[Federal Register Volume 60, Number 236 (Friday, December 8, 1995)]
[Rules and Regulations]
[Pages 62992-62998]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-29994]



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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 70

[AD-FRL-5343-3]


Clean Air Act Final Interim Approval of Operating Permits 
Program; Washington

AGENCY: U.S. Environmental Protection Agency (EPA).

ACTION: Final interim approval and notice of correction.

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SUMMARY: EPA is repromulgating final interim approval of one element of 
the State of Washington's title V air operating permits program. On 
November 9, 1994, EPA granted interim approval to Washington's 
operating permits program. 59 FR 55813 (November 9, 1994). One of the 
bases for granting Washington's program interim rather than full 
approval was that EPA determined that Washington's exemption for 
``insignificant emission units'' exceeded the exemption authorized for 
such units under the Clean Air Act. A coalition of industries filed a 
petition for review of EPA's decision to condition full approval on 
changes to Washington's treatment of insignificant emission units. Upon 
EPA's request for a voluntary remand, the Court remanded this interim 
approval issue to EPA for reconsideration. EPA continues to believe 
that Washington has impermissibly expanded the exemption for 
insignificant emission units and therefore again conditions full 
approval of the Washington operating permits program on changes to 
Washington's treatment of insignificant emission units.
    EPA is also approving a change to the jurisdiction of the Benton 
County Clean Air Authority.
    Finally, EPA is correcting the date for expiration of the interim 
approval and the due date of the required submission addressing the 
interim approval issues.

EFFECTIVE DATE: January 8, 1996.

ADDRESSES: Copies of Washington's submittal and other supporting 
information used in developing this action are available for inspection 
during normal business hours at the address indicated.

FOR FURTHER INFORMATION CONTACT: Elizabeth Waddell, 1200 Sixth Avenue, 
Seattle, Washington 98101.

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

A. Introduction

    As required under title V of the 1990 Clean Air Act Amendments 
(sections 501-507 of the Clean Air Act (``the Act'')), EPA has 
promulgated rules which define the minimum elements of an approvable 
State operating permits program and the corresponding standards and 
procedures by which the EPA will approve, oversee, and withdraw 
approval of State operating permits programs (see 57 FR 32250 (July 21, 
1992)). These rules are codified at 40 Code of Federal Regulations 
(CFR) Part 70. Title V requires States to develop, and submit to EPA, 
programs for issuing these operating permits to all major stationary 
sources and to certain other sources.
    The Act requires that States develop and submit these programs to 
EPA by November 15, 1993, and that EPA act to approve or disapprove 
each program within 1 year after receiving the submittal. EPA's program 
review occurs pursuant to section 502 of the Act and the part 70 
regulations, which together outline criteria for approval or 
disapproval. Where a program substantially, but not fully, meets the 
requirements of part 70, EPA may grant the program interim approval for 
a period of up to 2 years. If EPA has not fully approved a program by 2 
years after the November 15, 1993 date, or by the end of an interim 
program, it must establish and implement a Federal program.

B. Previous Action on Washington's Program

    Washington submitted its operating permits program to EPA in 
November 1993. In November 1994, EPA granted interim approval to 
Washington's program and conditioned full approval on, among other 
things, revisions to Washington's regulations pertaining to the 
treatment of insignificant emission units (IEUs).\1\ See 59 FR 55813 
(November 9, 1994). On January 9, 1995, the Western States Petroleum 
Association, Northwest Pulp & Paper Association, Aluminum Company of 
America, Columbia Aluminum Corporation, Intalco Aluminum Corporation, 
Kaiser Aluminum & Chemical Corporation and Vanalco Inc. (collectively, 
``Petitioners'') filed a petition with the United States Court of 
Appeals for the Ninth Circuit seeking review of the conditions in EPA's 
final interim approval of Washington's operating permits program. 
Western States Petroleum Association, et al. v. EPA, et al., No. 95-
70034 (9th Cir., Jan. 6, 1995). In their petition and subsequent brief, 
Petitioners claimed that EPA had exceeded its authority in requiring 
Washington to revise its IEU rules as a condition of full approval and 
that this condition was arbitrary, capricious, an abuse of discretion, 
and not otherwise in accordance with the law. Petitioners' brief 
clarified that Petitioners were challenging only EPA's requirement that 
Washington revise its IEU rules to obtain full approval and did not 
challenge any of the four other conditions for full approval. The State 
of Washington filed a brief as intervenor in the matter.

