[Federal Register Volume 59, Number 216 (Wednesday, November 9, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-27683]


[[Page Unknown]]

[Federal Register: November 9, 1994]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 70

[AD-FRL-5103-8]

 

Clean Air Act Final Interim Approval of Operating Permits 
Programs in Washington

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final interim approval.

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SUMMARY: EPA is promulgating interim approval of the operating permits 
program submitted by the State of Washington for the purpose of 
complying with Federal requirements for an approvable State program to 
issue operating permits to all major stationary sources and to certain 
other sources. The Washington program includes submittals by the 
Washington Department of Ecology (Ecology), the Washington Energy 
Facility Site Evaluation Council (EFSEC), and seven local air 
authorities: the Benton-Franklin Counties Clean Air Authority (BFCCAA), 
the Northwest Air Pollution Authority (NWAPA), the Olympic Air 
Pollution Control Authority (OAPCA), the Puget Sound Air Pollution 
Control Agency (PSAPCA), the Spokane County Air Pollution Control 
Authority (SCAPCA), the Southwest Air Pollution Control Authority 
(SWAPCA), and the Yakima County Clean Air Authority (YCCAA).

EFFECTIVE DATE: December 9, 1994.

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

FOR FURTHER INFORMATION CONTACT: Elizabeth Waddell, U.S. Environmental 
Protection Agency, 1200 Sixth Avenue, AT-082, Seattle, Washington 
98101, (206) 553-4303

SUPPLEMENTARY INFORMATION:

I. Background and Purpose

Introduction

    Title V of the Clean Air Act Amendments of 1990 (sections 501-507 
of the Clean Air Act (``the Act'')) and implementing regulations at 40 
Code of Federal Regulations (CFR) part 70, require that States develop 
and submit operating permits programs to EPA by November 15, 1993, and 
that EPA act to approve or disapprove each program within one 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 two years. 
If EPA has not fully approved a program by two years after the November 
15, 1993 date, or by the end of an interim program, it must establish 
and implement a Federal program.
    On August 18, 1994, EPA proposed interim approval of the operating 
permits program for Ecology, EFSEC, NWAPA, OAPCA, PSAPCA, SCAPCA, and 
SWAPCA. The same Federal Register notice proposed disapproval of the 
programs for BFCCAA and YCCAA and, in the alternative, interim approval 
of these programs if certain regulatory changes were made before EPA 
took final action on the proposal. See 59 FR 42552 (Aug. 18, 1994). EPA 
received eleven public comments on the proposal. In this notice EPA is 
taking final action on its proposal to promulgate interim approval of 
the operating permits program for Ecology, EFSEC, and all seven local 
air authorities in Washington (collectively, ``the local air 
authorities'').

II. Final Action and Implications

A. Analysis of State Submission and Response to Public Comments

    Both BFCCAA and YCCAA made the regulatory changes necessary to 
receive interim approval. The board of directors of BFCCAA repealed 
BFCCAA Reg. 1, Secs. 4.01, 4.02, 4.04, 4.05, 4.06, and 4.07 on August 
18, 1994. The revised regulations were submitted to the Washington 
State register and became effective on September 23, 1994. On September 
14, 1994, the board of directors of YCCAA repealed YCCAA Reg. 1, 
Secs. 6.02, 6.04, 6.05, 6.07, and 6.08; revised YCCAA Reg. 1, 
Sec. 12.01 to provide that the identified provisions of the Washington 
State Administrative Code are incorporated by reference unless the 
YCCAA regulation is more stringent; Revised YCCAA Reg. 1, Sec. 12.02 so 
that the identified provisions of Federal law are incorporated by 
reference. The revised regulations were submitted to the Washington 
State register and became effective on October 22, 1994. The revised 
regulations for BFCCAA and YCCAA were submitted by the State of 
Washington on September 29, 1994 as an amendment to the Washington 
Title V program.
    EPA received eleven public comments on the proposed interim 
approval of the Washington program, including comments from the 
Washington Department of Ecology and the Puyallup Tribe of Indians. No 
commenters objected to approval of the Washington permit program, 
although one commenter requested that the program not be approved 
before November 15, 1994 because of the substantial time needed to 
complete permit applications.
1. Insignificant Emissions Units
    Most of the commenters stated that the insignificant emissions 
units provisions of the State operating permit regulation (WAC 173-401-
200(16) and 173-401-530) should be granted full approval rather than 
interim approval. These commenters disagreed with EPA's interpretation 
that no unit for which there is an applicable requirement could be 
defined as ``insignificant.'' They further stated that such an 
interpretation would prevent Washington and most other States from 
granting any relief for insignificant emission units, which they argue 
is inconsistent with the intent of Part 70. The result would be that 
all emissions, regardless of size and environmental impact, would be 
subject to all Part 70 requirements, including periodic monitoring, 
reporting, recordkeeping and compliance certification. Permit 
applications would have to describe emissions from all units and 
responsible officials would be required to conduct extensive due 
diligence efforts in order to certify the compliance of emission units 
that emit very small quantities of pollutants. Commenters emphasized 
that this was an unreasonable regulatory burden that would result in 
excessive paperwork and would likely decrease the ability of permitting 
agencies to effectively enforce Title V permits because inspectors 
would have to read through numerous pages of specifications and 
requirements to determine which emission units actually have permit 
conditions.
    EPA maintains, however, that Title V and the Part 70 rules preclude 
the exemption of emission units as ``insignificant'' when such units 
are subject to an applicable requirement. Section 504(a) of the Act 
requires that ``each permit issued under this title shall include 
enforceable emission limitations and standards, a schedule of 
compliance, a requirement that the permittee submit to the permitting 
authority, no less often than every 6 months, the results of any 
required monitoring, and such other conditions as are necessary to 
assure compliance with applicable requirements of the Act, including 
the requirements of the applicable implementation plan.'' (emphasis 
added). Section 70.6(a)(1) provides that each permit shall include 
``emission limitations and standards, including those operational 
requirements and limitations that assure compliance with all applicable 
requirements at the time of permit issuance.'' Furthermore, 
Sec. 70.6(c)(1) requires that each permit shall contain ``compliance, 
certification, testing, monitoring, reporting, and recordkeeping 
requirements sufficient to assure compliance with the terms and 
conditions of the permit.'' The fact that an emission unit may emit 
only small quantities of pollutants does not provide a basis to exempt 
it from the fundamental statutory requirement that the permit 
specifically include, and ensure compliance with, all applicable 
requirements.
    EPA understands the implementation concerns expressed by the 
commenters but disagrees that the Part 70 permit requirements need be 
unduly burdensome for these smaller emission units with only generally 
applicable requirements. For example, the requirement to ``describe'' 
emissions of regulated pollutants in a permit application is not a 
requirement to quantify those emissions. These smaller units can be 
aggregated and described in very general terms (e.g. all valves and 
flanges not otherwise specified). Furthermore, the requirement to 
include in a permit compliance certification, test, monitoring, 
reporting, and recordkeeping sufficient to assure compliance with the 
terms and conditions of the permit does not impose the same level of 
rigor with respect to small emission units that do not require 
extensive testing or monitoring in order to determine compliance with 
the applicable requirements.
    Several commenters also stated it was unreasonable and 
inappropriate to require Washington to change its provisions for 
insignificant emission units at this time because this issue is part of 
ongoing litigation over the part 70 rules and may be revised. EPA 
acknowledges that it may be both burdensome and confusing if the Part 
70 rules on insignificant emission units are changed and Ecology is 
required to revise its rules twice, once to meet EPA's current 
objection and later if part 70 is revised. EPA has no legal mechanism, 
however, to either grant a longer interim approval period or to grant 
full approval under the current part 70 rules based on a possibility 
that the part 70 regulations may change as a result of notice and 
comment rulemaking sometime in the future.
2. Definition of Title I Modification
    In its August 18, 1994 Federal Register notice proposing interim 
approval for the Washington program, EPA advised the State that it 
would be required to revise its definition of the term ``title I 
modification'' to obtain full EPA approval:

    Revise WAC 173-401-200(33), the definition of ``Title I 
modification,'' to include any modification permitted through a 
minor source preconstruction permit. The EPA believes the phrase 
``modification under an[y] provision of title I of the Act'' in 40 
CFR 70.7(e)(2)(i)(A)(5) is best interpreted to mean literally any 
change at a source that would trigger permitting authority review 
under regulations approved or promulgated under Title I of the Act. 
This would include State preconstruction review programs approved by 
EPA as part of the State Implementation Plan under section 
110(a)(2)(C) of the Clean Air Act and regulations addressing source 
changes that trigger the application of NESHAP established pursuant 
to section 112 of the Act prior to the 1990 amendments. The EPA 
intends to revise its criteria for interim approval in 40 CFR 
70.4(d) prior to taking final action on this proposal to grant 
Washington interim approval so that interim approval may be granted 
to State programs like Washington's that currently allow a more 
narrow definition of Title I modification. (59 FR 42557).

    On August 29, 1994, EPA proposed revisions to the interim approval 
criteria in 40 CFR 70.4(d) to, among other things, allow State programs 
with a more narrow definition of ``title I modification'' to receive 
interim approval (59 FR 44572). The Agency also solicited public 
comment on the proper interpretation of ``title I modifications'' (59 
FR 44573). The Agency stated that if, after considering the public 
comments, it continues to believe that the phrase ``title I 
modifications'' should be interpreted as including minor NSR changes, 
it would revise the interim approval criteria as needed to grant states 
that adopted a narrower definition interim approval.
    In response to EPA's proposed interim approval of the Washington 
program, several commenters questioned whether the State's adoption of 
a narrower ``title I modification'' definition justified anything other 
than full approval. These commenters asserted that Washington's current 
definition is the correct one under the existing regulations and the 
Clean Air Act and that a broader interpretation including minor NSR 
would be wholly unworkable.
    One commenter, the National Environmental Development Association/
Clean Air Regulatory Project (NEDA/CARP), further contended that EPA 
was using the August 29, 1994 proposed rule to effectively require 
revision of a State operating permits program that was otherwise 
consistent with current Part 70 and that such an approach was 
unauthorized, not supported by the Clean Air Act or Part 70, and poor 
public policy. NEDA/CARP also suggested that EPA's August 18, 1994 
proposal to require Washington to adopt a broader interpretation of 
``title I modification'' to obtain full approval indicated that the 
Agency does not intend to consider public comment on the August 29, 
1994 proposal that solicits comments on the proper interpretation of 
``title I modifications.''
    As noted in the August 18, 1994 Federal Register notice, proposing 
interim approval of Washington's operating permit program, EPA intended 
to finalize its revisions to the interim approval criteria under 40 CFR 
70.4(d) before taking final action on part 70 programs submitted by the 
States. However, that is no longer possible. Publication of the 
proposed revisions was delayed until August 29, 1994, and EPA received 
several requests to extend the public comment period.1 Given the 
importance of the issues in that rulemaking to States, sources and the 
public, but mindful of the need to take action quickly, EPA agreed to 
extend the comment period until October 28, 1994 (see 59 FR 52122 
(October 14, 1994)). Consequently, final action to revise the interim 
approval criteria will not occur before the deadline for EPA action on 
State programs, such as Washington's, that were submitted on or before 
November 15, 1993.2
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    \1\EPA originally established a 30-day public comment period for 
the August 29, 1994 proposal. In response to several requests for 
extension, however, EPA agreed to allow an additional thirty days 
for public comments. See 59 FR 52122 (October 14, 1994).
    \2\Section 502(d) requires, in relevant part, that ``[n]ot later 
than 1 year after receiving a program, and after notice and 
opportunity for public comment, the Administrator shall approve or 
disapprove such program, in whole or in part.''
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    EPA believes it would be inappropriate to delay action on 
Washington's program, perhaps for several months, until final action is 
taken on the interim approval revisions. EPA also believes it would be 
inappropriate to grant interim approval to Washington on this issue 
before final action is taken to revise the current interim approval 
criteria of 40 CFR 70.4(b) to provide a legal basis for such an interim 
approval. Until the revision to the interim approval criteria is 
promulgated, EPA's choices are to either fully approve or disapprove 
the narrower ``title I modification'' definition in States such as 
Washington. For the reasons set forth below, EPA believes that 
disapproving such programs at this time solely because of this issue 
would be inappropriate.
    First, EPA has not yet conclusively determined that a narrower 
definition of ``title I modifications'' is incorrect and thus a basis 
for disapproval (or even interim approval). The Agency has received 
numerous comments on this issue as a result of the August 29, 1994 
Federal Register notice, and EPA cannot and will not make a final 
decision on this issue until it has evaluated all of the comments. 
Second, EPA believes that the Washington program should not be 
disapproved because EPA itself has not yet been able to resolve this 
issue through rulemaking. Moreover, disapproving programs from States 
such as Washington that submitted their programs to EPA on or before 
the November 15, 1993 statutory deadline could lead to the perverse 
result that these States would receive disapprovals, while States which 
were late in submitting programs could take advantage of revised 
interim approval criteria if and when these criteria become final. In 
effect, States would be severely penalized for having made timely 
program submissions to EPA. Finally, disapproval of a State program for 
a potential problem that primarily affects permit revision procedures 
would delay the issuance of Part 70 permits, hampering State/Federal 
efforts to improve environmental protection through the operating 
permits system.
    For the reasons mentioned above, EPA is approving the Washington 
program's use of a narrower definition of ``title I modifications'' at 
this time.3 However, should EPA in the interim approval criteria 
rulemaking make a final determination that such a narrow definition of 
``title I modification'' is incorrect and that a revision of the 
interim approval criteria is warranted, the Agency will propose further 
action on Washington's program so that the State's definition of 
``title I modifications'' could become grounds for interim 
approval.4 A State program like Washington's that receives full 
approval of its narrower ``title I modification'' definition pending 
completion of EPA's rulemaking must ultimately be placed on an equal 
footing with States that receive interim approval in later months under 
any revised interim approval criteria because of the same issue. 
Converting the full approval on this issue to an interim approval after 
EPA completes its rulemaking will avoid this inequity. EPA anticipates 
that an action to convert the full approval on the ``title I 
modification'' issue to an interim approval would be effected through 
an additional rulemaking, so as to ensure that there is adequate notice 
of the change in approval status.
