. The
EPA is committed to working with States within available resources to
assure that the timetable for overall permit issuance is not adversely
affected by pending SIP revisions that are not straightforward
tightenings. The extent of the problem, however, will vary greatly and,
in some cases, may require a specific plan of action between EPA and
certain States to expedite SIP processing where the problem is
substantial.

In California, where this problem is believed to be most extensive, EPA,
the districts, and the California Air Resources Board are in the process
of identifying rules in the SIP backlog that are not straightforward
tightenings or are relaxations of the currently approved SIP, and will
target them for expeditious processing. These rules will be identified
within a specified timeframe, generally within 1 year of the effective
date of a district\'s part 70 program. The EPA\'s Region IX will enter
into formal agreements with affected districts and will commit to take
action on this \"targeted\" portion of the SIP backlog before
comprehensive permit issuance for sources affected by the backlog would
be required, provided this is consistent with the transition
plan^1^[^19] (as it may be revised). Other EPA Regional Offices will
determine the need and resources available for this type of exercise on
a case-by-case basis. Region IX will also commit to process
expeditiously any similar rules submitted or identified after the period
of the formal agreement, although such processing would not necessarily
occur before permits must be issued to sources affected by these rules.

Under Region IX\'s formal agreements, permitting authorities in the
districts need not issue the portion of the part 70 permit covering
emissions units affected by the targeted backlog until the rule adoption
or change identified in the formal agreement has been acted on by EPA,
consistent with the flexibility allowed in the permit issuance
transition plan in the permitting authority\'s program. This should in
most cases allow permitting authorities to delay issuing permits to
sources to the extent they are affected by the targeted SIP backlog
until EPA completes its review action on the pending SIP revisions.
Where a transition plan contains a permit issuance schedule that would
not allow postponing permit issuance until EPA has acted on the proposed
SIP revisions, appropriate changes to the plan can still be made to
defer permit issuance until EPA action on the targeted SIP backlog. Such
changes would be made following the same approach described for changing
application forms in EPA\'s first White Paper. Within these constraints,
a permitting authority may allow for issuance of part 70 permits to the
facility in phases such that permits covering those emissions units of
the facility affected by the targeted SIP revision are issued later.
This result is also consistent with the flexibility contained in § 70.2
(see definition of \"Part 70 permit\") for the permitting authority to
issue multiple permits to one part 70 source if it makes sense to do so.
Alternatively, the permitting authority could issue the permit in its
entirety based on the current SIP.

The EPA agrees that delays in permit issuance described above will not
be cause for an EPA finding of failure by the permitting authority to
adequately administer or enforce its part 70 program. Any initial permit
issued under a phased approach (i.e., the first phase involves all
emissions units unaffected by the SIP backlog targeted by EPA), however,
does not shield the source from the enforceability of the requirements
excluded in the first phase permit and the obligation to obtain permit
conditions covering the excluded emissions units after EPA has acted on
the relevant SIP rule backlog.

c\. [Ongoing actions]{.underline}. The preceding guidance should address
the most significant problems associated with the development of part 70
permit applications and the subsequent issuance of part 70 permits that
result from the existence of a SIP backlog. The EPA recognizes, however,
that areas experiencing the most significant start-up problems with
respect to pending SIP rules may well require an ongoing program to
manage the potential SIP backlog so as to prevent significant problems
of this nature from occurring in the future. In some situations it may
be appropriate on a continuing basis for EPA to determine preliminarily
whether a submitted rule can be listed as one which would assure
compliance with the SIP rule it seeks to replace. This would enable the
permitting authority to adjust its priorities for requiring application
updates and for accomplishing permit issuance and revision.

For post application submittal, a source that has filed a complete
application may opt to, or be required to, update its current
application as a result of changes or pending changes to the SIP. The
likelihood of these changes occurring will vary from area to area, and
are most likely to affect sources scheduled later in the transition
period for initial permit issuance. For example:

> o A local rule previously relied upon may be amended by the State or
> district.
>
> o Where a local rule that was previously listed in the formal
> agreement for expeditious SIP processing (because the rule is not a
> straightforward strengthening) is disapproved by EPA and the source
> has relied on that rule in preparing its application, the applicant
> must file an application update that either demonstrates that
> compliance with the local rule would assure compliance with the
> current SIP or demonstrates direct compliance with the current SIP.
>
> o The adoption and submission to EPA of a more stringent local rule
> after an applicant has filed its application may present a new and
> desired opportunity for streamlining. If so, the applicant could opt
> to file an application update to shift the compliance focus of its
> current application to the newly adopted local rule, which is pending
> SIP approval, provided it meets the streamlining criteria described in
> section II.A. above.

For post permit issuance, sources may also encounter changes to rule
situations after initial permit issuance that could lead them to request
a permit revision. For example, sources may propose a revision to an
issued part 70 permit where a newly adopted local rule would present a
desirable streamlining opportunity. The significant permit revision
process would be required under the current part 70 to accomplish this
change. Note that EPA in its revisions to part 70 may authorize
permitting authorities to use a less extensive permit revision process.

To initiate the permit revision, the source must file an application to
revise the permit to contain the requirements of local rule instead of
the current SIP. This application must meet the previously defined and
applicable streamlining criteria.

In response, the permitting authority may subsequently revise the permit
based on the local rule in lieu of the current SIP where (1) the rule is
listed by the EPA as one where compliance with it would assure
compliance with the relevant portions of the current SIP, or (2) the
applicant has provided a source specific demonstration consistent with
the streamlining criteria in section II.A.2. that assures this result. A
permit shield or similar permit condition should be issued for purposes
of certainty. In the absence of a shield or similar permit condition,
all aspects of the approved SIP remain enforceable, regardless of the
source\'s compliance status with respect to the permit. The EPA
encourages permitting authorities currently without provisions for
incorporating permit shields to add them at their first opportunity.

3\. Process.

a\. [Initial Applications]{.underline}. An applicant proposing to submit
its part 70 permit application based on a local rule that has been
submitted for EPA approval rather than the current SIP would take one of
two courses of actions depending on the status of the local rule with
EPA and/or the permitting authority:

The first course of action would be appropriate for local rules that (1)
have been previously demonstrated to EPA\'s satisfaction to be at least
as stringent as the approved SIP rule so as to assure compliance with it
for all subject sources, (2) are otherwise authorized by the permitting
authority based on its judgement that such rules will likely be the
basis for the part 70 permit (e.g. EPA approval of the rule is
imminent), or (3) have been specifically identified in a formal
agreement between the permitting authority and EPA for expeditious SIP
processing, i.e., the \"targeted backlog.\" Rules listed in a formal
agreement will typically involve local rules pending SIP approval which
do or could represent full or partial relaxations of the current SIP.
Where they choose to use this approach, the permitting authority and EPA
will maintain an up-to-date list of local rules which meet any of these
criteria.