    \1\ For the purpose of this action, ``IEU'' refers to activities 
and emission units that are defined as insignificant under WAC 173-
401-200(16) and 173-401-530, when used in discussing Washington's 
program, and refers to the generic concept under part 70, when used 
in discussing the requirements of part 70.
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    In reviewing the issue, EPA determined that the Petitioners and the 
State of Washington had raised a substantial question concerning EPA's 
interpretation of the IEU provisions of part 70 and the specific 
regulatory revisions EPA had ordered the State to make to its IEU rules 
as a condition of full approval. EPA therefore moved the Court on May 
23, 1995, to vacate and remand to EPA those portions of EPA's final 
interim approval of Washington's operating permits program concerning 
IEUs. The Court granted EPA's motion on July 7, 1995.
    Following the Court's order, EPA again reviewed the part 70 
regulations and Washington's IEU provisions and, on September 28, 1995, 
again proposed interim approval of the State's program (60 FR 50166). 
EPA explained in the proposal that EPA continued to believe that 
Washington's IEU provisions did not comport with the requirements of 
part 70 with respect to permit content because the State's regulations 
expressly excluded IEUs subject to generally applicable requirements of 
the Washington State Implementation Plan (SIP) from all the 
requirements of 40 CFR 70.6, except for the requirement to include in 
the permit all applicable requirements. EPA also expressed its concern 
that the State's definition of 

[[Page 62993]]
IEU excluded, perhaps unintentionally, IEUs from certain permit 
application requirements that apply to IEUs and possibly from even 
title V applicability determinations.
    During the public comment period on the September 1995 proposal, 
EPA received comments from the Petitioners, the State of Washington, 
Department of Ecology (``State'' or ``Ecology''), and the Boeing 
Corporation, an aerospace manufacturing concern with major operations 
in Washington State (collectively, the ``commenters''). The commenters 
addressed only EPA's proposed interim approval of the Washington IEU 
program. No comments were received regarding the change in jurisdiction 
of Benton County Clean Air Authority or the correction of the 
expiration date for interim approval.
    EPA has carefully reviewed the comments and continues to believe 
that the Washington IEU program must be revised as a condition of full 
approval. As discussed in more detail below, EPA grants deference to 
the State's interpretation of its IEU regulations, and is therefore 
satisfied, based on the State's interpretation, that the State's IEU 
regulations meet the requirements of part 70 with respect to permit 
applications and title V applicability. The problems with the permit 
content requirements of section 70.6 which EPA addressed in the 
September 1995 proposal, however, arise not from a difference of 
opinion as to the interpretation of Washington's regulations, but 
instead from a difference of opinion as to the plain meaning and intent 
of the part 70 regulations themselves. EPA continues to believe that 
part 70 does not exempt IEUs subject to applicable requirements from 
the testing, monitoring, recordkeeping, reporting, compliance, and 
compliance certification requirements of 40 CFR 70.6(a)(1), (a)(3) and 
(c). Because Washington's title V program expressly excludes IEUs 
subject to generally applicable requirements from these requirements of 
section 70.6, EPA continues to believe that the Washington IEU 
regulations do not qualify for full approval.

II. Final Action and Implications

A. Response to Comments

    As discussed above, the comments addressed only EPA's proposed 
interim approval of Washington's IEU regulations.
1. Permit Content
    As the State of Washington and Petitioners concede, the Washington 
program expressly exempts IEUs subject to generally applicable 
requirements from the testing, monitoring, recordkeeping, reporting, 
compliance, and compliance certification requirements of section 
70.6.<SUP>2 See WAC 173-401-200(16), 173-401-530(2)(c) and 173-401-
530(2)(d). Instead, for IEUs subject to generally applicable 
requirements of the Washington SIP, the Washington program requires 
only that the permit contain the generally applicable requirements that 
apply to such IEUs. WAC 173-401-530(2)(b). The commenters argue that 
the language and intent of the part 70 regulations allow such an 
exemption from the permit content requirements of section 70.6 for 
IEUs. EPA disagrees.

