### Federal Register / Vol. 50, No. 147 / Wednesday, July 31, 1985 / Rules and Regulations
§41.16 Auditcosts.

The cost of audits made in accordance with the provisions of these regulations

are allowable charges to Federal assistance programs.

(a) The charges may be considered a direct cost or an allocated indirect cost, determined in accordance with the provision ofCircular A-87, "Cost principles for State and local governments."

(b) Generally, the percentage ofcosts charged to Federal assistance programs for a single audit shall not exceed the percentage that Federal funds expended represent of total funds expended by the recipient during the fiscalyear. The percentage may be exceeded, however, ifappropriate documentation demonstrates higher actual cost. (Pub. L.98-502) §41.17 Sanctions.

The Single Audit Act provides that no cost may be charged to Federal assistance programs foraudits required by the Act that are not made in accordance with these regulations. In

cases ofcontinued inability or unwillingness to have a proper audit, Federal agencies must consider other appropriate sanctions including:

(a) Withholding a percentage of assistance payments until the audit is completed satisfactorily,

(b) Withholding or disallowing overhead costs, and

(c) Suspending the Federal assistance agreement until the audit is made. (Pub.L.98-502) 

### §41.18 Auditorselection.

In arranging for audit services State and local governments shall follow the procurement standards prescribed by Attachment 0 ofCircular A-102, "Uniform requirements for grants to State and local governments." The standards provide that while recipients

are encouraged to enter into intergovernmental agreements for audit and other services, analysis should be made to determine whether it would be

more economical to purchase the services from private firms.In instances where use ofsuch intergovernmental agreements are required by State statutes (e.g., audit services) these statutes will take precedence. (Pub.L. 

### 98-502) §41.19 Small and minorityauditfirms.

Small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals shall have the maximum practicable opportunity to participate in contracts awarded to fulfill the requirements of these regulations. Recipients ofFederal assistance shall take the following steps to further this goal:

(a) Assure that small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals are used to the fullest extent practicable.

(b) Make information on forthcoming opportunities available and arrange timeframes for the audit so as to encourage and facilitate participation by small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.

(c) Consider in the contract process whether firms competing for larger audits intend to subcontract with small audit firms and audit firms owned and controlled by socially and economically disadvantaged individuals.

(d)Encourage contracting with small audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals which have traditionally audited government programs and,in such cases where this is not possible, assure that these firms

are given consideration for audit subcontracting opportunities.

(e) Encourage contracting with consortiums ofsmall audit firms as described in paragraph (a) ofthis section when a contract is too large for

an individual small audit firm oraudit firm owned and controlled by socially and economically disadvantaged individuals.

(f)Use the services and assistance, as appropriate, ofsuch organizations as the Small Business Administration in the solicitation and utilization ofsmall audit firms or audit firms owned and controlled by socially and economically disadvantaged individuals. (Pub. L. 98-502) §41.20 Reporting.

Each Federal agency will report to the Director ofOMB on or before March 1, 1987, and annually thereafter on the effectiveness ofState arid local governments in carrying out the provisions ofthese regulations. The report must identify each State or local government or Indian tribe that, in the opinion of the agency, is failing to comply with these regulations.

(Pub. L.98-502)
[FR Doc. 85-18121 Filed 7-30-85; 8:45am]
BILLING CODE 6320-01-M 

### ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 52 [A-9-FRL-2858-3] Approval and Promulgation of Implementation Plans; North Coast Air Basin AirPollutionControl Regulations, State ofCalifornia

AGENCY: Environmental Protection 

### Agency (EPA). ACTION: Notice offinal rulemaking.

SUMMARY: This notice approves PSD 

### rules for the three Districts which make up the North Coast AirBasin in California. TheDistricts in the North Coast AirBasin (NCAB] adopted Prevention ofSignificant Deterioration (PSD)regulations in late 1981 and early 1982. The regulations were submitted as a SIPrevision on August6,1982, and EPA proposed approval onJune 21, 1983. The Districts revised theirrules in 1983 and 1984 in response to the problems cited in EPA's proposed rulemaking. In this notice,EPA is approving therevised rules because theyremedy the concerns defined in the Notice ofProposed Rulemaking. EFFECTIVE DATE:August 30, 1985.