In preparing initial part 70 permit applications with respect to such
local rules the applicant:

> **Step One** - Will indicate in its application that it has opted for
> this approach, list or cross-reference all requirements from
> applicable local rules that are eligible for this approach, and refer
> to the list maintained for this purpose by the permitting authority.
>
> **Step Two** - Will identify in the permit application the current SIP
> requirements that the pending SIP revision would replace.
>
> **Step Three** - May choose to certify compliance with the
> requirement(s) of the pending local rule in lieu of the current SIP if
> there is sufficient source compliance data on which to base such a
> certification. (The EPA is proposing to revise its part 70 regulations
> to provide that such a certification would meet the requirements of
> § 70.5(c)(10).)
>
> **Step Four** - May propose that a permit shield would be in effect
> upon permit issuance. For those listed local rules which are
> recognized by EPA as being able to assure compliance with the current
> SIP rule, the applicant would indicate in the application that a
> permit shield (or alternatively, other similar language where
> authority for a permit shield is not available) is being proposed to
> be incorporated into the permit to confirm this understanding.

The second course of action would be appropriate where the criteria
specified above have not been met for a particular rule and an applicant
still wants to base its initial part 70 application on such local rules
pending SIP approval. In this instance, the process would be essentially
the same but the source would have to demonstrate that compliance with
the local rule would assure compliance with the current SIP (i.e., make
an adequate demonstration consistent with the streamlining criteria
described in section II.A.2. above.) and submit it with the permit
application in step one. Again, if a part 70 permit application has
already been submitted without streamlining but the source agrees to
subsequently pursue this option, the permitting authority may work with
the source to support streamlining requirements during the permit
development process.

b\. [Initial Permit Issuance Process]{.underline}. After receiving a
complete application, the permitting authority must note where the
applicant has proposed use of the approaches described above in section
II.B.3.a. The note would be placed in the application summary, the
application, or the revised application. Copies of the application
summary, the application, or the revised application containing such
proposals must be submitted promptly to EPA (unless EPA has agreed that
the demonstration is of a type not required for advance submittal to
EPA).

Where the rule is listed by EPA as one where compliance with it would
assure compliance with the relevant portions of the current SIP, or the
applicant has provided a source specific demonstration consistent with
the streamlining outlined in section II.A.2., the permitting authority
may proceed to issue the permit based on the local rule in lieu of the
current SIP. A permit shield or similar permit condition which confirms
this understanding should be issued for purposes of certainty.

If an applicant chooses to demonstrate that a local rule assures
compliance with the applicable SIP for all affected emissions units, the
permitting authority will evaluate this proposal and any supporting
documentation. Upon completion of this evaluation and prior to releasing
a draft permit public notice, the permitting authority is advised to
communicate any concerns to the applicant and provide reasonable
opportunity for the applicant to accept the findings or propose a
resolution of the differences. This may cause some revisions to the
application as originally filed.

If the permitting authority or EPA are not satisfied that the local rule
(as it applies to the applicant\'s facility) assures compliance with the
applicable SIP rule, the applicant must revise its application to rely
on the SIP rule. All required application updates must be submitted on
or before the reasonable deadline required by the permitting authority
for the source to maintain its application shield.

Consistent with the flexibility allowed in the permit issuance
transition plan (as it may be revised), the permitting authority may
delay issuance of those portions of a source\'s permit that are covered
by a rule identified in a Region IX type formal agreement, which targets
certain SIP rules for expeditious processing, until EPA has acted on the
relevant rule(s). Alternatively, comprehensive permits may be issued to
such a source [prior]{.underline} to the time that EPA has acted on the
rule provided that they are based on the current SIP (unless the source
has provided an adequate streamlining demonstration).

4\. Enforcement.

All terms and conditions of the part 70 permit are enforceable by EPA
and by citizens. In addition, a source violating the emissions
limitation in the part 70 permit is also subject to enforcement action
for violation of the current SIP emissions limits if a violation of this
limit can be documented.

Upon issuance of a part 70 permit based on the local rule, the permit
terms and conditions implementing the local rule would become federally
enforceable. A source would not be subject to an EPA enforcement action
for any failure to meet monitoring, recordkeeping, and reporting
requirements that are required under the currently approved SIP, if such
an understanding has been specified in the permit. These requirements
would no longer be independently enforceable, provided the source
attempts in good faith to implement the monitoring, recordkeeping, and
reporting approach required under the local rule.

If subsequently the permitting authority or EPA determines that the
permit does not assure compliance with applicable requirements, the
permit must be reopened and revised.

5\. Discussion.

Sources in California districts currently are subject to several locally
adopted rules which are pending before EPA as proposed SIP revisions.
The majority of these local rules have been determined by the districts
to be more stringent than the SIP rules that they seek to replace,
although some of these rules would relax the current SIP requirements
for certain affected sources. In some cases, technology-forcing SIP
rules have been found to be infeasible to achieve and, instead of
seeking to enforce them, districts have adopted achievable local rules.
Until the local rules are approved into the SIP, sources are subject to
both the local rule and the federally-approved version of the rule.

The resulting \"outdated SIP\" presents special problems to sources
which must file a part 70 permit application. In particular, questions
arise as to whether sources must complete their applications and certify
compliance based on SIP rules which have been superseded by more
stringent local rules or by rules that have been relaxed where, for
example, the permitting authority has found the current SIP rules to be
unachievable. Those problems, while most apparent in their effect on the
start-up of a part 70 program, are also ongoing in nature and may create
a need to update initially complete permit applications and to revise
issued permits. The EPA believes that these problems with outdated SIP
rules are most extensive in California but are not unique to that State.

The EPA strongly believes that implementation of title V to the extent
possible should complement, not complicate, the implementation of other
titles, including title I, the purpose of which is to assure adoption of
programs that will attain and maintain the national ambient air quality
standards (NAAQS).^2^[^20] Accordingly, the Agency is providing this
guidance which will allow sources and permitting authorities to rely on
more stringent local rules for permit issuance. The overall strategy for
sensitizing the SIP revision process to part 70 concerns presented in
this guidance will allow sources to focus more on current air quality
requirements in all aspects of part 70 permit application development
and update, permit issuance, and permit revision.

The legal basis for recognizing a local rule pending SIP approval in
lieu of the current, but less stringent, SIP requirement or for
streamlining multiple applicable requirements is identical to the basis
for adopting a streamlined emissions limit to replace multiple
applicable requirements (see discussion in section II.A.5.). The
opportunities for shifting to the more stringent local rule are
correspondingly affected by the limitations previously described for the
streamlining of applicable requirements.

**C. Treatment Of Insignificant Emissions Units.**

1\. Issue.

