[Federal Register: January 12, 1999 (Volume 64, Number 7)]
[Proposed Rules]
[Page 1879-1928]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr12ja99-25]

[[Page 1879]]

_______________________________________________________________________

Part II

Environmental Protection Agency

_______________________________________________________________________

40 CFR Part 63

Approval of State Programs and Delegation of Federal Authorities;
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[FRL-6212-3]
RIN 2060-AG60


Approval of State Programs and Delegation of Federal Authorities

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed amendments; notice of public hearing.

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SUMMARY: The EPA is proposing to change the Agency's current procedures
for delegating to State, local, territorial, and Indian tribes as
defined in 40 CFR 71.2 or agencies (i.e., S/L's) the authority to
implement and enforce Federal air toxics emissions standards and other
requirements. Specifically, these regulatory amendments propose to
revise procedures and criteria for approving S/L rules, programs, or
other requirements that would substitute for Federal emissions
standards or other requirements for hazardous air pollutants (HAP)
established under section 112 of the Clean Air Act (Act). Section
112(l) of the Act authorizes us to approve S/L programs when S/L
alternative requirements are demonstrated to be no less stringent than
the rules we promulgate.
    These amendments would increase the flexibility of our existing
regulations in 40 CFR part 63, subpart E that implement section 112(l)
of the Act. They would provide a greater number of approval processes
from which S/L's can choose, increase the flexibility S/L's have to
demonstrate equivalency for their alternative requirements, and provide
options that will expedite the approval process. In addition, the
policy guidance in this notice clarifies what S/L's must or can do to
obtain delegated authority under subpart E, including how they can
demonstrate equivalency for alternatives to Federal requirements.
    These changes are in response to requests we received from State
and local air pollution control agencies to reconsider our existing
regulations in light of implementation difficulties they have
experienced or anticipated. We believe this effort is consistent with
the President's regulatory ``reinvention'' initiative, and it will
result in less burden to S/L's, regulated industries, and the Federal
Government without sacrificing the emissions reduction and enforcement
goals of the Act. These amendments reduce the potential for redundant
or conflicting air regulations on industry while they accommodate a
wider variety of S/L program needs.
    This rulemaking addresses requirements that apply to S/L's, should
they choose to obtain delegation or program approval under section
112(l). (Obtaining delegation under section 112(l) is voluntary). This
rulemaking does not include any requirements that apply directly to
stationary sources of HAP or small businesses that emit HAP.

DATES: Comments. Comments must be received on or before March 15, 1999.
    Public Hearing. Anyone requesting a public hearing must contact the
EPA no later than January 26, 1999.

ADDRESSES: Comments. Comments should be submitted (in duplicate, if
possible) to: Air and Radiation Docket and Information Center (6102),
Attention Docket Number A-97-29, Room M-1500, U.S. Environmental
Protection Agency, 401 M Street, S.W., Washington, D.C. 20460. The EPA
requests a separate copy also be sent to the contact person listed
below (see FOR FURTHER INFORMATION CONTACT). Comments and data may also
be submitted electronically by following the instructions listed in
Supplementary Information.
    Public Hearing. If a public hearing is held, it will be held at the
EPA's Office of Administration Auditorium, Research Triangle Park,
North Carolina. Persons interested in attending the hearing or wishing
to present oral testimony should notify the contact person listed
below.
    Docket. Docket No. A-97-29, containing information relevant to this
proposed rulemaking, is available for public inspection and copying
between 8:00 a.m. and 5:30 p.m., Monday through Friday, at the EPA's
Air and Radiation Docket and Information Center (6102), 401 M Street,
S.W., Washington, D.C. 20460; telephone (202) 260-7548. A reasonable
fee may be charged for copying.

FOR FURTHER INFORMATION CONTACT: Mr. Tom Driscoll, Integrated
Implementation Group, Information Transfer and Program Integration
Division (MD-12), U.S. Environmental Protection Agency, Research
Triangle Park, North Carolina 27711; telephone (919) 541-5135;
facsimile (919) 541-5509, electronic mail address
``driscoll.tom@epa.gov.''

SUPPLEMENTARY INFORMATION:

Regulated Entities

    Entities potentially affected when the EPA takes final action on
this proposed rule are S/L governments that voluntarily take delegation
of section 112 rules, emissions standards, or requirements. The final
action on this proposal will not regulate emissions sources directly.
These categories and entities include:

------------------------------------------------------------------------
           Category                             Examples
------------------------------------------------------------------------
S/L governments..............  S/L governments that voluntarily request
                                approval of rules or programs to be
                                implemented in place of Act section 112
                                rules, emissions standards or
                                requirements or voluntarily request
                                delegation of unchanged section 112
                                rules.
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This list is not intended to be exhaustive, but rather provides a guide
for readers regarding entities likely to be regulated by final action
on this proposal. This list contains the types of entities that EPA is
now aware could potentially be regulated by final action on this
proposal. Other types of entities not included in the list could also
be regulated. The procedures and criteria for requesting and receiving
approval of these S/L government rules or programs or voluntarily
requesting delegation of section 112 rules are in Sec. 63.90 through
Sec. 63.97, excluding Sec. 63.96, of this subpart.

Electronic Access and Filing Addresses

    This notice, the proposed regulatory texts, and other background
information are available in the docket and by request from the EPA's
Air and Radiation Docket and Information Center (see ADDRESSES), or
access through the EPA web site at: http://www.epa.gov/ttn/oarpg.
    Electronic comments on the proposed National Emission Standard for
Hazardous Air Pollutants (NESHAP) may be submitted by sending
electronic mail (e-mail) to: a-and-r-docket@epamail.epa.gov. Submit
comments as an ASCII file avoiding the use of special characters and
any form of encryption. Comments and data will also be accepted on a
diskette in WordPerfect 5.1 or 6.1 or ASCII file format. Identify all
comments and data in electronic form by the docket number

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(A-97-29). No confidential business information should be submitted
through electronic mail. You may file comments on the proposed rule
online at many Federal Depository Libraries.

Outline

    The information presented in this preamble is organized as follows:

I. Purpose and Summary
II. What is the subject and purpose of this rulemaking?
    A. Reasons for revisiting section 112(l) regulations
    B. Legal and policy framework for revising section 112(l)
regulations
III. Who is subject to this rulemaking?
IV. What process was used to arrive at the decisions in this
rulemaking?
V. How do the delegation options currently in subpart E work?
    A. Four ways to obtain delegation under the current subpart E
    B. General approval criteria for delegations under the current
subpart E
    C. Specific approval criteria and administrative process
requirements for delegations under the current subpart E
    D. Federal enforceability of approved requirements
    E. Purpose of up-front approval for all subpart E delegation
options
    F. EPA can withdraw approval if a S/L is inadequately
implementing or enforcing its approved rule or program
VI. What concerns have S/L's raised regarding the current subpart E
delegation options and what actions has EPA taken to address these
concerns?
    A. S/L issues with subpart E
    B. What actions have EPA taken to address S/L's concerns?
    C. Summary of proposed regulatory changes to subpart E
    D. Policy guidance provided in the preamble
    E. Policy guidance provided outside the preamble
VII. How do the revised delegation processes work?
    A. Sec. 63.93 substitution of authorities
    B. Sec. 63.97 State program approval process
    C. Sec. 63.94 equivalency by permit approval process
VIII. How do the revised delegation processes compare?
    A. What section 112 programs or sources are covered by each
process?
    B. What is required for up-front approval?
    C. What is required to demonstrate that alternative requirements
are equivalent?
    D. What is required for EPA approval of alternative
requirements?
    E. When do EPA and the public have an opportunity to comment on
S/L submittal?
IX. How should a S/L decide which delegation process(es) to use?
    A. Sec. 63.93 substitution of rules or authorities
    B. Sec. 63.94 equivalency by permit
    C. Sec. 63.97 State program approval
X. How will EPA determine equivalency for S/L alternative NESHAP
requirements?
    A. Introduction
    B. Equivalency of alternative levels of control and compliance
and enforcement measures
    C. Using compliance evaluation studies in equivalency
demonstrations
    D. Proposed process for determining equivalency under subpart E
    E. Equivalency of alternative work practice standards
    F. Equivalency of alternative General Provisions
XI. How will the section 112(r) accidental release program
provisions of subpart E change, and how will these changes affect
the delegation of the RMP provisions?
XII. Administrative requirements for this rulemaking
    A. Public Hearing
    B. Docket
    C. Executive Order 12866
    D. Enhancing the Intergovernmental Partnership Under Executive
Order 12875
    E. Consultation and Coordination with Indian Tribal Governments
Under Executive Order 13084
    F. Paperwork Reduction Act
    G. Regulatory Flexibility Act
    H. Unfunded Mandates Reform Act
    I. Protection of Children from Environmental Health Risks and
Safety Risks Under Executive Order 13045
    J. National Technology Transfer and Advancement Act
XIII. Statutory Authority

I. Purpose and Summary

    One of the reasons Congress created section 112(l) of the Act was
to recognize that many S/L's already had programs or regulations in
place to reduce emissions of toxic air pollutants, and that some S/L's
might wish to implement their programs or regulations in place of
otherwise applicable section 112 standards. After promulgation of the
initial subpart E regulations, some S/L's voiced the view that subpart
E would be more useful if we could allow S/L's more flexibility in
implementing their programs in place of section 112 standards. Based on
these comments, we decided to investigate ways to provide more
flexibility, particularly through the use of a greater variety of
regulatory pathways, so long as the result would clearly be emissions
reductions equivalent to the Federal standard being replaced.
    During the process of ``reinventing'' the subpart E regulations, we
have solicited and responded to commenters through several different
routes. First, we conducted two stakeholder meetings to assess the
concerns not only of S/L's, but also of industries indirectly affected
by the subpart E regulations and environmental/public interest groups.
We also benefited from the input of issue work groups comprised of
representatives from the States, EPA Regions, and other EPA offices. We
used input from the stakeholder meetings, as well as other meetings
with S/L's, to create a draft preamble and regulatory amendments which
contained changes resulting from several commenters' suggestions. We
placed this draft on the Internet and solicited comments, which then
resulted in additional changes which we believe will fulfill our goal
of making the delegation of the section 112 standards easier, without
sacrificing environmental protection.
    Another way that we have involved stakeholders is through the
Sacramento Protocol effort. Officials from the California Air Resources
Board (CARB), the South Coast Air Quality Management District (SCAQMD),
and the EPA Headquarters and Region IX Offices collaborated to analyze
five SCAQMD rules to determine whether they would achieve the same
emissions reductions as the otherwise applicable section 112 standards.
We discuss the results of the Sacramento Protocol in section X., of
this preamble.
    These proposed changes to the subpart E regulations will provide
more flexibility in both accepting delegation of the section 112
standards and implementing approved alternative standards. In order to
provide more flexibility to S/L's, we are proposing several broad-based
changes: (1) Allowing more approval options; (2) allowing use of
holistic demonstrations to evaluate the stringency of S/L rules; and
(3) providing more flexibility in monitoring, reporting, and
recordkeeping (MRR).
    First, to provide more flexibility and clarity, we have taken
Sec. 63.94, ``Approval of a State program that substitutes for section
112 emissions standards,'' and split it into two sections: Sec. 63.94,
Equivalency by Permit (EBP) and Sec. 63.97, State Program Approval
(SPA). The SPA option addresses approval of a broad variety of
regulatory and enforcement vehicles. The EBP option could be used to
expedite the section 112(l) review process significantly in those cases
where just a handful of sources required to obtain permits under title
V of the Act are affected by delegation of a section 112 standard to a
S/L (for example where a source category consists of just a few sources
in a State).
    We have included partial approval as another way to increase the
flexibility S/L's will have when accepting delegation of the section
112 standards. When using partial approval, a S/L would only accept
delegation for part of its program or its rule.
    We also intend to add flexibility by allowing S/L's to implement
their

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delegated standards through a greater variety of regulatory vehicles.
The original subpart E regulations only allowed implementation of
alternative rules through rulemaking or title V permits. However, we
are proposing to expand the options for the implementation of
alternative S/L rules by allowing S/L's to implement the delegated
standards through rulemaking, title V permits, S/L permits, general
permits, permit templates, and administrative orders.
    In addition, we intend to increase the ability of S/L's to
demonstrate that their standards are equivalent to the otherwise
applicable section 112 standards by adopting a holistic approach to
evaluating S/L standards. In other words, we would evaluate S/L
standards as a whole to determine whether they would achieve equal or
better emissions reductions than the otherwise applicable section 112
standard.
    Finally, we propose to increase the amount of flexibility S/L's
would have in comparing their compliance assurance measures to the
compliance assurance measures in the otherwise applicable section 112
standard. Section X.D.3. of this preamble contains a detailed
discussion of how we would compare the compliance assurance measures in
an alternative S/L standard to the compliance assurance measures in the
otherwise applicable section 112 standard. In general, we want to
guarantee that S/L compliance assurance measures will ensure the same
rate of compliance that our compliance assurance measures would ensure.
Furthermore, we are proposing to allow the process developed under the
Sacramento Protocol to be used as a supplement to the overall
evaluation of S/L standards.

II. What Is the Subject and Purpose of This Rulemaking?

A. Reasons for Revisiting Section 112(l) Regulations

    Before the Act was amended in 1990 (1990 Amendments), many S/L's
developed their own programs for the control of air toxics (i.e., HAP)
from stationary sources. Some of these S/L programs have now been in
place for many years and, for some of the source categories regulated
by Federal emissions standards under section 112 of the Act, the S/L
programs may have succeeded in reducing air toxics emissions to levels
at or below those required by the Federal standards. For purposes of
this discussion, the Federal emission standards established under
section 112 authority are codified in 40 CFR part 63. These standards
are referred to as NESHAP.
    These programs, developed to address specific S/L needs, often
differ from the Federal rules we develop under section 112. As a
result, S/L programs may result in controls or other requirements that,
on the whole, are more stringent than, equivalent to, or less stringent
than controls resulting from the corresponding Federal emissions
standards in terms of the emissions reductions they achieve.
    The U.S. Congress was very aware of S/L air toxics programs in the
course of developing the 1990 Amendments to the Act. Seeking to
preserve these programs, Congress included provisions in section 112(l)
that allow us to recognize S/L's air toxics rules or programs in place
of some or all of the corresponding Federal section 112 requirements.
In other words, we may approve S/L rules or programs if they meet
certain criteria (such as demonstrating adequate resources, legal
authorities, level of control, and compliance and enforcement measures)
and allow them to substitute for part 63 NESHAP regulations established
under sections 112(d), 112(f), or 112(h) (or other section 112
requirements such as the Risk Management Program addressed in section
112(r) and 40 CFR part 68). In addition, section 112(l) allows us to
delegate to S/L's the authority to implement and to enforce part 63
NESHAP exactly as we promulgate them, that is, without any changes.
    Thus, a S/L may obtain delegated authority to implement and enforce
a NESHAP in either of two circumstances: (1) when the S/L has taken
delegation for unchanged Federal standards, a process called
``straight'' delegation, or (2) when the S/L obtains approval for rules
or other requirements that substitute for the Federal NESHAP
requirements. Under section 112(l), submission of any rules or programs
by S/L's for approval and delegation is voluntary. If S/L's do not
obtain approval or delegation, we continue to have primary authority
and responsibility to implement and to enforce section 112 regulations.
    Overall, the goal of section 112(l) is to allow S/L regulators to
implement and enforce their programs (or rules) to control emissions of
HAP from stationary sources, provided those programs achieve results
that are equivalent to the Federal program. We believe that Congress
intended S/L's to be the primary authorities responsible for carrying
out the mandates of the Federal air toxics program. Where S/L air
toxics regulations control emissions of HAP as stringently as NESHAP,
we believe that it is Congress's intention in section 112(l) to
integrate these programs with the Federal air toxics program as it was
revised in 1990. (S/L's may also have volatile organic compounds (VOC),
particulate matter (PM), or lead (Pb) regulations developed under
section 110 of the Act that indirectly control emissions of HAP and
that may, in some cases, be substituted for section 112 requirements.)
    Section 112(l) allows the integration of Federal and S/L programs
in order to minimize the potential for ``dual regulation.'' Dual
regulation refers to a situation in which sources of HAP are subject
simultaneously to S/L and Federal requirements that overlap, conflict,
or are otherwise duplicative. By working together to minimize the
potential for dual regulation, we and our S/L co-regulators hope to
reduce unnecessary burden associated with (1) complying with section
112 air toxics control requirements, and (2) issuing permits and
otherwise implementing or enforcing those requirements. We consider
burden ``unnecessary'' when it does not materially contribute to
assuring that sources of HAP achieve the emissions reduction goals
established by our Federal section 112 requirements, or it does not
contribute toward assuring compliance with those requirements.
    Under section 112(l)(2) of the Act, we are required to publish
``guidance'' that governs how S/L's may develop and submit, and how we
may approve, S/L air toxics rules or programs that meet the goals of
the Act and the Federal air toxics program. On November 26, 1993, we
finalized regulations that carried out this mandate. (See 58 FR 62262,
Approval of State Programs and Delegation of Federal Authorities, Final
rule). The November 26, 1993 regulations, which can be found in 40 CFR
part 63, subpart E, provide regulatory ``guidance'' regarding approval
of S/L rules or programs that can be implemented and enforced in place
of Federal section 112 rules as well as the delegation of our
authorities and responsibilities associated with those rules. Under
subpart E, such agencies may obtain approval from us to implement and
enforce provisions of their own air pollution control programs in lieu
of federally promulgated NESHAP and other section 112 requirements for
stationary sources. Once approved, S/L rules and applicable
requirements resulting from those rules are considered federally
enforceable and substitute for the Federal requirements that would
otherwise apply to those stationary sources. Overall, the subpart E

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regulations assure that all sources of HAP that are subject to
regulation under section 112 achieve the emissions reductions that are
intended by the Federal emissions standards or other requirements.
    The current subpart E provides several different processes (that we
also refer to as options) that a S/L may pursue to obtain delegation or
program approval. A S/L would pursue one or more of these delegation/
approval processes based on the particular programmatic needs and goals
of that agency. A S/L may ``mix and match'' the various processes
provided in subpart E to minimize the overall burden associated with
program approval and to obtain the desired delegation outcome. In
addition to providing the procedural requirements for delegation and
program approval, subpart E describes the necessary criteria and other
requirements a S/L rule or program must meet in order for us to approve
it.
    After subpart E was promulgated, several S/L's raised concerns to
us about making these regulations more workable. Since August 1995, we
have been engaged in discussions with S/L representatives to understand
their concerns and to rethink how subpart E might be better structured
to accomplish its goals. These discussions have focused on and
benefited from experiences to date actually implementing the approval
processes included in subpart E. Based on these experiences and the
relative maturity of the air toxics and the title V operating permits
programs since promulgation of the subpart E rules in 1993, we believe
it is appropriate at this time to revise the subpart E regulations.
    Thus, in this notice, we are proposing to amend the existing
subpart E regulations to make them easier to use. One goal of this
effort is to introduce additional flexibility into the subpart E
approval processes and criteria in order to accommodate a wider variety
of S/L program needs, without sacrificing the emissions reduction and
enforceability goals of the Act. Through this effort, we hope to
provide additional flexibility to S/L in how they accept delegation for
the section 112 program, including how they are required to establish
the equivalency of their alternative requirements. We believe this will
result in less overall burden to S/L in seeking approval for delegation
requests, to us in approving such requests, and to regulated industries
in complying with the array of S/L and Federal regulations to which
they are subject. In making it easier for S/L to obtain delegation (and
in minimizing disruption of S/L programs), we hope to achieve the
second critical goal of this effort to revise subpart E, to further
minimize the likelihood of dual regulation of stationary sources.

B. Legal and Policy Framework for Revising Section 112(l) Regulations

    In proposing revisions to the subpart E regulations, we have
provided as much additional flexibility as we believe is appropriate,
both in light of the statute and given our need to assure the American
public that they are getting the same or better environmental
protection from the S/L requirements that would replace the Federal
section 112 requirements. We believe that the flexibility provided in
the subpart E delegation/approval processes cannot compromise the
environmental results or the enforceability of the otherwise applicable
Federal requirements.
    Equivalency demonstrations that S/L's submit for specific
alternative section 112 requirements must show that the alternative
requirements achieve the emissions reductions required by the otherwise
applicable Federal requirements. They also must demonstrate equivalency
on an affected source basis.<SUP>1</SUP> However, this does not mean
that S/L's must demonstrate ``line-by-line'' equivalency with the
section 112 requirements.
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    \1\ Affected source is a defined term in Sec. 63.2 of the part
63 General Provisions. It refers to the portion of a stationary
source that is regulated by a Federal section 112 emissions standard
or requirement.
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    As a legal matter, only the EPA has the authority to approve
alternative section 112 requirements that apply to a category of
sources for which we have promulgated Federal emissions standards. In
other words, we may not delegate to S/L's the authority to make
findings of equivalency between their programs' requirements and the
requirements of the otherwise applicable Federal standards.
    In these rule revisions, we are proposing that the ``test'' for
equivalency between the S/L and Federal requirements should be the same
no matter which delegation/approval option a S/L chooses to pursue
among the options that allow alternative requirements to be substituted
for Federal requirements. By ``test'' we mean the criteria that we
would use to determine whether S/L requirements are as stringent as
ours in terms of the effect they would have on achieving the required
emissions reductions, assuring compliance, and enabling appropriate
enforcement actions.
    Before discussing the proposed changes to subpart E, we thought it
would be useful to identify who is subject to this rulemaking, describe
the process that was used to arrive at the decisions in this package,
review background on the existing structure and content of subpart E,
and summarize the key S/L concerns that we have addressed in this and
previous actions.

III. Who Is Subject to This Rulemaking?

    This rulemaking addresses requirements that apply to ``States,''
should they choose to obtain delegation or program approval under
section 112(l) of the Act. Submission of rules or programs by
``States'' for approval and delegation under section 112(l) is
voluntary. The definition of ``State'' in subpart E covers all non-
Federal authorities, including local air pollution control agencies,
statewide programs, Indian Tribes, and U.S. Territories. Because these
authorities are the primary intended audience for this regulation, from
this point on we use ``you'' or ``your'' to address our comments
directly to any or all of these authorities. In addition, we may also
refer to these authorities as S/L. Note, however, that any requests for
comment on these proposed amendments are directed to the public-at-
large, not just S/L.
    Consistent with the existing subpart E regulations that govern
section 112(l) delegations and approvals, this rulemaking does not
include any requirements that apply directly to stationary sources of
HAP. We regulate HAP sources by developing NESHAP and other types of
requirements under section 112. The subpart E regulations that are the
subject of this rulemaking merely establish criteria and procedures for
determining the governmental agency that will have primary
responsibility within a jurisdiction for implementing and enforcing our
emissions standards (and other substantive section 112 requirements),
and they establish the processes by which you may implement regulations
that, while not identical to our emissions standards, achieve the same
or better results.

IV. What Process Was Used To Arrive at the Decisions in This
Rulemaking?

    In August 1995, S/L air pollution control program officials,
presented to us their views as to why the current subpart E rule needs
to be revised. They indicated that subpart E does not provide
sufficient flexibility for you to use its delegation options, and that
the requirements for establishing that your programs result in
equivalent or better emissions reductions are too

[[Page 1884]]

burdensome. During the succeeding 2 years, we held numerous discussions
with representatives of S/L air pollution control program officials to
better understand their views and to develop options for addressing
their concerns while still assuring that the requirements of the Act
are met. After developing some approaches for responding to S/L air
pollution control program officials' concerns, we involved a wider
group of stakeholders, e.g., industry and public interest groups, to
alert them of our plans and to ask for their input. For example, we
held meetings with the Toxics/Permitting/New Source Review Subcommittee
of the Clean Air Act Advisory Committee in Washington, DC, with
stakeholders in Los Angeles, California on December 5 and 6, 1996, and
with stakeholders in Washington, DC on February 26, 1997 and July 9 and
10, 1997 to gather their input. We also undertook a study with CARB and
SCAQMD to analyze emission reductions of their rules compared with the
otherwise applicable section 112 standards.