    \2\ This includes the requirement to include ``gapfilling'' 
testing, monitoring, recordkeeping and reporting requirements for 
IEUs, as required by 40 CFR 70.6(a)(3)(i), (ii) and (iii); 
compliance certification, testing, monitoring, reporting and 
recordkeeping requirements sufficient to assure compliance with the 
generally applicable requirements for subject IEUs, as required by 
40 CFR 70.6(c)(1); compliance certification for IEUs, as required by 
40 CFR 70.6(c)(5); and, for IEUs not in compliance, a compliance 
schedule and progress reports, as required by 40 CFR 70.6(c)(3) and 
(4).
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    The commenters acknowledge that there is no reference in 40 CFR 
70.6 to IEUs. They argue, however, that this fact ``in no way 
undermines the authority granted to states in section 70.5 to exempt 
insignificant emission units from permit program requirements.'' 
Section 70.5, however, does not exempt IEUs from ``permit program 
requirements'' in general, but instead exempts IEUs only from certain 
permit application requirements. There is nothing in the language of 
section 70.5 or elsewhere in the part 70 regulations to support the 
commenters' argument that, because a State may exempt IEUs from certain 
permit application requirements in section 70.5, a State may also 
exempt IEUs from certain permit content requirements in section 70.6.
    The commenters' reliance on EPA's inherent power to exempt emission 
units with de minimis emissions from certain permit content 
requirements is also misplaced. EPA did indeed rely on Alabama Power 
Co. v. Costle, 636 F.2d 323 (D.C. Cir. 1980), to exempt IEUs from 
certain permit application requirements in section 70.5. See 57 FR 
32250, 32273 (July 21, 1992). Whether EPA could have relied on this 
same authority to exempt IEUs from certain permit content requirements 
in section 70.6, however, is irrelevant at this point. As stated above, 
nothing in the language of the part 70 regulations themselves or in the 
preamble to the proposed or final part 70 regulations supports the 
commenters' argument that the limited exemption in certain permit 
application requirements in section 70.5 also extends to the permit 
content requirements of section 70.6. The commenters' concern appears 
to be with the part 70 regulations themselves, that is, the failure of 
the part 70 regulations to exempt IEUs subject to applicable 
requirements from certain permit content requirements of section 70.6. 
The time for raising such an issue has long since past.
    Unable to point to any language in the part 70 regulations 
supporting their interpretation, the commenters rely on ``logic.'' The 
commenters first argue that ``it is entirely illogical for EPA to 
specifically exempt these IEUs from the application and then attempt to 
regulate these same IEUs in the final permit.'' The commenters go on to 
state that EPA's decision undermines the broad purpose of part 70's IEU 
program exemption. The commenters appear to misunderstand the purpose 
and scope of the part 70 program for insignificant emissions units and 
activities. In promulgating section 70.5(c), EPA crafted a limited 
exemption regarding the information required in part 70 permit 
applications. Notwithstanding this general exemption from certain 
permit application requirements, section 70.5(c) requires that an 
application ``may not omit information needed to determine the 
applicability of, or to impose, any applicable requirement.'' This 
means that when information is needed in an application to determine 
whether substantive requirements apply to an IEU, even this limited 
exemption to the permit application requirements provided in section 
70.5 falls away.
    In a similar vein is the comment that not allowing IEU's to be 
exempted from permit content requirements ``essentially obliterates the 
exemption.'' EPA disagrees. An emission unit that is not exempted from 
the application must be addressed in accordance with section 
70.5(c)(3), which among other things requires a physical description of 
the emissions points, information about the emissions, raw materials 
and production rate, and any air pollution control equipment. EPA 
therefore sees no basis for the argument that extension of the IEU 
exemption to the permit content requirements of section 70.6 is 
necessary in order to give meaning to the IEU exemption.
    The commenters also argue that ``If insignificant emission units 
are not entirely exempted from the monitoring, recordkeeping, reporting 
and certification requirements of a permit, both sources and permitting 
agencies will be forced to expend substantial 

[[Page 62994]]
resources without compensating environmental benefit.'' As an initial 
matter, EPA again points out that this concern challenges the part 70 
regulations themselves and should have been raised following final 
promulgation of the part 70 regulations. Such concerns are untimely 
when raised in the context of EPA's action on Washington's title V 
program. In any event, EPA disagrees that applying the testing 
monitoring, recordkeeping, reporting, and compliance certification 
requirements of section 70.6 to IEUs with applicable requirements will 
be unduly burdensome or result in no compensating environmental 
benefit.
    The commenters imply that requiring the provisions of section 70.6 
to be met with respect to IEUs subject to applicable requirements will 
result in unnecessary paperwork. As EPA discussed in its September 1995 
proposal on this action, part 70 allows States flexibility in tailoring 
the amount and quality of information required in the permit 
application, and the rigor of compliance requirements in the permit, to 
the type of emission unit and applicable requirement in question. See 
60 FR 50170; See also White Paper for Streamlined Development of Part 
70 Permit Applications, from Lydia Wegman, Deputy Director of EPA's 
Office of Air Quality Planning and Standards, to EPA Regional Air 
Directors (July 10, 1995). The requirement to include in a permit 
testing, monitoring, recordkeeping, reporting, and compliance 
certification sufficient to assure compliance with the terms and 
conditions of the permit does not require the permit to impose the same 
level of rigor with respect to emission units that do not require 
extensive testing or monitoring in order to assure compliance with the 
applicable requirements as it does with respect to emission units that 
do require extensive testing or monitoring because of their potential 
to violate emission limitations or other requirements under normal 
operating conditions. As provided for in 40 CFR 70.6(a)(3)(B), 
recordkeeping may be used to provide reliable data that are 
representative of the source's compliance with the permit. For example, 
records showing the use of natural gas as the fuel for combustion 
sources would, in most cases, provide reliable data for a certification 
of compliance with sulfur dioxide emission limits.
    The burden of ensuring that a permit meets the requirements of 
section 70.6 can also be significantly minimized by using standard 
permit terms to address testing, monitoring, recordkeeping, reporting, 
compliance and compliance certification requirements for common 
generally applicable requirements that apply to IEUs. Permits could, 
for example, contain a chart summarizing the monitoring, recordkeeping, 
and reporting requirements that would form the basis for compliance 
certifications for the generally applicable requirements for IEUs.
    In the September 1995 proposal on this action, EPA pointed to the 
Oregon operating permits program as an example of a program that had 
effectively implemented the requirements of section 70.6 for IEUs. The 
Oregon program received interim approval effective January 3, 1995, (59 
FR 61820 (December 2, 1994)),<SUP>3 one month after Washington's 
program first received final interim approval. Since that time, Oregon 
permitting authorities have received complete title V permit 
applications from over 86 sources, have issued 12 final title V permits 
and have submitted to EPA an additional 5 proposed title V permits. As 
discussed in the September 1995 proposal on this action, Oregon has 
used standard permit terms in its title V permits to address generally 
applicable requirements for IEUs as well as the associated testing, 
monitoring, recordkeeping, reporting, compliance, and compliance 
certification requirements for such IEUs. See 60 FR 50170-50171. Based 
on EPA's review of public comments on the 5 proposed and 12 final 
permits issued to date, Oregon sources have not objected to the permit 
terms relating to IEUs.