How must sources address insignificant emissions units (IEU\'s) subject
to at least one applicable requirement?^2^[^21] (Insignificant emissions
units are in most cases not directly regulated, and therefore could be
left off the permit entirely, were it not for the presence of certain
generic or facility-wide requirements that apply to all emissions
units.) Must the application and the subsequent permit address each IEU
individually and require periodic monitoring where it is not otherwise
provided by a generically applicable requirement? On what basis can the
initial and future compliance certifications be made for IEU\'s with
generally applicable requirements?

2\. Guidance.

The EPA interprets part 70 to allow considerable discretion to the
permitting authority in tailoring the amount and quality of information
required in permit applications and permits as they relate to IEU\'s. In
general, permit applications must contain sufficient information to
support the drafting of the part 70 permit (including certain
information for IEU\'s subject to only generally applicable
requirements) and to determine compliance status with all applicable
requirements. The EPA, however, interprets part 70 to allow permitting
authorities considerable discretion as to the format and content of
permits, provided that compliance with all applicable requirements,
including those for IEU\'s, is assured. The Agency believes that the
clarifications contained herein afford permitting authorities sufficient
flexibility to treat IEU\'s in a manner commensurate with the
environmental benefits that may be gained from their inclusion in the
permit.

a\. [Permit Applications - Information]{.underline}. With regard to
part 70 requirements to describe and list IEU\'s in applications and
permits, the permitting authority can use the generic grouping approach
for emissions units and activities as discussed in the first White
Paper. In addition, the requirement to identify all applicable
requirements, as it related to IEU\'s subject to generally applicable
requirements, can normally be addressed by standard or generic permit
conditions with minimal or no reference to any specific emissions unit
or activity. The EPA has reviewed and acquiesced in the issuance of
permits wherein generally applicable requirements are incorporated
through the use of tables describing a tiered compliance regime for
these requirements as they affect different sizes of emissions units,
including a distinct and more streamlined compliance regime for IEU\'s.
Different generic permit tables may be necessary to cover the situation
for a particular type of IEU which is governed by different applicable
requirements. Similarly, the first White Paper provides that no
emissions estimates need be provided for even regulated emissions
streams where it would serve no useful purpose to do so. This should be
the case for IEU\'s where the amount of emissions from a unit is not
relevant to determining applicability of, or compliance with, the
requirement. Except where the contributions of IEU\'s would need to be
more precisely known to resolve issues of applicability or major source
status would the permitting authority need to request emissions
estimates for part 70 purposes.

b\. [Permit Applications - Initial Compliance
Certifications]{.underline}. Section 70.5(c)(9) requires complete
part 70 applications to contain a certification of compliance with all
applicable requirements by a responsible official and a statement of the
methods used for determining compliance. This certification must be
based on a \"reasonable inquiry\" by the responsible official. The EPA
believes that, for the generally applicable or facility-wide
requirements applying to an IEU, reasonable inquiry for initial
certifications need only be based on available information, which would
include any information required to be generated by the applicable
requirement. Regarding the latter, and as is true for any applicable
requirement, the initial certification can be based on only the latest
cycle of required information (e.g., a source could generally rely on a
demonstration of compliance resulting from the most recent required
monitoring, notwithstanding the existence of prior monitoring indicating
non-compliance at a previous point in time). Where an applicable
requirement (generally applicable or otherwise) does not require
monitoring, the § 70.5(c)(9) requirement to certify compliance does not
itself require that monitoring be done to support a certification.
Similarly, there is no need to perform an emissions test to support this
compliance certification if none is required by the applicable
requirement itself. The EPA interprets § 70.5(c)(9) to allow for a
certification of compliance where there is no required monitoring and,
despite a \"reasonable inquiry\" to uncover other existing information,
the responsible official has no information to the contrary.

c\. [Permit Content - Applicable Requirements]{.underline}. With regard
to part 70 obligations to include all applicable requirements in the
permit, the permitting authority can also use the generic grouping
approach for emissions units and activities as discussed in the first
White Paper. That is, generally applicable requirements can normally be
adequately addressed in the part 70 permit by standard permit conditions
with minimal or no reference to any specific emissions unit or activity,
provided that the scope of the requirement and the manner of its
enforcement are clear. As noted above, different generic permit
provisions may be necessary to cover the situation for which different
types of IEU\'s are governed by different applicable requirements.

d\. [Permit Content - Monitoring, Recordkeeping, and
Reporting]{.underline}. Section 70.6(a)(3)(i) requires all applicable
requirements for monitoring and analysis procedures or test methods to
be contained in part 70 permits. In addition, where the applicable
requirement does not require periodic testing or monitoring (which may
consist of recordkeeping designed to serve as monitoring), the
permitting authority must prescribe periodic monitoring sufficient to
yield reliable data from the relevant time period that are
representative of the source\'s compliance with the permit. Many of the
generically applicable requirements for IEU\'s have a related test
method, but relatively few have a specific regimen of required periodic
testing or monitoring.

The EPA believes that the permitting authority in general has broad
discretion in determining the nature of any required periodic
monitoring. The need for this discretion is particularly evident in the
case of generally applicable requirements, which tend to cover IEU\'s as
well as significant emissions units. The requirement to include in a
permit testing, monitoring, recordkeeping, reporting, and compliance
certification sufficient to assure compliance does not require the
permit to impose the same level of rigor with respect to all emissions
units and applicable requirement situations. It does not require
extensive testing or monitoring to assure compliance with the applicable
requirements for emissions units that do not have significant potential
to violate emissions limitations or other requirements under normal
operating conditions. In particular, where the establishment of a
regular program of monitoring would not significantly enhance the
ability of the permit to assure compliance with the applicable
requirement, the permitting authority can provide that the status quo
(i.e., no monitoring) will meet § 70.6(a)(3)(i). For IEU\'s subject to a
generally applicable requirement for which the permitting authority
believes monitoring is needed, a streamlined approach to periodic
monitoring, such as an inspection program to assure the proper operation
and maintenance of emissions activities (e.g., valves and flanges),
should presumptively be appropriate.