### Copies of therules are available for public inspection during normal business hours at theEPA Region IX office at the address below and atthe following locations:

EPALibrary, Public Information Reference Unit, 401 "M" Street, SW., Washington, D.C. 20460 Office ofFederal Register,1100 "L"

Street,NW., Room 8401, Washington, D.C. California StateAir Resources Board,

Technical Support Division, 1131 "S" Street, Sacramento, CA 95814 Mendocino County AirPollution Control

District, Courthouse, 890North Bush, Ukiah, CA 95482 Northern Sonoma County AirPollution

Control District, 134A North Street, Healdsburg, CA 95448
FOR FURTHER INFORMATION CONTACT: 

### Mark C.Brucker, AirManagement Division, Environmental Protection Agency,Region IX, (415) 974-7657, FTS 454-7651 SUPPLEMENTARY INFORMATION: 

### This portion ofthe notice has five sections: Background, Supplementary Revisions (whichdiscusses new submittals from the District), Public Comments, EPA Actions, and the Regulatory Process. 30941

I

### 30942 Federal Register / Vol. 50, No. 147 / Wednesday, July 31, 1985 / Rules and Regulations

Background

The Clean Air Act stipulates that each State Implementation Plan (SIP) shall include a PSD program. The North Coast Districts revised their rules in 1981 and 1982 to follow EPA's PSD requirements. On June 21, 1983 (48FR 28290), EPA proposed to approve the NCAB rules. The proposal was based on the assumption that the Districts would modify the rules to clarify certain points and to address the problems EPA identified. TheDistricts did so in 1983 and 1984.

The entire North Coast isdesignated either attainment ofunclassified for all criteria pollutants. The Basin includes the North Coast Unified Air Quality Management District, which covers Humboldt, Del Norte and Trinity Counties, and the separate Districts in Mendocino County and Northern Sonoma County.

EPA's regulations forPSD programs
are contained in 40 CFR 51.24, "Prevention ofSignificant Deterioration ofAir Quality." EPA has been administering the PSD program in the NCAB under the federal PSD permitting regulation, 40 CFR 52.21.

In the Notic ofProposed Rulemaking, EPA identified several problems. Four of those problems were described in the notice and three others were identified. The problems are stated in this section ofthe notice and the actions taken to remedy them are described in the Supplementary Revisions section.

Theminor concerns that were identified in the NPR were the source definition, stack heights, and the division ofresponsibility between the Districts and EPA.

The problems that were described in detail are as follows:

(1)There were several areas where the emission calculation procedures seemed to conflict with EPA requirements or were unclear. They did not clearly require limitations and emission reductions to be federally enforceable and there was uncertainty abouthow emission baselines are set.

(2) EPA regulations require notification ofeither EPA or federal officials responsible for Class Iareas when sources may affqct these areas. The Rules did not clearly address how Class I notification would be handled.

(3)The provisions forpublic notice

were incomplete. EPA requires that

more information be made available to the public than the Rules provided for and the Rules allow for a public hearing, ifrequired.

(4) Statelaw, not the local rules, allows permitting ofcogeneration sources which would violate air quality increments.

One additional issue arose after the 1983 notice. Two court decisions concerning stack heights led EPA to impose new restrictions on approval of PSD rules. In response to EPA's resulting policy the Districts have cooperated by revising their Rules to prohibit credit for stacks which exceed "good engineering practice" heights. EPA and the Districts have also agreed that EPA willretain PSD permitting authority for sources which are major under EPA's regulation and which would either have stacks

Submittal date

Mendocino County Dec. 3,1984

..................................

Apr. 19. 1934

......................................

Aug. 6,1982

.......................................

North Coast Unified July 10, 1984

......................................

Mar. 14,0 84

.....................................

Aug. 6,1982.

.............. (Del Note. Humboldt and Trinity

Counties)

Northern Sonoma County June 21,1985

.................................... Oct. 19, 1984

.....................
Aug.6, 1982

.......................................



### Withrespect to the four major problems cited in the 1983 notice and described above, the following actions

were taken:

(1) The Districts revised several parts oftheirrules to clarify emission calculation procedures and to ensure that they fully meet all of EPA's requirements.

(2) TheDistricts agreed to take responsibility for informing officials responsible for Class I areas ofany projects that may effect those areas. Theyrevised their rules accordingly.

(3) The APCD's expanded the public notice section ofthe rules to include all ofthe provisions that EPArequested.