V. How Do the Delegation Options Currently in Subpart E Work?

A. Four Ways To Obtain Delegation Under the Current Subpart E

    The following discussion explains the delegation options currently
available to you under the existing subpart E regulations. Sections
VII. through X. of the preamble, below, explain how we are proposing to
modify and expand these delegation options to give you more choices in
how you may seek delegation for one or more section 112 emissions
standards or requirements.
    Subpart E as currently written contains four ways for you to obtain
delegation. You may use any one or any combination of these options in
your request for approval of your rules, authorities, or programs. (If
you are accepting delegation of all Federal section 112 rules without
changes, streamlined delegation mechanisms are available. See the
original subpart E proposal preamble, 58 FR 29298, May 19, 1993, and
the direct final amendments in 61 FR 36295, July 10, 1996.) Under each
of these delegation options, you must demonstrate that each of your
rules, standards, or requirements (as appropriate) for an affected
source is no less stringent than the Federal rule, emissions standard,
or requirement that would otherwise apply to that same affected source.
    The four ways to obtain delegation are listed.
    1. Unchanged Federal Standards--``Straight'' delegation to
implement an unchanged Federal standard or requirement. Under this
process, you may receive delegation for Federal standards and
requirements that are unchanged from the promulgated requirements, as
well as delegation of authority for unchanged rules and standards that
we will issue in the future. These provisions are addressed in
Sec. 63.91 and in various guidance memoranda and documents, including
``Interim Enabling Guidance for the Implementation of 40 CFR Part 63,
Subpart E'' (EPA-453/R-93-040, November 1993).
    2. Rule Adjustment--Delegation to implement a Federal standard
through approval of your rule (or rules) that adjusts a Federal rule in
minor ways that are already listed in subpart E, Sec. 63.92. Each
adjustment taken individually must be no less stringent than the
corresponding requirement in our standard. If your rule meets the
criteria listed in Sec. 63.92, you can receive approval to replace our
rule with yours very quickly.
    3. Authority Substitution--Delegation to implement a Federal
standard through approval of your rule (or rules, or other authorities)
that adjusts a Federal rule in significant ways that are not predefined
in subpart E and are no less stringent. Taken as a whole, the
adjustments must result in rules (or other authorities) that are
equivalent to, or no less stringent than, the Federal standard in terms
of the emissions reductions that they require. These provisions are
addressed in Sec. 63.93.
    4. Program Approval--Delegation to implement some or all Federal
emissions standards through development of terms and conditions in 40
CFR title V operating permits, rather than through approval of your
substantive rules. First, through an ``up-front'' approval, we ratify
your commitments to develop appropriate permit terms and conditions;
later, we review the proposed permits for sources affected by the
NESHAP. Through the title V permitting process you may change
requirements in the Federal emissions standards, provided that the
results of each change are equivalent to (i.e., unequivocally no less
stringent than) the corresponding Federal requirements and you
demonstrate the equivalency of your alternative requirements by
presenting the proposed permit terms and conditions in the ``form'' of
the Federal standard. By ``form'' of the Federal standard, we mean the
terms and units of measurement in which the requirements are expressed.
These provisions are addressed in Sec. 63.94.

B. General Approval Criteria for Delegations Under the Current Subpart
E

    To obtain delegation under any of these approval processes, you
must demonstrate that you have met certain basic approval criteria that
are listed in Sec. 63.91 as well as any additional process-specific
approval criteria that are included in the sections that address the
delegation mechanisms that you choose to pursue. To obtain approval for
your rule or program, Sec. 63.91 requires you to demonstrate to us that
you have adequate legal authority and resources to implement and
enforce your rule or program upon approval. You must also demonstrate
that your rule or program assures that all sources within your
jurisdiction will comply with each applicable section 112 rule. In
addition, you must provide an expeditious implementation schedule, a
plan that assures expeditious compliance by all sources subject to the
rule or program, and a copy of each of your statutes, regulations, and
other requirements that contain the appropriate provisions granting
authority to implement and enforce your rule or program upon approval.
In general, title V program approval is sufficient to demonstrate that
you have satisfied subpart E's general approval criteria in Sec. 63.91,
at least for sources permitted under your title V program.

C. Specific Approval Criteria and Administrative Process Requirements
for Delegations Under the Current Subpart E

1. Sec. 63.91 ``Straight'' Delegation
    Under the ``straight'' delegation option in Sec. 63.91, you may
implement Federal section 112 requirements without changes. You may use
this option when you want to accept delegation of an existing or a
future Federal section 112 standard as promulgated. The approval
process under Sec. 63.91 consists of notice and comment rulemaking in
the Federal Register. Upon approval of your request for delegation of
Federal section 112 rules as promulgated (there are some variations for
section 112(r) accidental release programs), we would publish the
approval in the Federal Register and incorporate it, directly or by
reference, in the appropriate subpart of part 63. In addition, you can
establish a mechanism for future delegation of section 112 standards as
promulgated (e.g., automatic or adoption by reference) that is suitable
for your State's method of adopting regulations. Future delegations of
promulgated section 112 rules would not have to go

[[Page 1885]]

through an additional Federal Register public notice and comment. This
mechanism can be similar to the process established under EPA's 1983
guidance in the ``Good Practice Manual for New Source Performance
Standards (NSPS) and NESHAP.''
    Alternatively, you could choose to submit separate Sec. 63.91
requests for delegation of each specific 112 requirement. If no adverse
comments are expected, we can do direct final rulemaking to streamline
the delegation of these section 112 requirements. Under this option,
the Federal Register notice would state something like ``* * * unless
adverse comments are received, this action will be considered final in
21 days.''
    For additional detail on how this and the other current subpart E
delegation options work, see ``Interim Enabling Guidance for the
Implementation of 40 CFR Part 63, Subpart E'' (EPA-453/R-93-040,
November 1993).
2. Sec. 63.92  Rule Adjustment
    Under the rule adjustment option in Sec. 63.92, we can approve one
(or more) of your rules that is structurally very similar to, and is
clearly at least as stringent as, the Federal rule for which you want
to substitute your rule(s). Under this option, you may only make an
adjustment to the Federal rule that results in emissions limits and
other requirements that are clearly no less stringent, on an affected
source basis, than the Federal rule. There can be no ambiguity
regarding the stringency of any of the proposed adjustments. Section
63.92 includes a list of rule adjustments that may be approved under
this option--for example, lowering a required emissions rate or
subjecting additional emissions points within a source category to
control requirements. We consider all of these adjustments to result in
requirements that are more stringent than the corresponding Federal
requirements. In addition, your rule must have undergone public notice
and provided an opportunity for public comment in your jurisdiction
before you submit it to us for approval. If we find that the necessary
criteria are met, we would approve your rule with adjustments, and it
becomes federally enforceable in lieu of the otherwise applicable
section 112 rule. Upon approval, your rule would be published in the
Federal Register and incorporated directly or by reference into part
63, without additional notice and opportunity for comment.
3. Sec. 63.93  Substitution of Authorities
    Under Sec. 63.93, substitution of authorities (which is commonly
referred to as the rule substitution option), we can approve
substitution of one (or more) of your rules or requirements for a
Federal rule, where your rule is structurally different from the
corresponding Federal rule. Under this section, we also may approve a
rule that is different from the Federal rule in ways that do not
qualify for approval under Sec. 63.92--that is, in ways that are not
``unambiguously no less stringent.'' This situation might arise when
you submit a rule that was written independently of the Federal rule or
when, for example, your rule achieves equivalent emissions reductions,
but with a combination of levels of control and compliance and
enforcement measures not addressed in or by the Federal rule. (Level of
control and compliance and enforcement measures are terms that are
defined in Sec. 63.90.) Any rules or other requirements that you submit
under this section must be enforceable under your State law.
    Under the existing subpart E rule language, authorities that you
may submit for approval under this section include the following:
    (1) S/L rules or other requirements enforceable under State law; or
    (2) In the case of alternative work practice standards, specific
title V or part 71 permit terms and conditions for the source or set of
sources in the source category for which you are requesting approval
under subpart E. The permit terms and conditions must address control
requirements as well as compliance and enforcement measures.
    Under Sec. 63.93, you must make a detailed demonstration that your
rule (or other authorities) would achieve equal or greater emissions
reductions (or other measure of control stringency where appropriate)
for each affected source regulated by the Federal section 112 rule.
Upon receipt of a complete request for approval of a substituted rule
(or other authorities), we would conduct a rulemaking to request public
comments on the proposed substitution. If we find that your
demonstration is satisfactory and the public comments do not dissuade
us, we would approve your rule, publish it in the Federal Register, and
incorporate it directly or by reference into part 63. Your approved
rule and/or requirements would be federally enforceable and they would
replace the otherwise applicable Federal rule in your jurisdiction for
the affected sources.
    The approval criteria in Sec. 63.93(b)(2) require that, in any
request for approval under this section, you provide detailed
documentation that your authorities contain or demonstrate:
    (1) Applicability criteria that are no less stringent than those in
the respective Federal rule. Applicability criteria is also a term that
is defined in Sec. 63.90;
    (2) Levels of control and compliance and enforcement measures that
would achieve emissions reductions from each affected source that are
no less stringent than would result from the otherwise applicable
Federal standard;
    (3) A compliance schedule that assures that each affected source is
in compliance no later than would be required by the otherwise
applicable Federal rule; and
    (4) Additional criteria specified in Sec. 63.93(b)(4) that are not
repeated here.
    To obtain approval under Sec. 63.93, you must demonstrate that you
have satisfied the approval criteria in Sec. 63.93(b) in addition to
the approval criteria in Sec. 63.91(b). As we mentioned earlier, you
may usually demonstrate that you have satisfied Sec. 63.91(b) if you
have an approved title V or part 71 operating permits program. In
addition, once you have demonstrated that you have satisfied the
Sec. 63.91(b) criteria under a Sec. 63.93 approval action, you
generally would not have to repeat the Sec. 63.91(b) demonstration when
you submit additional rules for approval in the future, provided that
your approved resources, authorities, and other program elements are
still adequate to implement and enforce the rules for which you are
seeking delegation, and provided that you are not seeking delegation
for rules that affect sources that your original program approval did
not address (e.g., area sources). Another example of a situation in
which you may need to resubmit Sec. 63.91(b) approval elements is when
you submit for approval an alternative compliance and enforcement
strategy that involves a more resource-intensive inspection program
than the one previously approved.
4. Sec. 63.94  Program Approval
    Under the current program approval option in Sec. 63.94, we may
approve your program so that you can substitute alternative
requirements for one, some, or all section 112 emissions standards
through the title V or permitting process. Currently, this option is
available only for sources that will be permitted under title V.
    For approval to implement and enforce your program in place of the
otherwise applicable Federal section 112 emissions standards, you must

[[Page 1886]]

make a number of legally binding commitments:
    (1) First, you must commit to regulating every source that would
have been regulated by the Federal section 112 emissions standards for
which your program is intended to substitute;
    (2) Second, you must provide assurance that the level of control
and compliance and enforcement measures in each 40 CFR title V permit
you issue for these sources is at least as stringent as those that
would have resulted from the otherwise applicable Federal emissions
standards;
    (3) Finally, you must commit to expressing the 40 CFR title V
operating permits conditions in the ``form'' of the otherwise
applicable Federal standard. This means that you must commit to
translating your standards from the ``form'' you have used in your
rules to the Federal ``form'' so that operating permits conditions are
expressed in the same terms and units of measure and include the same
monitoring and test procedures as in the Federal rule or federally
approved alternatives. This means that you must use monitoring and
testing methods which we have approved for application under the
Federal rule.
    To approve these commitments and identify the list of sources or
source categories for which you intend to use this option, we would do
a notice and comment rulemaking in the Federal Register. We refer to
this rulemaking as the ``up-front'' approval. Our approval of
alternative requirements for specific sources would take place during
the title V permit issuance process. Thus, beyond the ``up-front''
approval of your commitments and other legal authorities, under this
option we do not conduct rulemaking to approve your alternative,
source-specific requirements.
    This mechanism, including the ``form'' of the standard approval
criterion in Sec. 63.94(b)(2)(D), was intended to provide us with an
opportunity for expedited review of your alternative requirements in
the form of title V permit terms and conditions during the permit
issuance process, instead of requiring us to examine and approve source
category rules through the authority (rule) substitution option in
Sec. 63.93. The title V permit issuance process includes opportunities
for public and EPA review, and for EPA objection, of the proposed
alternative S/L requirements; therefore, it can serve as the approval
mechanism in lieu of Federal rulemaking under this option. In addition,
the permit itself acts as the Federal enforcement mechanism under this
option. Upon our approval of the proposed permit, the alternative
requirements become federally enforceable and replace the otherwise
applicable Federal section 112 requirements for that particular
standard (or standards) for that particular source.
    The program substitution option as currently written allows you to
substitute an entire program of alternative air toxics rules for all or
some of the Federal section 112 rules. This type of situation might
arise if you have a mature air toxics program with many regulations
affecting source categories regulated by Federal section 112 standards.
If we approve your program under this option, you can implement and
enforce alternative NESHAP requirements for specific emissions
standards that are identified in the ``up-front'' program approval.
These emissions standards and/or requirements may have been established
under sections 112(d), 112(f), 112(h), or other section 112 provisions.

D. Federal Enforceability of Approved Requirements

    Our promulgated section 112 standard is the applicable and
federally enforceable standard until we approve your rule or program to
take its place following the procedures and criteria in subpart E. Your
rule or program requirements become the applicable and federally
enforceable standard starting on the date of approval of your rule,
program, or other requirement (or in the case of Sec. 63.94 program
approval, starting on the date of permit issuance). Under subpart E,
Sec. 63.91(a)(6), the date of approval is the date of publication in
the Federal Register. After the approval date, our promulgated standard
is no longer applicable or enforceable for the sources in your
jurisdiction.
    Although you become the primary implementation and enforcement
authority when you accept delegation for a section 112 emissions
standard, we continue to have concurrent authority to enforce the
standard which, depending on the delegation mechanism you used, may be
either your approved rule or the unchanged Federal standard. In other
words, after we approve your rule or program, we still have the
authority to enforce the complete emissions standard, including any
``alternative'' requirements arising from your rule or program. This
authority is spelled out in section 112(l)(7) of the Act and Sec. 63.90
and Sec. 63.97 of the proposed rule. Nothing in these amendments
changes our interpretation of section 112(l)(7), or how it is
implemented through subpart E.

E. Purpose of Up-Front Approval for All Subpart E Delegation Options

    No matter which subpart E delegation option(s) you pursue, you must
demonstrate that you have satisfied the general delegation/approval
criteria contained in Sec. 63.91(b). In addition, under the current
rule, to obtain delegation/approval under a particular option in
Sec. 63.92, Sec. 63.93, Sec. 63.94, or Sec. 63.95, you must demonstrate
that you have satisfied the additional approval criteria specified in
the relevant section.
    The rulemaking we conduct under each subpart E delegation option to
codify our finding that you have satisfied the up-front approval
criteria serves several critical functions under section 112(l). First,
the process of approving the up-front portion of your program assures
that you have met the delegation criteria in section 112(l)(5) (as
codified in Sec. 63.91(b)), that is, that you have demonstrated
adequate authority and resources, an expeditious implementation
schedule, an adequate enforcement strategy, and that your program is
likely to satisfy the objectives of the Act. (To the extent that these
have already been satisfied through a title V program approval, you
need not resubmit information demonstrating that you meet the
Sec. 63.91(b) criteria. As we explain later, we believe that title V
program approval often is sufficient to demonstrate that you have met
the Sec. 63.91(b) criteria.)
    Second, our section 112(l) approval of your program provides the
legal foundation by which section 112 requirements may be replaced by
your alternative requirements such that your requirements become the
federally enforceable requirements in lieu of the applicable Federal
requirements. By acting on your program as a whole, we are satisfying
certain prerequisites for removing the Federal requirements from the
list of applicable requirements to which sources are subject for
enforcement purposes (and that must be accounted for in sources' title
V permits). The up-front approval component under the subpart E
approval processes is necessary for you to apply your alternative
requirements to section 112-affected sources and have those
requirements be considered federally enforceable.
    Third, the up-front approval step provides for an orderly way of
identifying which authorities have been delegated to you in relation to
specific Federal emissions standards or requirements. Delineation is
necessary for us, the public, and the regulated community to ascertain
readily what requirements apply to each affected

[[Page 1887]]

source. Without this process, there is no way to distinguish legally
and practicably which emissions standards or requirements apply to each
affected source and which agency has primary implementation and
enforcement authority for each affected source. (It is particularly
important to clarify which agency has primary enforcement authority for
Federal requirements as they apply to particular sources before those
requirements are incorporated into sources' title V permits.) This is
why we require you to specifically request in your submission for
approval the Federal section 112 authorities for which you are seeking
delegation. It would be assumed that all other existing (i.e.,
promulgated) or future Federal requirements not cited are not delegated
to you.
    If, in the future, you would like to expand the coverage of your
approved program to include additional Federal requirements, you must
repeat the up-front approval step to identify those requirements, the
affected source categories, and any additional information that we need
to approve by rulemaking to allow you to implement and enforce your
alternative requirements for those categories. You would also be
required to certify that nothing in your program has changed in any way
that affects your ability to meet the Sec. 63.91(b) approval criteria.
    This is not to say, however, that you must resubmit information
that you have already submitted and had approved under title V.
Previously, in the subpart E promulgation preamble (see 58 FR 62271-
72), we stated that ``the information which must be submitted by a
State under part 70 encompasses the information required under section
112(l)(5) for approval of State programs that seek only to implement
and enforce Federal standards exactly as promulgated,'' and ``for part
70 sources, part 70 approval also constitutes approval under section
112(l)(5) of the State's programs for delegation of section 112
standards that are unchanged from Federal standards as promulgated.''
This means that, for delegation requests under the existing subpart E
regulations where the Sec. 63.91(b) approval criteria are the only
criteria that you must satisfy, i.e., for ``straight'' delegation
situations, you can demonstrate that you have satisfied the
Sec. 63.91(b) criteria by demonstrating title V program approval (for
the sources for which you are accepting delegation that are covered by
your title V program). In the preamble to the existing subpart E rule,
we did not make clear that, under the existing subpart E regulations,
title V program approval could be considered sufficient to demonstrate
that you have satisfied the section 63.91(b) criteria for delegation
requests other than ``straight'' delegations.

F. EPA Can Withdraw Approval If a S/L Is Inadequately Implementing or
Enforcing Its Approved Rule or Program

    Section 63.96 in subpart E addresses what happens if we find that
you are not implementing or enforcing your approved rule or program
according to the criteria you agreed to when you obtained delegation.
Section 63.96 lays out procedures and criteria that address program
corrections and program withdrawals. For example, at any time after we
approve your rule or program we may ask you to provide us with
information that shows how you are implementing and enforcing the rule
or program. If we have reason to believe that you are not adequately
implementing or enforcing your approved rule or program (or that the
approved rule or program is not as stringent as the otherwise
applicable Federal rule, emissions standard, or requirements, or that
you no longer have adequate authorities and resources to implement and
enforce), we would inform you in writing of our findings and the basis
for them. You then have an opportunity to correct the deficiencies and
to inform us of the corrective actions you have undertaken and
completed. If we find that your actions are not adequate to correct the
deficiencies, we would notify you that we intend to withdraw approval
of your previously approved rule or program (or part of it). The
withdrawal process includes opportunities for a public hearing and a
public comment period.
    Based on public comments received, and your reaction to them, we
may notify you of changes or actions that we think are needed to
correct your rule or program deficiencies. If you do not correct these
deficiencies within 90 days, we would withdraw approval of your
federally enforceable rule or program. Upon withdrawal, your rule is no
longer federally enforceable and the Federal rule that it had replaced
again becomes the federally enforceable set of applicable requirements
for the subject sources. With the withdrawal notice, we would publish
an expeditious schedule for the sources subject to your previously
approved rule or program to come into compliance with the applicable
Federal requirements. You would need to revise the title V operating
permits for any sources that were subject to your previously approved
rule or program.
    Section 63.96 also provides that you may submit a new rule or
program (or portion) for approval after we have withdrawn approval of
your rule or program (or portion). You may also voluntarily withdraw
from an approved rule or program (or portion) by notifying us and all
subject sources and by providing notice and opportunity for public
comment within your jurisdiction. If you voluntarily withdraw from
approval, we would publish an expeditious timetable for sources to come
into compliance with the applicable Federal requirements and you would
revise their title V operating permits to reflect the new requirements.

VI. What Concerns Have S/L's Raised Regarding the Current Subpart E
Delegation Options and What Actions Has EPA Taken To Address These
Concerns?

A. S/L Issues With Subpart E

    On August 14, 1995, S/L air pollution control program officials
presented us with a list of issues and implementation difficulties that
they associate with subpart E's requirements. This list was compiled by
S/L representatives based on their actual experiences with subpart E
and on anticipated difficulties with forthcoming submissions for
approval. As we understand their concerns, some of their major issues
are that subpart E appears to require a ``line-by-line'' equivalency
demonstration between your requirements and ours, and that you must
present your alternative requirements in the ``form'' of the Federal
standard. ``Form'' of the standard refers to the terms, such as units
of measure, in which emissions limits and compliance and enforcement
measures are expressed. (For example, if a certain Federal emissions
standard requires an emissions limit of 5 pounds per hour of a HAP from
a particular piece of equipment, you would have to express an emissions
limit resulting from your programs' requirements in the same units,
i.e., pounds per hour, and the actual limit would have to be 5 or fewer
pounds per hour in order to be no less stringent than the Federal
standard.)
    We think these concerns arise from language in Sec. 63.94 that
requires separate equivalency demonstrations for emissions limits,
compliance and enforcement measures (MRR), and compliance dates. These
provisions were included because we believed it would simplify and
speed our and the public's analysis that your program's alternative
requirements achieve the same or better results than our rules or
programs; without these provisions, we believe we would not have the
resources to perform this analysis during our 45-

[[Page 1888]]

day review period for each permit. Our understanding is that they
believe these provisions limit your flexibility to substitute your
requirements for the Federal requirements. They asked us to remove the
``form'' of the standard and line-by-line equivalency requirements from
subpart E. This is the key issue we addressed through these regulatory
amendments and clarifications to subpart E.
    Another one of their concerns with subpart E as it is currently
structured pertains to the length of the approval process for a rule
substitution under Sec. 63.93. Section 63.93 allows us to take up to
180 days to review and act on your submittal, consistent with section
112(l)(5) of the Act, which allows us 180 days to approve or disapprove
a ``program.'' They expressed concern that the 180-day review period
may cause delays for the regulated community, and they requested that
we explore ways to expedite the approval process.
    They also expressed concern that the program approval option in
Sec. 63.94 does not include a mechanism for you to accept delegation of
the Federal requirements for section 112 area sources that are not
required to obtain title V operating permits. You asked us to revise
subpart E so that a mechanism is available to delegate changed Federal
standards for both title V and non-title V sources.
    They also asked us to clarify how you may substitute alternative
work practice standards (WPS) for federally promulgated WPS under
section 112(l). One of their concerns relates to the equivalency
criteria for ``nonquantifiable WPS,'' that is, those WPS for which the
expected emissions reductions or specific performance requirements
cannot be quantified.
    They reiterated their concern about the potential for dual
regulation if you are unable to demonstrate equivalency and obtain
approval to implement and enforce your rules or programs in place of
ours. As we mentioned earlier, dual regulation describes the situation
where sources must comply simultaneously with overlapping, redundant,
inconsistent, or incompatible S/L and Federal requirements. While we do
not think this situation will occur very frequently, we agree that it
should be avoided wherever possible.
    On October 30, 1997, the California Air Resources Board (CARB)
presented us with detailed comments on an initial draft of these
proposed rule revisions. In general, they suggested expanding the
universe of acceptable regulatory vehicles that you could use to
substitute for Federal standards. Our detailed response, including
clarification of what regulatory vehicles may and may not be used under
what circumstances, is contained in section VI.B.2. below.