The EPA\'s policy on IEU monitoring needs is based on its belief that
IEU\'s typically are associated with inconsequential environmental
impacts and present little potential for violations of generically
applicable requirements, and so may be good candidates for a very
streamlined approach to periodic monitoring. As EPA noted in the first
White Paper, generally applicable requirements typically reside in the
SIP. Permitting authorities therefore not only have the best sense of
which requirements qualify as generally applicable, but also where it is
appropriate to conclude that periodic monitoring is not necessary for
IEU\'s subject to these requirements. Where the source ascertains that
the permitting authority will not require periodic monitoring for
IEU\'s, it can of course omit a periodic monitoring proposal from the
application.

e\. [Permit Content - Compliance Certifications]{.underline}. Section
70.6(c)(5) requires in part that each permitted source submit no less
frequently than annually a certification of its compliance status with
all the terms and conditions of the permit. This certification will be
based on available information, including monitoring and/or other
compliance terms required in the permit. Where a particular emissions
unit presents little or no potential for violation of a certain
applicable requirement, the \"reasonable inquiry\" required by title V
can be abbreviated. Since it can be determined in the abstract that
violation of the requirement by these emissions units is highly
improbable, it is reasonable in that instance to limit the search for
information to what is readily available. As noted above, EPA believes
that an IEU subject to a generally applicable requirement typically
presents little or no potential for violation of those requirements. It
follows that where, for instance, a permit does not require monitoring
for IEU\'s subject to a generally applicable requirement, and there were
no observed, documented, or known instances of non-compliance, an annual
certification of compliance is presumptively appropriate. Similarly,
where monitoring is required, an annual certification of compliance is
also appropriate when no violations are monitored and there were no
observed, documented, or known instances of non-compliance.

3\. Discussion.

Many of the concerns expressed to EPA regarding the treatment of IEU\'s
in the application and permit arise because IEU\'s are in most cases not
directly regulated, and therefore could be left off the permit entirely,
were it not for the presence of certain generic requirements that apply
to all emissions units. Though the focus of concern is the applicability
of the generic requirements to IEU\'s, response to these concerns derive
primarily from the flexibility that exists in part 70 for dealing with
generically applicable requirements. In implementing this flexibility,
it may be appropriate for the permitting authority to further
distinguish between units that have been designated as insignificant and
those that have not. This is so because the relative size of a unit can
be an important factor in deciding how to fashion permit terms even for
a generically applicable requirement, and State-established IEU\'s
normally define the smallest emissions points. However, EPA notes that,
as a matter of part 70 interpretation, whether a unit has been
designated as insignificant is not necessarily critical to its treatment
in the part 70 permit.

Concerns have been expressed that addressing in part 70 permits the
relatively trivial portion of emissions attributable to IEU\'s will
consume a disproportionate share of the total resources available to
issue part 70 permits. That is, according to their understanding of
part 70, applicants and permitting authorities will expend greater
resources than warranted to determine the specific applicability of
requirements to IEU\'s, how compliance with them will be assured, and
the basis on which the certification of compliance status of the source
with respect to these IEU\'s would be made.

The EPA believes that the policy described for addressing generically
applicable requirements in applications and permits as they apply to
IEU\'s allows permitting authorities sufficient flexibility to
streamline the required administrative effort commensurate to the
environmental significance of the varying types of IEU situations. This
should prevent the potentially high but unintended level of costs
identified by certain sources and permitting authorities from occurring
in the future with respect to IEU\'s.

**D.** **Use Of Major Source And Applicable Requirement Stipulation.**

1\. Issue.

When an applicant stipulates that it is a major source and subject to
specific applicable requirements, how much, if any, additional
information related to applicability is necessary in the part 70 permit
application?

2\. Guidance.

If an applicant stipulates that it is a major source^2^[^22] and subject
to specific applicable requirements, it need not provide additional
information in its application to demonstrate applicability with respect
to those requirements, provided that (1) the permitting authority has
had previous review experience with a particular source (e.g., issued it
a permit), or (2) otherwise has an adequate level of familiarity with
the source\'s operation (e.g., current emissions inventory information).
This does not affect the requirement to provide information for other
purposes under part 70, such as to support a compliance certification or
a request for a permit shield or to describe the emissions activities of
its site (see first White Paper).

Accordingly, permitting authorities may allow the applicant to stipulate
that:

> o Its facility is a major source and subject to part 70 permitting,
> without providing any additional information for the applicability
> determination;
>
> o It is subject to specific applicable requirements, to be included in
> its part 70 permit, without providing additional information to
> establish applicability for stipulated requirements; or
>
> o It is subject to only portions of an applicable requirement and
> state that it is not subject to other portions. Such a stipulation
> must explicitly state which portion of the rule applies and which does
> not and an explanation must be provided for this conclusion.

Stipulation by a source to major source status or specific applicable
requirements in a part 70 application does not preclude the permitting
authority from requesting additional information from the applicant for
establishing the applicability of non-stipulated requirements or for
verifying a stipulation that certain requirements are not applicable.

3\. Discussion.

In general, part 70 requires that applications contain information to
the extent needed to determine major source status, to verify the
applicability of part 70 or applicable requirements, and to compute a
permit fee (as necessary). Section 70.5(c) requires the application to
describe emissions of all regulated air pollutants for each emissions
unit.

In the first White Paper, EPA indicated a substantial degree of
discretion for permitting authorities in this area. It indicates that
States may adopt different approaches to meet the minimum program
requirements established by the part 70 regulations depending on local
needs. In many instances, a qualitative description of emissions will
satisfy this standard. However, the applicant may need to provide more
detailed information for purposes other than determining applicability
and to foster efficiency in the permitting program.

For the purpose of determining the applicability of part 70 or other
specific requirements, the information required in an application should
be streamlined for the mutual benefit of the applicant and the
permitting authority. An applicant that stipulates it is a major source
subject to part 70 and to other applicable requirements should not be
required to provide any additional information to verify those facts in
its part 70 application. However, the applicant must provide sufficient
information to allow the permitting authority to impose the applicable
requirement. In addition, the resulting application streamlining would
not relieve the applicant from submitting, or the permitting authority
from reviewing, emissions or other data for part 70 purposes other than
determining applicability.

In the case where there is no dispute that a stationary source is
subject to part 70, and the applicant stipulates that the source is a
part 70 source in the application, no further information would be
required for applicability determination. An example would be a source
which is currently operating under a prevention of significant
deterioration permit because it is major for PM-10. Both the source and
the permitting authority agree that the source is subject to the
State\'s part 70 program.

A source may also streamline the part 70 permit process by stipulating
that specific applicable requirements apply. This does not relieve the
source of its obligation to identify all applicable requirements or
preclude the permitting authority from requesting additional
information, including information pertaining to the applicability of
requirements not covered in the stipulation. For example, a stationary
source may stipulate it is subject to a SIP rule. However, the
permitting authority may suspect that the source is also subject to a
New Source Performance Standard (NSPS), but may need more information
for confirmation. In this case, the permitting authority would request
additional information related to the applicability of the NSPS.

Similarly, an applicant may stipulate that it is subject to only
portions of an applicable requirement and state that it is not subject
to other portions. In such case, the permitting authority may request
the applicant to provide additional information to demonstrate that it
is not subject to requirements in question. However, if a source
requests a permit shield, additional information to demonstrate the
non-applicability of these requirements must be submitted.

**E.** **Referencing Of Existing Information In Part 70 Permit
Applications And Permits.**

1\. Issue.

Can an applicant in its permit application, and can the permit itself,
reference existing information that is available at the permitting
authority? Also, can the permit application and the permit reference
applicable requirements through citation rather than by a complete
reprinting of the requirements themselves in the part 70 permit
application or permit?