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    \3\For similar reasons, the EPA will not construe 40 CFR 
70.7(e)(2)(i)(A)(3) to prohibit Washington from allowing minor NSR 
changes to be processed as minor permit modifications. See 59 FR 
44573-44574.
    \4\State programs with a narrower ``title I modifications'' 
definition that are acted upon by EPA after an Agency decision that 
such a narrower definition is inappropriate would be considered 
deficient, but would be eligible for interim approval under revised 
40 CFR 70.4(b).
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3. Section 112(g) Modifications
    One commenter stated that EPA has proceeded in a confusing and 
unauthorized fashion by proposing a construction ban on section 112(g) 
modifications and that EPA should not delegate section 112(g) authority 
until it completes its own rulemaking.
    EPA did not propose a construction ban but simply noted the 
provision of section 112(g)(2) of the Act which prohibits the 
modification, construction, or reconstruction of a source after the 
date of approval of a Title V program unless maximum achievable control 
technology (MACT), determined on a case-by-case basis if necessary, is 
met. Although section 112(g)(1) requires the Administrator to publish 
guidance with respect to the implementation of section 112(g), the 
plain meaning of section 112(g)(2) is that it takes effect on the 
effective date of the Title V program in any State.
    EPA has acknowledged that States may encounter difficulties 
implementing section 112(g) prior to the promulgation of final EPA 
regulations (see June 28, 1994 guidance memorandum entitled ``Guidance 
for Implementation of Section 112(g)'' signed by John Seitz). EPA has 
issued guidance, in the form of a proposed rule implementing 112(g), 
which may be used to determine whether a physical or operational change 
at a source is not a modification either because it is below de minimis 
levels or because it has been offset by a decrease of more hazardous 
emissions (see 59 FR 15004 (April 1, 1994)). EPA believes the proposed 
rule provides sufficient guidance to permitting authorities and sources 
until such time as EPA's section 112(g) rulemaking is finalized.
    Although EPA does not have a program designed specifically to 
implement section 112(g), Washington does have a preconstruction review 
program that could serve as a procedural vehicle for rendering 
federally enforceable a case-by-case MACT or offset determination. 
Although the scope of Washington's program may not cover every 
situation where a section 112(g) modification, construction, or 
reconstruction may occur, it would cover most circumstances. In order 
to provide a federally-recognized mechanism to implement section 112(g) 
on an interim basis until final EPA regulations are promulgated, EPA 
intends to propose approval of Washington's preconstruction review 
program in a separate Federal Register notice. Final approval of 
Washington's preconstruction review program, and not this final 
approval of its Title V operating permit program, would represent EPA's 
delegation of section 112(g) authority to the State.
4. Limitations on Potential To Emit
    One commenter objected to EPA's requirement that OAPCA revise its 
definition of ``potential to emit'' to include only those limitations 
on a source's capacity to emit that are federally enforceable, arguing 
that it requires local authorities to ignore their own and other State-
enforceable limitations.
    The cited definition appears in OAPCA Reg. 1, Art. 6, which 
addresses the operating permit program. As such, the definition of 
potential to emit must be consistent with the Part 70 rules which 
require, for the purposes of the Title V operating permit program, that 
all limits on potential to emit be federally enforceable. EPA does not 
place any restrictions on a local authority's use of non-Federally 
enforceable emission limits on non-Title V sources or on establishing 
additional, non-federally enforceable emission limits on Title V 
sources. However, in order for such limitations to be recognized for 
purposes of the Federal Clean Air Act, they must be enforceable by EPA 
and by citizens under the Act.
5. Scope of the Program--Tribal Lands
    EPA proposed to exclude from the Washington Title V program, Title 
V sources located on any trust or restricted lands within the Puyallup 
1873 Survey Area or any other lands within the exterior reservation 
boundaries of a Federally-recognized Indian Tribe because Ecology did 
not establish that it had jurisdiction over sources on these lands. EPA 
proposed to apply the Ecology and PSAPCA Title V program to non-trust 
lands within the 1873 Survey Area of the Puyallup Reservation because 
Ecology and PSAPCA submitted legal analysis demonstrating their 
authority to administer environmental laws on these lands. See 59 FR at 
42554.
    Ecology and PSAPCA presented legal analysis based on the Washington 
Indian (Puyallup) Land Claims Settlement, which expressly allocates 
jurisdiction according to a settlement agreement between the Tribe, 
Federal, State and local governments and certain private property 
owners. 25 U.S.C. 1773-1773j. The settlement agreement, in turn, gives 
Federal, State and local governments exclusive jurisdiction for the 
administration of environmental laws on all non-trust lands within the 
1873 Survey Area and gives the Federal government and the Tribe 
exclusive jurisdiction for the administration of environmental laws on 
all trust and restricted lands within the Area.
    The Puyallup Tribe of Indians commented that EPA correctly applied 
the settlement agreement in its proposed determination not to approve 
the application of Washington's Title V program to trust and restricted 
lands within the 1873 Survey Area. The Tribe also commented that 
Washington's request for authority over non-trust lands within the 
Survey Area was consistent with the settlement agreement.
    In today's action, EPA finalizes its proposed determination that 
the Washington Title V program apply to Title V sources located on non-
trust lands within the Survey Area.
    During the public comment period, Ecology commented ``that [it] has 
requisite authority to enforce and run the Air Operating Permits 
Program on tribal lands.'' Ecology's comments do not appear to 
challenge EPA's proposed allocation of jurisdiction over the Puyallup 
Reservation. Rather, Ecology appears to contend that EPA has erred in 
proposing to exclude application of the State's Title V program to 
Title V sources within the exterior reservation boundaries of all other 
Federally-recognized Tribes located within the State.
    In support of this contention, Ecology generally asserts that 
Ecology has ``necessary jurisdiction to regulate Title V sources 
throughout the state.'' Ecology also appears to be alleging that, at a 
minimum, it has authority over non-Indian owned Title V sources on non-
Indian owned fee lands within reservations. Ecology states that the law 
presumes it has authority over such sources and that the legal opinion 
accompanying its Title V program submittal should be interpreted to 
apply consistently at least to all fee lands within the exterior 
boundaries of the State. Ecology comments that ``[c]ourts have only 
found for tribal jurisdiction when the weight of tribal interests is 
great enough'' and that ``[s]everal potential major sources owned by 
non-[I]ndians with no tribal relationships can be found in the State on 
fee lands within reservations.''
    To obtain Title V program approval a State must demonstrate that it 
has adequate authority to issue permits and assure compliance by all 
sources required to have permits under Title V with each applicable 
requirement under the Act. See Section 502(b)(5) of the Act; 40 CFR 
70.4(b)(3)(i). The authority must include:

    A legal opinion from the Attorney General from the State or the 
attorney for those State, local, or interstate air pollution control 
agencies that have independent counsel, stating that the laws of the 
State, locality, or interstate compact provide adequate authority to 
carry out all aspects of the program. This statement shall include 
citations to the specific stat[ut]es, administrative regulations, 
and, where appropriate, judicial decisions that demonstrate adequate 
authority. 40 CFR 70.4(b)(3).

    Thus, the Act requires States to support their Title V program 
submittals with a specific showing of adequate legal authority over all 
regulated sources, including sources located on lands within Indian 
reservations.
    EPA concludes that Ecology has not adequately demonstrated 
authority to regulate Title V sources owned by Tribal members or 
located on their territory or trust lands. Ecology's inability to reach 
into Indian country and apply environmental regulation to Tribal 
members, their territory or trust lands is not a new issue. Ecology 
previously asserted regulatory jurisdiction over Tribal lands in a 
submittal to EPA under the Resource Conservation and Recovery Act 
program. EPA declined to apply the program to waste-related activities 
on Tribal lands and its decision was upheld on judicial review. See 
Washington Department of Ecology v. EPA, 752 F.2d 1465 (9th Cir. 1985).
    The court's conclusion was informed by ``well-settled principles of 
Indian law'' including the principle that ``States are generally 
precluded from exercising jurisdiction over Indians in Indian country 
unless Congress has clearly expressed an intention to permit it.'' 
Washington Department of Ecology, 752 F.2d at 1469-1479 (citations 
omitted); see also United States v. Mazurie, 419 U.S. 544, 556 (1975) 
(the inherent sovereign authority of Indian Tribes extends ``over both 
their members and their territory''); Montana v. United States, 450 
U.S. 544, 556-557 (1981) (Tribes generally have extensive authority to 
regulate activities on lands that are held by the United States in 
trust for the Tribe).
    Washington has also asserted jurisdiction over underground 
injection activities on Indian lands under the Safe Drinking Water Act, 
claiming its laws are applicable throughout the borders of the State. 
EPA concluded that Washington could not regulate these activities on 
Indian lands because it had failed to demonstrate that its authority to 
regulate was not preempted by Federal law, and that the State 
regulation would not infringe on Tribal self-government. 53 FR 43080-
43081-43082 (Oct. 25, 1988); see White Mountain Apache Tribe v. 
Bracker, 448 U.S. 136 (1980); California v. Cabazon Band of Mission 
Indians, 408 U.S. 202 (1987).
    Ecology contends that EPA should nevertheless presume that Ecology 
at least has authority over non-Indian owned Title V sources on fee 
lands within the exterior boundaries of Federally-recognized Indian 
reservations. EPA concludes that Ecology has also failed to adequately 
demonstrate authority over Title V sources located on fee lands within 
reservations.
    EPA's regulations require specific evidence of legal authority. 
Adequate authority is especially necessary in these circumstances 
where, as set out below, Supreme Court case law recognizes inherent 
sovereign Tribal authority to regulate activities on fee lands where 
the conduct may have a serious and substantial impact on Tribal health 
or welfare, air pollution activities generally pose serious health 
risks, EPA has proposed to interpret the Tribal authority provisions of 
the Act as granting Tribes authority over air pollution activities on 
fee lands within reservations, and Federal Indian law and policies 
direct EPA to treat Tribes as sovereigns and to consider Tribal 
interests in taking Federal actions that affect Tribes.
    The Supreme Court has indicated that a Tribe ``may * * * retain 
inherent power to exercise civil authority over the conduct of non-
Indians on fee lands within its reservation when that conduct threatens 
or has some direct effect on the * * * health or welfare of the 
tribe.'' Montana, 450 U.S. at 566. A Tribe's inherent authority must be 
determined on a case-by-case basis, considering whether the conduct 
being regulated has a direct effect on the health or welfare of the 
Tribe substantial enough to support the Tribe's jurisdiction over non-
Indians. See Brendale v. Confederated Tribes and Bands of the Yakima 
Indian Nation, 492 U.S. 408 (1989).
    The case law addressing a Tribe's authority over non-members on 
non-Indian owned fee lands within the exterior boundaries of a 
reservation must be viewed in light of the concerns presented by air 
pollution activities and, importantly, the 1990 Amendments to the Act. 
In 1990, Congress broadly addressed Tribal authority under the Act, 
adding sections 110(o) and 301(d) to the Act.\5\ Section 301(d)(2) of 
the Act authorizes EPA to issue regulations specifying those provisions 
of the Act for which it is appropriate ``to treat Indian Tribes as 
States.'' Further, it addresses the potential jurisdictional scope of 
Tribal programs under the Act, authorizing EPA to treat Tribes in the 
same manner as States for ``the management and protection of air 
resources within the exterior boundaries of the reservation or other 
areas within the tribe's jurisdiction.'' Section 301(d)(2)(B) of the 
Act. In addition, section 110(o) provides that Tribal implementation 
plans under the Act ``shall become applicable to all areas * * * 
located within the exterior boundaries of the reservation, 
notwithstanding the issuance of any patent and including rights-of-way 
running through the reservation.''
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    \5\In the 1977 Amendments to the Act, Congress gave Tribes 
authority to redesignate ``[l]ands within the exterior boundaries of 
reservations'' for purposes of the Prevention of Significant 
Deterioration of Air Quality program. Section 164(c) of the Act.
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    EPA has proposed to interpret these and other provisions of the Act 
as granting Tribes--approved by EPA to administer Clean Air Act 
programs in the same manner as States--authority over all air resources 
within the exterior boundaries of a reservation for such programs. EPA 