B. What Actions Have EPA Taken To Address S/L's Concerns?

    This section describes the rule changes and policy clarifications
that we are making, or have already made, in response to your comments
and suggestions.
1. Summary of Flexibility Added to Subpart E Prior to These Proposed
Amendments
    Even before this rulemaking action, we took several steps to
address your concerns. As a first step, through a direct final Federal
Register notice that was published on July 10, 1996 (see 61 FR 36295,
``Approval of State Programs and Delegation of Federal Authorities,''
Direct final rule), we made various changes to the rule language in
subpart E. Because there were no adverse comments, the direct final
rule became effective on August 19, 1996. That rulemaking effected the
following changes:
    (1) It deleted a duplicative requirement in Sec. 63.93 that sources
report the results of all required monitoring or testing at least every
6 months under an approved S/L rule or program. This requirement was
duplicative of reporting requirements already included in individual
NESHAP standards and the title V permit program regulations.
    (2) It clarified the process for ``straight'' delegation of future
NESHAP standards through a single, advance program approval.
    (3) It established the regulatory framework under which you can
obtain section 112(l) approval for S/L programs that create federally
enforceable limits on sources' potential to emit HAP.
    (4) It delayed the requirement that you coordinate with the
Chemical Safety and Hazard Investigation Board (established by section
112(r)) until the board is convened.
    In addition, since August 1995, we issued two policy memoranda to
clarify the flexibility that we believe already exists under Sec. 63.93
for making equivalency determinations between S/L and Federal rules.
(See, (1) ``Section 112(l) Submittal Equivalency Determination--
Recordkeeping Requirements, John S. Seitz, Director, Office of Air
Quality Planning and Standards (MD-10) to David Howekamp, Director, Air
and Toxics Division, Region IX, June 26, 1995.'' and (2)
``Clarification to the June 26, 1995 Memorandum, `Section 112(l)
Submittal Equivalency Determinations--Recordkeeping Requirements', John
S. Seitz, Director, Office of Air Quality Planning and Standards (MD-
10), Regional Air Division Directors, November 26, 1996.'' Both memos
are located in the docket.) These memoranda clarified our
interpretation of the ``holistic'' approval criteria in
Sec. 63.93(b)(2) as it is currently written. Essentially, we stated
that, in order to demonstrate the equivalency of your substitute rules
(or other requirements or authorities) with one of our NESHAP
standards, you must demonstrate that your rule would result in
equivalent emissions reductions. Provided you can demonstrate that the
level of control and MRR of your rule, when taken as a whole, result in
equivalent or better overall emissions reductions, and provided that
your requirements do not compromise Federal enforceability, the
existing subpart E regulations allow us to approve your compliance
measures even when they differ from our rules in form and stringency.
In other words, line-by-line equivalency with the Federal rule for MRR
is not required if your alternative rule as a package is demonstrated
to be as stringent as the Federal standard. However, we would not
approve a less stringent emission limit with very stringent MRR. Your
emission limits must be as stringent as the Federal emission limits. In
the November 26, 1996 memorandum, we further clarified that, under a
Sec. 63.93 approval, line-by-line equivalency is not required to obtain
approval. In addition, we stated our intention that the flexibility
discussed in the June 26, 1995 memorandum regarding the record
retention period be granted ``when evaluating any alternative
compliance measures, including recordkeeping and reporting
requirements, provided that Federal enforceability is not diminished in
this process.''
2. Summary of Flexibility Added to Subpart E Through These Proposed
Amendments
    Through this action, we are proposing various regulatory changes to
subpart E to provide additional flexibility to you in how you may
accept delegation for the Federal section 112 program, including how
you are required to establish the equivalency of your alternative
requirements. These changes augment the flexibility already provided in
our July 10, 1996 rulemaking. In addition to proposing regulatory
changes, we are providing new policy guidance that clarifies: (1) Our
interpretations of the existing regulations and guidance documents; (2)
our expectations regarding the equivalency demonstration process; (3)

[[Page 1889]]

our expectations regarding equivalency demonstrations for alternative
work practice standards and General Provisions; and (4) the types of
situations that each subpart E delegation/approval option is designed
to address. That is, we have clarified when we think it is appropriate
for you to pursue a delegation request under each option according to
the circumstances in your jurisdiction.
    Overall, the revised subpart E regulation and accompanying policy
guidance provide the following additional flexibility:
    (1) more substitution options;
    (2) holistic equivalency demonstration (covering both emissions
limits and MRR) showing that the S/L rules and requirements, seen as a
whole, are equivalent to the Federal MACT standards, rather than a
line-by-line equivalency determination and ``form of the standard''
requirement;
    (3) same equivalency demonstration test for the rule substitution,
equivalency by permit (EBP), and SPA options (which are discussed at
length in the next section);
    (4) expedited processes for approving alternative section 112
requirements under the new EBP and SPA processes;
    (5) mechanisms for approving and implementing alternative section
112 requirements for area sources;
    (6) increased options in regulatory vehicles for alternatives
(which are discussed later in this section);
    (7) approval of some kinds of alternative work practice standards
without having to quantify their effect on emissions; and
    (8) approval of alternative General Provisions (as found in 40 CFR
part 63, subpart A) based on a tiered classification scheme that allows
for different approval criteria depending on the nature of the General
Provisions requirement.
    We have also added an option to this rule to partially approve S/L
rules or programs. We believe that if the majority of your rule or
program submitted for approval under section 112(l) meets the subpart E
criteria, then you should get approval of that portion of the rule or
program that meets the requirements. This option provides an additional
means to minimize the dual regulation effect that the original subpart
E rulemaking was designed to address. Therefore, a program that you
submit under this subsection may provide for partial or complete
delegation of the Administrator's authorities and responsibilities to
implement and enforce emissions standards and prevention requirements,
but may not include authority to set standards less stringent than
those promulgated by the EPA.
    In their current form, subpart E provisions limit us to a binary
choice of either complete approval or complete disapproval. In other
words, if you make an adequate equivalency demonstration for your S/L
rule in its entirety, we would grant full approval of your rule or
program to be used in place of the corresponding Federal requirement.
However, if any part of the demonstration is found lacking, we would
disapprove the submittal in its entirety.
    We believe that partial approval of your air toxics rules and
programs and accidental release prevention programs (ARPP) is
reasonable, is authorized by statute, and is a viable policy option.
Section 112(l)(1) of the Act specifically allows for either ``partial
or complete delegation'' of EPA's authorities and responsibilities. In
addition, this partial approval option will facilitate implementation
of section 112(l) in circumstances where it would make good sense, as
discussed further below.
    Under this approval option, you would submit your S/L rule or
program for our approval. If we find that a separable portion of your
rule fails to meet any of the criteria of sections 63.92, 63.93, 63.94,
63.95, or 63.97, then we would not approve that portion of your rule or
program. We are proposing to define ``separable portion'' as a
section(s) of a rule or a portion(s) of a program which can be acted
upon independently without affecting the overall integrity of the rule
or program as a whole. We could still approve the remaining portion,
provided that we determine that such partial approval would not unduly
confuse the regulated sources or public nor confuse the delegation
process itself. The Federal rule would continue to apply in place of
the portion of your rule that was disapproved.
    For example, we would consider the scenario where you only wished
to implement and enforce NESHAP standard(s) adopted by reference into
S/L law, but only as these standards apply to title V sources, as a
separable portion that we could delegate to you.
    To add a twist to the example in above, if we determine that the
criminal enforcement provisions in your rule are not applicable to
covered area sources, then we would approve the rest of your submittal
and deny delegation of the rule as to criminal enforcement for area
sources.
    Again, in this case, all criminal enforcement of area sources would
be our responsibility, and you would refer all such matters to the
appropriate Regional Office for investigation and resolution. You
should not have to resubmit the entire proposal with reference to the
criminal enforcement for area sources removed, merely so that we could
approve the whole package. We would also specify which portions of the
S/L rule or program are not approvable. This is another case where it
is much more efficient for both you and us for us to allow for partial
approval.
    Another situation where partial approval could be used is where
your rule or program covers a subcategory or subcategories of the
source affected by a Federal standards, but not necessarily all sources
covered by that standard. These must be logical and compelling
subcategories (for example, hard but not decorative chrome plating, or
storage tanks of a particular size at several different types of
facilities).
    There are cases where we believe that partial approval is
inappropriate. An example is the case where the test methods in the
alternative rule are inadequate. Since the test methods are linked to,
and are thus an integral part of, the specific level of control of a
standard, we cannot deem the test methods a ``separable portion.''
Consequently, we could not approve part of a submittal that specifies
the level of control and disapprove the part that specifies the test
methods associated with that level of control.
    If you submit a rule or program with deficient MRR, then your rule
or program could be partially disapproved as to these areas of
deficiency. At some point, however, sources and governmental agencies
may become confused if there are too many separate provisions, some of
which are delegated and others not. If we determine that there are too
many areas of deficiency or if separating the responsibilities between
the Federal and State Government would be too cumbersome, then we may
disapprove your whole rule or program and ask that it be resubmitted in
a form that is closer to complete approval with only a few areas that
must be disapproved. We are under no duty to approve rules or programs
in part. We reserve the right to disapprove your rules and programs
entirely, if in our judgment, partial approval is not workable.
    If you, in preconsultation with us, are aware of the deficiencies
in your submittal, you can merely leave the deficient parts out. In
this case, your submittal would include reference to any deficiencies.
As a practical matter, all parties will not be aware of all deficiency
issues that may arise in the course of a review. That is why partial

[[Page 1890]]

approval authority allows us to selectively approve the satisfactory
portions of the submittal and is therefore, a more efficient mechanism.
We are soliciting comments on appropriate uses of the partial approval
option.
    We have received recent comments from CARB, who suggested expanding
the universe of acceptable regulatory vehicles that you could use to
substitute for Federal standards when regulatory adjustments therein
are fairly straightforward. The following are our positions on the use
of each of those specific suggestions:
    (1) Proposed rules: Proposed rules cannot be used to substitute for
Federal standards, simply because proposed rules are subject to change,
and there is no process for us to review those changes after we have
approved substitution of your proposed rule.
    (2) Permits: (a) Title V Permit Conditions: You may use title V
permit conditions to substitute for a Federal standard under any of the
options outlined in this rule, except for rule adjustment (Sec. 63.92).
However, as we explain in section 8.C. below, you may only use a
maximum of five title V permits to substitute for each Federal maximum
achievable control technology (MACT) standard, unless you choose to
develop General permits under the SPA option.
    (b) General Permit Conditions: You may use General permit
conditions under title V for any number of sources under the SPA option
outlined in Sec. 63.97 of this rule. The great advantage of using
General permit conditions is that we would approve specific permit
terms and conditions up-front, through the subpart E approval process,
and you would not then need to go through rulemaking at the S/L level.
Of course, the General Permit must establish specific terms and
conditions for all emissions points and compliance measures covered by
the Federal MACT standard and any other applicable requirements.
    (c) Permit Templates: As we understand it, a permit template is
different from a general permit in that the permit template would
contain an outline for what each permit should look like, but would not
contain specific permit terms and conditions for each emissions point.
Therefore we believe that you could use permit templates under the SPA
option, provided that we approve both the permit template and the
individual permits, in order to make the individual permits federally
enforceable. Because we would need to approve individual permits, we
believe, consistent with our equivalency by permit approach, that
permit templates should only be used for five or fewer sources in a
source category. However, we request comment on how we could allow use
of permit templates for more sources in a source category.
    (d) Previously-Issued S/L Permit Conditions: As with title V
permits, you may substitute previously-issued S/L permit conditions for
a Federal standard for five or fewer sources in a source category.
These previously-issued permits do not have to be initially federally
enforceable to be submitted for approval, because our approval and
subsequent rulemaking will confer Federal enforceability on them.
Either the SPA option (Sec. 63.97) or rule substitution option
(Sec. 63.93) may be used to approve these permits, but not the rule
adjustment option (Sec. 63.92). The rule adjustment option only
pertains to minor pre-approved changes to Federal standards through S/L
rulemaking. In addition, if a previously-issued S/L permit is used to
substitute for a Federal standard, and is later modified, that
modification must be subject to both public and EPA review.
    (e) Enforcement Orders: A S/L level enforcement order, such as a
board order in California, could be allowed, only so long as the
enforcement order contains enough specific detail to meet our
requirements for demonstrating equivalency (for example, the
enforcement order should contain a level of detail comparable to the
detail contained in a title V permit). In addition, you must provide
legal assurance that the enforcement order will automatically be
translated to a permit after it expires. We are seeking comments on the
use of enforcement orders as a mechanism to demonstrate equivalency
with federal standards.
    (3) Subcategorization: In CARB's comments, they suggest that
different approval options could be used for different subcategories of
sources within a source category regulated by a Federal MACT standard.
We agree, within certain limits. You must create logical and compelling
subcategories of sources that are clear and simple to delineate and
understand, such as area versus major sources, new versus existing
sources, or different source types within a Federal source category or
NESHAP (for example, hard versus decorative chromium electroplating).
In addition, our proposed revisions to Sec. 63.91 allow for partial
approval of S/L rules (see discussion in section VII.C.2. below), which
we would envision as being similar to subcategorization.
    (4) Direct Final Rulemaking: You have requested that we use direct
final rulemaking, rather than the usual procedures of separate proposed
and final rules, in approving substitute S/L authorities. You say using
direct final rulemaking would greatly expedite the approval process.
Direct final rulemakings are generally only used when adverse comments
are not expected. That determination must be made on a rule-by-rule
basis, so a generic provision in subpart E that requires the use of
direct final rulemakings in a wide variety of circumstances would be
inappropriate. However, on a rule-by-rule basis, we will continue to
evaluate the appropriateness of direct final rulemaking.
    (5) Title V Approval in lieu of Rulemaking: You have requested that
we allow use of the title V permit approval process as a way of
avoiding up-front S/L rulemaking for all options under subpart E. We
believe we can only provide this mechanism under Sec. 63.94 (the
equivalency by permit option). A proposed title V permit is approved if
EPA does not act on it within 45 days; therefore the possibility exists
that a S/L could substitute its requirements for a Federal standard
without adequate EPA review. The equivalency by permit process is
limited to five or fewer sources, which provides greater assurance to
us that we will be able to review all permit changes within 45 days.
3. Sacramento Protocol
    One issue you have raised is the length of time and the amount of
effort required to demonstrate equivalency with Federal requirements.
In July 1997, we entered into a delegation and program integration
initiative, called the Sacramento Protocol, with the CARB and the South
Coast Air Quality Management District (SCAQMD) to determine whether
identified State and District air pollution control requirements are
technically equivalent to the requirements found in five Federal
NESHAPs, and whether the demonstration of equivalency could be
developed quickly. The five Federal NESHAPs selected for the initiative
were:

Chromium Electroplating
Secondary Lead Smelting
Aerospace Manufacturing
Gasoline Distribution
Wood Furniture Manufacturing

    The Sacramento Protocol team developed a process to evaluate the
requirements of the five NESHAP. The first step in the process was to
prepare tables that compared the SCAQMD/CARB requirements and the
NESHAP requirements. After review of the tables,

[[Page 1891]]

EPA identified questions and potential issues for which we needed more
information. We went to Southern California to observe inspections of
sources in these categories, which allowed the team members to
evaluate, ``in the field,'' the differences between the S/L and Federal
requirements. The inspections also provided us an opportunity to
evaluate SCAQMD permits and their associated conditions, the permit
evaluation process, inspection staff capability, the inspection
process, source compliance status, and local rule structure.
    As a part of the inspections, the team expanded and added further
detail to the regulation comparison tables. After completing the
comparisons between the S/L requirements and the NESHAP requirements,
the team made one of four conclusions regarding each of the NESHAP
requirements in relation to the corresponding S/L requirements. First,
the team found many of the CARB and SCAQMD requirements to be directly
equivalent to the NESHAP requirements. Second, a similar number of CARB
and SCAQMD requirements could be made equivalent to the NESHAP
requirements by making changes or revisions to the applicable permits
or rules. Third, for some NESHAP requirements, the end result of the
comparison appeared equivalent, but there remained some uncertainty
about the determination. Consequently, the team recommended specific
conditions to ensure equivalency and, with these conditions, viewed the
requirements as technically equivalent. However, in recognition that
the equivalency decisions reached in this effort may set a precedent
for future decisions, the team believed that these issues should be
referred to CARB and EPA management for final resolution. Fourth, for
some requirements the team ``agreed to disagree.'' The disagreements
centered on differences of opinion about the equivalency of a
substitute requirement or on the necessity of a particular NESHAP
requirement.
    Most of this work, including completing the equivalency
demonstration, was completed within 2 months. We believe the Sacramento
Protocol initiative clearly shows that equivalency demonstrations can
be evaluated in a timely fashion if they contain all the elements
needed in a regulation comparison table. Other ways to streamline this
process include keeping the EPA Regional Offices apprised of your
intentions, and contacting the EPA Regional Offices prior to the
submittal of an equivalency demonstration when you know that there may
be significant issues with your submittal.
    The Sacramento Protocol initiative was also beneficial in providing
us with experience in evaluating S/L equivalency demonstrations and in
teaching us more about how the rule substitution process works. We also
believe that we learned where we could provide additional flexibility
for alternative requirements. As part of this learning experience, we
decided that our position on work practice standards could be modified
(see section X.E. below). We also worked with CARB and SCAQMD in
determining how rule effectiveness studies and frequent inspection
programs could be substituted for some MRR requirements. For more
information concerning the Sacramento Protocol, you may obtain a copy
of ``The Sacramento Protocol Final Report'' by contacting Mr. Tom
Driscoll at the address and telephone number referenced earlier. This
report is also on EPA's TTN website, also referenced earlier.

C. Summary of Proposed Regulatory Changes to Subpart E

    As we previously discussed, subpart E as currently promulgated
provides four ways to receive delegation for section 112 regulations:
(1) Sec. 63.91 delegation of unchanged Federal standards;
(2) Sec. 63.92 rule adjustment;
(3) Sec. 63.93 authorities substitution; and
(4) Sec. 63.94 program substitution.
    In this proposed rulemaking we are proposing that there be five
ways to receive delegation:
    (1) Sec. 63.91 delegation of unchanged Federal standards;
    (2) Sec. 63.92 rule adjustment;
    (3) Sec. 63.93 substitution of authorities;
    (4) Sec. 63.94 equivalency by permit (EBP); and
    (5) Sec. 63.97 program approval.
    Table 1 compares the current structure of subpart E in terms of the
content of each section to the structure we are proposing in these
regulatory amendments. The primary changes we are proposing are to
replace the current program substitution process in Sec. 63.94 with the
new EBP process and to add the new SPA process to
Sec. 63.97.<SUP>2</SUP> One way to think of these amendments is that we
divided the former program substitution process into two separate, but
related, new approval options: the EBP process, which is similar in
effect to the existing program substitution process except that it may
be used only for a small number of sources per source category, and the
SPA process, which covers a large number of sources and is similar to
the rule substitution process. These process options are discussed and
compared in detail in sections VIII. and IX. of this preamble. In
addition, we are proposing a number of minor changes to other sections
to support these more significant regulatory amendments.
---------------------------------------------------------------------------

    \2\ Although we would prefer to have all the delegation process
options appear in sequential sections of subpart E, we have
intentionally skipped over sections 63.95 and 63.96 in order to
avoid disrupting existing citations to these sections in other
regulatory text and guidance materials. We believe that, on the
whole, the approach we are proposing will be less confusing and less
burdensome to implement.
---------------------------------------------------------------------------

1. Proposed Changes to Sec. 63.90
    For Sec. 63.90 we are proposing to add and modify a number of
subpart E's definitions. We are proposing to revise the definition for
``level of control'' to say, ``Test methods and associated procedures
and averaging times are integral to the level of control'' in order to
make explicit that test methods and associated procedures and averaging
times must be considered in assessing the emissions limitation portion
of the level of control and that they are not part of compliance and
enforcement measures. We are also proposing to revise the definition of
``compliance and enforcement measures'' to delete reference to test
methods and procedures.

[[Page 1892]]

                  Table 1.--Structure of Subpart E Before and After Proposed Regulatory Changes
----------------------------------------------------------------------------------------------------------------
 Section No. in 40 CFR part 63,       Title and content of section in         Title and content of section in
            subpart E                      existing regulations                  proposed new regulations
----------------------------------------------------------------------------------------------------------------
63.90...........................  Program Overview......................  Program Overview
63.91...........................  Criteria Common to all approval         Criteria Common to all approval
                                   options.                                options
63.92...........................  Approval of a S/L rule that adjusts a   Approval of a S/L rule that adjusts a
                                   section 112 rule.                       section 112 rule
63.93...........................  Approval of S/L authorities that        Approval of S/L authorities that
                                   substitute for a section 112 rule.      substitute for a section 112 rule
63.94...........................  Approval of a S/L program that          Approval of S/L permit terms and
                                   substitutes for section 112 emissions   conditions that substitute for
                                   standards.                              section 112 emissions standards
63.95...........................  Additional approval criteria for        Additional approval criteria for
                                   Federal accidental release prevention   Federal accidental release prevention
                                   programs.                               programs
63.96...........................  Review and withdrawal of approval.....  Review and withdrawal of approval
63.97...........................  [Reserved]............................  Approval of a State program that
                                                                           substitutes for section 112
                                                                           requirements
63.98...........................  [Reserved]............................  [Reserved]
63.99...........................  Delegated Federal authorities.........  Delegated Federal authorities
----------------------------------------------------------------------------------------------------------------

    We are proposing to add a definition for ``alternative
requirements'' because this term is used throughout the amendments to
subpart E. We are requesting comment on whether this definition is
useful and whether it is complete in its current wording. We have also
revised the definition for ``program'' to make it more appropriately
reflect how this term is used throughout the subpart E regulations as
they exist, and as we are proposing to amend them.
    We are also proposing to add a definition to that subsection for
the term ``partial approval,'' and to amend the existing definition of
``approval'' in Sec. 63.90(a) to make it consistent with the proposed
definition of ``partial approval.'' We are seeking comment on these
changes. In addition, we are adding new definitions for ``minor * *
*,'' ``intermediate * * *,'' and ``major changes to a test method,''
and ``minor * * *,'' ``intermediate * * *,'' and ``major changes to
monitoring'' to help explain which General Provisions discretionary
authorities may be delegated to S/L's under Sec. 63.91 (see section
VI.C.2. below).
    Finally, we are proposing to add a new paragraph to Sec. 63.90 to
address how tribal governments may apply for delegation pursuant to the
Tribal Air Rule in 40 CFR part 49.
2. Proposed Changes to Sec. 63.91
    In Sec. 63.91(b), we clarify that you may cite or refer to
documents that you are required to submit for an approval under this
subpart when these documents are readily accessible to us and to the
public. This would save you the trouble of having to submit hard copies
of documents that we already have or that we may obtain in other ways,
for example, electronically.
    We have also added a paragraph to address what S/L's must do to
update their section 112(l) approvals when we amend, repeal, or revise
previously promulgated Federal section 112 requirements that affect
sources. Section 63.91(c)(3) would require that if we revise a MACT
standard upon which you have based an equivalency demonstration for a
S/L rule, program, or permit, then you must revise that equivalency
demonstration within 90 days. We also propose to apply the same review
procedures to a revised equivalency demonstration as we would use for
an initial submittal under section 112(l). We request comment on these
requirements. We also request comment on whether you believe there is a
need for us to notify you, at the time when we revise a MACT standard,
of the need for you to submit a revised equivalency demonstration.
    As discussed above in section VI.B.2, we are providing a mechanism
for partial approval of a S/L rule or program. We propose to edit
Sec. 63.91(a) and to insert Sec. 63.91(d)(2) to provide for such a
partial approval of a S/L's air toxics and ARPP authorities. The EPA is
seeking comments on this proposed edit and specifically on the approach
described.
    Section 63.91(b)(1) currently requires you to provide a written
finding that you have the legal authority necessary to implement and
enforce your S/L rule and to assure compliance by all sources. At a
minimum, you must: (1) have enforcement authorities that meet the
requirements of 40 CFR 70.11; (2) have authority to request compliance
information; (3) have authority to inspect sources and records; and (4)
retain enforcement authority, if you, the S/L, delegate authorities to
a local agency, unless the local agency has authorities that meet
section 70.11. Section 63.91(b)(6) currently contains similar language
that requires you to satisfy criteria (1) and (4) above. We originally
included Sec. 63.91(b)(6) to ensure that a S/L did not receive approval
for rules or programs if it lacked sufficient enforcement authority.
    We now believe, however, that Sec. 63.91(b)(1) ensures the
sufficiency of S/L enforcement authorities and that Sec. 63.91(b)(6) is
an unnecessary and redundant provision. Consequently, we propose to
delete Sec. 63.91(b)(6), and seek comments on the proposed deletion of
this duplicative requirement.
    Under the Part 63 General Provisions, the EPA Administrator has the
authority to approve certain types of alternatives, or to make other
decisions under the General Provisions and the subparts. Questions have
been raised as to whether you may make the same discretionary decisions
when S/L are delegated the General Provisions. Section 63.91, as
promulgated in 1993, did not delineate which discretionary authorities
are delegated to you when you take ``straight'' delegation of the
General Provisions. Therefore Sec. 63.91(e)(1) to (e)(3) of this
proposal clarify which discretionary authorities may be delegated to
you through ``straight'' delegation of the General Provisions.
    These provisions address your authority to make source-specific
decisions only, not source-category wide decisions. If you wish to make
discretionary decisions on a source-category-wide basis under the
General Provisions, then, as with other part 63 requirements, you would
need to use one of the other section 112(l) delegation processes to
substitute your own rule or program for a Federal rule or rules.
    These new provisions provide clarity about those specific General
Provisions

[[Page 1893]]

authorities that would be nationally significant or would alter the
stringency of an underlying standard and thus, would not be delegated
to you. We believe that clarifying the delegation policy of the General
Provisions' authorities will help promote national consistency.
    These new provisions are intended to be generally consistent with
previous policies developed for both New Source Performance Standards
(NSPS) under part 60, and for changes to State implementation plans
(SIP). Past guidance issued for NSPS discretionary changes has
permitted delegation to S/L's of all the Administrator's authorities
except those that require Federal rulemaking, or those for which
Federal oversight is critical to ensuring national consistency in the
application of Standards. (However, such delegations generally do not
give S/L's the authority to issue interpretations of Federal law that
are subsequently binding on the Federal Government). Current SIP
policy, as reflected in ``White Paper Number 2 for Improved
Implementation of the Title V Operating Permits Program <SUP>3</SUP>,''
permits you to alter SIP requirements so long as the alternative
requirements are shown to be equally stringent and are within a pre-
approved protocol (and so long as public review is provided and EPA
approval is obtained).
---------------------------------------------------------------------------

    \3\  Memorandum from Lydia Wegman, Deputy Director, OAQPS, to
Regional Air Division Directors, March 5, 1996.
---------------------------------------------------------------------------

    The Part 63 General Provisions include 15 specific types of
determinations for which the Administrator may make discretionary
decisions on a source-specific basis. When the General Provisions are
delegated to a S/L agency, such discretion may be appropriately
delegated to the S/L agency, provided the stringency of the underlying
standard would not be compromised and/or decisions such as an approved
change would not be nationally significant.
    We have divided the General Provisions discretionary authorities
into two groups, based upon the relative significance of each
discretionary type of decision. Category I contains those authorities
which can be delegated. We believe that the EPA Regional Office does
retain the authority to request review of these decisions, although we
expect that this authority will be exercised infrequently. Category II
contains those authorities which cannot be delegated.
    In general, we believe that where possible, authority to make
decisions which are not likely to be nationally significant or to alter
the stringency of the underlying standard, such as minor changes to
test methods, should be delegated to you. (Note, however, that the
authority to approve decreases in sampling times and volumes when
necessitated by process variables has typically been delegated in
conjunction with the minor changes to test methods, but these types of
changes are not included within the scope of minor changes defined in
Sec. 63.90.) Therefore, minimal EPA involvement is required. Section
63.91(e)(1)(ii) lists the authorities in category I, i.e., those
authorities which may be delegated.
    Section 63.91(e)(3)(ii) lists the authorities in category II, which
includes those decisions which generally may result in a change to the
stringency of the underlying standard, which is likely to be nationally
significant, or which may require a Federal Register notice. These
authorities, therefore, will always be retained by the EPA, and may not
be delegated to you.
3. Proposed Changes to Sec. 63.92
    We have retained the provisions of Sec. 63.92 without significant
changes.
4. Proposed Changes to Sec. 63.93
    Proposed changes to Sec. 63.93 are discussed in detail in section
VII.4. of this preamble. The significant change we are proposing is to
delete Sec. 63.93(a)(4)(ii), which specifies certain authorities that
may be approved under this section. We believe this change will not
affect the usefulness of this section to you.
5. Proposed Changes to Sec. 63.94
    Table 2 summarizes the flexibility offered under the new
equivalency by permit process compared with the existing program
substitution process.
6. Proposed Changes to Sec. 63.95
    Proposed changes to Sec. 63.95 are discussed in detail in section
XI. of this preamble. The major changes being proposed include
revisions needed to make these requirements consistent with the part 68
requirements, which implement the ARPP. We are also proposing to
clarify the authority of S/L's to have more stringent standards,
including lists with additional chemicals or lower thresholds. Finally,
we propose that S/L's may continue to request delegation for a full or
partial program, for a defined universe of sources, so long as you
accept delegation of the entire section 112(r) program for that defined
universe.
7. Proposed Addition to Sec. 63.97
    Table 3 summarizes the flexibility offered under the new SPA
process compared with the existing program substitution and rule
substitution processes.

