March 5, 1996

MEMORANDUM

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).2

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 B. Development Of Applications And Permits For Outdated SIP Requirements.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)3

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) 541-53315WHITE 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 oftenoverlapping 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

2reducing 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

3permit 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

4apply 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.

5Sources 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.

1 A. Streamlining Multiple Applicable Requirements 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

1Title 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.

2Emissions 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.

6single 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 conditions3

. 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

3The 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 streamlining occurring in the future.

7cooperative 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

8account4

, 5 :

o Emissions limitation formats (emissions limits in
different 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 times6 ; and

o Test methods prescribed in the applicable requirements

. 7

4Applicable 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.

5Sources 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).

6While 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.

7The 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, orsection 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

9Limitations 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

. 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

. 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 (LDAR8 ) programs). The

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.

8For 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

10streamlined 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 limit9

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.

9Title 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

11that 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. 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 monitoring11 ) would be included in the permit. 12 The recordkeeping and reporting

demonstrations and may wish to defer such streamlining until after issuance of the initial part 70 permit.

10Quality assurance requirements pertaining to continuous monitoring systems should be evaluated using the same approach.

11The applicant may propose alternative monitoring of equal rigor. Permitting authorities may only implement streamlining which involves alternative or new monitoring methods within the flexibility granted by the SIP and any delegation of authority
from EPA (where section 111/112 standards are involved).

12Permitting 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

12associated with the selected monitoring approach may be presumed to be appropriate for use with the streamlined
limit

. 13

, 14

, 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

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 SO2 emissions from a boiler firing pipeline quality natural gas.)

13Where 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.

14Where 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.

15The 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.)

13initial 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 source16

. 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

16A 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.

14applicable 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

15problems 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

16unit. 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

17source 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

18approving 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

19Court'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

. 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

20SIP 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 satisfaction17 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. 18 Further, such a finding would not predetermine the outcome of the part 70 permit proceeding. Reviewers would have the ability to evaluate any

17Where 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.

18If 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.

21proposed 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

. 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

22extensive, 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 plan19 (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

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

23above 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

. 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

24shift 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

. 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

25part 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

26the 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

. 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 priorto the time that EPA has acted on the rule provided

27that 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

28create 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). 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? 21

20This 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.

21An 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 nothave 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

29(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

. 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

treatment in the application as an insignificant emissions unit.

30estimates 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

. 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

. 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

31IEU's are governed by different applicable requirements.

d. Permit Content - Monitoring, Recordkeeping, and Reporting

. 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

32necessary 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

. 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.

33Concerns 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 source22 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

22If an applicant stipulates it is a major source, it must list all pollutants for which it is major.

34to 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

35application. 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?

362. Guidance.

a. General

. 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 public23

. 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

. 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) 24 :

23Referenced 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).

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

37o 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

. 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 requirements25

.

25In the case of a merged permit program, i.e., where a State has merged its NSR and operating permits programs, previous

38Where 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

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.

39the 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

40reports 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.

41Attachment 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,

1demonstrate 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.

2Attachment 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, providedthe 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

. 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

. 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

. 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

. 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

. 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

. 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

2alternative. 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

. 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

. 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

. 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

. 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

. 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

3appropriate baseline and test method should be specified. 1 See draft "Guidelines for determining capture efficiencies" for criteria for evaluating alternative capture efficiency requirements.

6. Averaging Time

. 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

. 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

. 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

. 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.

1Implied improvements noted by the NSPS auto coating transfer efficiency table cannot be accepted at face value.

410. Production Level

. 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.

5