has explained that ``[t]his grant of authority by Congress would enable 
such Tribes to address conduct on all lands, including non-Indian owned 
fee lands, within the exterior boundaries of a reservation.'' 59 FR 
43956, 43958-43960 (Aug. 25, 1994) (legal rationale).
    Further, EPA observed that even without this proposed grant of 
authority, Indian Tribes would very likely have inherent authority over 
all activities within reservation boundaries, including non-Indian 
owned activities on fee lands, that are subject to regulation under the 
Act. The high mobility of air pollutants, resulting area-wide effects 
and the seriousness of such impacts would all tend to support such 
inherent Tribal authority. See 59 FR 43958, n. 5; see also 56 FR 64876 
at 64877-64879 (Dec. 12, 1991). In fact, Congress relied on the serious 
harm posed by air pollution in adopting the Act. Congress found that 
``the growth in the amount and complexity of air pollution * * * has 
resulted in mounting dangers to the public health and welfare, 
including injury to agricultural crops and livestock, damage to and 
deterioration of property and hazards to air and ground 
transportation.'' Section 101(a)(2) of the Act; see also, e.g., H.R. 
Rep. No. 490, 101st Cong. 2d Sess. (1990); S.Rep. No. 228, 101st Cong., 
1st Sess. (1989).
    Ecology advances various reasons why it makes ``practical sense'' 
for EPA to allow Ecology to regulate all Title V sources throughout the 
State, including those within reservation boundaries. For example, 
Ecology contends that:
    (1) Ecology is more protective of air quality than minimum Federal 
standards require and therefore regulation by EPA or the Tribe in lieu 
of the State would represent backsliding to minimum Federal standards 
and may give reservation residents inequitable protection;
    (2) The nature of air pollution transport and impacts renders it 
undesirable to have different regulatory bodies within the State and 
within reservations;
    (3) Non-Indian populations will be impacted because of the 
proximity of trust and fee lands as well as the proximity of 
reservation lands and non-reservation populations; and
    (4) The State is well-situated to regulate all Title V sources, 
having extensive experience with air quality protection and a 
comprehensive, effective program.
    These arguments do not provide adequate evidence to conclude that 
Washington's program should apply to Title V sources within the 
exterior reservation boundaries of Federally-recognized Indian Tribes 
or, in particular, non-Indian activities on fee lands. As indicated 
previously, the legal test for determining whether a Tribe has inherent 
sovereign authority over non-Indian activities centers on the conduct 
at issue. That the State may effectively regulate the conduct in lieu 
of a Tribe does not defeat Tribal sovereign interests. Otherwise, 
inherent Tribal sovereignty would be determined not by the Tribal 
interests at stake but by a State's willingness to infringe upon Tribal 
domain.
    Nor does the fact that Ecology has adopted requirements more 
stringent than the federal minimum support Ecology's claim of 
authority. Ecology's policy choices about the nature and desirability 
of State-wide air quality management cannot displace any inherent 
authority Tribes may have or any authority that Congress may have 
granted to Tribes under the Clean Air Act. Tribes may very well have 
inherent sovereign authority over air pollution activities on fee lands 
and may exercise that authority to regulate more stringently than 
Federal law requires. In addition, the adoption of sections 301(d) and 
110(o) of the Act evince Congressional intent to allow Tribes to 
implement Clean Air Act programs in the same manner as States. Congress 
gave EPA the responsibility of identifying the programs under the Act 
for which such treatment is appropriate. EPA's proposed Clean Air Act 
Tribal authority rule provides that Tribes, like States, will retain 
authority under the Act to impose requirements that are more stringent 
than Federal standards. 59 FR 43967.
    At the same time, Congress and EPA recognize that it may take time 
for Tribes to develop the air quality management expertise that States 
have amassed for 20 years. Nevertheless, Tribes must demonstrate 
adequate capability before EPA will authorize them to implement a Clean 
Air Act program. In reviewing tribal programs, EPA was directed by 
Congress to assure that the Tribe is ``capable * * * of carrying out 
the functions to be exercised in a manner consistent with the terms and 
purposes of [the Act] and all applicable regulations.'' Section 
301(d)(2)(C) of the Act. Further, EPA will fill gaps in air quality 
protection in the interim period before tribal Clean Air Act programs 
are approved, as necessary to ensure that reservation air quality is 
adequately protected. 59 FR at 43960-43961.
    Ecology also relies on the legal opinion submitted with its Title V 
program stating that it applies consistently at least to all fee lands 
within the State. The opinion relied on by Ecology, however, does not 
specifically address or analyze the legal basis for application of the 
Title V program to sources on fee lands within the exterior reservation 
boundaries of Federally-recognized Tribes. Ecology submitted a 
specific, sound legal analysis to support its authority over the non-
trust lands within the Puyallup 1873 Survey Area. Ecology now requests, 
without specific legal analysis, that EPA give Ecology authority over 
all Title V sources on all other Federally-recognized Indian 
reservations.
    EPA is guided by Federal and Agency Tribal policy in making 
decisions affecting Tribes. Washington Department of Ecology, 752 F.2d 
at 1471 & n. 5. As outlined below, these policies direct EPA to treat 
Tribes as sovereign governments not as subdivisions of States.
    On January 24, 1983, the President issued a Federal Indian Policy 
stressing two related themes: (1) That the Federal government will 
pursue the principle of Indian ``self-government'' and (2) that it will 
work directly with Tribal governments on a ``government-to-government'' 
basis. An April 29, 1994 Presidential Memorandum reiterated that the 
rights of sovereign Tribal governments must be fully respected. 59 FR 
22951 (May 4, 1994). EPA's Tribal policies commit to certain 
principles, including the following:

    EPA recognizes Tribal Governments as sovereign entities with 
primary authority and responsibility for the reservation populace. 
Accordingly, EPA will work directly with Tribal Governments as the 
independent authority for reservation affairs, and not as the 
political subdivisions of States or other governmental units.
* * * * *
    In keeping with the principal of Indian self-government, the 
Agency will view Tribal Governments as the appropriate non-Federal 
parties for making decisions and carrying out program 
responsibilities affecting Indian reservations, their environments, 
and the health and welfare of the reservation populace. Just as 
EPA's deliberations and activities have traditionally involved 
interests and/or participation of State Governments, EPA will look 
directly to Tribal Governments to play this lead role for matters 
affecting reservation environments.

    November 8, 1984 ``EPA Policy for the Administration of 
Environmental Programs on Indian Reservations''; Policy Reaffirmed by 
Administrator Carol M. Browner in a Memorandum issued on March 14, 
1994.
    The United States also has a unique fiduciary relationship with 
Tribes, and EPA must consider Tribal interests in its actions. Nance v. 
EPA, 645 F.2d 701, 710 (9th Cir. 1981), cert. denied, Crow Tribe of 
Indians v. EPA, 454 U.S. 1081 (1981). Taken together, Federal law and 
policy counsel that it would be inappropriate for EPA to approve a 
State program covering activities within reservation boundaries without 
an adequately demonstrated legal basis.
    For the foregoing reasons, EPA concludes that, except for the non-
trust lands identified within the 1873 Survey Area of the Puyallup 
reservation, Ecology has not adequately demonstrated that it has 
authority over Title V sources located on lands within the exterior 
reservation boundaries of Federally-recognized Tribes. In sum, Ecology 
relies on a general legal opinion and associated assertion that its 
authority should apply throughout the State, an undocumented claim that 
several potential major sources owned by non-Indians with no ``tribal 
relationships'' can be found in the State on fee lands within 
reservations, and several practical reasons why EPA should allow 
Washington's Title V program to regulate Title V sources within 
reservations and at least on fee lands within reservations. Title V 
plainly requires a specific demonstration of authority over regulated 
sources. Based on the Clean Air Act and Federal Indian law and 
policies, EPA concludes that Ecology has not adequately supported the 
application of its Title V program to reservations generally or to fee 
lands within reservation boundaries.
6. Criminal Authorities
    Ecology has also commented that the State currently has sufficient 
legal authority to recover criminal fines for false material statements 
and tampering with monitoring devices, as required by 40 CFR 
70.11(a)(3)(iii). EPA disagrees. Ecology has submitted no additional 
authority to support this assertion. Instead, Ecology relies on the 
June 7, 1994, opinion of the Washington Attorney General, which EPA 
reviewed and considered before proposing interim approval of the 
Washington operating permits program in part because Washington law did 
not contain these necessary criminal authorities. As previously stated, 
EPA does not believe that the authorities discussed in the Attorney 
General's opinion are as broad as the authorities required by 40 CFR 
70.11(a)(3)(iii) [see 59 FR 42552 (August 18, 1994)]. Therefore, EPA 
maintains its position that in order to receive full approval, Ecology 
must revise RCW 70.94.430 to incorporate the criminal authorities 
required by 40 CFR 70.11(a)(3)(iii).

B. Options for Approval/Disapproval

    EPA is promulgating interim approval of the operating permits 
programs submitted by Ecology, EFSEC and the local air authorities on 
November 1, 1993.\6\ In order to receive full approval, the Washington 
permitting authorities must make the following changes:\7\
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    \6\The scope of this action does not include the issuance of 
permits or the enforcement of standards for sewage sludge 
incinerators under Section 405 of the Clean Water Act, 42 USC 1345. 
Delegation of sewage sludge incinerator permitting under the Clean 
Water Act, if requested by the State, would be considered in a 
separate administrative action (see 40 CFR Parts 122 and 501).
    \7\All changes required for Ecology to receive full approval 
must be made before EFSEC or any local air authority may receive 
full approval. In addition, in order to receive full approval, EFSEC 
and each local air authority must make such changes to their 
regulations as are necessary under applicable State and local law to 
incorporate into their respective regulations all required changes 
to Ecology's operating permits program.
---------------------------------------------------------------------------