D. Policy Guidance Provided in the Preamble

    This preamble provides policy guidance on the following topics:

 Table 2.--Comparison Between Flexibility Under Existing and Amended Subpart E for Equivalency by Permit Process
----------------------------------------------------------------------------------------------------------------
  Element of equivalency by permit
          approval process                Existing rule requires . . .       New rule would allow or require . .
----------------------------------------------------------------------------------------------.-----------------
Equivalency demonstrations for       <bullet> Permit terms and conditions   <bullet> Permit terms and conditions
 alternative section 112              in the form of the Federal standard    not necessarily in the form of the
 requirements.                        (63.94).                               Federal standard.
                                     <bullet> Line-by-line equivalency for  <bullet> Holistic equivalency for
                                      levels of control and compliance and   levels of control and compliance
                                      enforcement measures (63.94).          and enforcement measures.
Up-front approval..................  <bullet> Up-front approval on S/L      <bullet> Up-front approval on S/L
                                      authorities, commitments, and          authorities and eligible sources.
                                      eligible source categories--180 days  <bullet> No S/L rulemaking needed to
                                      with rulemaking..                      establish commitments.
                                                                            <bullet> Expedited up-front approval
                                                                             process-90 days with rulemaking.

[[Page 1894]]

Approval of alternative              <bullet> That a title V permit be      <bullet> That a title V permit be
 requirements.                        used to substitute S/L requirements    used to substitute S/L requirements
                                      for Federal requirements..             for Federal requirements.
                                                                            <bullet> EPA review and approval
                                                                             required for all alternative
                                                                             requirements, before public review
                                                                             of permit--90 days without
                                                                             rulemaking.
                                     <bullet> EPA and public review and     <bullet> EPA and public review and
                                      comment during the permit issuance     comment during the permit issuance
                                      process. Affirmative EPA approval      process. Affirmative EPA approval
                                      not required--45 days.                 not required--45 days.
Section 112 program applicability..  <bullet> Permit terms to be            <bullet> Permit terms to be
                                      substituted for emissions standards    substituted for section 112 (d),
                                      established under sections 112 (d),    (f), or (h) emissions standards.
                                      (f), or (h) or other section 112
                                      provisions.
----------------------------------------------------------------------------------------------------------------

Table 3.--Comparison Between Flexibility Under Existing and Amended Subpart E for State Program Approval Process
----------------------------------------------------------------------------------------------------------------
 Element of state program approval
              process                     Existing rule requires . . .       New rule would allow or require . .
----------------------------------------------------------------------------------------------.-----------------
Equivalency demonstrations for       <bullet> Permit terms and conditions   <bullet> Permit terms and conditions
 alternative section 112              in the form of the Federal standard    not necessarily in the form of the
 requirements.                        (63.94).                               Federal standard.
                                     <bullet> Line-by-line equivalency for  <bullet> Holistic equivalency for
                                      levels of control and compliance and   levels of control and compliance
                                      enforcement measures (63.94).          and enforcement measures.
Up-front approval..................  <bullet> Up-front approval on S/L      <bullet> Up-front approval on
                                      authorities, commitments, and          authorities, source categories,
                                      eligible source categories--180 days   generic requirements,
                                      with rulemaking (63.94).               implementation mechanisms--90 or
                                                                             180 days with rulemaking.
Approval of alternative              <bullet> EPA/public review and         <bullet> EPA/public review and
 requirements.                        approval required for all              approval required for all
                                      alternative requirements--180 days     alternative requirements--180 days
                                      with rulemaking (63.93).               with rulemaking
                                     <bullet> Substitutions on a source     <bullet> Substitutions on a source
                                      category basis.                        category basis.
Area source mechanisms.............  <bullet> Substitutions for area        <bullet> Substitutions for area
                                      source requirements by rule (63.93)    source requirements on a source
                                      or title V permit when sources are     category basis through S/L
                                      permitted under title V (63.94).       enforceable mechanisms other than
                                                                             rules or title V permits.
                                                                             Alternative requirements must be
                                                                             approved by rulemaking--180 days.
Section 112 program applicability..  <bullet> Substitutions for emissions   <bullet> Substitutions for emissions
                                      standards established under section    standards established under section
                                      112 (d), (f), or (h) or other          112 (d), (f), or (h) or other
                                      section 112 provisions (63.94).        section 112 provisions.
----------------------------------------------------------------------------------------------------------------

    (1) Our interpretations of existing regulations and guidance (e.g.,
the holistic equivalency demonstration test);
    (2) Our expectations regarding your submittal under the equivalency
demonstration process;
    (3) Our expectations regarding equivalency demonstrations for
alternative work practice standards and general provisions;
    (4) How the delegation/approval options work and compare with each
other, and the S/L situations they are designed to address;
    (5) Functions of the up-front approval process in subpart E
delegation options; and
    (6) Use of title V program approval to demonstrate that
Sec. 63.91(b) criteria have been met.

E. Policy Guidance Provided Outside the Preamble

    Currently, we are developing guidance which will clarify in much
greater detail than the discussions provided in this preamble regarding
what we are looking for from you when you submit alternative
requirements for an equivalency demonstration. As part of this
guidance, we intend to provide a model equivalency demonstration
package that contains all the elements that are required in an
equivalency demonstration for a rule substitution and examples of how
we would evaluate equivalency for specific hypothetical requirements.
We are also developing guidance on demonstrating equivalency of WPS
that would provide examples of quantifiable and nonquantifiable part 63
WPS standards, what we might approve as alternatives, and our rationale
for the approval. Finally, we are preparing General Provisions guidance
that expands on the guidance provided in this preamble and explains the
criteria for how we would determine equivalency with each part 63
General Provisions requirement. We are seeking comments from you about
what other kinds of guidance would be most helpful.

VII. How Do the Revised Delegation Processes Work?

A. Sec. 63.93  Substitution of Authorities

    In section VI.C.3. of the preamble, we presented a detailed
discussion about the administrative process requirements and
equivalency criteria for obtaining delegation/approval under the
substitution of authorities process in Sec. 63.93. Because we believe
that the approval criteria included in Sec. 63.93 already allow for a
``holistic'' review of substituted rules and authorities, we do not
believe that any regulatory changes to these criteria are necessary.
Thus, this proposal has not changed the equivalency criteria in this
option. Because we are not proposing in this rulemaking to amend any
aspects of the approval process or criteria under sections 63.93(a) and
(b), the previous

[[Page 1895]]

discussion in section VI.C.3. is still relevant.
    In the following discussion we clarify and request comment on what
types of authorities you may substitute for section 112 rules under
Sec. 63.93, and we explain our rationale for proposing to amend rule
language that deals with this topic.
    Under Sec. 63.93 as written, we can approve one (or more) of your
rules that is structurally different from the Federal rule for which
you wish to substitute your rule(s), or we may approve a rule that is
different from the Federal rule in ways that do not qualify for
approval under Sec. 63.92. Sec. 63.93 as written also allows us to
approve certain authorities (other than rules) that substitute for a
section 112 rule when these differ in form from the Federal section 112
rule. Under the existing rule language in sections 63.93(a)(4)(i) and
(a)(4)(ii), authorities that you may submit for approval under this
section include:
    (1) Rules or other requirements enforceable under S/L law that
would substitute for a section 112 rule; or
    (2) Specific title V permit terms and conditions for the source or
set of sources in the category for which you are requesting approval
when (a) the permit terms would substitute for standards promulgated
under section 112(h); (b) we have determined that your work practice,
design, equipment, or operational requirements are adequate under the
provisions of the Federal standard; and (c) you have an approved
program under sections 63.94.
    We have reevaluated these provisions in light of the other changes
we are proposing to the delegation processes under subpart E and we
think that certain changes to these provisions may be warranted. First,
we are proposing to delete the provisions of Sec. 63.93(a)(4)(ii) (that
deal with specific title V permit terms and conditions that would
substitute for standards promulgated under section 112(h)) because we
believe it is no longer necessary to have a provision in Sec. 63.93 for
approval of alternative section 112(h) requirements that differ in form
from the Federal standard. Specifically,
    (1) section 63.94 as amended would no longer require up-front
approval of legally binding S/L commitments, so these commitments
should not be a prerequisite for obtaining approval under Sec. 63.93;
    (2) Section 63.94 as amended would require the same equivalency
test as Sec. 63.93 (i.e., you would no longer be required to submit
permit terms and conditions in the form of the Federal standard and
make a line-by-line equivalency demonstration), so that Sec. 63.94's
equivalency criteria should not be a prerequisite for obtaining
approval under Sec. 63.93;
    (3) Section 63.94 as amended would require you to specify in your
up-front approval each source or source category (with five or fewer
sources in a category) for which you will submit alternative
requirements for approval in the future (in general <SUP>4</SUP>), but
this requirement is not necessary for obtaining approval under
Sec. 63.93; and
---------------------------------------------------------------------------

    \4\ This is generally the case, except when you submit your
draft permit terms and conditions at the same time that you submit
your request to use the equivalency by permit process. Regardless of
the timing of when you submit your permit terms and conditions under
revised Sec. 63.94, the ``up-front approval'' step in this process
only covers your demonstration of resources and authorities under
title V/Sec. 63.91(b) and your identification of sources that you
will cover under this delegation process.
---------------------------------------------------------------------------

    (4) Under our revised policy for demonstrating equivalency with
WPS, we are no longer requiring that alternative WPS be expressed in
the same form as the Federal standard. (See the discussion in section
XI.E. of this preamble for a complete discussion of our rationale.)
    Under the proposed rule revisions, Sec. 63.93(a)(4) would read as
follows: ``Authorities submitted for approval under this section shall
include State rules or other requirements enforceable under State law
that would substitute for a section 112 rule.''
    Second, Sec. 63.93(a)(4)(i) specifies that you may submit for
approval under this section rules or other requirements enforceable
under S/L law that would substitute for a section 112 rule. We request
comments from you and other interested stakeholders to help us
understand and clarify what enforceable authorities other than S/L
rules may practicably be substituted under this option (including
authorities that would substitute for section 112(r) requirements). As
a policy matter, we believe it is appropriate to limit our review and
approval under Sec. 63.93 to authorities that are applied on a source
category-wide basis, rather than to individual sources (except when you
only have one source in a source category).<SUP>5</SUP> In our proposed
scheme of amended delegation options, Sec. 63.93's purpose is to allow
us to approve your alternative rules on a rule-by-rule basis when you
wish to substitute rules for a relatively limited number of source
categories (compared with the SPA process). Depending on the comments
that we receive, we may delete reference to ``other requirements'' from
the description of authorities that may be approved under this section,
change Sec. 63.93(a)(4) to read ``Authorities submitted for approval
under this section shall include State rules (i.e., rules that are
enforceable under State law for categories of sources) that would
substitute for a section 112 rule,'' and change the title of Sec. 63.93
to ``Approval of a State rule that substitutes for a section 112
rule.''
---------------------------------------------------------------------------

    \5\ Also, under Sec. 63.93, each approval action covers both the
generic Sec. 63.91(b) approval criteria and the substantive
alternative requirements that you will implement and enforce in lieu
of the Federal requirements for a specified source category. You
cannot obtain approval under Sec. 63.93 unless you submit the
enforceable conditions for that source category with your Sec. 63.93
submittal.
---------------------------------------------------------------------------

    We are also clarifying that we believe you can implement
alternative compliance and enforcement strategies, on a rule-by-rule
basis, within the context of the existing regulations in Sec. 63.93.
This approach is discussed in section X.C., ``Using compliance
evaluation studies in equivalency demonstrations.''

B. Sec. 63.97  State Program Approval Process

    To address some of your concerns with the existing substitution
options in subpart E, we developed the SPA process which, in this
rulemaking, we are proposing to add to Sec. 63.97. Although Sec. 63.97
numerically follows Sec. 63.94 in which we address the new EBP process,
we have chosen to discuss the SPA process before the EBP process to
enhance the overall clarity of the next sections of the preamble.
1. Background
    In your comments and suggestions to us, you requested that we
explore ways to approve your alternative requirements in a more
expeditious manner. You also asked us to add more flexibility to the
program substitution process so you are not restricted to putting
alternative requirements into title V permits. This would allow you to
address area sources that are not covered by your title V programs.
Finally, you asked us to eliminate the requirements for line-by-line
equivalency demonstrations and the ``form'' of the Federal standard in
Sec. 63.94 as it is currently structured. This would give you more
flexibility in how you can demonstrate that your requirements are at
least as stringent as the Federal requirements.
    The new SPA process addresses these concerns. Compared with the
existing program approval process in Sec. 63.94, the SPA process
provides you with additional flexibility by eliminating the ``form'' of
the standard and modifying equivalency requirements. Compared with the
existing rule substitution process in Sec. 63.93, it has the potential
to minimize the time and burden

[[Page 1896]]

associated with approving your alternative requirements, especially in
situations where you have a well-developed program with many comparable
requirements that apply to sources subject to Federal emissions
standards. The SPA process would allow you to obtain approval up-front,
and at one time, for generic alternative requirements that you wish to
apply to more than one source category (e.g., S/L general provisions,
work practice standards, or equipment standards). The SPA process also
would allow you to bundle groups of regulations or requirements and
submit them at one time for more efficient processing, or you could
submit requirements arising from multiple S/L rules to substitute for
requirements in a single NESHAP or other Federal section 112
regulation. The SPA process would allow you to substitute your
alternative requirements for Federal area source requirements using S/
L-enforceable mechanisms other than source category-wide rules. And,
finally, the SPA process would allow you to substitute your alternative
requirements for Federal section 112 requirements arising from section
112(f), the residual risk program, section 112(k), the urban area
source program, section 112(m), the Great Waters program, and others.
2. The Proposed State Program Approval Process
    The SPA process, which would be codified in new Sec. 63.97, is
intended to provide an additional process option for you to obtain
approval of alternative requirements. The proposed SPA process is a
two-step process that we believe could expedite our approval of your
alternative requirements, provide you with more flexibility to submit
your alternative requirements in the future as the Federal regulations
are promulgated, and provide a more ``holistic'' approach for
determining whether or not an alternative requirement assures
compliance with the Federal standard or other requirement. (For a
discussion on how we will determine equivalency, see section X.)
    Under the proposed SPA process, you could seek approval for a
program to be implemented and enforced in lieu of specified existing or
future section 112(d), section 112(f), or section 112(h) emissions
standards. In addition, you may seek programmatic approval to
substitute your alternative requirements for requirements under
sections 112(k), 112(m), 112(n), and 112(c)(6), but only after we have
promulgated regulations implementing those programs. You may not seek
approval under this process to implement and enforce alternative
section 112(r) requirements (that address section 112's Risk Management
Program); alternative section 112(r) requirements may be submitted
under Secs. 63.92, 63.93, and 63.95 of subpart E.
    The proposed SPA process consists of two steps. In the first step,
you submit to us, and we approve your up-front program. Up-front
approval involves assuring that you have adequate authorities and
resources to implement and enforce your proposed substitute provisions,
as well as informing us of which source categories your program covers.
The up-front program approval consists of mandatory and optional
elements. The optional elements allow you to customize the program
approval to suit your particular needs, and they allow you to speed the
flow of the subsequent steps. The up-front approval takes place via
notice and comment rulemaking in the Federal Register and, as proposed,
it may take a maximum of 90 or 180 days to complete, depending on the
complexity of your submittal. In the second step, you submit to us, and
we approve your specific alternative requirements. These alternative
requirements may be submitted in the form of rules, permits, or
requirements in other enforceable mechanisms for major and/or area
sources but, as in Sec. 63.93, they must be enforceable as a matter of
S/L law before you can submit them for approval. Also, as in
Sec. 63.93, in step two of the SPA process, we approve your alternative
requirements through notice and comment rulemaking in the Federal
Register, and this process, as proposed, may take up to 180 days to
complete. Following completion of the SPA process, your approved
alternative requirements must be incorporated correctly into title V
permits, where required.
    Both steps one and two are critical steps in the SPA process. In
these steps, we approve your authorities to substitute your alternative
requirements for Federal requirements, and your alternative
requirements become federally enforceable. (Until we approve your
alternative requirements, the otherwise applicable Federal requirements
continue to apply.) It is important to note, however, that steps one
and two need not take place separately in time. You may submit your
program approval elements and your alternative requirements for
simultaneous approval, for section 112 requirements that are already
promulgated at the time of your submittal.
    Alternatively, you may submit your alternative requirements at a
future date (or multiple future dates), after the up-front approval has
been completed, for section 112 requirements that are not already
promulgated or for which you do not choose to substitute requirements
at the time of your up-front approval. Each time you submit your
alternative requirements at a future date after your up-front program
submittal, we would repeat the approval process under step two. (It is
not necessary to repeat the Sec. 63.91(b) demonstration and approval if
the basis for your earlier program approval has not changed.)
    Under the SPA process, as for all the subpart E delegation/approval
processes, we act on your program by taking public comment on your
program submittal and promulgating a rule amending part 63 to
incorporate your program. (This was discussed in the original subpart E
proposal preamble at 58 FR pages 29297-98.) Because we are required to
publish a Federal Register notice to approve your program, we believe
it is appropriate to allow for at least a 90-day period for the up-
front approval step for submittals that do not contain any alternative
requirements, and the full 180 day-period for the up-front approval
step for submittals that do contain alternative requirements. These
time periods are consistent with the time periods allowed or proposed
for comparable review and approval steps for the other substitution
options in subpart E.
    However, to address your concerns about how long it takes to
receive subpart E approval, we are committed to processing these
approvals as expeditiously as possible (i.e., in less than 90 or 180
days if possible). We are particularly interested in receiving comments
on whether an approval can take place in less than 180 days in
situations where the submittal includes alternative requirements
(especially when the equivalency comparison is complex). We are also
interested in your thoughts about whether and how both steps of the SPA
process could be completed in a combined total of 180 days, even when
the alternative requirements are submitted at a future date after the
up-front program approval has been completed. One suggestion is to
delay rulemaking on the up-front program approval until future
rulemaking takes place for approval of the alternative requirements;
although up-front rulemaking would be delayed, we could still evaluate
your submittal and prepare for the future rulemaking. (To help you
develop your comments, we refer you to timelines describing how steps
in the approval process would play out during the 180-day period. These
are included in the document entitled ``Interim Enabling Guidance for
the Implementation of 40

[[Page 1897]]

CFR part 63, subpart E,'' EPA-453/R-93-040, November 1993. This
document is included in the docket.)
    In addition, to address your concerns about how long it takes to
receive subpart E approval, we have shortened the up-front approval
period to 90 days when your submittal does not contain any alternative
requirements. To accommodate the administrative process steps that are
required to take place during this period, we shortened the individual
time periods that are allowed or required for us to publish the
proposed Federal Register notice (from 45 to 21 days), for the public
to comment (from 30 to 21 days), for you to respond to the public
comments (from 30 to 14 days), and for us to prepare and publish the
final Federal Register notice (to about 30 days). We request comment on
whether these proposed time periods are feasible, adequate, and
acceptable for this purpose, given that we are trying to balance our
desire to expedite the approval process with our interest in allowing
the public sufficient time to comment. We have carried over this
approach to the EBP up-front approval process as well, and we are also
requesting comments on the application of this approach in that
context.
    Based on our experience reviewing your alternative requirements
under the existing subpart E, we strongly recommend that you take steps
under the up-front portion of the SPA process to streamline the review
process for your alternative requirements. The following discussion on
up-front approval elements and criteria suggests how your submittal
could contribute toward simplifying and streamlining the process.
Alternatively, we recommend that you work with your EPA Regional Office
in advance of any formal submittal under the SPA process to get early
feedback on the approvability of your submittal elements. At its
discretion, your Regional Office may offer you a preliminary assessment
of your submittal, and it can advise you on how your submittal may be
improved, so that the formal approval process proceeds smoothly and
expeditiously. Your Regional Office also may be willing to work with
you to find mutually acceptable ways to shorten the review process. For
example, you could discuss what you will include in your equivalency
submittal package, the equivalency demonstration criteria you will
follow, and the style and format of your supporting analyses and
documentation, so that the Regional Office is likely to consider your
step two submittal complete; or you could discuss ways to speed the
administrative aspects of the approval process. While we have
eliminated the requirement to express your alternative requirements in
the form of the Federal standard, expressing them this way would make
the review and approval of your requirements go more easily and
quickly.
    a. Step one: Up-front approval. i. Up-front approval elements and
criteria--The up-front approval step serves several critical functions
under the SPA process. As discussed earlier in this preamble: (1) it
assures that you have met the delegation criteria in section 112(l)(5)
and Sec. 63.91(b); (2) it provides the legal foundation by which
section 112 requirements may be replaced by your alternative
requirements (whether they arise from an enforceable S/L rule or permit
terms and conditions) such that your requirements become the federally
enforceable requirements in lieu of the applicable Federal
requirements; and (3) it provides for an orderly way of identifying
which authorities have been delegated to you in relation to specific
Federal emissions standards or requirements. In addition, the SPA up-
front approval gives you the opportunity to implement alternative
compliance and enforcement strategies (such as through the compliance
evaluation study approach discussed in section XI.C. of this preamble).
You also could obtain approval to implement and enforce alternative
requirements that apply generically to more than one category of
sources, and you could specify which enforceable mechanisms you will
use to substitute alternative requirements for area sources. Our intent
is that our one-time, up-front review and approval of these program
elements will streamline the subsequent review of your (additional)
alternative requirements for section 112 rules.
    As a first step, as in the existing Sec. 63.94, you would submit
certain elements of your program for up-front approval. The up-front
program submittal under the SPA process must include, at a minimum, the
following two elements:
    (1) Sec. 63.91(b) demonstration. The first element is a
demonstration of how you have satisfied the criteria in Sec. 63.91(b)
that address the basic adequacy of your program to accept delegation to
implement and enforce Federal section 112 requirements. These criteria
ensure that you have adequate authorities and resources to implement
and enforce the substituted provisions, including the authorities and
resources to implement your area source program. Title V program
approval may be sufficient to demonstrate that you have satisfied the
Sec. 63.91(b) criteria for sources covered by your title V program; and
    (2) Identification of source categories and/or Federal section 112
requirements. The second element is an identification of the source
categories and/or the Federal section 112 requirements for which you
will accept delegation and for which you intend to substitute
requirements at that time or in the future. (Note, however, that you
cannot substitute requirements for a Federal requirement until it is
promulgated.)
    In addition, depending on the design and complexity of your program
and what you want to achieve by substituting your program under the SPA
process, you may submit for approval one or more of the following
elements:
    (3) Generic program requirements. You may obtain approval in this
step for generic alternative requirements that you intend to apply to
one or more source categories, e.g., if you have a different approach
to implementing the startup, shutdown, and malfunction plan required in
Sec. 63.6(e) of the part 63 General Provisions, or if you have a
different approach generally from the Federal requirements for
recordkeeping and reporting, preconstruction review, or any number of
other ``general provisions.'' In addition to general provisions, which
are often administrative in nature, you could obtain generic approval
for substantive control regulations (e.g., design, equipment, or
performance standards) that apply to more than one source category and
reduce emissions of HAP.
    You could do a generic equivalency demonstration for these
requirements at this early stage in the SPA process. This early
demonstration of equivalency would help to expedite our review and
approval of your subsequent submittals for promulgated Federal
regulations, and it would allow the public to comment on the general
applicability of these approaches.
    (4) Enforceable mechanisms for area source requirements. The next
element is a description of the mechanism(s), that is enforceable as a
matter of S/L law, that will be used to make your alternative
requirements for area sources federally enforceable when they are
approved during step two. In addition, you must include a demonstration
that you have adequate resources and authorities to implement and
enforce these mechanisms (or the requirements they generate).
    Under the SPA process you may use S/L enforceable mechanisms, such
as S/L operating permits programs other than title V programs, to
develop and submit