    \3\ Oregon's IEU provisions received full approval when EPA 
granted the Oregon title V program final interim approval, see 59 FR 
61820 (December 2, 1994), and the entire Oregon title V program has 
now received final full approval. See 60 FR 50106 (September 28, 
1995).
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    EPA is committed to issuing additional guidance to aid State and 
local permitting authorities in drafting permits which comply with the 
permit content requirements of section 70.6. EPA intends to issue such 
guidance with respect to IEUs with applicable requirements within the 
next several months. This guidance will address such things as 
streamlining the permit by using general conditions which apply to 
categories of IEUs; appropriate monitoring, recordkeeping and reporting 
requirements for IEUs; and the appropriate level of information (i.e., 
reasonable inquiry) upon which compliance certifications would be 
based.
    One commenter on the Washington title V program has stated, without 
any substantiation, that ``a comparison of title V applications for 
similar sources in the two states reveals that Oregon applications were 
several times larger than those prepared in Washington, with the 
difference attributable to emissions units making up one or two percent 
of the source's total emissions.'' Although EPA has to date received 
only 16 permit applications from title V sources in Washington, a 
comparison of five Washington title V applications to Oregon title V 
applications for sources with the same SIC codes does not substantiate 
the commenter's claim. Although the Oregon permit applications that EPA 
reviewed were generally one-and-one-half times larger than their 
Washington counterparts, two of the five Washington applications 
contained more pages addressing IEUs and facility-wide applicable 
requirements than did their Oregon counterparts and one had the same 
number of pages. More importantly, none of these 10 permit applications 
for Washington and Oregon contained any significant number of pages 
addressing IEUs. The IEU-related portions of the Oregon applications 
ranged from 5 to 25 pages and the IEU-related portions of the 
Washington applications ranged from 3 to 19 pages. As indicated by the 
sample Oregon permit which was included in the docket for the proposal 
on this action, and the accompanying application for the permit which 
EPA has added to the docket, only 8 of the 165 pages of the permit 
application are devoted to IEUs, which includes three pages of 
checklists for categorically exempt IEUs, one page of brief 
descriptions/equations addressing aggregate insignificant IEUs, two 
pages listing facility-wide applicable requirements, and two pages 
listing compliance methods for the facility-wide applicable 
requirements. Note as well that not even two of the 27 pages of the 
Oregon permit for this source are devoted to IEUs. Any difference in 
the size of Oregon and Washington title V permit applications appears 
to be attributable to the difference in the forms required to be 
submitted for emission units other than IEUs and other differences in 
the Oregon and Washington air programs, such as the unique plant site 
emissions limit (PSEL) provisions of Oregon's rules. In short, Oregon 
permitting authorities and sources do not appear to be awash in the 
avalanche of paperwork for IEUs predicted by the commenters.
    EPA also vigorously disagrees that requiring permits to address the 
testing, monitoring, reporting, recordkeeping, compliance, and 
compliance certification requirements of section 70.6 for IEUs will 
have little or no environmental benefit. For example, the Washington 
IEU program lists ``vents 