2\. Guidance.

a\. [General]{.underline}. Information that would be cited or cross
referenced in the permit application and incorporated by reference into
the issued permit must first be currently applicable and available to
the permitting authority and public^2^[^23]. The information need not be
restated in the part 70 application. Standardized citation formats
should be established by the permitting authority to facilitate
appropriate use of this mechanism.

Referenced documents must also be specifically identified. Descriptive
information such as the title or number of the document and the date of
the document must be included so that there is no ambiguity as to which
version of which document is being referenced. Citations, cross
references, and incorporations by reference must be detailed enough that
the manner in which any referenced material applies to a facility is
clear and is not reasonably subject to misinterpretation. Where only a
portion of the referenced document applies, applications and permits
must specify the relevant section of the document. Any information
cited, cross referenced, or incorporated by reference must be
accompanied by a description or identification of the current
activities, requirements, or equipment for which the information is
referenced.

b\. [Permit Applications]{.underline}. The applicant and the permitting
authority should work together to determine the extent to which part 70
permit applications may cross reference agency-issued rules,
regulations, permits, and published protocols, and existing information
generated by the applicant. To facilitate referencing existing
information, permitting authorities should identify the general types of
information available for this purpose. To the extent that such
information exists and is readily available to the public, the following
types of information may be cited or cross referenced (as allowed by the
permitting authority)^2^[^24]:

> o Rules, regulations, and published protocols.
>
> o Criteria pollutant and HAP emission inventories and supporting
> calculations.
>
> o Emission monitoring reports, compliance reports, and source tests.
>
> o Annual emissions statements.
>
> o Process and abatement equipment lists and descriptions.
>
> o Current operating and preconstruction permit terms.
>
> o Permit application materials previously submitted.
>
> o Other materials with the approval of the permitting authority.

Applicants are obligated to correct and supplement inaccurate or
incomplete permitting authority records relied upon for the purposes of
part 70 permit applications. The responsible official must certify,
consistent with § 70.5(d), to the truth, accuracy, and completeness of
all information referenced.

c\. [Permits]{.underline}. Incorporation by reference in permits may be
appropriate and useful under several circumstances. Appropriate use of
incorporation by reference in permits includes referencing of test
method procedures, inspection and maintenance plans, and calculation
methods for determining compliance. One of the key objectives Congress
hoped to achieve in creating title V, however, was the issuance of
comprehensive permits that clarify how sources must comply with
applicable requirements. Permitting authorities should therefore balance
the streamlining benefits achieved through use of incorporation by
reference with the need to issue comprehensive, unambiguous permits
useful to all affected parties, including those engaged in field
inspections.

Permitting authorities may, after listing all applicable emissions
limits for all applicable emissions units in the part 70 permit, provide
for referencing the details of those limits, rather than reprinting them
in permits to the extent that (1) applicability issues and compliance
obligations are clear, and (2) the permit includes any additional terms
and conditions sufficient to assure compliance with all applicable
requirements^2^[^25].

Where the cited applicable requirement provides for different and
independent compliance options (e.g., boilers subject to an NSPS
promulgated under section 111 may comply by use of low sulfur fuel or
through add-on of a control device), the permitting authority generally
should require that the part 70 permit contain (or incorporate by
reference) the specific option(s) selected by the source. Alternatively,
the permit could incorporate by reference the entire applicable
requirement provided that (1) such reference is unambiguous in its
applicability and requirements, (2) the permit contains obligations to
certify compliance and report compliance monitoring data reflecting the
chosen control approach, and (3) the permitting authority determines
that the relevant purposes of title V would be met through such
referencing. The alternative approach would not be allowable if changing
from one compliance option to another would trigger the need for a prior
review by the permitting authority or EPA (e.g. NSR), unless prior
approval is incorporated into the part 70 permit (i.e., advance NSR).

The EPA does not recommend that permitting authorities incorporate into
part 70 permits certain other types of information such as the part 70
permit application (see first White Paper).

3\. Discussion.

Title V and part 70 do not define when citation or cross-referencing in
permit applications would be appropriate, although it obviously would
not be allowed where such citations or cross-references would not
support subsequent development of the part 70 permit. The EPA\'s first
White Paper states that a permitting authority may streamline part 70
applications by allowing the applicant to cross-reference a variety of
documents including permits and Federal, State, and local rules. This
guidance further provides that where an emissions estimate is needed for
part 70 purposes but is otherwise available (e.g., recent submittal of
emissions inventory) the permitting authority can allow the source to
cross-reference this information for part 70 purposes.

Permitting authorities\' files and databases often include information
submitted by the applicant which can also be required by part 70.
Development and review of part 70 permit applications could be
streamlined if information already held by the permitting authority and
the public is referenced or cited in part 70 permit applications rather
than restated in its entirety. Similarly, specific citations to
regulations that are unambiguous in their applicability and requirements
as they apply to a particular source will reduce the burden associated
with application development.

Incorporation by reference can be similarly effective in streamlining
the content of part 70 permits. The potential benefits of permit
development based on an incorporation by reference approach include
reduced cost and administrative complexity, and continued compliance
flexibility as enforceably allowed by the underlying applicable
requirements.

Expectations for referencing with respect to permit content are somewhat
better defined than for permit applications. Section 504(a) states that
each permit \"shall include enforceable emissions limitations and
standards\" and \"such other conditions as are necessary to assure
compliance with the applicable requirements.\" In addition, section
504(c) requires each permit to \"set forth inspection, entry,
monitoring, compliance certification, and reporting requirements to
assure compliance with the permit terms and conditions.\" Analogous
provisions are contained in §§ 70.6(a)(1) and (3). The EPA interprets
these provisions to place limits on the type of information that may be
referenced in permits. Although this material may be incorporated into
the permit by reference, that may only be done to the extent that its
manner of application is clear.

Accordingly, after all applicable emissions limits are placed in the
part 70 permit and attached to the emissions unit to which they apply,
the permitting authority may allow referencing where it is specific
enough to define how the applicable requirement applies and where using
this approach assures compliance with all applicable requirements. This
approach is a desirable option where the referenced material is
unambiguous in how it applies to the permitted facility, and it provides
for enforceability from a practical standpoint. On the other hand, it is
generally not acceptable to use a combination of referencing certain
provisions of an applicable requirement while paraphrasing other
provisions of that same applicable requirement. Such a practice,
particularly if coupled with a permit shield, could create dual
requirements and potential confusion.

Even where the referenced requirement allows for compliance options, the
permitting authority may issue the permit with incorporation of the
applicable requirement provided that the compliance options of the
source are enforceably defined under available control options,
appropriate records are kept and reports made, and any required
revisions to update the permit with respect to specific performance
levels are made. This treatment would be analogous to the flexibility
provided to sources through the use of alternative scenarios.