[[Page 1898]]

for approval alternative requirements for area sources. A thorough
discussion of this topic follows.
    (5) Alternative compliance and enforcement strategies. In addition,
if you elect to implement protocols that establish alternative
compliance and enforcement strategies (such as performing compliance
evaluation studies, which are discussed in section XI.C., below), we
must approve your proposal through rulemaking in the up-front approval
step. This approval may require you to supplement your previous
Sec. 63.91(b) demonstration if you need additional resources,
authorities, or requirements to implement the alternative strategies.
    The advantage of including information from elements (3) or (5) in
your up-front submittal is that it would allow significant aspects of
your equivalency demonstration for specific Federal section 112
requirements to be addressed and worked out generically and in advance
of our and the public's review of your alternative requirements during
the subsequent step two phase. Consequently, it can result in a
decrease in the time it would otherwise take to review and approve your
regulations or permits for one or more source categories. In fact, we
believe that the benefits from developing these up-front understandings
may be significant, and we think this is one of the major advantages of
pursuing the SPA option.
    ii. Process for making area source requirements federally
enforceable--One way that the SPA process is more flexible than the
existing program substitution process in subpart E is that the SPA
process may be implemented more readily for area sources. (The existing
program substitution process in Sec. 63.94 may be implemented for area
sources, but only if you will be permitting those sources under your
title V program. We understand that, in the near term, most title V
programs in the country will not cover the part 63 area sources that we
deferred from permitting. Nothing in this discussion, however, is
intended to deter you from using title V programs to permit area
sources.) We are proposing that, as part of the up-front SPA approval
process, you may submit a plan to implement your programs for area
sources, in addition to your plan for major sources. In this plan you
would identify the legally enforceable mechanism(s) that you would use
to implement and enforce your area source requirements. These legally
enforceable mechanisms may be either source category rules or general
permits (or a similar type of approach) that are specific to a source
category and are issued through a non-title V S/L permitting (or
similar) program. In either case, in step two we could approve these
rules or permits, that are already enforceable as a matter of S/L law,
in the same way that we can approve major source rules, that is,
through notice and comment rulemaking in the Federal Register. Whether
you regulate area sources through source category-wide rules, general
permits, or another enforceable mechanism, these rules become federally
enforceable upon approval of the specific alternative requirements in
step two. We are requesting comment on types of S/L enforceable
mechanisms other than rules and permitting programs that you may wish
to use for this purpose and specific descriptions of how you would use
these mechanisms.
    We are also requesting comment on the types of criteria that an
enforceable S/L mechanism must satisfy, if any, to be acceptable as a
source of alternative requirements that may be approved under section
112(l). For example, we are requesting comment on whether, as a
condition of obtaining approval for area source requirements submitted
through a non-rule mechanism, the public within a S/L jurisdiction
should have adequate notice and opportunity to submit written comment
to the S/L during the process of developing the enforceable terms and
conditions that would become the approved alternative requirements.
Such programs obviously must have authority to cover the sources in the
source category, and individual HAP, if any, for which you are
requesting Sec. 63.97 approval, and you must have authority and
resources to implement and enforce the program's requirements. These
criteria would be satisfied by the Sec. 63.91(b) component of the up-
front approval. We would like your comments on whether we should
establish any additional specific approval criteria for such programs
through these amendments to subpart E.
    For the revised regulation, we plan to review and approve general
permits, rules, requirements, or permit templates developed under
authority of your enforceable mechanism for area sources (or your title
V authority for major or area sources). We intend that Sec. 63.97
substitutions of requirements be applied on a source category-wide
basis, rather than to individual sources (except when you only have one
source in a source category). Each general permit or other approved
mechanism would take the place of a source category rule submitted for
approval under this option. As we explain in section VIII.C., which
describes the equivalency by permit process, we believe the use of
permits for demonstrating alternative requirements must be limited to
be implemented practicably, because of the burden associated with
reviewing individual permits containing alternative section 112
requirements expressed in a form that is different from that in the
underlying standard. Otherwise, we believe this approach will overtax
your ability to administer your programs and our ability to review your
permits within the specified time limits. This, in turn, could delay
the program approval process and adversely impact sources generally.
    Therefore, except when you have only one source in a source
category (or possibly in other limited circumstances described below),
you must submit for review and approval general permits, rules,
requirements, or permit templates for either major or area sources. You
may submit more than one such mechanism for each source category (or
class of sources in a source category, e.g., major sources) provided
the collection of submittals ensures that all of the otherwise
applicable Federal section 112 requirements in the emissions standard
and all sources for that source category are addressed. We are taking
comment on this approach.
    Your program for area sources need not apply to sources subject to
Federal standards for which you are not taking delegation under this
approval option. These sources would be subject to Federal standards or
your alternative requirements established under a different subpart E
option. However, your area source program must assure compliance with
all Federal section 112 emissions standards and requirements for which
you accept delegation under the SPA process.
    Furthermore, to reduce the burden associated with implementing an
enforceable area source mechanism under subpart E, we are clarifying
that you may specify as part of your up-front subpart E program
approval that only the permit terms and conditions that are established
to substitute for Federal section 112 requirements need to undergo
public and EPA review and become federally enforceable through step 2
of the SPA process. We hope that this minimizes disruption to your
existing programs by allowing you to maintain the rest of your program
as is, or as S/L-enforceable only.
    b. Step two: Approval of alternative section 112 requirements.
After or during the up-front approval, in step two of the SPA process,
you would submit to us the alternative requirements that you propose to
substitute for Federal section 112 requirements, and we would approve
or disapprove those requirements. We

[[Page 1899]]

would review and (dis)approve your alternative requirements for each
source category for which you wish to receive delegation to implement
alternative requirements. If we disapprove your substitution request,
you would proceed to implement the Federal rules. <SUP>6</SUP> For part
63 NESHAP or other Federal requirements that are already promulgated at
the time of your up-front submittal, step two may be combined with step
one, or it may occur after step one, depending on the status of your
existing rules or authorities. To be submitted for approval, your
alternative requirements must be enforceable as a matter of S/L law;
they may take the form of enforceable regulations, general permit terms
or conditions, administrative orders, board orders, or other legally
enforceable mechanisms in your jurisdiction. If the actual requirements
originate from policies instead of regulations, they may only be
submitted to us if they are included in an enforceable mechanism such
as a permit.
---------------------------------------------------------------------------

    \6\ Under your approved up-front program, you would already have
been delegated the authority to implement and enforce those Federal
requirements.
---------------------------------------------------------------------------

    Furthermore, the alternative requirements that you submit for a
particular NESHAP or other Federal requirement must apply to the entire
source category or subcategory. Under the SPA process, as under the
Sec. 63.93 process for substitution of rules, we will only review and
approve alternative requirements that do not require a source-specific
evaluation to determine their equivalency. This means that, if you are
using a permitting mechanism to make your requirements enforceable for
a source category, you could only submit general permits. (Earlier we
asked for comment on the feasibility and desirability of creating
limited exceptions to this policy.)
    After we have determined whether your alternative requirements are
acceptable, the public would have 21 days to comment on your proposed
alternative requirements and our evaluation of them through a notice
and comment rulemaking published in the Federal Register. Then, after
considering the public comments and your responses to them, we would
act on your submittal by notifying you in writing as to whether we have
approved or disapproved your request for substitution. We would also
publish our findings in a final Federal Register notice. Because your
alternative requirements do not become federally enforceable or replace
the otherwise applicable Federal section 112 requirements until the
final Federal Register notice is published, we strongly recommend that
you begin your SPA approval process under step two in plenty of time to
receive approval before the first substantive compliance date for the
otherwise applicable Federal requirements. (By substantive compliance
date we mean a date by which the source is required to comply with
provisions to install and operate control equipment, make process
changes, or take other physical steps that reduce emissions of HAP to
the atmosphere.) For sources that need a long lead time to come into
compliance with your requirements or the otherwise applicable NESHAP
requirements, more than two years may be needed. We recommend that you
develop suitable timelines for implementing the SPA process steps with
your EPA Regional Office at the time of up-front approval, or as early
in the process as possible.
    During the course of developing this proposed rulemaking, some of
you suggested that a 45-day review period (similar to the 45-day review
period for proposed title V operating permits) should be adequate for
acting on alternative section 112 requirements under the SPA process.
However, because of the potential complexity of equivalency
demonstrations, the application of approved alternatives to all sources
or groups of sources within the affected source category or subcategory
within your jurisdiction, and the need to do a rulemaking to approve
your source category-wide alternative requirements, we believe that 45
days is not adequate as the maximum allowable review period.
    In developing the SPA process, we explored options under which we
could approve your alternative requirements in step two without the
need for additional Federal rulemaking, but the Act prohibits that. 42
U.S.C. Sec. 7697(d). See also, Administrative Procedures Act, 5 U.S.C.
Secs. 551, 553. Under the APA, Agency actions of general applicability
and future effect designed to implement the law are considered rules
and must undergo rulemaking. Approvals of your source category or
subcategory applicable alternative requirements, which will be
implemented and enforced in lieu of the Federal section 112 standards,
fall within the above description of a ``rule.'' Consequently, we must
undergo a rulemaking to grant such an approval.
    c. Incorporation of alternative requirements into title V permits.
Following completion of step two of the SPA process, you would
incorporate the new federally applicable requirements into title V
permits for sources that are required to have such permits. This action
is important for several reasons relating to section 112(l)
substitutions of requirements. First, we and the public have an
opportunity to ensure that the approved alternative section 112
requirements are implemented correctly via the permit issuance process.
Second, the permit is a publicly available repository of the
requirements that apply to an affected source. We, you, the affected
source, and the public all have access to the same information about
what is required from that source.
    Although we and the public have an additional opportunity to review
your alternative section 112 requirements during the permit issuance
process, this is not an opportunity to ``second guess'' the approval of
those requirements that took place during the step two review. The
purpose of the review during the permit issuance process is to ensure
that the terms and conditions of previously approved alternative
requirements are incorporated properly into the permit.
3. Changes to Previously Approved Alternative Requirements
    After we have approved your alternative requirements (rules or
permit terms), if your alternative requirements then change in any way
that would change the approved section 112 provisions, you must
resubmit your rules or permits to us for reapproval in order for your
new alternative requirements to become federally enforceable in place
of the set of alternative requirements we previously approved.
Subsequently, if relevant, you must open and revise any federally
enforceable permits (or permit terms) that contain these alternative
section 112 requirements to bring them up to date with your revised,
approved alternative requirements. In other words, you must repeat step
two and revise your title V permits whenever your underlying
regulations, policies, or permits change so that your subpart E-
approved rules and permits correctly reflect your most current
requirements for those affected sources. As a matter of Federal
enforceability, until we approve your revised alternative requirements
under step two, sources remain subject to the applicable alternative
section 112 requirements that we approved previously. If your
alternative requirements originate from source category rules, you must
first submit those rules to us, as in step two, to obtain our approval
that the changed rules satisfy the equivalency demonstration criteria.
    If your alternative requirements originate from policies that
result in permit terms and conditions, rather than from enforceable
rules, if you make any

[[Page 1900]]

changes to those policies, or if you implement those policies
differently from how they are expressed in the approved permit terms
and conditions, you must submit the revised permit terms and
conditions, as in step two, to obtain our approval that the changed
permit terms satisfy the equivalency demonstration criteria.
4. Criteria for Demonstrating Equivalency of Alternative Requirements
    Under proposed Sec. 63.97(d), each individual submittal for
specific alternative requirements must:
    (1) Identify the specific conditions that sources in the source
category must comply with under your requirements, including which of
these are alternative requirements that you want to implement and
enforce in lieu of the otherwise applicable Federal requirements. You
must submit copies of all S/L rules, regulations, permits,
implementation plans, or other enforceable mechanisms that contain the
entire set of requirements for which you are seeking approval,
including any alternative requirements, or if these documents are
readily available to us and the public, you may cite the relevant
portions of the documents or indicate where they are available;
    (2) Identify how these conditions are the same as or different from
the relevant Federal requirements through a side-by-side comparison of
your requirements and ours. Your submittal must contain sufficient
detail for us to be able to make a determination of equivalency between
your alternative requirements and the Federal requirements;
    (3) Provide detailed information that supports and justifies why
you believe that your alternative requirements, taken as a whole, are
no less stringent than the otherwise applicable Federal requirements,
that is, how they meet the equivalency criteria specified in
Sec. 63.93(b). For example, this equivalency demonstration must
demonstrate how your requirements will achieve equivalent or greater
emissions reductions compared to the Federal requirements for each
affected source.
    We would then evaluate the specific alternative requirements by
using the equivalency ``test'' contained in Sec. 63.93(b). Section XI.
of the preamble contains a complete discussion on how we would conduct
an equivalency evaluation under the criteria of Sec. 63.93(b) to ensure
that the alternative requirements are no less stringent, taken as a
whole, than the otherwise applicable Federal requirements. (In the
future, we may supplement this discussion with additional guidance.)

C. Sec. 63.94  Equivalency by Permit Approval Process

1. Overview and Purpose of an Equivalency by Permit Process
    Because of issues you raised about the current program substitution
process in Sec. 63.94, we are proposing to revise Sec. 63.94 to create
an equivalency by permit (EBP) approval process which does not include
a requirement for you to submit your alternative requirements in the
form of the Federal standard. The proposed EBP process would allow you
to substitute, for a limited number of sources, alternative
requirements and authorities that take the form of permit terms and
conditions instead of source category regulations. Under this three-
step process, you could seek approval to implement alternative section
112(d), section 112(h), or section 112(f) requirements that would be
enforced in lieu of part 63 emissions standards by submitting permit
terms and conditions that satisfy subpart E's equivalency demonstration
criteria. Once approved, these permit terms and conditions would be
included in a title V permit, through the appropriate title V permit
issuance process, to replace the otherwise applicable Federal
requirements. This process satisfies your request for a means of
obtaining delegation for a few sources without having to go through
rulemaking at the S/L level to establish source category-specific
regulations. It also allows you to substitute alternative requirements
on a source-specific basis for area sources when those sources are
permitted under title V.
    The proposed EBP process accomplishes similar objectives to those
that the current Sec. 63.94 is intended to accomplish; however, the EBP
process provides flexibility beyond that now in Sec. 63.94 by allowing
a ``holistic'' approach for determining equivalency between your
alternative requirements and the Federal emissions standards. The
proposed EBP process differs from the current process in Sec. 63.94 in
that it does not require you to present your permit terms and
conditions in the form of the Federal standard in order to demonstrate
equivalency (although doing so may greatly reduce the time it takes to
approve your alternative requirements). Rather, it relies on the same
equivalency demonstration ``test'' that is currently in Sec. 63.93(b)
for rule substitutions and that we are proposing for the Sec. 63.97 SPA
process.
    To balance this additional flexibility, we are proposing to add a
process step (i.e., step two, in which we review your draft permit
terms and conditions before they are included in proposed permits) and
limit the scope of applicability of the EBP process (i.e., allow the
EBP approach for 5 or fewer sources in a source category that is
affected by a NESHAP for which you want to substitute alternative
requirements). These ``checks and balances'' would ensure that the
results of EBP implementation are comparable to the results that would
be achieved through the other subpart E processes in terms of the types
of alternative requirements that could be approved, the opportunities
for public and EPA review of alternative requirements, and the overall
burden that would be associated with implementing this approach (for
you, for us, and for regulated sources). In addition, the checks and
balances would provide assurance that the proper emission reductions
are achieved. These concepts are explained further in the remainder of
this section of the preamble.
    Essentially, the EBP process is appropriate when a source-specific
analysis is necessary to determine the effect of the alternative
requirements. In general, it is appropriate when you do not already
have S/L standards that apply to source categories regulated by part 63
emissions standards. For example, EBP could be appropriate for SIP-
approved rules that regulate HAP indirectly. Alternative requirements
may also arise from health-based or technology-based rules that
generate source-specific requirements based on a source's operations,
location, construction or modification activities, etc. Because each of
these situations requires a source-specific analysis, general permits
would not be appropriate under the EBP process.
    The EBP process is similar to (but not the same as) the title V
permit streamlining process we developed for minimizing duplication
among multiple applicable requirements that apply to the same emissions
point at a source. (For guidance on permit streamlining, see our March
5, 1996 policy guidance document entitled ``White Paper Number 2 for
Improved Implementation of the Title V Operating Permits Program,''
commonly called White Paper 2, which can be found on our website at
http://www.epa.gov/ttn/oarpg/t5wp.html.) Through title V permit
streamlining, a source may elect to consolidate multiple applicable
requirements into a single set of applicable requirements that assure
compliance with each of the ``subsumed'' requirements to the same
extent as would be achieved by having

[[Page 1901]]

the source comply with each requirement independently. Through the EBP
process, you (as the permitting authority) may have Federal section 112
requirements replaced with your approved alternative requirements that
are no less stringent than the section 112 requirements that they
replace. Sources subject to the title V operating permits programs must
continue to meet the requirements of that program in addition to the
requirements of subpart E.
    The EBP process differs from the rule substitution and the SPA
processes in that three steps are required under EBP to obtain our
approval for your alternative requirements. While all of the
substitution options require Federal rulemaking action to approve your
program elements (i.e., the Sec. 63.91(b) criteria and any other up-
front approval elements) and a step where we review and (dis)approve
your alternative requirements, the EBP process also requires a final
step where we review and (dis)approve how those alternative
requirements are incorporated into title V permit terms and conditions.
In the other substitution options, your alternative requirements are
approved by rulemaking and become federally enforceable after the
second step. In the EBP process, after approval of the S/L alternative
requirements, you must incorporate the approved permit terms and
conditions into Title V permits.
    The EBP and SPA processes also differ in that the scope of
applicability for EBP is narrower than the scope for SPA. Under the SPA
process you submit and we approve alternative requirements that apply
to entire source categories; this approach may impact numerous sources
in many source categories. In contrast, under the EBP process, you
submit and we approve alternative requirements that apply to a small
number of individual sources in a category. These sources may or may
not comprise all the sources in that category in your jurisdiction. (If
they do not comprise all your sources in that category, you must accept
delegation for the remainder of your sources in the category under a
different subpart E delegation process.)
2. Steps in the Proposed Equivalency by Permit Process
    a. Step one: Up-front approval. As a first step you would submit
certain elements of your program for up-front approval (as in the
existing Sec. 63.94 and the proposed SPA processes). The purpose of the
up-front submittal is for you to demonstrate that you have satisfied
the basic Sec. 63.91(b) criteria for obtaining delegation, demonstrate
that you have an approved title V permit program to implement the EBP
approach, and identify the sources in the source categories for which
you wish to use the EBP approach. (You may identify sources for which
part 63 emissions standards will be established in the future.)
    In discussing the form that an EBP process could take, some of you
have suggested that an up-front approval would be redundant when you
already have an approved title V program. We disagree, at least in
part. As we already discussed for the SPA process, the State-specific
up-front approval for an EBP program serves critical functions under
section 112(l) including ensuring that you meet the Sec. 63.91(b)
criteria for delegation, providing a legal foundation for you to
replace the otherwise applicable Federal NESHAP requirements in your
permits with your alternative, federally enforceable requirements, and
delineating the specific sources and Federal emissions standards for
which you have accepted delegation. Also, as in the SPA process, the
up-front approval step allows us to verify that you have adequate
resources and authorities to implement your alternative section 112
requirements through your approved implementation mechanism, which in
this case is your title V permit program. As we have mentioned
previously, title V program approval generally is sufficient to
demonstrate that you have satisfied the Sec. 63.91(b) criteria for the
sources covered by your title V program, but it is not sufficient to
satisfy the other purposes of the up-front approval.
    Section 63.94(b) of the proposed rule, which contains the criteria
for up-front approval, differ from the approval criteria currently in
Sec. 63.94(b) in that they no longer require you to make legally
binding commitments to express your title V permit terms and conditions
in the form of the Federal standard.
    In addition, they no longer can be construed to require you to
demonstrate equivalency in a line-by-line manner. The new second step
in the EBP process, where we review and approve your alternative
requirements, replaces the up-front commitments. In this step we have
the opportunity to evaluate your alternative permit terms and
conditions the same way we would evaluate your alternative rules under
the rule substitution or SPA processes, so the up-front, legally
binding commitments are no longer necessary to implement this option.
    We are proposing that you submit for approval under the EBP process
an up-front package that, in addition to including a written request to
use the EBP process:
    (1) Identifies the existing or future Federal NESHAP standards to
be replaced;
    (2) Specifies the specific sources to be covered for each NESHAP
standard (not to exceed five sources per source category) as well as
the process you will use to accept delegation for the other sources in
the source category in your jurisdiction; and
    (3) Demonstrates that you have an EPA-approved title V program for
the sources for which you wish to use the EBP process.
    Because the up-front EBP submittal elements do not contain
alternative requirements, we are proposing that we could take a maximum
of 90 days to review (following a determination that the submittal is
complete) and (dis)approve the program you submitted up-front,
including the opportunity during this period for public comment during
the rulemaking on your submittal. Through a proposed rulemaking notice
in the Federal Register, we would inform the public of and request
comments on your desire to use the EBP process for the source
categories and sources that you have identified. This notice would also
inform the public that they may provide comments on specific equivalent
alternative requirements during the comment period for individual draft
permits. Assuming the public comments are favorable, as for all the
subpart E processes, we would promulgate a rule amending part 63 to
incorporate your program. Our proposed timeline for the 90 days is the
same as for the simple up-front approval process in SPA.
    If you submit alternative requirements (in the form of permit terms
and conditions) at the same time you submit your up-front program, we
could evaluate them on approximately the same 90-day timeline we use to
approve your up-front program (though they do not have to undergo
rulemaking), but we could not approve your alternative requirements
until your up-front approval becomes effective (at the time of
publication in the Federal Register). After your up-front approval has
been completed, if you wish to implement the EBP process for individual
sources or sources in source categories that are not already identified
as part of your approved EBP program, you would need to repeat the up-
front approval process to add those sources to your program. As part of
your resubmittal for program approval, you would not have to repeat the
portions of the demonstration that pertain to the Sec. 63.91(b) program
approval criteria, provided that your