[[Page 62995]]
from rooms, buildings and enclosures that contain permitted emissions 
units or activities from which local ventilation, controls and separate 
exhaust are provided'' as ``categorically exempt'' IEUs if they are 
subject to no applicable requirements other than the generally 
applicable requirements of the Washington SIP. WAC 173-401-532(9) and 
173-401-530(2)(a). EPA has received a title V application from one 
Washington facility which lists ``furnace building roof monitor and 
other vents, doorways'' as collectively emitting 922 tons of 
particulate per year. The application also indicates that these 
emission points are subject only to the generally applicable opacity 
limit (WAC 173-400-040(1)), grain loading standard (WAC 173-400-060), 
and sulfur dioxide standard (WAC 173-400-040(6)) in the Washington SIP. 
Based on the description provided in the application, EPA believes that 
these emission units would qualify as IEUs under WAC 173-401-532(9) and 
173-401-530(2)(a). The application indicates that these emissions units 
are not in compliance with the State's opacity limit. Washington's 
current regulations would require that the title V permit for this 
source contain the generally applicable requirements that apply to 
these IEUs, but would exempt them from any other requirements of 
section 70.6, including the requirement to submit an annual compliance 
certification. The environmental benefit of requiring the title V 
permit for such a source to include an appropriate level of testing, 
monitoring, recordkeeping, and reporting, and to require annual 
certification of the compliance status of these IEUs, should be 
obvious. Requiring IEUs to be addressed in the permit puts the burden 
on sources to ensure that they are in compliance with the applicable 
requirements, rather than on permitting authorities to document that 
such sources are out of compliance. This shift in responsibility for 
ensuring compliance is one of the major objectives of the title V 
program.
    The commenters final comment on the permit content issue is that, 
in finding that Washington's IEU regulations fail to meet the permit 
content requirements of section 70.6, EPA is holding the Washington 
program to a different standard than the agency has applied to other 
States. The commenters can point to no instance, however, in which EPA 
has given approval to an IEU program which expressly exempts IEUs from 
some or all permit content requirements, as does the Washington 
program. Instead, the commenters' argument appears to be that EPA has 
approved State programs that exempt or require only the summary listing 
of IEUs in permit applications and that, ``Because the [IEU] units are 
not listed in the permit application there is a clear inference to 
sources, and the tacit understanding by the permitting agencies that 
IEUs are not included in the operating permit.'' This is not the case.
    EPA has approved State title V programs that exempt or allow 
sources to omit IEUs from or merely list IEUs in the permit 
application, but only if the States have shown to EPA's satisfaction 
that their programs meet the two minimum requirements of section 
70.5(c) for the treatment of IEUs in permit applications. First, 
insignificant activities which are exempt because of size or production 
rate must be listed in the permit application. Second, the permit 
application may not omit information needed to determine the 
applicability of, or to impose, any applicable requirement or any 
required fee.<SUP>4 EPA also required the State of Washington to 
satisfy these requirements as a condition of full approval of its IEU 
provisions and, as discussed below, EPA now finds that Washington has 
satisfied these requirements for permit applications.

    \4\ The Wisconsin program does not specifically contain this 
requirement. As EPA clarified in its technical support document 
supporting EPA's approval of the Wisconsin program, however, because 
the State very narrowly defined IEUs and required that all IEUs be 
listed in the application, the Wisconsin program met the 
requirements of section 70.5(c).
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    But, contrary to the commenters' assertion, EPA has also required, 
as a condition for full approval of a State's IEU program, that the 
State ensure that permits issued for such sources comply with the 
requirements of section 70.6 with respect to all IEUs subject to 
applicable requirements. EPA disagrees with the inference drawn by the 
commenters, namely, that other State programs might be interpreted to 
exempt IEU's from permit content requirements because the State 
programs have provided sources relief from certain permit application 
requirements. Such an inference is not reasonable or appropriate given 
the fact that there is no language in the State program regulations 
cited by the commenters which contain or suggest an exemption from the 
permit content requirements and given the fact that the federal 
regulation under which the State programs have been approved does not 
allow for this result. Indeed, for obvious reasons, EPA's approval of 
these programs has been based on the assumption that State program 
regulations will be interpreted in the same way that EPA has 
interpreted part 70. That is, where the State program does not 
specifically exempt IEU's from permit content requirements, EPA has 
assumed that no such exemption will be inferred. Where EPA has been 
concerned that a State program could be interpreted to provide an 
exemption from permit content requirements for IEUs subject to 
applicable requirements, EPA has clarified its expectation in the 
Federal Register notice acting on such programs that the permitting 
authorities must ensure that all permits issued ``assure compliance 
with all applicable requirements at the time of permit issuance.'' See 
60 FR 32603, 32608 (June 23, 1995); 60 FR 44799, 44801 (August 29, 
1995). If, during implementation of such programs, permits are issued 
which do not comply with the requirements of section 70.6 with respect 
to IEUs subject to applicable requirements, EPA would consider this 
grounds for objecting to individual permits, 40 CFR 70.8(c)(1), as well 
as grounds for withdrawing approval of such State programs, 40 CFR 
70.10(c)(1)(ii)(B).
    In summary, the commenters can point to no instance in which EPA 
has approved a State program which expressly exempts IEUs with 
applicable requirements from the permit content requirements of section 
70.6. Moreover, the commenters can point to no action on the part of 
EPA which has expressly or implicitly condoned a tacit exemption from 
the permit content requirements for such IEUs. EPA's decision to grant 
interim rather than full approval to the Washington IEU regulations for 
failing to comply with the requirements of section 70.6 is fully 
consistent with EPA's actions on other State IEU programs.
2. Permit Application Requirements
    The commenters also objected to EPA's proposed finding that the 
Washington regulations fail to meet the requirements of section 70.5 
for permit applications with respect to IEUs. The basis of EPA's 
position was that WAC 173-401-200(16) appears to specifically exempt 
activities and units deemed insignificant under WAC 173-401-530 from 
all of Washington's permit program requirements, except as provided in 
WAC 173-401-530. WAC 173-401-530, however, does not include all of the 
requirements of section 70.5 which a State must meet with respect to 
IEUs, most importantly, the requirement of section 70.5(c) that a 
permit application may not omit information needed to determine the 
applicability or to impose any 