**Attachment A**

**Approval of Alternative Test Methods**

The part 63 general provisions, as well as other EPA air regulations
implementing sections 111 and 112 of the Act, allow only EPA-approved
test methods to implement emissions standards that are established by
States to meet Federal requirements. Accordingly, streamlining cannot
result in any requirement relying on a State-only test method unless and
until EPA, or the permitting authority acting as EPA\'s delegated
agency, approves it as an appropriate method for purposes of complying
with that streamlined standard. Currently, all States may be delegated
authority to make decisions regarding minor revisions to EPA approved
test methods (i.e., minor changes are those that have isolated
consequences, affect a single source, and do not affect the stringency
of the emissions limitation or standard). The EPA is exploring options
for defining where delegation to States is appropriate for reviewing
major revisions or new test methods, and for expediting the approval
process where the Agency retains final sign-off authority. The EPA
recognizes that its approval must generally occur in a timeframe
consistent with the time constraints of the part 70 permit issuance
process. Until further guidance on this subject is issued, States must
obtain EPA approval for all State-only test methods which represent
major changes or alternatives to EPA-approved test methods prior to or
within the 45-day EPA review period of the proposed permit seeking to
streamline requirements.

With respect to SIP requirements, the ability for a permitting authority
to authorize use of a different test method depends on the governing
language contained in the SIP. For example, some SIP\'s expressly
connect a test method with a particular emissions limit but allow for
the use of an equally stringent method. Other SIP\'s contain a more
exclusive linkage between an emissions limit and its required test
method (i.e., limit A as measured by test method B). The SIP-approved
test method can be changed only through a SIP revision unless the SIP
contains provisions for establishing alternative test methods.
Attachment B contains example SIP language which provides a mechanism
that can establish an alternative applicable requirement in such cases
without the need for a source-specific SIP revision.

Permitting authorities may implement streamlining which involves
alternative or new test methods within the flexibility granted by the
SIP and any delegation of authority granted by EPA (where section
111/112 standards are involved). Permit applications containing a
request for a streamlined requirement based on an alternative or new
test method must, to be complete, demonstrate that the alternative or
new test method would determine compliance at the same or higher
stringency as the otherwise applicable method. The EPA expects to
receive expeditiously (i.e., well in advance of any draft permit
issuance) those portions of an application dealing with a proposal for
streamlining, including any demonstration of test method adequacy. Any
required EPA approval of an alternative or new test method need not be
obtained as a precondition for filing a complete application, but it
must be secured before the final part 70 permit can be issued. As
mentioned previously, EPA intends to structure its approval process to
comport reasonably with the timelines for part 70 permit issuance.

**Attachment B**

**SIP Provisions For Establishing**

**Alternative Requirements**

**I. Overview.**

States may revise their SIP\'s to provide for establishing equally
stringent alternatives to specific requirements set forth in the SIP
without the need for additional source-specific SIP revisions. To allow
alternatives to the otherwise-applicable SIP requirements (i.e.,
emissions limitations, test methods, monitoring, and recordkeeping) the
State would include language in SIP\'s to provide substantive criteria
governing the State\'s exercise of the alternative requirement
authority.

**II. Example Language For Part 70 Sources To Establish Alternative SIP
Requirements.**

The following is an example of enabling language that could be used to
provide flexibility in the SIP for allowing alternative requirements to
be established for part 70 sources.

> In lieu of the requirements imposed pursuant to (reference specific
> applicable sections(s) or range of sections to be covered), a facility
> owner may comply with alternative requirements, **provided** the
> requirements are established pursuant to the part 70 permit issuance,
> renewal, or significant permit revision process and are consistent
> with the streamlining procedures and guidelines set forth in section
> II.A. of White Paper Number 2.
>
> For sources subject to an approved part 70 program, an alternative
> requirement is approved for the source by EPA if it is incorporated in
> an issued part 70 permit to which EPA has not objected. Where the
> public comment period precedes the EPA review period, any public
> comments concerning the alternative shall be transmitted to EPA with
> the proposed permit. If the EPA and public comment periods run
> concurrently, public comments shall be transmitted to EPA no later
> than 5 working days after the end of the public comment period. The
> Director\'s \[permitting authority\'s\] determination of approval is
> not binding on EPA.
>
> Noncompliance with any provision established by this rule constitutes
> a violation of this rule.

**III. Example Language For Non-Part 70 Sources To Establish Alternative
SIP Requirements.**

**\[NOTE: This section is a draft that EPA expects to finalize after
appropriate revisions in the near future.\]**

For sources not subject to an approved part 70 program, the following is
an example of enabling language that States may use to revise/submit SIP
rules which would provide flexibility in the SIP for allowing
alternative requirements to be established.

**A. Procedures.**

> 1\. [General]{.underline}. In lieu of the requirements imposed
> pursuant to \[reference applicable sections\] of this plan, a source
> owner may comply with an alternative requirement, provided that the
> Director approves it consistent with the procedures of this paragraph
> and the criteria of paragraph B.
>
> 2\. [State Review Procedure]{.underline}. The Director may establish
> an alternative requirement in \[a review process defined by the
> State\], provided that the requirements of this paragraph are met for
> EPA and public review and for notification and access are met. The
> Director\'s determination of approval is not binding on EPA.
>
> 3\. [Public Review]{.underline}. The Director shall subject any
> proposed alternative to adequate public review but may vary the
> procedures for, and the timing of, public review in light of the
> environmental significance of the action. For the following types of
> changes \[add list of de minimis actions subject to EPA review\], no
> public review shall be necessary for the approval of the alternative.
>
> 4\. [EPA Review]{.underline}. The Director shall submit any proposed
> alternative to the Administrator through the appropriate Regional
> Office, except for the following types of changes \[add list of de
> minimis actions subject to EPA review\] no EPA review shall be
> necessary for the approval of the alternative. Until the specific
> alternative SIP requirement has completed EPA review, the otherwise
> applicable SIP provisions will continue to apply.
>
> 5\. [Periodic Notification And Public Access]{.underline}. For all
> actions taken by the State to establish an alternative requirement,
> the Director shall provide in a general manner for periodic
> notification to the public on at least a quarterly basis and for
> public access to the records regarding established alternatives and
> relevant supporting documentation.
>
> 6\. [Enforcement]{.underline}. Noncompliance with any alternative
> established by this provision constitutes a violation of this rule.
> The EPA and the public may challenge such an alternative limit on the
> basis that it does not meet the criteria contained in the SIP for
> establishing such an alternative. In addition, EPA and the public can
> take enforcement action against a source that fails to comply with an
> applicable alternative requirement.