Ecology
    (1) Revise RCW 70.94.430(1) to provide for maximum criminal 
penalties of not less than $10,000 per day per violation, as required 
by 40 CFR 70.11(a)(3)(ii).
    (2) Revise RCW 70.94.430 to allow the imposition of criminal 
penalties against any person who knowingly makes any false material 
statement, representation or certification in any form, in any notice 
or report required by a permit, as required by 40 CFR 70.11(a)(3)(iii). 
This provision must include maximum penalties of not less than $10,000 
per day per violation.
    (3) Revise RCW 70.94.430 to allow the imposition of criminal 
penalties against any person who knowingly renders inaccurate any 
required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
    (4) Delete WAC 173-401-735(3) entirely or revise it so that it 
refers to RCW 34.05.570(4)(b), rather than RCW 7.16.360.
    (5) Revise WAC 173-401-530(2) to define an emissions unit as 
insignificant only if it is subject to no federally enforceable 
applicable requirement and delete the last sentence in WAC 173-401-
200(16) (``These units and activities are exempt from permit program 
requirements except as provided in WAC 173-401-530.'').
EFSEC
    No additional changes are necessary for the EFSEC operating permits 
program to receive full approval other than those that may be necessary 
under applicable State and local law to incorporate into EFSEC's 
regulations all changes to the State operating permits program required 
for full approval.
BFCCAA
    No additional changes are necessary for the BFCCAA operating 
permits program to receive full approval other than those that may be 
necessary under applicable State and local law to incorporate into 
BFCCAA's regulations all changes to the State operating permits program 
required for full approval.
NWAPA
    (1) Revise NWAPA Section 132.1 to provide for maximum criminal 
penalties of not less than $10,000 per day per violation, as required 
by 40 CFR 70.11(a)(3)(ii).
    (2) Revise NWAPA Section 132 to allow the imposition of criminal 
penalties against any person who knowingly makes any false material 
statement, representation or certification in any form, in any notice 
or report required by a permit, as required by 40 CFR 70.11(a)(3)(iii). 
This provision must include maximum penalties of not less than $10,000 
per day per violation.
    (3) Revise NWAPA Section 132 to allow the imposition of criminal 
penalties against any person who knowingly renders inaccurate any 
required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
    (4) Revise NWAPA Sec. 133.1 to provide for maximum civil penalties 
of not less than $10,000 per day per violation in the case of 
violations of multiple standards by a specific emissions unit, as 
required by 40 CFR 70.11(a)(3).
PSAPCA
    (1) Revise PSAPCA Reg. I, Sec. 3.13(a) to provide for maximum 
criminal penalties of not less than $10,000 per day per violation, as 
required by 40 CFR 70.11(a)(3)(ii).
    (2) Revise PSAPCA Reg. I, Sec. 3.13 to allow the imposition of 
criminal penalties against any person who knowingly makes any false 
material statement, representation or certification in any form, in any 
notice or report required by a permit, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
    (3) Revise PSAPCA Reg. I, Sec. 3.13 to allow the imposition of 
criminal penalties against any person who knowingly renders inaccurate 
any required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
OAPCA
    (1) Revise OAPCA Reg. 1, Sec. 3.27(b)(1) to provide for maximum 
criminal penalties of not less than $10,000 per day per violation, as 
required by 40 CFR 70.11(a)(3)(ii).
    (2) Revise OAPCA Reg. 1, Sec. 3.27(b) to allow the imposition of 
criminal penalties against any person who knowingly makes any false 
material statement, representation or certification in any form, in any 
notice or report required by a permit, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
    (3) Revise OAPCA Reg. 1, Sec. 3.27(b) to allow the imposition of 
criminal penalties against any person who knowingly renders inaccurate 
any required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
    (4) Revise the definition of ``potential to emit'' in OAPCA Reg. 1, 
Sec. 6.00 to provide that any physical or operational limitation on the 
capacity of a source to emit a pollutant shall be treated as part of 
its design only if the limitation is federally enforceable (see 40 CFR 
70.2 (definition of potential to emit)).
SCAPCA
    (1) Revise SCAPCA Reg. I, Sec. 2.04(B) to eliminate the limitation 
on the control officer's authority to request criminal penalties to 
cases in which a violator has failed to correct the violation after a 
``reasonable and/or required period of time.''
    (2) Revise SCAPCA Reg. I, Sec. 2.11(A)(1) to provide for maximum 
criminal penalties of not less than $10,000 per day per violation, as 
required by 40 CFR 70.11(a)(3)(ii).
    (3) Revise SCAPCA Reg. I, Sec. 2.11(A) to allow the imposition of 
criminal penalties against any person who knowingly makes any false 
material statement, representation or certification in any form, in any 