[[Page 1902]]

former demonstration is still adequate to show that you have the
resources, authorities, and other program elements necessary to
implement the EBP program for the additional sources. Finally, nothing
precludes you from obtaining up-front approval simultaneously under
more than one subpart E substitution process, e.g., SPA and EBP. We are
eager to work with you to streamline the administrative aspects of
obtaining subpart E approval to the maximum degree possible within the
framework of these regulations.
    If we disapprove your program approval request, the Federal
emissions standards or requirements remain the applicable requirements
for those sources. You would proceed to implement the Federal rules for
those sources that are covered by your title V program.
    b. Step two: Approval of alternative NESHAP requirements. After we
approve your program you may proceed to implement step two, the
development and submittal of the draft permit terms and the equivalency
demonstrations themselves. In step two of the EBP process, we would
review and approve your alternative requirements for each source for
which you have received delegation under the EBP process. For Federal
standards that are already promulgated at the time of your up-front
submittal, step two may take place concurrently with step one, or it
may occur after step one. The purpose of step two is for us to evaluate
and approve the actual draft permit terms and conditions that you are
proposing to include in permits for these sources to replace the
otherwise applicable Federal NESHAP requirements.
    In step two of the EBP process, you would submit to us the specific
draft permit terms and conditions that you propose to substitute for
Federal section 112 requirements, and we would approve or disapprove
those terms and conditions. If practical, we prefer that you submit
just the terms and conditions that would substitute for the Federal
section 112 requirements, thereby omitting any State-only requirements,
and that this submittal take place well before you prepare the complete
draft permits for the affected sources, so that the terms you include
in the complete draft permits reflect the comments you receive from us
on your alternative section 112 requirements. However, in some
situations it may be appropriate for you to submit complete draft
permits at this step, and it may speed the overall permit issuance
process when time is of the essence. Your submittal must include the
complete set of draft permit terms and conditions that substitute for
the Federal NESHAP, an identification of which terms contain
alternative requirements, and your supporting documentation for your
equivalency demonstration. Additional information on the criteria you
may use to demonstrate equivalency for alternative requirements is
located in section VII.C.4. of this preamble. After considering your
submittal, we would notify you in writing (which may be done
electronically) as to whether we have approved or disapproved your
alternative requirements. We may approve your submittal on the
condition that you make certain changes to the permit terms and
conditions that we identify.
    We are proposing that we could take up to 90 days after receiving a
complete submittal to review and either approve or disapprove your
permit terms and conditions. We are proposing that this review period
take no more than 90 days because we are not required to do a
rulemaking following our evaluation. However, we think 90 days is an
appropriate amount of time to review your alternative requirements
because this step is essentially the same as our review of your rules
or issued permits under the rule substitution or SPA processes. Each
individual permit under the EBP process is like a substituted rule. We
are seeking comments on whether more or less time should be allowed for
this approval step. Regardless, in any particular situation, we may not
need to take the maximum amount of time allocated for our review when
you provide complete, well-documented information and demonstrations in
your submittal. For example, we may require less time to review and
approve your alternative requirements when you submit your permit terms
and conditions in the form of the Federal standard and/or your
requirements are no less stringent than the Federal NESHAP requirements
on their face.
    Furthermore, we believe it is appropriate to require an EPA review
period for your alternative requirements that takes place separately
from and in advance of our opportunity under title V to review your
proposed permits, and we believe this review period must be long enough
to allow us adequate time to complete our evaluation. The 90-day period
we are proposing for the EBP process is consistent with the amount of
time we would have under the other subpart E substitution options to
evaluate your alternative rules or permit terms (not including the time
needed to do rulemaking), and we think that up to 90 days will be
needed to complete our evaluation of your alternative requirements,
which would be comparable to a rule substitution evaluation for each
permit. Therefore, we think the 45-day review period provided for under
title V is not adequate for this purpose. In addition, we are not
required under title V to review your proposed permit before it can be
issued, but under subpart E we must have an affirmative opportunity to
approve or disapprove your alternative requirements for them to replace
the otherwise applicable Federal requirements. The second step of the
EBP process satisfies the need under section 112(l) for a mandatory
requirement that we review and approve your alternative requirements.
    After reviewing our comments on your draft permit terms and
conditions, you would make adjustments as necessary and develop a
complete draft permit for public review and comment under the title V
regulations. Under these revisions to subpart E, in your notice of
draft permit availability to the public, you must identify where the
alternative requirements appear and specifically solicit comments on
those requirements. In notifying the public, you must follow the public
notification procedures of your approved title V program. The draft
permit terms and conditions must also be accompanied by comprehensive
supporting documentation that demonstrates how they satisfy the
criteria for equivalency. We are calling this supporting documentation
the ``equivalency demonstration,'' and it must conform to the guidance
for demonstrating equivalency that we have provided in section XI. of
this preamble. Under title V, you are required to provide an
opportunity for a public hearing on the draft permit as well as a
comment period of at least 21 days.
    When we approve your program's alternative requirements, those
requirements may replace the corresponding Federal requirements and
become the federally enforceable requirements applicable to the
affected sources. Your alternative requirements would become federally
enforceable at the time of permit issuance. If we disapprove your
alternative requirements, you would proceed to implement the Federal
rules for sources covered by your title V program. To gain approval to
implement the EBP process for a subset of sources in a category in your
jurisdiction, you must accept delegation for the remainder of the
sources in the category through another subpart E process, such as
straight delegation. Your alternative requirements may not become
federally

[[Page 1903]]

enforceable when the permit issues unless and until we approve them
during step two. We have added rule language to this effect to prevent
alternative requirements from inadvertently becoming federally
enforceable if, for some reason, you include them in your proposed
permits without our explicit approval and if, for some reason, we fail
to object to those permits.
    c. Step three: Incorporation into title V permits. After we have
approved your draft permit terms and conditions as equivalent, you
would incorporate them into proposed title V permits using the
appropriate permit modification process. As required under title V, you
would send the proposed permits to us for our review and approval and
we would have up to 45 days to object to the proposed permit. In
accordance with title V, if we object in writing to the issuance of the
proposed permit, you would be unable to issue the permit. However, if
we have approved your alternative requirements in step two, and if we
do not object to the proposed permit, when the permit is issued your
alternative requirements would become the federally applicable
requirements in lieu of the Federal NESHAP standard(s). Under EBP,
compliance with the set of Sec. 63.94 alternative requirements would be
considered compliance with all of the applicable NESHAP requirements
that are replaced by that set of alternative requirements.
    This step is critical for several reasons. First, under the EBP
process, the permit issuance process is the legal mechanism (that
replaces notice and comment rulemaking) for making your alternative
requirements federally enforceable in lieu of the otherwise applicable
Federal section 112 requirements. Second, we and the public have an
opportunity to ensure that the approved alternative section 112
requirements are implemented correctly via the permit issuance process.
To enhance this opportunity, the notice of permit availability and the
permit must flag that the permit contains alternative section 112
requirements, and the approved equivalency demonstration for that set
of requirements must be attached to each draft, proposed, and final
permit. Third, the permit is the publicly available repository that
contains the alternative section 112 requirements that apply to an
affected source. Our letter of approval to you in step two may not
necessarily be readily accessible to the public and, although it
contains approved alternative requirements, it does not contain the
applicable requirements for that source, as defined in title V. Through
the permit document, we, you, the affected source, and the public all
have access to the same information about what is required from that
source.
    Although we have an additional opportunity to review your
alternative section 112 requirements during the permit issuance
process, this should not be viewed as an opportunity to ``second
guess'' the approval of those requirements that took place during the
step two review. The purpose of our 45-day review with regard to the
alternative section 112 requirements is to ensure that the previously
approved permit terms and conditions are incorporated properly into the
permit.
3. Program Approval Criteria
    Because of the time necessary for us to review title V permits
containing alternative NESHAP requirements expressed in a form that is
different from that in the underlying Federal standard, we believe this
process should be applied in a given jurisdiction only to relatively
few sources. We believe that widespread use of the EBP process could
hamper your ability to administer your title V operating permits
programs, and it could overtax our resources for reviewing permits.
This, in turn, could delay permit issuance for sources generally.
Because of our concern about the potential burden associated with this
process, we are proposing to limit the number of sources that could use
EBP. We are proposing that you may participate in the EBP process for
five or fewer sources in your jurisdiction that are subject to a
promulgated Federal NESHAP. For five or fewer sources within a source
category, we should be able to review each individual equivalency
demonstration within the proposed timeframe. As we mentioned
previously, if you have more than five sources subject to a NESHAP for
which you want to substitute alternative requirements, you should use a
process other than EBP.
    We recognize that our selection of five or fewer sources in a
category is a subjective decision based on our assessment of the burden
that will be associated with preparing and reviewing individual permits
with equivalency demonstrations (which could be comparable to five rule
substitutions). Therefore, we are seeking comment on our proposal to
include in Sec. 63.94 a defined maximum number of sources in a category
for which you could use the EBP process. We are also seeking comment on
whether a number other than five would be acceptable; whether there
should be a defined maximum number of sources in all categories taken
together for which you could use the EBP process; or whether the
maximum number for each category and/or the total number of sources for
all categories should be a matter that is negotiated between you and
the Regional Office during the up-front approval. We would appreciate
detailed justification for any responses that you provide to these
questions.
    In addition to having approved permit programs and a limited number
of sources in a NESHAP-affected source category, two additional
conditions need to be satisfied in order for you to submit equivalent
alternative requirements in step two. First, a Federal NESHAP standard
must have been promulgated. Equivalent alternatives cannot be developed
without having a basis for comparison. (This is true for all the
substitution options.) Second, your equivalent alternative requirements
must be specific to the sources to which they will apply. In general,
the EBP process is designed to address situations where you lack a rule
or combination of rules the effect of which would be comparable to the
NESHAP for which they would substitute. Should you have other rules or
a combination of rules the effect of which would be comparable to the
Federal NESHAP, you should investigate the use of alternative subpart E
processes such as rule substitution or SPA, or permit streamlining as
described in White Paper 2. Examples of S/L requirements that are
suitable as the basis for developing permit terms and conditions under
the EBP process are source-specific SIP requirements and ambient
concentration limits derived from health-based rules.
    In order to ensure that permits are issued in time to avoid
potential dual regulation on NESHAP-affected sources, we strongly
recommend that you give us your step two submittal at least 1\1/2\ to 2
years in advance of the first substantive compliance date for a NESHAP.
(By substantive compliance date we mean a date by which the source is
required to comply with provisions to install and operate control
equipment, make process changes, or take other physical steps that
reduce emissions of HAP to the atmosphere.) We think that 1\1/2\ to 2
years is an appropriate amount of time to implement steps two and three
of the EBP process for a typical title V permit issuance process.
During the first 3 months we would approve or disapprove your
alternative requirements. During the remainder of the time you would
issue the title V permit and sources would take steps as necessary to
comply with the new

[[Page 1904]]

applicable requirements. For sources affected by simple NESHAP
standards (or with very simple permits), and for submittal of
alternative requirements that are not significantly different from the
NESHAP requirements, a timeframe shorter than 2 years may be adequate.
For sources that need a long lead time to come into compliance with
your requirements or the otherwise applicable NESHAP requirements, more
than 2 years may be needed. We recommend that you develop suitable
timelines for implementing the EBP process steps with your EPA Regional
Office at the time of up-front approval, or as early in the process as
possible. Before final permits are issued under the EBP option, sources
are subject to all applicable Federal NESHAP requirements.
4. Criteria for Demonstrating Equivalency for Alternative Requirements
    Each submittal of permit terms and conditions for a source must:
    (1) Identify the specific, practicably enforceable conditions with
which the source must comply;
    (2) Identify how these conditions are the same as or different from
the relevant Federal requirements through a side-by-side comparison of
your requirements and ours;
    (3) Provide detailed information that supports and justifies your
belief that your alternative requirements meet the equivalency ``test''
in Sec. 63.93(b). Your submittal must contain sufficient detail to
allow us to make a determination of equivalency between your
requirements and ours.
    We would then evaluate the specific alternative requirements (i.e.,
permit terms and conditions) using the equivalency evaluation criteria
in Sec. 63.93(b) and discussed in section XI. of this preamble and any
guidance we develop to supplement the preamble. We believe that the
compliance evaluation study approach to demonstrating equivalency for
alternative compliance and enforcement measures described in section
X.C. is not appropriate for the EBP process, but we are taking comment
on whether this approach could be implemented effectively under this
process.
5. Changes to Previously Approved Alternative Requirements
    After we have approved your alternative requirements (permit terms
and conditions) in step two, if your alternative requirements change in
any way that would change the approved section 112 provisions, you must
resubmit your permit terms to us for reapproval in order for your new
alternative requirements to become federally enforceable in place of
the set of alternative requirements we previously approved.
Subsequently, you must open and revise the title V permits that contain
these alternative section 112 requirements using the appropriate permit
modification process to bring them up to date with your revised,
approved alternative requirements. In other words, you must repeat step
two and revise your title V permits whenever your underlying
regulations, policies, or permits change so that your subpart E-
approved permit terms correctly reflect your most current requirements
for those affected sources. As a matter of Federal enforceability,
until we approve your revised alternative requirements under step two,
sources remain subject to the applicable alternative section 112
requirements that we approved previously. If your alternative
requirements originate from policies that result in permit terms and
conditions, rather than from enforceable rules, if you make any changes
to those policies, or if you implement those policies differently from
how they are expressed in the approved permit terms and conditions, you
must submit the revised permit terms and conditions, as in step two, to
obtain our approval that the changed permit terms satisfy the
equivalency demonstration criteria.
6. How Equivalency by Permit Compares With Title V Permit Streamlining
    Under the proposed EBP process, you would be able to use your title
V permitting process to adjust and replace one or more applicable
Federal NESHAP standards with your equivalent alternative requirements.
This allows you, as the permitting authority, to substitute your
alternative requirements for similar part 63 NESHAP requirements and
make your alternative requirements federally enforceable. Substitution
of requirements under EBP is similar, but not identical to
``streamlining'' under White Paper 2, however, as the following
discussion makes clear.
    While the process in White Paper 2 allows permitting authorities as
well as sources to initiate streamlining, streamlining under White
Paper 2 can only be implemented when the permit applicant consents to
its use (see White Paper 2, page 2). Under the EBP process, you would
be allowed to initiate the substitution process, for example, by
identifying in the permit application the individual NESHAP standards
for which you want to substitute your alternative requirements, and you
could do so without a source's consent. (You could not replace Federal
requirements with your alternative requirements, however, until we
approve your alternative requirements in writing during step two of the
EBP process.)
    The purpose of streamlining under White Paper 2 is to synthesize
the conditions of multiple applicable requirements into a single new
permit term (or set of terms) that will assure compliance with all of
the requirements. Under White Paper 2, the applicable requirements that
are not selected as the set of streamlined requirements remain in
effect. Streamlining subsumes, rather than replaces, the nonstreamlined
requirements. This means that a source subject to enforcement action
for violation of a streamlined applicable requirement could potentially
also be subject to enforcement action for violation of one or more
subsumed applicable requirements.
    Under the EBP process, however, your equivalent alternative set of
applicable requirements replaces the NESHAP requirements. This means
that once the equivalent alternative requirements are included in an
approved federally enforceable operating permit, the replaced NESHAP
requirements are no longer relevant for compliance and enforcement
purposes.
    In order to demonstrate the adequacy of proposed streamlined
requirements under White Paper 2, a source must demonstrate that the
most stringent of multiple applicable emissions limitations for a
specific regulated air pollutant (or class of pollutants) on a
particular emissions unit (or collection of units) has been selected.
The MRR requirements associated with the most stringent emissions
limitation are presumed appropriate for use with that streamlined
emissions limit, unless reliance on that MRR would diminish the ability
to assure compliance with the streamlined requirements. Under EBP, you
must demonstrate that your alternative emissions limitation is as at
least as stringent as the otherwise applicable Federal emissions
limitation for a specific HAP (or class of HAP) for a particular
affected source. Your alternative MRR requirements may be approved if
they meet the ``holistic'' equivalency test for subpart E equivalency
determinations.
    Under White Paper 2, there is no limit on how many and which
applicable requirements can be streamlined. Under White Paper 2,
streamlining is not limited to the requirements arising from any
particular program; all applicable requirements are eligible for
streamlining. In contrast, under subpart E's EBP process, replacement
is limited

[[Page 1905]]

only to Federal NESHAP standards by equivalent alternative
requirements--only the Federal NESHAP standards are replaced, not
subsumed, by the equivalent alternative requirements established
through the EBP process. Note that after getting approval for
equivalent alternative requirements for section 112(l) purposes,
nothing prevents further streamlining of these requirements with other
applicable requirements under the process and criteria provided in
White Paper 2. However, when you seek to replace a Federal section 112
standard during the title V permit issuance process under Sec. 63.94,
streamlining must take place by meeting both the criteria of Sec. 63.94
and, except where contradictory, the criteria of White Paper 2 (see
White Paper 2, page 18).
    Under White Paper 2, applicable requirements that are not selected
as the most stringent, i.e. those that are ``unused,'' during the
streamlining process must be mentioned in the source's title V
operating permit under the permit shield section, if your program
offers a shield, or in the statement of basis section. This approach
ensures that all applicable requirements are accounted for in a single
document, including those subsumed by streamlining, and that the public
and enforcement agencies are able to assess compliance with subsumed
requirements quickly. We are not requiring a similar approach for the
EBP process. Rather, we believe it would be adequate if the equivalency
demonstration simply accompanies draft and final permits. If the
alternative requirements correctly replace the Federal NESHAP
requirements in the permit, there would be no need to assess compliance
with the replaced standards.

VIII. How Do the Revised Delegation Processes Compare?

    This section discusses similarities and differences among the rule
substitution process, the SPA process, and the EBP process as we are
proposing them in this rulemaking. The discussion compares these
options in terms of what they require, which steps are most critical,
and where and how they provide flexibility for you to obtain approval.
Differences exist among the three processes in terms of the section 112
programs or sources that they cover, the requirements for up-front
program approval, and the requirements and procedures for approval of
your alternative requirements (including what form your alternative
requirements must take before you can submit them to us). The three
processes are similar in terms of the ``test'' that you must meet to
demonstrate the equivalency of alternative requirements and in terms of
when we and the public have an opportunity to comment on your
submittal. All of these factors may affect your selection of delegation
options under subpart E.

A. What Section 112 Programs or Sources are Covered by Each Process?

    You may use the rule substitution and EBP processes to substitute
your alternative requirements for Federal rules and requirements
established under sections 112(d), 112(f), and 112(h). (Sec. 63.93 may
also be used to substitute your alternative requirements for Federal
section 112(r) requirements.) We are also proposing that the SPA
process cover additional Federal requirements established under other
section 112 provisions, but only after we have promulgated regulations
implementing those programs. You may not seek approval under the SPA
process to implement and enforce alternative section 112(r)
requirements that address section 112's Risk Management Plan (RMP).
    You may use the rule substitution and SPA processes to substitute
your alternative requirements for any number of Federal requirements
that apply to an unlimited number of sources in a source category. You
may use the EBP process to substitute your alternative requirements for
five or fewer sources in a source category regulated by a NESHAP. We
are seeking comment on whether the total number of sources for all
source categories should be limited. (Currently, as we are proposing to
amend Sec. 63.94, we are not proposing to limit the number of source
categories for which you could use the EBP process.)

B. What Is Required for Up-Front Approval?

    All three processes require an up-front approval to ensure, at a
minimum, that you have satisfied the Sec. 63.91(b) program approval
criteria. The up-front approval takes the form of an EPA rulemaking,
through notice and comment in the Federal Register. It can take 90 to
180 days for us to complete this process from the date that we receive
a complete request for approval, depending on whether we are approving
alternative requirements at the same time.
    The rule substitution process requires the least in terms of an up-
front approval, the EBP process requires somewhat more, and the SPA
process may require even more (depending on the nature of your
program). In addition to the Sec. 63.91(b) criteria (which, in general,
may be satisfied for title V sources by demonstrating title V program
approval):
    (1) For the SPA and EBP processes you obtain up-front approval for
current and future Federal standards or requirements for which you
intend to substitute alternative requirements. In your up-front
submittal (in step one) you would identify the Federal requirements and
the source categories they regulate. (For EBP you would need to
identify individual sources.)
    Because the rule substitution process collapses the up-front
approval and the approval of alternative NESHAP requirements into the
same step, the identification of particular NESHAP for which you will
be substituting requirements takes place at the time the rule
substitution request is approved during that step. It is not possible
under the rule substitution process to obtain advance approval to
substitute requirements for NESHAP that are not yet promulgated;
however, it is possible to obtain future approval for additional
alternative NESHAP requirements without having to repeat the
Sec. 63.91(b) program approval criteria demonstration.
    (2) For the SPA process you obtain up-front approval to implement
area source requirements using an enforceable area source mechanism
such as a general permit issued under a S/L-enforceable permitting
program. Under both SPA and the rule substitution process, you may
obtain delegation to implement alternative area source requirements
through approved alternative requirements that cover categories of area
sources.
    (3) For the SPA process, which covers programs of broad
applicability under section 112, you may obtain up-front approval for
generically applicable alternative requirements such as ``general
provisions'' or equipment leak standards. Generically applicable
requirements apply to more than one source category for which you will
be obtaining delegation.
    (4) For the SPA process you must obtain up-front approval to
implement a protocol that establishes an alternative compliance
strategy in place of MRR requirements for one or more part 63 emissions
standards, i.e., the compliance evaluation study approach outlined
later in the preamble in section X.C. The proposed up-front approval
criteria for the EBP process (see revised Sec. 63.94(b)) are simpler
and more streamlined than the existing approval criteria in
Sec. 63.94(b) and the proposed new approval criteria for SPA in
Sec. 63.97(b).
    In the same vein, the proposed up-front approval criteria for the
SPA

[[Page 1906]]

process (see proposed Sec. 63.97(b)) are potentially more extensive
than the existing approval criteria in sections 63.94(b) and 63.93(b).
This is because we may approve your use of area source mechanisms,
approve generic alternative requirements, or approve protocols for
establishing alternative compliance and enforcement strategies.
Depending on which program elements you get approved during this step,
we believe it may be possible to expedite the subsequent rulemaking to
approve your alternative requirements. Thus, in exchange for the effort
involved in seeking program approval under Sec. 63.97, you may obtain
approval for your alternative requirements in less time than it would
otherwise take.
    We are clarifying in this notice that, in general, all S/L's that
have received interim or final title V program approval have satisfied
the Sec. 63.91(b) approval criteria for title V sources. This
clarification establishes that, for all the delegation options under
subpart E, if you have received title V program approval, you need not
necessarily repeat the Sec. 63.91(b) demonstration of adequate
resources and authorities in your up-front submittal, at least for
title V sources. If you are implementing a program or rule for area
sources, however, you would have to demonstrate that you have met the
Section 63.91(b) criteria for those source categories and program
mechanisms. Also, for example, if you seek to obtain approval to
implement the compliance evaluation study approach discussed in section
X.C., you may have to update your Sec. 63.91(b) approval.

C. What Is Required To Demonstrate That Alternative Requirements Are
Equivalent?

    All three approval processes rely on the same ``test'' for
determining whether your alternative requirements are no less stringent
than the Federal requirements, and they rely on the same protocol for
preparing equivalency demonstrations. Each submittal of alternative
requirements must be accompanied by an equivalency demonstration
package that provides the technical justification and supporting
information we need to evaluate your requirements. Very briefly, the
test for equivalency is whether, taken as a whole, the levels of
control and compliance and enforcement measures in your alternative
requirements achieve equivalent or better emissions reductions compared
with the otherwise applicable Federal requirements at each affected
source, and compliance dates must be no later than those for the
Federal requirements. The next section of the preamble, which is
entitled ``How will EPA determine equivalency for S/L alternative
NESHAP requirements?,'' explains how we would apply this test.

D. What Is Required for EPA Approval of Alternative Requirements?

    For the rule substitution process we approve your alternative
requirements by doing rulemaking in step one. For the SPA process, we
approve your alternative requirements by doing rulemaking in step two.
The rulemaking step is the critical step in these processes in terms of
making your alternative requirements federally enforceable to replace
the NESHAP requirements. In the EBP processes we approve your
alternative requirements in step two by notice to you in writing.
Rulemaking is not required for step two approval of your alternative
requirements. (For SPA and EBP, approval of alternative requirements
can take place at the same time as the up-front approval, provided the
Federal section 112 requirements are promulgated and you are able to
submit your alternative requirements at the time of up-front approval.
You can think of this as simultaneously combining step two with step
one, as generally happens under the rule substitution process.)
    The SPA and EBP processes differ in terms of which step is the
critical step. Step two is the critical step in the SPA process because
this is when your alternative requirements become federally enforceable
to replace the section 112 requirements. For EBP, which is implemented
only through title V permitting programs, your alternative requirements
become federally enforceable and replace the NESHAP requirements in
step three, when the permits are issued. This is why it is critical for
us to have an opportunity to affirm or object to each permit in the EBP
process.
    When your alternative requirements become federally enforceable
through issued permits, the requirements may only be incorporated into
permits and considered federally enforceable if they have already been
approved by us. This eliminates the possibility that alternative NESHAP
requirements could become federally enforceable by ``default'' if we
fail to object to a permit during our review period. The purpose of the
permit review step from a section 112(l) approval perspective is to
ensure that the permit accurately incorporates the approved alternative
requirements.
    The EBP process allows your alternative requirements to replace the
otherwise applicable Federal section 112 requirements so that the
Federal requirements are no longer relevant for compliance and
enforcement purposes. This goes beyond White Paper Number 2's
streamlining guidance, which requires unused streamlined requirements
to be subsumed, rather than replaced, in the permit.
    For both the rule substitution and the SPA processes, your
alternative requirements must be submitted in a form that is
enforceable as a matter of S/L law and that applies to an entire source
category or subcategory unless you use the partial approval option. For
SPA these authorities may consist of rules or general permit terms and
conditions. We will not do source-specific reviews of alternative
requirements under these processes even with partial approvals (except
under rare circumstances, e.g., you only have one source in a
category). For the EBP process, your alternative requirements must be
submitted in the form of source-specific permit terms and conditions.
We will only do source-specific reviews of alternative requirements
under this process. An advantage of the EBP process is that you need
not undertake a source category rulemaking or general permitting
process at the S/L level before submitting alternative requirements for
approval.
    When the basis for your alternative requirements is S/L policies,
as opposed to enforceable regulations or rules, you may only submit
such alternative requirements when they are incorporated into
enforceable rules or permits (or other enforceable mechanisms). If and
when you revise your policies in a way that would change any
alternative section 112 requirements that we have already approved, you
must revise and resubmit your requirements for another approval that
allows us and the public to ensure that the subpart E equivalency
criteria are still satisfied for those requirements.