[[Page 62996]]
applicable requirement or to evaluate any required fee (the 
``applicable requirements gatekeeper'').<SUP>5 WAC 173-401-530 also 
does not incorporate the requirement that all applications be certified 
as to truth, accuracy and completeness, which is contained in WAC 173-
401-500(7)(c) and 173-401-520. Another problem noted by EPA was the 
fact that WAC 173-401-500(7) could be interpreted as allowing a permit 
application to be deemed complete even if the source had not provided 
the information in the permit application required by Washington's 
regulations for IEUs.

    \5\ Although, in the September 1995 proposal on this action, EPA 
did not specifically discuss the applicable requirements gatekeeper 
as one of the examples where the Washington program fails to satisfy 
the requirements of part 70 with respect to permit applications, the 
opening sentence of the discussion in the proposal on permit 
applications clearly expressed EPA's concern that the exemption in 
WAC 173-401-200(16) appeared to extend to the gatekeeper itself, 
which is contained in WAC 173-401-510(1). See 60 FR 50169.
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    The commenters, including the State of Washington, responded that 
EPA was taking an overly broad interpretation of the exclusion 
contained in WAC 173-401-200(16), thereby giving other provisions of 
Washington's IEU regulations no effect. Upon further review and based 
on the State's interpretation of its regulations, EPA finds that the 
Washington IEU provisions meet the requirements of section 70.5(c).
    The definition of IEU at WAC 173-401-200(16) does appear to exclude 
IEUs from all requirements except those contained in WAC 173-401-530. 
Certain other requirements of Washington's regulations for title V 
permit applications, however, specifically refer to IEUs. Importantly, 
WAC 173-401-510, which sets forth the permit application requirements 
for all sources in Washington, specifically refers to IEUs by stating:

    Information as described below for each emissions unit at a 
chapter 401 source other than insignificant emissions units shall be 
included in the application. However, an application may not omit 
information need to determine the applicability of, or to impose, 
any applicable requirement or to evaluate the fee amount required 
under the permitting authority's schedule.

WAC 173-401-510(1). The State has argued that this provision would be 
nullified if WAC 173-401-200(16) was interpreted to exempt IEUs from 
those provisions outside of WAC 173-401-530 that specifically refer to 
IEUs, such as 173-401-510(1). The State has assured EPA that this was 
not its intent. Instead, the State has stated that the ``applicable 
requirements gatekeeper'' of WAC 173-401-510(1) was specifically 
included to limit the statements in WAC 173-401-200(16) and 173-401-
510(1) that IEUs are not subject to the permit program requirements, 
including the application requirements, except as provided by WAC 173-
401-530.
    In response to the EPA's concern with respect to the requirement to 
certify the truth, accuracy and completeness of the permit application, 
the commenters state that ``Statements in a Washington operating permit 
application, including those regarding IEUs made in accordance with WAC 
173-401-530, are plainly subject to the certification requirements of 
WAC 173-401-500(7)(c).'' The State further argues that the State's 
standard permit application form requires certification of all 
information in the application and that if a source attempted to limit 
its certification with respect to IEUs, the State would view the 
application incomplete.
    In response to EPA's concern that the criteria for determining 
completeness in WAC 173-401-500(7) could be interpreted to allow an 
application to be deemed complete even if it omits all required 
information on IEUs, the commenters again point out that the specific 
provisions in WAC 173-401-510(1) and -500(4) require an application to 
include necessary information regarding IEUs to be complete and that 
interpreting WAC 173-401-200(16) to vitiate those provisions would 
render the specific references to IEUs in WAC 173-401-500 and 173-401-
510 meaningless.
    Although EPA believes the interrelationship among the various 
provisions in Washington's regulations for IEUs is far from clear, EPA 
is willing to grant deference to the State's interpretation of its own 
rules. Accordingly, EPA now finds that Washington's program fully meets 
the requirements of 40 CFR 70.5 regarding permit applications. Because 
the State will need to revise its title V rules to get full title V 
approval, EPA strongly encourages the State to revise its IEU 
provisions to clarify the relationship among WAC 173-401-200(16), 173-
401-500, 173-401-510, 173-401-520 and 173-401-530. EPA will also pay 
close attention during program implementation to permit applications 
and proposed permits to ensure that the Washington rules are 
implemented consistently with the State's assertions.
3. Applicability Determinations
    A final concern raised by EPA was that State law could be 
interpreted so as to exclude emissions from IEUs in the calculation of 
a source's potential to emit for purposes of determining whether the 
source was a major source and thereby subject to Washington's title V 
program in the first instance. Again, EPA's concern hinged on the 
extent of the exemption in WAC 173-401-200(16). The commenters 
responded by pointing out that the definition of ``insignificant 
activity'' or ``insignificant emission unit'' requires the unit or 
activity to be ``located at a chapter 401 source'' before it can 
qualify as insignificant and thus be exempted from certain permit 
program requirements. The commenters argue that this requires that a 
source first be determined to be a major source before any emission 
unit can be deemed insignificant, thus requiring all emissions, 
including emissions from IEUs, to be considered when determining if a 
source is a major source.
    Again, EPA is willing to grant deference to the State's 
interpretation of its own rules and finds that this provision complies 
with the requirements of 40 CFR Part 70. EPA will also pay close 
attention to applicability determinations during program implementation 
to ensure that the Washington rules are implemented consistently with 
the State's assertions.