**B. General Criteria for Evaluating Alternatives.**

> 1\. [Applicability]{.underline}. The unit(s) to which the requirements
> apply must be specified in the underlying SIP and in the
> permit/alternative. If percentage reductions are required from the
> source, the baseline must be clearly set. The SIP must require the
> submission of all the information necessary to establish the baseline,
> and the alternative requirement must achieve the reduction called for
> in the SIP.
>
> 2\. [Time]{.underline}. The alternative must specify the effective
> date of the alternative requirement. The underlying requirement of the
> SIP shall remain in effect until the effective date of the
> alternative. The alternative must clearly specify any future-effective
> dates or any compliance schedules that apply to the source under
> regulations in effect at the time of issuance. For instance, a source
> may be due to comply with requirements promulgated before the
> permit/alternative was issued, but which are effective prior to the
> expiration of the permit/alternative.
>
> 3\. [Effect of changed conditions]{.underline}. If alternative
> emissions limitations or other requirements are allowed in the
> underlying SIP, the associated documentation with the changed
> conditions must clearly demonstrate the alternative requirement is no
> less stringent than the original SIP requirement.
>
> 4\. [Standard of conduct]{.underline}. The alternative proposal must
> clearly state what requirements the source must meet. For example, the
> SIP must specify the emissions limit and what alternatives are
> acceptable. The alternative proposal must contain limits, averaging
> times, test methods, etc., that are no less stringent and must address
> how they are no less stringent than the underlying SIP requirements.
> The alternative proposal must also show whether it applies on a
> per-source or per-line basis or is facility-wide.
>
> 5\. [Transfer Efficiency]{.underline}. Any SIP allowing alternative
> emissions limits and using transfer efficiency in determining
> compliance must explicitly state the circumstances under which a
> source may use improved transfer efficiency as a substitute for
> meeting the SIP limit. The improvement should be demonstrated through
> testing and an appropriate baseline and test method should be
> specified.[^26] See draft \"Guidelines for determining capture
> efficiencies\" for criteria for evaluating alternative capture
> efficiency requirements.
>
> 6\. [Averaging Time]{.underline}. Both the SIP and the alternative
> proposal must explicitly contain the averaging time associated with
> each emissions limit (e.g., instantaneous, three hour average, daily,
> monthly, or longer). The time must be sufficient to protect the
> applicable NAAQS. The alternative proposal must demonstrate that the
> averaging time and the emissions limit in the alternative are as
> stringent as those in the original SIP requirements.
>
> 7\. [Monitoring and Recordkeeping]{.underline}. The alternative
> proposal must state how the source will monitor compliance with the
> emissions requirement, and detail how the proposed method compares in
> accuracy, precision, and timeliness to the SIP-approved method.
> Records and monitoring data must be retained for at least the same
> period of time as required by the SIP. The method must enable
> compliance determinations consistent with the averaging time of the
> emissions standard.
>
> 8\. [Test Methods]{.underline}. The alternative proposal must detail
> how the proposed test method in association with its particular
> emissions requirement (or rule) is at least as stringent as the
> approved method in association with its emissions limit (or rule)
> considering the accuracy, reliability, reproducibility, and timeliness
> of each test method taken in combination with its emissions limit. The
> application or proposal must also address how the change affects
> measurement sensitivity and representativeness, describe the need for
> the change, and indicate if the change is needed for unique conditions
> related only to the source in question. The method must enable a
> compliance determination consistent with the averaging time of the
> emissions standard associated with it.
>
> 9\. [Act Requirements]{.underline}. The alternative must meet the all
> applicable Act requirements (e.g., for reasonably available control
> technology, 15% VOC reduction, etc.) and must not interfere with any
> requirements of the Act, including any regarding the SIP\'s attainment
> demonstration and requirements for reasonable further progress.
>
> 10\. [Production Level]{.underline}. The emissions are no greater than
> the SIP allowable emissions at the same production level. Pre-1990
> production/operation scenarios cannot be used as part of any
> demonstration that the alternative requirements are as stringent as
> those in the SIP. Also, the demonstration must be performed using an
> EPA-approved test methods.

[^1]: 1 ^1^Title IV applicable requirements are an exception to this
    general rule. As set out in § 72.70(b), to the extent that any
    requirements of part 72 and part 78 are inconsistent with the
    requirements of part 70, part 72 and part 78 will take precedence
    and will govern the issuance, denial, revision, reopening, renewal,
    and appeal of the acid rain portion of an operating permit. The
    subsequent descriptions of streamlining therefore apply to
    requirements under parts 72 and 78 only to the extent that such
    requirements are, at the option of the applicant, used as
    streamlining requirements because they are the most stringent
    applicable requirements.

[^2]: 2 ^2^Emissions unit(s) means any part or activity of a stationary
    source that emits or has the potential to emit any regulated air
    pollutant (as defined in section 70.2) or any pollutant listed under
    section 112(b) of the Act. It is used in this paper to include
    specifically a grouping of emissions units at a stationary source
    that shares the same applicable requirement and compliance
    demonstration method for a given pollutant.

[^3]: 3 ^3^The EPA recognizes that the described streamlining process
    may not be allowed by all State regulations or be warranted or
    desired for all applicable requirements. Similarly, partial
    streamlining (i.e., the streamlining of some, but not all,
    applicable requirements that apply to the same emissions units) may
    be most cost effective where difficult comparisons or correlations
    are needed for streamlining the other remaining applicable
    requirements. In addition, there is no barrier to more extensive

[^4]: 4 ^4^

    Applicable requirements mean those requirements recognized by EPA,
    as defined in § 70.2. State and local permitting authorities may
    modify, eliminate, or streamline \"State-only\" requirements based
    on existing State or local law and procedures.

[^5]: 5 ^5^Sources may, in the interest of greater uniformity, opt to
    expand the scope of an applicable requirement to more emissions
    units so that the same requirements would apply over a larger
    section of the plant or its entirety, provided compliance with all
    applicable requirements is assured. Though a permit may through
    streamlining expand the scope of applicable requirements to include
    new emissions units, it may not change the basis on which compliance
    is determined (e.g., emissions unit by emissions unit, if that is
    the intent of the applicable requirement).

[^6]: 6 ^6^While the streamlining of requirements with varying averaging
    times is viable under this policy, in no event can requirements
    which are specifically designed to address a particular health
    concern (including those with short term averaging times) be
    subsumed into a requirement which is any less protective.

[^7]: 7 ^7^The predominant case is expected to involve test methods
    which have been EPA approved either as part of the SIP or as part of
    a Federal section 111 or 112 standard. If a permitting authority is
    seeking to base a streamlined limit on an alternative or new test
    method relative to the ones already approved by EPA for the SIP or a
    section 111, [or]{.underline} section 112 standard, some additional
    steps are needed to complete the proposed streamlining. As described
    in more detail in Attachment A, permitting authorities may only
    implement streamlining which involves alternative or new test
    methods within the flexibility granted by the SIP and any delegation
    of authority from EPA (where section 111/112 standards are
    involved). With respect to SIP requirements, the ability for a
    permitting authority to authorize use of a different test method
    depends on the governing language contained in the SIP. Attachment B
    contains example SIP language which provides a mechanism that can
    establish an alternative applicable requirement in such cases
    without the need for source specific SIP revisions.