E. When Do EPA and the Public Have an Opportunity To Comment on S/L
Submittal?

    For all subpart E delegation processes, we and the public are
provided an opportunity to comment during the up-front approval step as
well as during the subsequent steps to approve alternative requirements
and ensure that they are accurately reflected in title V operating
permits. For the up-front approval step, which always involves
rulemaking in the Federal Register, the public comment period must last
for a minimum of 21 days. The 21-day minimum public comment period is
also required for any other rulemaking activities. This includes the
approval of

[[Page 1907]]

substituted rules and authorities (i.e., alternative requirements)
under the rule substitution process in Sec. 63.93. Our review period,
including the consideration of public comments and publication in the
Federal Register, may not exceed 90 days for any approval that does not
involve rulemaking on alternative requirements, and 180 days for any
approval step that does involve rulemaking on alternative requirements.
    For the SPA process, the opportunity for us and the public to
review and comment on your alternative requirements may take place with
the up-front approval, or it may happen during the subsequent step. The
timing of this review depends on the status of your program and
regulations, on our promulgated rules, and on when you submit your
alternative requirements. Because this activity requires Federal
Register rulemaking, we are proposing that our review period for this
step can take up to 180 days.
    For the EBP process, the opportunity for us to review and comment
on your alternative requirements may take place roughly at the same
time as the up-front approval, or it may happen during the subsequent
step. (However, we cannot approve your alternative requirements until
we approve your request for delegation under the EBP process.) Again,
the timing of this review depends on the status of your program, on our
promulgated rules, and on when you submit your permit terms and
conditions. Because this activity does not require Federal Register
rulemaking, we are proposing that our review period for this step can
take up to 90 days. Under title V, the public would have 30 days to
review and comment on the complete draft title V permits after we have
approved or disapproved your alternative permit terms and conditions.
Also under title V, you must provide a 45-day period for us to review
and object to each proposed permit before it is issued (and for us to
review and object to each permit revision that amends, repeals, or
revises previously approved section 112 requirements). The purpose of
our and the public's review of each permit during the 45-day period is
to ensure that the permit terms and conditions accurately reflect the
substance of any approved alternative requirements.

IX. How Should a S/L Decide Which Delegation Process(es) To Use?

    This section discusses how the similarities and differences among
the rule substitution process, the SPA process, and the EBP process (as
we are proposing them in this rulemaking) may affect your selection of
delegation options under subpart E. By expanding the number of
delegation processes available under subpart E and by increasing their
ease of use, we hope to provide you with as much flexibility as we can
in accepting delegation for Federal section 112 requirements. Your
selection of delegation processes will depend on the structure of your
program including the nature of your industries, the needs of your
legislature, and the maturity of your program with regard to air toxics
(or related) regulations. To choose the most appropriate processes, we
invite you to consider what each option is designed to address and the
tradeoffs among the options.
    All the processes offer the same flexibility by allowing approval
of alternative MRR requirements. Furthermore, if your rule contains a
stricter emissions standard compared with the Federal standard, we can
accept a less stringent package of MRR requirements. Such flexibility
allows you to submit MRR requirements that differ from the Federal MRR
requirements.

A. Sec. 63.93  Substitution of Rules or Authorities

    The rule substitution option in Sec. 63.93 addresses situations
where you have a few source categories for which you want to substitute
alternative source category rules or other enforceable authorities for
major and/or area sources. The alternative requirements that you submit
to us for approval must already be enforceable under your S/L law in
the form of regulations or comparable enforceable requirements (such as
permit terms). This program may impact numerous sources in a source
category or across the source categories for which you substitute
rules.
    The rule substitution option offers several advantages. First, it
allows your alternative requirements to become federally enforceable
and replace the otherwise applicable Federal requirements upon our
approval of your rules. Second, it involves somewhat less up-front
effort to substitute alternative requirements than the EBP or SPA
options (potentially significantly less compared with SPA). Third, it
can be applied to an unlimited number of sources or source categories
including area sources. A disadvantage of the rule substitution option
is that it may entail a longer total review and approval process for
each rule compared to step two of the SPA process. This is because we
review each of your rules on an individual basis. Thus, this option
could be administratively more burdensome to us and to you in
developing and reviewing multiple rules. Nevertheless, you may decide
that substituting your own S/L requirements (e.g. toxic, VOC, or PM
rules) on a rule-by-rule basis both provides the best approach for
reducing dual regulation and achieving the required emissions
reductions most efficiently.

B. Sec. 63.94  Equivalency by Permit

    In other situations, where you have only a few sources for which
you want to substitute alternative requirements (or a few sources in
each of a few source categories) and you do not already have source
category rules that regulate these sources, it may make sense to use
the EBP process. An advantage of the EBP process is that you may submit
alternative requirements in the form of title V permit terms and
conditions; this allows you to bypass the sometimes lengthy process of
developing source category rules, which may not be an efficient use of
your resources for just a few sources. Disadvantages of the EBP process
are that it may be used only for five or fewer sources in a category
and only when a source-specific analysis is required to do an
equivalency demonstration; also, general permits are not allowed under
this option.

C. Sec. 63.97  State Program Approval

    If you decide to substitute alternative source category rules (or
enforceable authorities or general permit terms) for a large number of
Federal section 112 rules, then the SPA process may be appropriate for
you. This situation might arise if you decide to develop an entire air
toxics program, or if you already have a mature air toxics program,
with many regulations affecting source categories regulated by Federal
section 112 standards. (This delegation process may impact numerous
sources in a source category or across the source categories for which
you substitute rules.) The SPA process is appropriate in these
situations because it can eliminate the redundant review of generic
requirements that apply to multiple source categories each time we
review your alternative requirements for a new source category; thus,
it has the potential to shorten the review period for the specific
alternative requirements because some aspects of the approval would
have been worked out in advance.
    Another advantage provided by the SPA process is that it allows you
to substitute your area source requirements for Federal area source
requirements using source category rules or other enforceable
mechanisms such as Federally Enforceable State Operating Permit (FESOP)
general permits. Also,

[[Page 1908]]

like the rule substitution process, the SPA process allows your
alternative requirements to become federally enforceable and replace
the otherwise applicable Federal requirements upon our approval of your
rules or permits. A disadvantage of the SPA process is that it may
entail a more complex submittal and review process for the up-front
approval during step one compared with the EBP and rule substitution
processes. We believe this level of effort will be administratively
efficient, however, for developing and submitting multiple rules.
Finally, the SPA program covers section 112 requirements that we may
develop in the future under other sections besides sections 112(d),
(112(f), and 112(h), and it allows you to develop protocols to
establish alternative compliance and enforcement strategies.
    At the time you submit your program for up-front approval, your
alternative requirements do not yet need to be developed or
enforceable; however, when you submit your alternative requirements to
us for approval in step two, they must already be enforceable under
your S/L law in the form of regulations, general permit terms, or
requirements in another enforceable mechanism.

X. How Will EPA Determine Equivalency for S/L Alternative NESHAP
Requirements?

A. Introduction

    Before we can approve your alternative requirements in place of a
part 63 emissions standard, you must submit to us detailed information
that demonstrates how your alternative requirements compare with the
otherwise applicable Federal standard. This applies whether your
alternative requirements take the form of a S/L regulation, the terms
and conditions of specific permits, or any other format. This section
addresses what information you must submit and how we would decide
whether to approve that submittal. It also pertains to the information
that you could submit for approval under the SPA process as part of the
optional up-front program elements.
    In order to evaluate your submittal in a timely way, we would
expect you to develop and submit a side-by-side comparison of your
requirements and the Federal rule. This comparison would cover specific
elements pertaining to the applicability of the standard to subject
sources, the emissions limit (and its associated requirements such as
test methods, averaging times, and work practice standards), which
constitutes the level of control, the compliance and enforcement
measures (MRR), and associated requirements established in the part 63
General Provisions. (We intend to provide examples of such submittal in
forthcoming guidance). The details of the submittal would then be
organized according to these elements. Your submittal could be based on
S/L policies that are not necessarily enforceable as a matter of S/L
law, so long as they are then made federally enforceable through the
112(l) approval process. Fundamentally, you must demonstrate that your
alternative requirements will achieve the same (or more) emissions
reductions of the same pollutants from the same sources that will be
regulated by the Federal standard and that they will achieve the
reductions no later than the Federal standard. Also, our ability to
enforce the alternative requirements to the section 112 standard must
not be diminished.
    The expectations, guidelines, and requirements discussed in this
section would apply to the rule substitution, SPA, and equivalency by
permit approval processes we are proposing for revised subpart E. The
complexity of any particular submittal would depend, however, on the
process option you select, the complexity of the regulations that are
being compared, and the degree to which your requirements differ from
the Federal requirements. (However, the criteria for evaluating the
equivalency of your submittal would be the same under each process
option.) You must demonstrate to us that your alternative requirements
adequately achieve the emissions reduction and enforceability results
of the Federal standards and this burden typically is proportional to
how much your requirements deviate from the Federal requirements for
which they would substitute.
    The remainder of this section is organized as follows. Section
X.B., below, addresses our thinking regarding equivalency
demonstrations that involve alternative levels of control and
compliance and enforcement measures (including a discussion on how
compliance evaluation studies may be used to establish alternative
compliance and enforcement measures in section X.C.). This discussion
is followed by a more comprehensive description of the equivalency
demonstration process under subpart E in section X.D. Finally, in
section X.E. we address specific issues associated with demonstrating
equivalency for work practice standards and General Provisions.

B. Equivalency of Alternative Levels of Control and Compliance and
Enforcement Measures

    You told us that you believe the equivalency test in subpart E
should be flexible enough to accommodate approaches other than a line-
by-line equivalency of compliance and enforcement measures (that is,
MRR requirements) between your rules and the Federal rules. In your
view, line-by-line equivalency would preclude approving S/L approaches
to compliance assurance and enforcement that rely on fewer MRR
responsibilities for sources and greater inspection frequencies by
permitting authorities (or other elements, e.g., operator training) in
your programs. You believe these approaches can produce equivalent
results compared with the otherwise applicable Federal MRR
requirements.
    Your views highlight differences in philosophy and approach
regarding compliance assurance and enforcement between our respective
programs. While we believe that vigorous inspection programs are vital
to environmental protection programs, we do not believe that they
replace completely the need for adequate documentation by sources of
what air emissions (and operation, maintenance, and corrective
activities) have occurred since an inspector was last present at those
sources.<SUP>7</SUP> While we recognize that having a field presence is
an effective way to assure compliance, we continue to find compelling
reasons to limit how NESHAP MRR may be modified through the section
112(l) equivalency process to reduce the NESHAP MRR schemes. We believe
that using a frequent inspection program can substitute for some but
not all compliance and enforcement measures. We are seeking comment on
the use of a frequent inspection program as a substitute for some
compliance and enforcement measures.
---------------------------------------------------------------------------

    \7\ The MRR requirements in part 63 NESHAP serve the following
purposes:
    (a) To ensure that process operators are provided information
sufficient for them to know whether the process is operating in
compliance with applicable requirements;
    (b) To provide a source of information for plant managers,
corporate managers, and corporate environmental compliance personnel
to be able to review and ascertain whether facility operations are
in compliance with applicable requirements;
    (c) To provide sufficient information for State or Local program
and Federal inspectors to ascertain the degree of facility
compliance at times other than the period of an onsite inspection;
and
    (d) To provide sufficient evidence to document the compliance
status of a facility for law enforcement purposes.
---------------------------------------------------------------------------

    Earlier, in section VI.C.3. of this preamble, we clarified that we
believe that flexibility to approve alternative

[[Page 1909]]

compliance and enforcement approaches is already available in
Sec. 63.93, and that we intend to write sections 63.94 and 63.97 in a
similar way to comport with the language in Sec. 63.93(b). Therefore,
we are not proposing changes to the ``test'' in Sec. 63.93(b), but we
are proposing rule revisions to other subpart E sections to achieve the
flexibility afforded by Sec. 63.93(b).
    On a practical level, given the continuing need to do more with
fewer resources, S/L air pollution control enforcement offices may find
that they have fewer inspectors in the field and/or fewer travel
dollars to deploy the inspectors they do have. The development of new
section 112 standards that affect tens of thousands of sources
nationwide will put an even greater strain on S/L and Federal
inspection forces. You should be aware that once you agree to
substitute more frequent inspections for some MRR, you must continue
that higher frequency of inspections to ensure that your equivalency
determination remains valid.
    Furthermore, traditionally we have relied on you to be the first
authority to address violations. In doing so, you may take a year or
more to identify and address a violation. If you are unable to achieve
a satisfactory resolution, we may be called upon to assist you with a
Federal enforcement action. In some cases we may overfile as part of
our Federal oversight responsibility. If we are to conduct our
oversight duties, we must have sufficient evidence to review. Years
after a violation has occurred, it is likely that the most reliable
source of information will be a source's monitoring records that
clearly demonstrate violations.
    Because we may not initiate a Federal enforcement action for
several years after alleged violations have occurred, we require that
sources' records be retained for at least five years, the statutory
maximum generally allowed for Federal actions pursuant to 28 U.S.C.
Section 2462. (This is consistent with requirements for all major and
area sources who must obtain operating permits under title V of the
Act). In determining if the alleged violations are one-time violations
or are part of a continuing pattern of violations, we and the courts
must have records spanning a significant period of time to assess the
history of violations at a source. Thus, the five-year record retention
requirement that applies under the title V operating permits program
and the part 63 emissions standards is critical to our enforcement
efforts, and we will not modify this requirement through the section
112(l) approval process.
    The current standard for approvability for substituted rules under
subpart E Sec. 63.93(b)(2) is that the levels of control and MRR must
``result in emissions reductions from each affected source * * * that
are no less stringent than would result from the otherwise applicable
Federal rule.'' What this means as a practical matter is that if the
emissions limitation in your submittal is more stringent than the
emissions limitation in the Federal NESHAP standard, then the MRR in
your submittal can be slightly less stringent than the MRR in the
Federal rule. We cannot approve gross deficiencies in compliance and
enforcement measures, however. Similarly, if the emissions limitation
in your rule is identical to that in the Federal rule or it is
different but equal in stringency, your MRR package can be different
from the NESHAP MRR, but it must, in total, be no less stringent than
the NESHAP's compliance and enforcement provisions. This means that
some provisions in your MRR package can be less stringent than the
NESHAP if they are balanced by something in your MRR package that is
more stringent or more protective. For example, your monitoring could
be more stringent and your reporting frequency less stringent, so long
as the end result is equivalency.
    We explained this approach in our November 26, 1996 memorandum on
this topic. This memo clarified that we will evaluate your submittal
taken as a whole, that is, we will consider the stringency of the level
of control and the stringency of the compliance and enforcement
measures together. We must review the components individually, but we
will evaluate the sum of all the parts to determine if your submittal
is no less stringent than the Federal NESHAP. Note that we are not
proposing that less stringent emissions standards may be balanced by
more stringent MRR. Thus, we believe you already have flexibility under
the existing language of Sec. 63.93 to adjust the compliance and
enforcement measures in a manner that will allow for ``less stringent''
MRR, if it is balanced by a more stringent level of control.
    As promulgated in 1993, the equivalency language in Sec. 63.94
(program substitution) specifies that, taken individually, your level
of control must be no less stringent than the Federal NESHAP, and your
compliance and enforcement provisions must be no less stringent than
the Federal NESHAP. In addition, Sec. 63.94 as promulgated requires you
to put your requirements in the form of the Federal standard. This
language does not allow the same flexibility as the language in
Sec. 63.93. It does not allow the same flexibility to balance less
stringent MRR provisions against a more stringent level of control, and
it does not allow the same flexibility within the MRR component to
balance MRR provisions against each other. For example, you could not
submit monitoring that is more stringent and reporting that is less
stringent, or some other combination of adjustments, so that the end
result is equivalency with the Federal MRR provisions.
    In response to your requests for greater flexibility in the subpart
E equivalency process overall, we are proposing in this rulemaking to
create Sec. 63.97, the new SPA process, to mirror the equivalency
approach in Sec. 63.93. We are also proposing to extend the Sec. 63.93
approach to the equivalency by permit process in amended Sec. 63.94.
    Additionally, under these new provisions we would allow you to
substitute other types of compliance assurance and enforcement measures
to balance less stringent MRR measures in your substitution packages
when it is unclear whether your initial submittal is equivalent to the
Federal rule. For example, you may choose to include a guarantee of
high levels of compliance to be determined by annual audits or rule
effectiveness studies, the exact nature of which you would need to
negotiate with us (see the discussion on compliance evaluation studies
in section X.C., below). Or, for example, you may offer to put all
compliance reports from affected sources on an electronic bulletin
board available free to the public in return for less frequent
reporting.
    You and other affected parties should be aware of the difficulty of
comparing a more stringent level of control with less stringent MRR or,
where levels of control are equal, of comparing more and less stringent
MRR and/or entirely different enhancements to the compliance assurance
package as mentioned above. Deciding how much flexibility we can allow
on MRR provisions is not an exact science. We do not now have a
``common currency'' or ``rate of exchange'' that is generally
applicable to all standards. Therefore, we are not prepared at this
time to define precisely how increases in stringency may be traded for
some other kind of decreases in stringency. Where we are not convinced
that your package is equivalent, you may need to offer additional
improvements in your program or enhanced documentation to assist us in
reaching the conclusion that your rule or program is equivalent. For

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more detailed discussion of these issues, please see section X.D.3.
below.
    We seek comment on all aspects of this discussion. Because the
determination of equivalency is not an exact science, we are seeking
comment on how to make these criteria more precise.

C. Using Compliance Evaluation Studies in Equivalency Demonstrations

    In conjunction with stakeholders from California, we have developed
a proposed approach for using compliance evaluation studies in subpart
E rule substitutions to establish equivalency for MRR provisions. We
believe this approach can be implemented within the context of the
existing regulations for the rule substitution process under Sec. 63.93
(on a rule-by-rule basis) and for the proposed SPA process. We intend
to provide formal guidance in the near future to implement this
approach fully. The following discussion summarizes only the highlights
of the proposed approach.
    Upon promulgation of a 40 CFR part 63 Federal standard, you would
evaluate the level of control, WPS, and MRR in the Federal standard and
prepare a submittal with your alternative requirements that you believe
are adequate, as a package, to demonstrate equivalency with the Federal
requirements and to allow Federal enforcement actions on sources that
would otherwise be subject to the Federal standard. If differences
exist between the Federal standard MRR requirements and your
alternative MRR and it is unclear whether your requirements are
equivalent to the Federal requirements, you may offer to add to your
package a commitment to perform compliance evaluation studies. This
commitment would allow you to demonstrate that your requirements
satisfy the approval criteria of Sec. 63.93(b). We would then take
public comment on your rule substitution package through formal notice
in the Federal Register and either approve or deny the rule
substitution request that includes an approved plan for performing the
compliance evaluation studies. If approved, we would require that you
perform compliance evaluation studies as frequently as every year or
two in perpetuity.
    The compliance evaluation study for any source category in a part
63 NESHAP standard would consist of compliance assessments that would
take place before and after we approve your program. In the pre-
approval assessment, you would demonstrate to us that your existing MRR
requirements, either alone or in conjunction with appropriate
amendments, are achieving, or are likely to achieve, a high degree of
compliance with the NESHAP requirements to apply controls and achieve
the NESHAP-specified emissions reductions. In the post-approval
assessment, you would demonstrate the rate of compliance for the source
category (based on compliance with your approved alternative
requirements), the cause of noncompliance, if any, and you would
explain whether the noncompliance is related to your alternative MRR
provisions. This compliance rate information would be evaluated to
determine, to the degree possible, if implementing the part 63 NESHAP
MRR compliance provisions that were not included in your alternative
rule would be likely to result in an improved compliance rate. The
details for both phases of the compliance evaluation study would be
worked out with us in advance of their implementation and, if
acceptable, they would be approved, after public comment, in the
Federal Register as part of your rule substitution package.
    Any approval of a package that includes the compliance evaluation
study approach would be conditioned on (1) you actually performing your
commitments related to the compliance evaluation study, (2) a finding
through the post-approval compliance assessment of no significant
noncompliance, and (3) a finding through the post-approval compliance
assessment that your MRR provisions did not contribute significantly to
the noncompliance rate that is determined. If any of these conditions
are not satisfied, and adjustments to your program and regulations do
not correct these deficiencies, we may disapprove your program in
accordance with withdrawal provisions in Sec. 63.96. We seek comment on
this discussion and the use of compliance evaluation studies in
equivalency demonstrations.

D. Proposed Process for Determining Equivalency Under Subpart E

    Because of the complexities involved in determining whether your
alternative requirements are no less stringent, on the whole, compared
with Federal section 112 requirements, we are requiring that you
provide detailed demonstrations in your submissions when your
requirements are different from those in the otherwise applicable
Federal rules.
    You must provide in your submittal a side-by-side comparison of
your alternative requirements and the Federal requirements for which
they would substitute. Your submittal must contain all the detail we
need to determine equivalency. If you will be using more than one rule
to obtain equivalency for a particular Federal rule, then you must
attach each of your rules to your submittal and you must indicate the
relevant requirements of each rule in the side-by-side comparison. You
must also include all other documents containing requirements that are
part of your equivalency demonstration, such as any relevant portions
of your approved SIP. (If you are certain that these documents are
readily available to your EPA Regional Office and the public, it may be
sufficient to merely cite the relevant portions of the documents or say
where they are available, e.g., give an Internet address.) You must
submit all the information that is necessary to demonstrate whether
your alternative requirements achieve the emissions reductions called
for in the Federal standard.
    Even if your rules or policies specify that your alternative
requirements must be as stringent as the Federal section 112
requirements, you must still perform the complete equivalency
demonstration as described in this section for each individual Federal
requirement for which you wish to substitute requirements. Each of the
following elements must be addressed in the equivalency demonstration.
1. Applicability
    Your alternative standard, regulation, or permit terms and
conditions must cover all of the affected sources covered by the
Federal NESHAP standard. Your standard must not contain any exemptions
that do not also appear in the Federal rule. For example, you may
currently have rules that exempt particular affected sources, such as
those emitting particular pollutants, those performing a particular
type of operation (e.g., research and development), or those that are
below a size cutoff specified in the Federal rule. We cannot consider a
rule containing such exemptions to be equivalent (unless the Federal
rule provides for the same or broader exemptions). Similarly, we cannot
consider a rule to be equivalent if it does not control each of the HAP
controlled by the Federal standard to the same degree that the Federal
standard requires.
    In addition, as we explained in the original subpart E proposal
preamble at 58 FR 29303, ``except as expressly allowed in the otherwise
applicable Federal emissions standard, any forms of averaging across
facilities, source categories, or geographical areas, or any forms of
trading across pollutants, will be disallowed for a demonstration of

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stringency * * *.'' Any State rule must be demonstrated to be no less
stringent than an otherwise applicable Federal rule for any affected
source subject to the Federal rule rather than, on average, across
sources. This does not mean that a State's submittal must necessarily
include a separate demonstration of stringency for each individual
affected source within a State. Rather, a State must demonstrate that
its rule could reasonably be expected to be no less stringent for any
affected source within the State, reflecting knowledge of the number,
sizes, and operating characteristics of that kind of source within the
State subject to the relevant State rule. A worst case analysis may
reasonably suffice in some such demonstrations.''
2. Level of Control
    Your emissions limitation cannot be considered equivalent unless it
results in emissions reductions equal to or greater than the emissions
reductions required by the Federal NESHAP standard for each affected
source. This is a fundamental point, and it is the basis for many of
the requirements outlined in this section. The documentation associated
with your submittal must clearly demonstrate equivalency. Emissions
must be equivalent to the NESHAP emissions at all production levels and
all modes of operation.
    Test methods and averaging times are integral parts of the
emissions limit equivalency determination. We cannot make decisions on
the equivalency of your level of control without considering the test
method(s) and averaging time(s) associated with both the NESHAP and
your rules. In addition, the term ``emissions limit'' as it is used
here includes either a numerical emissions limitation or a work
practice standard.
    The subpart E rule allows for flexibility on those elements where
you can reasonably show that the outcome of your rule will be emissions
reductions that are equal to or greater than the emissions reductions
required by the Federal emissions standard. Subpart E does not allow
for an outcome where there would not clearly be equivalent emissions
reductions. The following criteria follow from this point:
    a. Form of the standard and burden of demonstration. The form of
your rule (or permit terms and conditions) does not have to mirror the
form of the Federal standard. However, because it is difficult to
compare rules that have different formats, your emissions reductions
need to be quantified in a way comparable to the Federal standard, and
must be equivalent or better. In addition, as we mentioned earlier, the
detail you provide in your demonstration should fully account for the
ways in which, and the degree to which, your requirements differ from
the Federal requirements.
    b. Scope of applicability demonstration. Your standard must show
equivalency on an affected source-by-affected source basis. This means
that you need not demonstrate that your standard equivalently covers
all the emissions points in the NESHAP affected source the same way
that the Federal NESHAP covers them (unless the NESHAP defines an
affected source as an individual emission point), but that the
emissions reductions that would be achieved from each affected source
is equivalent to the emissions reductions that would have been achieved
by the otherwise applicable part 63 emissions standard.
    c. Scope of pollutants covered. We may approve an alternative rule
which covers classes of pollutants, rather than individual pollutants
(e.g., VOC vs. specific HAP), but only if you can demonstrate that your
rule's effect is to control each of the HAP in the Federal standard to
the same degree as the Federal standard requires.
    d. Control efficiency. The control efficiency at which your
standard requires the pollution control equipment to operate must be as
stringent as the analogous control efficiency required by the Federal
standard.
    e. Performance test methods. Your alternative requirements must
state how compliance is to be determined and the appropriate test
method to be used. (The section 112(l) approval of your performance
test method is valid only for the explicit purpose for which it is
intended). The performance test method required by your rule must
ensure that the control equipment or other control strategy performs
well enough to achieve the same emissions reductions required by the
Federal rule. The performance test method in your alternative
requirements would be evaluated and approved holistically as part of a
package that includes your emissions limit, averaging time,
applicability criteria, and work practice standards.
    f. Averaging times. Your rule must explicitly contain the averaging
time associated with each emissions limit (e.g., instantaneous, 3-hour
average, daily, monthly, or longer). The averaging times in your rule
must be sufficient to assure the emissions reductions that your rule
requires, and they must be sufficient to assure compliance with the
limitations required in the otherwise applicable Federal requirements.
    Your alternative requirements must state explicitly those records
that sources are required to keep to assess compliance with the
associated time frame for the requirements. You must require records
that are commensurate with the applicable regulatory requirements and
they must be available for inspection upon request.
    g. Work practice standards. If your rule incorporates work practice
requirements which are different from those required by the Federal
rule, then you must show that your work practice requirements result in
emissions reductions that are equivalent to the Federal requirements in
cases where the work practice requirements are related to emissions
reductions. In cases where the work practice standards are related to
compliance and enforcement measures (MRR), your compliance and
enforcement requirements, including these work practices, must be
equivalent to the Federal compliance and enforcement measures as a
whole or equivalent to the Federal regulation as a whole. (See the
additional discussion on work practice standards in section X.E.
below.)
    h. Compliance dates. Your rule or permit terms must specify
compliance dates for your alternative requirements. The compliance
dates must be sufficiently expeditious to ensure that each affected
source is in compliance no later than would be required by the
otherwise applicable Federal rule.
3. Compliance and Enforcement Measures
    You will need to submit a detailed description of the compliance
and enforcement measures (MRR) required by your rule as part of the
side-by-side comparison of your rule and the Federal rule for which it
would substitute. We have already stated that the level of control in
your rule must be at least as stringent as the level of control in the
Federal rule. In addition, in order for equivalency to be granted, the
level of control and MRR of your rule, taken together as a whole, must
be equivalent to the level of control and MRR of the Federal rule,
taken together as a whole. This means that equivalency can be granted
under two possible scenarios:
    a. If your level of control is equal to the Federal emissions
limit, then the sum of your MRR requirements must be as stringent as
the sum of the Federal MRR requirements.
    This means that you must require MRR that, on the whole, is
equivalent to the requirements in the Federal rule. If