B. Interim Approval Action

    EPA is promulgating interim approval of Washington's regulations 
addressing IEUs. Ecology must make the following revisions to its IEU 
provisions as a condition of full approval:

    (5) Revise WAC 173-401-200(16) (Definition of ``insignificant 
activity'' and ``insignificant emissions unit''); WAC 173-401-530 
(Insignificant emission units); WAC 173-401-532 (Categorically 
exempt insignificant emission units); and WAC 173-401-533 (Units and 
activities defined as insignificant based on size or production 
rate) to ensure that permits contain all applicable requirements and 
meet all permit content requirements of 40 CFR 70.6 for all emission 
units, even for IEUs.

    This requirement replaces Condition 5 under the heading ``Ecology'' 
in section II.B. of EPA's November 9, 1994, Federal Register notice 
granting final interim approval of the Washington operating permits 
program. See 59 FR 55818. Note that this action in no way affects the 
changes necessary to address all other interim approval issues 
identified in the November 9, 1994 Federal Register notice. In other 
words, as a condition of full approval, Washington must also correct 
the four other deficiencies in its program identified in the November 
9, 1994, notice and the other Washington permitting authorities must 
correct all 

[[Page 62997]]
deficiencies in their respective programs identified in the November 9, 
1994, notice. See 59 FR 55818-55819.
    EPA is also approving as a program revision the transfer of title V 
permitting and enforcement authority for sources in Franklin County to 
the Washington Department of Ecology.
    Finally, EPA is correcting the dates in 40 CFR Part 70, Appendix A 
for expiration of the interim approval of the Washington State and 
local operating permits programs from November 9, 1996, to December 9, 
1996, and is correcting the date by which the State is required to 
submit a corrective program from May 9, 1996, to June 9, 1996.

C. Effective Date of Interim Approval

    This action does not change the time period for the initial interim 
approval, which is December 9, 1996. During this ongoing interim 
approval period, the State is protected from sanctions for failure to 
have a program, and EPA is not obligated to promulgate, administer and 
enforce a Federal permits program for the State of Washington. Permits 
issued under the Washington program have full standing with respect to 
part 70. In addition, the 1-year deadline for submittal of permit 
applications by subject sources and the 3-year time period for 
processing the initial permit applications began upon the effective 
date of interim approval, which in this case was December 9, 1994.
    If the State of Washington were to fail to submit a complete 
corrective program for full approval by the date 6 months before 
expiration of the interim approval (by June 9, 1996) EPA would start an 
18-month clock for mandatory sanctions. If the State of Washington were 
then to fail to submit a complete corrective program before the 
expiration of that 18-month period, EPA would be required to apply one 
of the sanctions in section 179(b) of the Act, which would remain in 
effect until EPA determined that the State of Washington had corrected 
the deficiency by submitting a complete corrective program. Moreover, 
if the Administrator were to find a lack of good faith on the part of 
the State of Washington both sanctions under section 179(b) would apply 
after the expiration of the 18-month period until the Administrator 
determined that the State of Washington had come into compliance. In 
any case, if, 6 months after application of the first sanction, the 
State of Washington still had not submitted a corrective program that 
EPA found complete, a second sanction would be required.
    If, following expiration of final interim approval, EPA were to 
disapprove the State of Washington's complete corrective program, EPA 
would be required to apply one of the section 179(b) sanctions on the 
date 18 months after the effective date of the disapproval, unless 
prior to that date the State or Washington had submitted a revised 
program and EPA had determined that it corrected the deficiencies that 
prompted the disapproval. Moreover, if the Administrator found a lack 
of good faith on the part of the State of Washington both sanctions 
under section 179(b) would apply after the expiration of the 18-month 
period until the Administrator determined that the State of Washington 
had come into compliance. In all cases, if, 6 months after EPA applied 
the first sanction, the State of Washington had not submitted a revised 
program that EPA had determined corrected the deficiencies that 
prompted disapproval, a second sanction would be required.
    In addition, discretionary sanctions may be applied where warranted 
any time after the end of an interim approval period if a State has not 
timely submitted a complete corrective program or EPA has disapproved a 
submitted corrective program. Moreover, if EPA has not granted full 
approval to a State program by the expiration of an interim approval 
and that expiration occurs after November 15, 1995, EPA must 
promulgate, administer and enforce a Federal permit's program for that 
State upon expiration of interim approval.