(4)Districts agreed to have EPA retain permitting authority for those PSD 

### higher than 65 meters or which plan to
use dispersion techniques. When EPA issues its final stack height regulations the Districts can adopt requirements to satisfy the regulations and EPAwould then be able to drop itspermitting of those sources.

Copies ofEPA's detailed evaluation of the rules are available atEPA's Region IXoffice listed earlier in this notice. Supplementary Revisions

These rules have beenrevised several times.The submittals that EPA is approving are as follows:

Definitions. Permits. New source review. Standards. Defiritions. Permit requirements. New Source review.

Exclusions. Definitions. Environmental assessment. Action on applications.

Definitions. Permit requirements. Permits. New source review. Definitions. Definitions. Permit requirements. New source review. Exclusions. Environmental assessment. Actionon applications.

New source review. Definitions. Permits. New source review. Definitions. Definitions. Permit requirments. Environmental assessment. New source review. Action on applications. Exclusions.



### sources that would cause increment problems because ofstate law, since the Districts do nothave any power to correct the problems by themselves. The Districts also pointed out that many sources which claim to be cogeneration
sources do not in factmeet the definition provided by state law and are not exempted from any ofthe District's requirements.
Public Comments

EPA received two comment letters,

onefrom North Coast Unified AQMD and one from Pacific Gas and Electric (PG&E). The District's letter and subsequent discussions clarified some aspects ofcogeneration source permitting and have been reflected in Rule

130 (b2, ml,p3,s7)

.......................................... Chapter II

............................. 220 (a)(2), (b)

...................................................... (3,4.6.8,9)

............................................................ 130

................................. 200

........................................................................ 220 (a)(1&3), (b)

................................................. (l,2,5,7J,(c)

.......................................................... 260

.................................................. :..................... 130(bl,ml,p5,2)

................................................ 210

........................................................................ 230

........................................................................

130(b2,ml,p3,s7)

............................ ;.., ................ 200(c)(3-6)

........................................................... Chapter II

............................................................ 220 a~b

................................................................. 130

...................................................................... 130(bl.m2,nl,p5,s2)

........................................... 200 (s),(b),(c)(1-2),(d)

........................................ 220(c)

................................................................. 260

........................................................................ 210

....................................................................... 230

......................... ........................................

220 (a)

................................................................. 130 (b2,ml,s7,p3ap3)

...................................... Chapter II

............................................................ 220(b)

.................................................................. 130

.................... . . .............. 130(blnl,p5,s2)

................................................ 200

.................................................................. 210

....................................................................... 220(c)

........................................................... 230
.................................................................. 200
.......................................................................

### Federal Register / Vol. 50, No. 147 / Wednesday, July 31, 1985 /'.Rules and Regulations

clarification ofEPA's Evaluation Report. The PG&E letter addressed issues which primarily concern EPA's PSD regulations, rather than whether ornot EPA should approve these rules.
EPA Actions

In this notice, EPA is taking two actions:

1. EPA is approving the North Coast rules under Section 110 ofthe Clean Air Act and Part C, Subpart 1, (PDS) and is incorporating them into the California State Implementation Plan (SIP).

2. EPA is rescinding 40 CFR 52.270, except for (a) majorcogeneration

sources and modification which would
cause increment violations, (b) sources subject to stack height credit restrictions, (c) sources ofIndian lands, and (d) sources forwhich EPAhas issued PSD permits.

The Office of Management and Budget has exempted this rule from the requirements ofSection 3 ofExecutive Order 12291.

Incorporation by reference ofthe State Implementation Plan for the State ofCalifornia was approved by the Director of the Federal Register on July 1, 1982.
List of Subjects in 40 CFR Part 52

Airpollution control agency, Incorporation byreference, Ozone, Sulfur oxides, Nitrogen dioxide, Lead, Particulate matter,Carbon, monoxide, Hydrocarbons, Intergovernmental relations.

Dated: May 14, 1985. Lee M.Thomas, Administator.

PART 52

-- AMENDED]

Subpart FofPart 52, Chapter I,Title 40 ofthe Code ofFederal Regulations is amended as follows: Subpart F-California

1.The authority citation for Part 52 continues to read as follows:

Authority: 42 U.S.C. 7401-7642. 2. Section 52.220 is amended by adding (c)(124)(vi)(B), (c)(vii)(B), (c)(viii)(B), (c)(ix)(B), and (c)(x)(B), (c)(153)(ii)(B), (c)(154)(i)(B), (c)(155)(v)(B), (c)(156(vi), (c)(158)(i)(B), and (c)(162) as follows: §52.220 Identification of plan.
* * * *

.