notice or report required by a permit, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
    (4) Revise SCAPCA Reg. I, Sec. 2.11(A) to allow the imposition of 
criminal penalties against any person who knowingly renders inaccurate 
any required monitoring device or method, as required by 40 CFR 
70.11(a)(3)(iii). This provision must include maximum penalties of not 
less than $10,000 per day per violation.
SWAPCA
    No changes in the SWAPCA operating permits program are necessary to 
receive full approval other than those that may be necessary under 
applicable State and local law to incorporate into SWAPCA's regulations 
all required changes to Ecology's operating permits program.
YCCAA
    Revise YCCAA Reg. I, Sec. 2.01, to delete the requirement that 
violations be ``knowing.'' Part 70 prohibits a permitting authority 
from including a mental state as an element of proof for civil 
violations (see 40 CFR 70.11(a)(i)).
    This interim approval, which may not be renewed, extends until 
November 9, 1996. During this interim approval period, the State is 
protected from sanctions and EPA is not obligated to promulgate a 
Federal permits program in the State. Permits issued during the interim 
approval period of Washington's operating permits program have full 
standing with respect to Part 70. In addition, the 180 day time period 
under State law for submittal of permit applications by subject sources 
and the three-year time period for processing initial permit 
applications begin upon interim approval.
    If the State fails to submit a complete corrective program for full 
approval by May 9, 1996, EPA will start an 18-month clock for mandatory 
sanctions. If the State fails to submit a corrective program that EPA 
finds complete before the expiration of that 18-month period, EPA must 
apply sanctions. If EPA disapproves a State's corrective program, and 
the State has not submitted a subsequent corrective program that EPA 
determines corrects the deficiencies of the disapproved program within 
18 months after the disapproval, then EPA must apply sanctions. In both 
cases, if the State has not corrected the deficiency within six months 
after EPA applies the first sanction, a second sanction is required. In 
addition, discretionary sanctions may be applied where warranted any 
time after the end of the interim approval period if the State has 
failed to submit a complete corrective program or after EPA disapproves 
a submitted corrective program. If the EPA has not granted full 
approval to the State program by November 9, 1996, EPA must promulgate, 
administer, and enforce a Federal permits program for Washington upon 
expiration of the interim approval.

III. Administrative Requirements

A. Docket

    Copies of the State's submittal and other information relied upon 
for the final interim approval, including public comments on the 
proposal received and reviewed by EPA, are maintained in the docket at 
the EPA Regional Office. The docket is an organized and complete file 
of 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 action does 
not impose any new requirements, it does not have a significant impact 
on a substantial number of small entities.

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.

    Dated: October 28, 1994.
Chuck Clark,
Regional Administrator.

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

PART 70--[AMENDED]

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

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

    2. Part 70 is amended by adding a new appendix A as follows:

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

    This appendix provides information on the approval status of 
State and Local operating Permit Programs.
    Washington.
    (a) Department of Ecology (Ecology): submitted on November 1, 
1993; effective on December 9, 1994; interim approval expires 
November 9, 1996.
    (b) Energy Facility Site Evaluation Council (EFSEC): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires November 9, 1996.
    (c) Benton-Franklin Counties Clean Air Authority (BFCCAA): 
submitted on November 1, 1993 and amended on September 29, 1994; 
effective on December 9, 1994; interim approval expires November 9, 
1996.
    (d) Northwest Air Pollution Authority (NWAPA): submitted on 
November 1, 1993; effective on December 9, 1994; interim approval 
expires November 9, 1996.
    (e) Olympic Air Pollution Control Authority (OAPCA): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires November 9, 1996.
    (f) Puget Sound Air Pollution Control Agency (PSAPCA): submitted 
on November 1, 1993; effective on December 9, 1994; interim approval 
expires November 9, 1996.
    (g) Southwest Air Pollution Control Authority (SWAPCA): 
submitted on November 1, 1993; effective on December 9, 1994; 
interim approval expires November 9, 1996.
    (h) Spokane County Air Pollution Control Authority (SCAPCA): 
submitted on November 1, 1993; effective on December 9, 1994; 
interim approval expires November 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 November 9, 1996.

[FR Doc. 94-27683 Filed 11-8-94; 8:45 am]
BILLING CODE 6560-50-P