[^8]: 8 ^8^For LDAR programs, stringency comparisons likely will be
    based on the aggregate requirements of each LDAR program (screening
    levels, frequency of inspection, repair periods, etc,) and the
    resultant overall actual emissions reduction expected from the
    affected equipment. In cases where a convincing demonstration cannot
    be made based on existing information or the regulations themselves
    have not clearly defined the expected emissions reduction, verifying
    test data may be required. Alternatively, the applicant, the
    permitting authority, and EPA can work together to devise a method
    consistent with the principles of EPA\'s \"Protocol For Equipment
    Leak Emissions Estimation\" (EPA-453/R-95-017, November 1995) for
    determining relative stringency. Where a demonstration of the
    relative stringency of LDAR programs as applied to the affected
    equipment is not feasible, sources may modify elements of a
    particular LDAR program to produce a program that clearly (i.e.,
    without further analysis) assures compliance with the other
    applicable LDAR programs.

[^9]: 9 ^9^Title V allows for the establishment of a streamlined
    requirement, provided that it assures compliance with all applicable
    requirements it subsumes. However, EPA recognizes that construction
    of such hybrid or alternative limits can be more complicated than
    the situation where the streamlined limit is one of the applicable
    emissions limits. Accordingly, sources and States may need more time
    to agree on acceptable demonstrations and may wish to defer such
    streamlining until after issuance of the initial part 70 permit.

[^10]: 0 ^10^Quality assurance requirements pertaining to continuous
    monitoring systems should be evaluated using the same approach.

[^11]: 1 ^11^The applicant may propose alternative monitoring of equal
    rigor. Permitting authorities may only implement streamlining which
    involves alternative or new monitoring methods within the

[^12]: 2 ^12^Permitting authorities and sources should presume that
    existing monitoring equipment \[such as continuous emissions
    monitors (CEMs)\] required and/or currently employed at the source
    should be retained. A permitting authority or applicant would have
    the opportunity to demonstrate that retention of such monitoring
    equipment is inappropriate, such as when the monitoring equipment is
    no longer relevant or is technically infeasible (e.g., the source
    has switched to a closed loop process without emissions or the
    streamlined limit corresponds to levels too low for a monitor to
    measure, such as SO~2~ emissions from a boiler firing pipeline
    quality natural gas.)

[^13]: 3 ^13^Where recordkeeping is the means of determining compliance
    (e.g., in the miscellaneous metal parts and products coating rules,
    the typical role of monitoring is fulfilled by recordkeeping), the
    appropriate recordkeeping would be determined in the same manner
    described for monitoring.

[^14]: 4 ^14^Where a standard includes recordkeeping associated with a
    limit in addition to recordkeeping linked to a monitoring device
    (e.g., a coating facility that has recordkeeping requirements
    pertaining to coating usage, as well as recordkeeping for monitoring
    associated with an add-on control), both types of recordkeeping must
    be incorporated into the permit.

[^15]: 5 ^15^The result offers considerable potential to reduce the
    different reporting burdens associated with different applicable
    requirements well beyond what was previously available (e.g.,
    synchronizing the required reporting cycles from different
    applicable requirements to coincide with the most stringent one
    beginning at the earliest required date). (See also Final General
    Provisions, § 63.10(a)(5), March 16, 1994.)

[^16]: 6 ^16^A future applicable requirement (e.g., MACT standard newly
    promulgated under section 112 with a compliance date 3 years in the
    future) may be determined to be the most stringent applicable
    requirement if compliance with it would assure compliance with less
    stringent but currently applicable requirements. In such a case, the
    source may propose either a streamlined requirement based on
    immediate compliance with the future applicable requirement or it
    may opt for a phased approach where the permit would contain two
    separate time-sensitive requirements. Under the latter approach, one
    streamlined requirement addressing all currently applicable
    requirements would be defined to be effective until the future
    applicable requirement became effective. The permit would also
    contain a second streamlined requirement which also addressed the
    future applicable requirement and would become the new streamlined
    requirement after expiration of the first streamlined requirement.

[^17]: 7 ^17^Where resources allow and the situation calls for it, EPA
    will go on record with a letter to the permitting authority with a
    list of rules that it has preliminarily determined will assure
    compliance with the corresponding SIP approved rule.

[^18]: 8 ^18^If a part 70 permit is issued based upon a pending SIP
    revision and a permit shield is incorporated in the permit,
    compliance with the permit would be deemed to be compliance with all
    applicable requirements. If EPA or the permitting authority later
    discovers that the permit terms do not assure compliance with all
    applicable requirements, including the applicable SIP, the permit
    would have to be reopened and revised.

[^19]: 9 ^19^Transition plan refers to the 3-year transition strategy
    for initial part 70 permit issuance described in § 70.4(b)(11).

[^20]: 0 ^20^This guidance is designed primarily to alleviate situations
    where the SIP backlog is both large and longstanding. It is not to
    be used as a means of anticipating the outcome of pending attainment
    status redesignations.

[^21]: 1 ^21^An emissions unit can be an IEU for one applicable
    requirement and not for another. However, such a unit may be
    eligible for treatment as an IEU only with respect to those
    pollutants not emitted in significant amounts. The term
    \"significant\" as used in this policy statement does
    [not]{.underline} have the meaning as used in § 52.21 (e.g., 15 tpy
    PM-10, 40 tpy VOC) but rather means that the emissions unit does not
    qualify for treatment in the application as an insignificant
    emissions unit.

[^22]: 2 ^22^If an applicant stipulates it is a major source, it must
    list all pollutants for which it is major.

[^23]: 3 ^23^Referenced documents must be made available (1) as part of
    the public docket on the permit action or (2) as information
    available in publicly accessible files located at the permitting
    authority, unless they are published or are readily available (e.g.,
    regulations printed in the Code of Federal Regulations or its State
    equivalent).

[^24]: 4 ^24^Use of cross-referencing does not shift any burden of
    reproducing or otherwise acquiring information to the permitting
    authority.

[^25]: 5 ^25^In the case of a merged permit program, i.e., where a State
    has merged its NSR and operating permits programs, previous NSR
    permits expire. This leaves the part 70 permit as the sole
    repository of the relevant prior terms and conditions of the NSR
    permit. Under these circumstances, it is not possible to incorporate
    by reference the expired NSR permits.

[^26]: 1 ^1^Implied improvements noted by the NSPS auto coating transfer
    efficiency table cannot be accepted at face value.