III. Administrative Requirements

A. Docket

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

B. Executive Order 12866

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

C. Regulatory Flexibility Act

    EPA's actions under section 502 of the Act do not create any new 
requirements, but simply address operating permits programs submitted 
to satisfy the requirements of 40 CFR part 70. Because this proposed 
action does not impose any new requirements, it does not have a 
significant impact on a substantial number of small entities.

D. Unfunded Mandates

    Under section 202 of the Unfunded Mandates Reform Act of 1995, 
signed into law on March 22, 1995, EPA must prepare a budgetary impact 
statement to accompany any proposed or final rule that includes a 
Federal mandate that may result in estimated costs to State, local, or 
tribal governments in the aggregate; or to the private sector, of $100 
million or more. Under section 205, EPA must select the most cost-
effective and least burdensome alternative that achieves the objectives 
of the rule and is consistent with statutory requirements. Section 203 
requires EPA to establish a plan for informing and advising any small 
governments that may be significantly or uniquely impacted by the rule.
    EPA has determined that the action proposed today does not include 
a Federal mandate that may result in estimated costs of $100 million or 
more to either State, local, or tribal governments in the aggregate, or 
to the private sector. This Federal action approves pre-existing 
requirements under State or local law, and imposes no new Federal 
requirements. Accordingly, no additional costs to State, local, or 
tribal governments, or to the private sector, result from this action.

List of Subjects in 40 CFR Part 70

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

    Authority: 42 U.S.C. sections 7401-7671q.

    Final Interim Approval of the part 70 operating permits program for 
the Washington Department of Ecology, the Washington Energy Facility 
Site Evaluation Council, the Benton County Clean Air Authority, the 
Northwest Air Pollution Authority, the Olympic Air Pollution Control 
Authority, the Puget Sound Air Pollution Control Agency, the Spokane 
County Air Pollution Control Authority, the Southwest Air Pollution 
Control Authority, and the Yakima County Clean Air Authority.

    Dated: November 15, 1995.
Chuck Clarke,
Regional Administrator.

PART 70--[AMENDED]

    Part 70, chapter I, title 40 of the Code of Federal Regulations is 
amended as follows: 

[[Page 62998]]

    1. The authority citation for part 70 continues to read as follows:

    Authority: 42 U.S.C. 7401, et seq.

    2. Part 70 is amended by revising the Washington paragraph of 
Appendix A as follows:

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

* * * * *

Washington

    (a) Department of Ecology (Ecology): submitted on November 1, 
1993; effective on December 9, 1994; interim approval expires 
December 9, 1996.
    (b) Energy Facility Site Evaluation Council (EFSEC): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (c) Benton County Clean Air Authority (BCCAA): submitted on 
November 1, 1993 and amended on September 29, 1994 and April 12, 
1995; effective on December 9, 1994; interim approval expires 
December 9, 1996.
    (d) Northwest Air Pollution Authority (NWAPA): submitted on 
November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (e) Olympic Air Pollution Control Authority (OAPCA): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (f) Puget Sound Air Pollution Control Agency (PSAPCA): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires December 9, 1996.
    (g) Southwest Air Pollution Control Authority (SWAPCA): 
submitted on November 1, 1993; effective on December 9, 1994; 
interim approval expires December 9, 1996.
    (h) Spokane County Air Pollution Control Authority (SCAPCA): 
submitted on November 1, 1993; effective on December 9, 1994; 
interim approval expires December 9, 1996.
    (i) Yakima County Clean Air Authority (YCCAA): submitted on 
November 1, 1993 and amended on September 29, 1994; effective on 
December 9, 1994; interim approval expires December 9, 1996.
* * * * *

[FR Doc. 95-29994 Filed 12-7-95; 8:45 am]
BILLING CODE 6560-50-P