(c) * * * (124) * * * (vi) * * * (B)New oramended rules 210 and 230.

(vii) * * * (B)'New or amended rules 210 and 230.

(viii) * * * (B) New or amended rules 130 (bI,ml, p5, s2), 210, and 230.



### (ix) * * * (B) New or amended rules 130, 130 (bi, nl, p5, and 200, s2), 210, 220(c), and 260. 

### x] * * (B) New or amended rules 210 and 230.

* * * * * *

(153) * * * 

### (it) * * * (B) New or amended rules, 130, 130 (bi, m2, nl, p5, s2), 200 (a), (b), (c)(1-2), and (d), 220(c), and 260.

(154) * * * 

## i) * * * (B) New or amended rules, 130,200, 220(a)(1&3), (b)(1, 2, 5, and 7), (c), and 260.

(155) * * * 

### v) * * * (B) New or amended rules 130 (b2,ml, p3, and s7), Chapter II, 200 (c)(3-6) and 220 (a)and (b).

(156) * * * (vi)Northern Sonoma County APCD. (A) New or amended rules 130 (b2, ml, p3, p3a, and s7), Chapter II, 220(B).

* * * * * *

(158) * * * 

## (i)* * * (B) New or amended rules 130 (b2,ml, p3, s7), Chapter II,220 (a)(2) aid (b)(3, 4, 6, 8 and 9).

• * * * * *

(162) Revised regulations for the following APCD were submitted on June 21, 1985 by theGovernor's designee.

(i)Northern Sonoma County APCD. (A) Amended rule 220 (a).

• * * * * *

3. Section 52.270 is amended by adding paragraphs (b)(2) through (b)(4) to read as follows: §52.270 Significant deterioration of air quality. (b)* * * (2) ThePSD rules for the North Coast Unified Air Quality Management District are approved under Part C, Subpart 1, ofthe Clean Air Act. However, EPA is retaining authority to apply §52.21 in certain cases. The provisions of§52.21 (b) through (w) are therefore incorporated and made a part ofthe state plan for California for the North Coast Unified Air Quality Management District for:

(i)Those cogeneration and resource recovery projects which aremajor stationary sources ormajor modifications under §52.21 and which would cause violations ofPSD increments.

(ii) Those projects which are major stationary sources ofmajor modifications under §52.21 and which would either have stacks taller than 65 meters orwould use "dispersion techniques" as defined in § 51.1.

(iii) Sources for which EPA has issued permits under §52.21, including the following permits and any others for which applications are received by July 31, 1985;

(A) Arcata Lumber Co. (NC 78-01; November 8, 1979), (B) Northcoast Paving (NC 79-03; July 5, 1979),

(C) PG&E Buhne Pt. (NC 77-05). (3)The PSD rules for the Mendocino County Air Pollution Control District are approved under Part C, Subpart 1,ofthe Clean Air Act.However, EPA is retaining authority to apply §52.21 in certain cases. The provisions of § 52.21 (b) through (w) are therefore incorporated and made a part of the state plan for California for the Mendocino County Air Pollution Control District for:

(i) Those cogeneration and resource recovery projects which are major stationary sources or major modifications under §52.21 and which would cause violations ofPSD increments.

(ii) Those projects which are major stationary sources ormajor modifications under §52.21 and which would either have stacks taller than 65 meters or would use "dispersion techniques" as defined in §51.1.

(iii) Any sources forwhich EPAhas issued permits under §52.21, including any permits for which applications are received by July 31, 1985.

(4)The PSD rules for the Northern Sonoma County Air Pollution Control District are approved under Part C, Subpart 1,ofthe Clean Air Act. However, EPA is retaining authority to apply §52.21 in certain cases. The provisions of §52.21 (b) through (w) are therefore incorporated and made a part of the state plan forCalifornia forthe Northern Sonoma County Air Pollution Control District for:

(i) Those cogeneration and resource recovery projects which are major stationary sources ormajor modifications under §52.21 and which would cause violations ofPSD increments.

(ii) Those projects which are major stationary sources ormajor modifications under §52.21 and which would either have stacks taller than 65 130943