[[Page 1912]]

your requirements are different from the Federal requirements, but are
still considered close to equivalency with the Federal requirements,
and it is difficult to demonstrate equivalency definitively, then you
may pursue alternative compliance and enforcement strategies through
the compliance evaluation study approach discussed above.
    b. If your level of control is more stringent than the Federal
level of control, then the sum of your MRR requirements can be less
stringent than the sum of the Federal MRR requirements, so long as your
rules and requirements, seen as a whole, are equivalent to the Federal
MACT standard's combination of emission limits, MRR, and other
requirements.
    This means that your rule as a whole must be equivalent to the
Federal rule.
    For either scenario a. or b., we believe there are limits to the
differences in MRR that we would accept in an equivalency
demonstration. We believe that your alternative requirements must, at a
minimum, meet one or both of the following tests:
    i. S/L MRR requirements are no less stringent than Federal MRR; or
    ii. S/L MRR requirements assure compliance with the level of
control or work practice standards to the same degree as the Federal
requirements.
    In order to satisfy either of the tests above when you might not
otherwise be able to demonstrate equivalency, there may be additional
measures of assurance that could, in sum, bring your MRR requirements
up to equivalency. For example, we could consider accepting
requirements for additional training for operators, a program of
frequent inspections, a requirement of public or electronic posting of
compliance reports, a State audit program, systems to alert operators
to exceedances (lockout systems which shut down operations if you begin
operating out of compliance could substitute for some MRR), or other
similar measures.
    We believe that MRR is a critical component of any standard. MRR
helps to reduce pollution by alerting the operator to abnormal
conditions, so that corrective action can be quickly taken to reduce
pollution. Additionally, MRR helps to ensure that there is a record of
compliance, or non-compliance, which the enforcement agency can use.
This record of data which would lead to enforcement provides an
incentive for sources to stay sufficiently below the level of mandated
emissions so as to avoid enforcement, thus further reducing pollution.
    It is possible that a S/L with a less stringent emissions
limitation could in actual practice achieve greater cleanup than the
Federal MACT because of the vigor of their enforcement program. While
that might be a good result for the environment, what matters more for
the purposes of the comparison required by section 112(l) is that the
standards, seen as a whole, are equivalent. However, we will not accept
S/L emission limits that are less stringent.
    The language in section 112(l)(5)(A) of the Act, which discusses
the basis for approval or disapproval, says that the Administrator
shall disapprove a S/L program if the authorities are not adequate to
assure compliance. We interpret this section to mean that even if some
lesser degree of MRR than the MACT's MRR is in a S/L rule, which must
be balanced by a more stringent emissions requirement in order for the
standard as a whole to be seen as equivalent, at no point can the S/L
MRR package be inadequate to assure compliance by all sources within
the S/L's jurisdiction with each applicable standard. In essence, this
phrase in the Act is establishing a bottom line below which no MRR
submittal is approvable.
    Some of you have objected to the general inability to characterize
tradeoffs in such a balancing of emissions limits and MRR. However, the
same is true of trading off increased inspections, extensive compliance
assistance and inspector training for less MRR, as California has
proposed. How do we assess these tradeoffs? There is no exact answer.
We must exercise judgment by weighing all the facts, and use wisdom and
common sense to make as fair an assessment as possible.
    With that in mind, we may still consider an extensive inspection
program as complementing and assisting with operator conducted
monitoring. However, it should be understood that we expect that all S/
L's will have an inspection program as an integral part of the
resources devoted to implementing the program. An inspection program
should be truly superior in order to justify a reduction in MRR. For
example, we would ask you to show us an inspection checklist that you
will use for each inspection; also, inspections should be frequent,
such as twice yearly. However, an accurate record of compliance
activity when the inspector is not present, with good MRR, is the best
measure of ongoing compliance.
    Finally, we also believe there are some ``bottom line'' conditions
that are absolutely necessary to satisfy any of these tests, and that
substitute rule (or set of requirements) must contain these conditions.
Some of these conditions are:
    a. We cannot approve your alternative rules if they allow you to
exercise ``Director's discretion'' to change any approved requirements
once we have granted equivalency and completed the subpart E approval
process. (However, you may be able to develop source-specific
alternative requirements through other mechanisms such as obtaining
delegated authority under the part 63 General Provisions (see
discussion in section X.D.4. below) for some of our discretionary
provisions or streamlining a source's permit conditions following the
guidance in White Paper 2.)
    b. Major sources must retain records for at least 5 years.
    c. Your submittal must sufficiently document and support any
requirements that are different from Federal NESHAP requirements.
4. General Provisions
    Your submittal must address all of the relevant General Provisions
in part 63, subpart A and demonstrate that your rule or set of other
requirements contains the same or equivalent provisions. In order to
ensure that the review process is workable and timely, it is essential
that your submittal address each requirement in the General Provisions
and discuss any differences between a proposed alternative and the
General Provisions. Mere references to other S/L rules or other
requirements or to the fact that such matters are handled in sources'
permits are not sufficient to demonstrate equivalency (although
demonstrations may be made through permit terms and conditions). For
example, saying that the General Provisions' intent is satisfied by
``State rule 452,'' is incomplete without an explanation of the
relevant features of rule 452 that address the individual General
Provisions requirements, and submission of a copy of rule 452 as part
of your section 112(l) submittal. Similarly, an assumption that the
permit writer will automatically include quality control requirements
for monitors, for example, is not acceptable. The requirements must be
in the form of a S/L rule or enforceable permit terms and conditions.
    Furthermore, alternative requirements based on policies or other
mechanisms that are not regulations or rules formally adopted under S/L
law are only approvable so long as you understand that they become
federally enforceable when we approve them under 112(l).
    Section X.F. below contains a more comprehensive discussion of how
we would determine equivalency between

[[Page 1913]]

S/L requirements and the General Provisions to part 63.
5. Relationship to Other Clean Air Act Requirements
    Section 63.91(f) establishes that any S/L alternative approved
under section 112(l) of the Act must not override the requirements of
any other applicable program or rule under the Act or under S/L law.
For example, a source subject to a section 112 NESHAP standard may also
be subject to controls for criteria pollutants such as best available
control technology (BACT), reasonably available control technology
(RACT), or fifteen percent VOC reduction under a SIP, or be subject to
other S/L-level rules. We expect that S/L's will submit, for approval
as alternatives to section 112 standards, rules which were established
to comply with some of these VOC or other criteria pollutant reduction
requirements. Nothing in this rule should be construed as allowing
sources to avoid any of those otherwise applicable requirements. In
fact, we expect that the section 112(l) process, by allowing S/L's to
substitute already-established requirements for section 112 rules,
might help S/L's and sources avoid having to implement requirements
that are duplicative across Federal and S/L programs.

E. Equivalency of Alternative Work Practice Standards

    Under section 112(h) of the Act, if it is not technologically or
economically feasible to establish a numerical emissions limitation
when setting an emissions standard under sections 112(d) (maximum
achievable control technology standards) or 112(f) (residual risk
standards), we have authority to establish design, equipment, work
practice, or operational standards, or combinations of these, so long
as they are consistent with the provisions of sections 112(d) and (f).
In addition, we are required to establish requirements that will ensure
the proper operation and maintenance of any design or equipment element
we establish in a WPS, the general term that applies to section 112(h)
standards.
    One of the issues you brought to our attention is that the
equivalency demonstration requirements for alternative WPS in subpart E
are not clear. You asked us to clarify how you may substitute
alternative WPSs for federally promulgated WPS under section 112(l).
The following discussion responds to this request by explaining our
interpretation of what is required under the Act to substitute
alternative requirements for Federal WPS and what flexibility exists
under subpart E to implement this interpretation.
    For the purpose of equivalency demonstrations under section 112(l),
we consider work practice standards as part of the level of control in
some cases and as part of the compliance and enforcement provisions in
other cases. For example, the equipment leak provisions in several
NESHAP, requiring sources to monitor valves, connectors, and other
equipment, are considered WPS that reduce HAP emissions. Another
example of a WPS that reduces emissions is the requirement in the
Halogenated Solvent Degreaser NESHAP to store used rags, that are
contaminated with HAP solvent, in barrels with tight fitting lids.
These examples contrast with administrative-type WPS which a source
performs to measure and/or document its emissions reductions, process
operations and maintenance, etc. for the purposes of determining
compliance and establishing a record for enforcement actions. This
latter type of activity falls into the category of compliance and
enforcement measures, or MRR. An example of a WPS that would be
considered a compliance and enforcement measure is the Wood Furniture
Manufacturing NESHAP requirement to develop a work practice
implementation plan.
    One of your concerns about WPS equivalency demonstrations relates
to the distinction between ``quantifiable WPS'' and ``nonquantifiable
WPS.'' Quantifiable WPS are those WPS for which the expected emissions
reductions can reasonably be measured, e.g., for leak detection and
repair requirements. (Quantifiable WPS may relate directly to an
emissions limitation or have specific performance requirements that are
measurable or quantifiable such as a capture efficiency.)
Nonquantifiable WPS are those for which it is impossible to measure the
expected emissions reductions (or establish specific performance
requirements that are measurable or quantifiable), e.g., a requirement
to place solvent soaked rags in covered containers, or a requirement to
develop and implement an operation and maintenance (O&M) plan.
    It is your belief that WPS should be separated into quantifiable
and non-quantifiable emissions as a way of differentiating between
those WPS that are tied to emissions standard and those WPS that are
tied to compliance and enforcement measures. Although we agree that we
should clearly differentiate between WPS tied to emissions reductions
and those tied to compliance and enforcement measures, we do not agree
that only quantifiable WPS are tied to emission standards. As indicated
above, some WPS that are nonquantifiable are also tied to emissions
reductions. We believe that differentiating between WPS on the basis of
whether or not it is tied to emissions reductions is sufficient.
    For all WPS that are identified as tied to the level of control or
emissions reductions component of an emissions standard, we believe
that any equivalency demonstration for WPS must address WPS in
essentially the same manner as level of control, that is, based on a
``no less stringent'' test in terms of emissions reductions achieved.
This interpretation is supported by section 112(h)(3), which allows
alternative WPS to be established on a source-specific basis if an
owner or operator can demonstrate to our satisfaction that ``an
alternative means of emissions limitation will achieve a reduction in
emissions of any air pollutant at least equivalent to the reduction in
emissions of such pollutant achieved'' under the Federal WPS for which
the alternative is being proposed.
    Any alternative WPS requirements that you submit must meet the ``no
less stringent'' test and/or must match the effect of the corresponding
Federal WPS in terms of the results they are intended to achieve. In
other words, our interpretation of the ``no less stringent'' test for
determining equivalency is whether your WPS achieve, in our best
engineering judgement, the same emissions reductions as the Federal
WPS, and we would make this determination based on an evaluation of
whether your WPS meet the same objectives or intent as the Federal WPS.
In addition, any alternative WPS that you propose for approval must be
enforceable as a practical matter. We believe that no changes to
subpart E are needed to implement this interpretation.
    For WPS that are part of the emissions limitation component of the
Federal standard, the alternative requirements you propose to implement
in lieu of a part 63 emissions standard must address every WPS in that
Federal standard. This means that each Federal WPS must have an
equivalent counterpart in your requirements, or for the WPS for which
you do not propose alternative requirements, you must implement the
Federal WPS for that source or source category. Once equivalency for
the emissions limitation component of that standard is established,
including the complete WPS component, we may evaluate the equivalency
of your entire submittal, including the MRR component, according to the
``holistic'' equivalency test described above in

[[Page 1914]]

subsection D. of this section of the preamble. For WPS that are
identified as part of the compliance and enforcement measures, there is
more flexibility on how equivalency may be demonstrated. For more
discussion on demonstrating equivalency of compliance and enforcement
measures, see the discussion in section X.B. above.
    One approach to expediting your subpart E approval and to
simplifying implementation of section 112 requirements in your
jurisdiction is to develop generic alternative WPS rules that are
similar in function to the General Provisions WPS requirements in
subpart A of part 63. These would apply to all (or many) source
categories for which you seek to substitute alternative requirements.
Because part 63 emissions standards generally have been promulgated
without information supporting the derivation of their WPS and the
associated expected emissions reductions, this information is not often
available as a basis for equivalency demonstrations under subpart E.
Therefore, we are proposing as a matter of implementation guidance
that, when this information is absent, best engineering judgement be
used to establish the expected results from or intent of the WPS for
which you seek equivalency. To assist us in making these judgements, we
expect you to provide whatever information is needed and in a
sufficient level of detail to make an effective comparison. We request
comment on whether additional guidance is needed to implement this
approach and, if so, the form that such guidance should take.
    In the original subpart E proposal preamble (see 58 FR 29306), we
indicated that alternative design, equipment, work practice, or
operational standards established under section 112(h) must be
expressed in the same form of the Federal standard under the Sec. 63.94
program approval option or they could not be approved (except for the
provisions of Sec. 63.93(a)(4)(ii)). In situations where a Federal
standard does not contain a numerical emissions limit, and instead
specifies some sort of equipment, work practice, or operational
requirements, it is less clear what it means to express a level of
control in the same form as the Federal standard. Effectively, this
means that, depending on the form of the Federal standard, it might not
be possible to express some S/L requirements in the same form, in which
case the Federal requirements would remain the applicable requirements.
    We believe that the existing language in Sec. 63.93(b)(2), which
contains the holistic equivalency test we are proposing to apply to
equivalency demonstrations under sections 63.93, 63.94, and 63.97, is
sufficiently flexible for us to approve alternative WPS requirements as
we have described. We also believe this language gives you sufficient
flexibility to substitute reasonable alternatives to the Federal WPS
and that providing specific guidance and examples for demonstrating
equivalency would be more beneficial than adding regulatory language.
We are seeking comments, however, on whether the language in
Sec. 63.93(b)(2) is too restrictive in this regard, what specific text
changes might be warranted, and how such text changes would clarify the
rule or make it more workable. We intend to develop guidance to better
define these equivalency criteria and the information we would need
from you to evaluate your equivalency demonstrations for WPS.

F. Equivalency of Alternative General Provisions

    The purpose of this discussion is to clarify how you should
demonstrate equivalency for the part 63 General Provisions contained in
40 CFR part 63, subpart A.<SUP>8</SUP> In this rulemaking we neither
propose to change any rule language in subpart A, nor to take comment
on the General Provisions themselves. Rather, we are taking comments on
our guidelines for demonstrating equivalency for the General Provisions
as we present them in this preamble.
---------------------------------------------------------------------------

    \8\ The General Provisions were promulgated on March 16, 1994
(59 FR 12408).
---------------------------------------------------------------------------

    In addition, we intend to issue guidance that more fully explains
the guidelines discussed below and our intended application of them in
reviewing individual submittal. This guidance should be helpful to you
in developing submittal that adequately address our equivalency
criteria and demonstration guidelines. We view the development of these
guidance materials as an ongoing process that will reflect the
evolution of our policy as we resolve questions and issues that arise
in future submittal.
    The body of the guidance will be a table that categorizes each
individual requirement in the General Provisions according to a simple
classification scheme that is introduced below.
1. Function and Importance of the General Provisions
    The General Provisions for part 63 NESHAP contain the common
administrative and technical framework for all emissions standards
established under section 112. Rather than reproducing common elements
in each standard, we have used the General Provisions to present these
common requirements in one place, subpart A of part 63. The General
Provisions contain requirements that pertain to the administrative and
the compliance-related aspects of implementing NESHAP. For example, the
General Provisions include administrative procedures and criteria for
determining the applicability of standards, responding to other
requests for determinations, granting extensions of compliance, and
approving sources' requests to use alternative means of compliance from
that specified in an individual standard. Compliance-related provisions
spell out the responsibilities of sources to comply with the relevant
emissions standards and other requirements. These provisions include
compliance dates, operation and maintenance requirements, methods for
determining compliance with standards, procedures for emissions
(performance) testing and MRR requirements.
    The General Provisions apply presumptively to every subpart of part
63, unless specifically overridden in an individual subpart. Part 63
subparts typically include tables that make explicit which General
Provisions requirements have been overridden or replaced for that
standard.
    The General Provisions approach eliminates redundancy in
administrative and compliance-related requirements that are common to
all section 112 standards, and it ensures that a baseline level of
consistency will be maintained among individual NESHAP. Because the
General Provisions are a cornerstone to every section 112 emissions
standard, every S/L submittal under subpart E must address how your
alternative requirements compare in effect to the General Provisions.
2. Demonstration of Equivalency Between S/L Rules or Programs and the
General Provisions
    Some of you are concerned that any equivalency demonstration would
require a line-by-line showing that your requirements are equivalent to
the General Provisions. Instead, you have argued that you should be
able to demonstrate generally that a combination of your rules and
policies accomplishes the intent of the General Provisions and that
this general showing should be sufficient for an equivalency
demonstration.
    We believe that a general showing of intent is not sufficient to
demonstrate equivalency under section 112(l) for the

[[Page 1915]]

General Provisions. The General Provisions are an integral part of each
part 63 NESHAP, and we consider them to be just as important as the
requirements in a source category-specific NESHAP when we evaluate an
equivalency demonstration. However, at the same time, we think a line-
by-line equivalency demonstration is not necessary for every General
Provisions requirement. Rather, we think the General Provisions can be
classified into distinguishable categories of requirements that would
require different criteria to evaluate their equivalency. The level of
rigor associated with an equivalency demonstration for a particular
General Provisions requirement would depend on which category it is in.
We have outlined this process in the following paragraphs and in an
associated guidance document.
3. General Provisions Categories Simplify Equivalency Determinations
    The individual requirements in the General Provisions can be
classified into one of three categories:
    (1) Substantive requirements,
    (2) Quality assurance/quality control requirements, and
    (3) Administrative requirements.
    ``Substantive requirements'' is the most restrictive category and
consists of those requirements that are based on statutory requirements
or on key (fundamental) EPA policies. An example of a statutory
requirement is the requirement for new sources to comply with
promulgated standards on the promulgation date, or upon startup if the
startup date is later than the promulgation date. The 5-year record
retention requirement for major sources is a cornerstone of our
compliance assurance and enforcement program. We would be unlikely to
approve alternatives to any of the requirements in this class. However,
under some circumstances we may approve an alternative requirement, but
we would require a detailed showing based on case-specific factors to
demonstrate that the alternative requirement is justified. The test for
this category is ``equivalence''--the alternative requirement must be
as stringent as Federal requirement on a one-to-one basis.
    In the second class of requirements, called ``quality assurance/
quality control requirements,'' we would judge whether the requirement
in the General Provisions is related to an important policy and/or
guidance that is required of every standard. In this case, your
regulatory language could differ, but a requirement that achieves the
same intent must be included in all substituted rules. In our
judgement, requirements that fall into the category of ``quality
assurance/quality control'' directly impact the level of control and
our ability to determine compliance. For example, the General
Provisions require sources to develop detailed startup, shutdown, and
malfunction (SSM) plans for operating and maintaining sources during
periods of SSM. The essential standard is that sources, including their
process and air pollution control equipment, must be operated and
maintained in a manner consistent with good air pollution control
practices for minimizing emissions to the levels required by the
standards. However, there are many acceptable ways to implement the
general requirements to develop SSM plans and programs of corrective
action. Therefore, for the ``quality assurance/quality control''
category, your alternative requirements need not be identical to the
corresponding General Provisions. For us to find that your alternative
requirements are no less stringent, we would require that they satisfy
the intent and the enforceability of the requirements as written in the
Federal rules. Like ``substantive requirements,'' for ``quality
assurance/quality control'' requirements you must have equivalent
provisions in the rules or other requirements you submit to us for
approval.
    An example of another situation where we could be flexible in
granting equivalency for requirements in the second category is the
preconstruction review requirements found in Sec. 63.5. Section 63.5
implements the requirement in section 112(i)(1) of the Act that we (or
a delegated agency) review sources' plans for major construction or
reconstruction activities to determine that new and reconstructed major
sources can comply with promulgated NESHAP when they start up. We are
sensitive to the fact that you already have preconstruction review
programs and that section 112 sources may be required to undergo
preconstruction review for other purposes such as major or minor new
source review. We believe we can find your existing programs to be as
stringent as the requirements of Sec. 63.5 provided they achieve
similar results as Sec. 63.5 would achieve. For affected sources, this
also would eliminate the burden of having to go through two similar
preconstruction review processes.
    We consider the final category, ``administrative requirements,'' to
be the most flexible in terms of your opportunities to make adjustments
in your rules or programs. ``Administrative requirements'' relate
primarily to program management. For example, Sec. 63.10(a) allows
sources to streamline their reporting requirements by requesting
adjustments to their reporting schedules. Because this provision is not
essential to implementing NESHAP, and because the particular form its
process requirements take is not essential to implementing the intent
of the provision as a whole, you have discretion to eliminate it
altogether or to substitute an alternative process that meets the same
intent. In either case, the resulting package must be as stringent or
more stringent than the Federal requirements. While some
``administrative requirements'' may be necessary to implement the
Federal NESHAP the way we think they should be implemented, in general
for this category of General Provisions, you have considerable
flexibility to alter the form of the requirements.
    The following table provides some additional examples of how we
categorize various General Provisions requirements according to the
classification scheme we just described. In the table, ``substantive
requirements'' are indicated by an ``A,'' ``quality assurance/quality
control requirements'' are indicated by a ``B,'' and ``administrative
requirements'' are indicated by a ``C'' under the column labeled
``Equivalency Determination.'' A complete classification scheme for all
the General Provisions requirements will be provided in the guidance
document referenced above.
4. How Would the Equivalency Demonstration Process Be Implemented for
the General Provisions?
    Each of your submittals that contain alternative requirements must
contain an equivalency demonstration for the pertinent General
Provisions (unless your rules or permit terms implement the part 63
General Provisions unchanged). In order to ensure that the review
process is workable and timely, it is essential that your submittal
specifically address each requirement in the General Provisions and
discuss any differences between a proposed alternative and the General
Provisions.
    To demonstrate equivalency for ``substantive requirements,'' you
would need to demonstrate that they are equivalent (i.e., as stringent
as the corresponding Federal requirement) on a one-to-one basis. For
example, the requirement within a standard to do a compliance
demonstration (e.g., a performance test) is a fixed requirement that
you would need to reflect in your section 112(l) submittal. However,

[[Page 1916]]

within the limits of the associated requirements classified as either
``quality assurance/quality control'' or ``administrative,'' we would
have discretion in determining overall equivalency, and we may be able
to determine equivalency holistically, by considering more than one
requirement at a time.

                          Examples of Guidance: General Provisions Equivalency Criteria
----------------------------------------------------------------------------------------------------------------
     Part 63 General Provisions                                         Equivalency
             Reference                  Summary of section(s)          determination              Comments
----------------------------------------------------------------------------------------------------------------
63.1(a)(6).........................  How to obtain source         C                        Not related to
                                      category list or schedule.                            statutory
                                                                                            requirement or
                                                                                            fundamental policy.
                                                                                            Purely
                                                                                            informational.
63.1(a)(7).........................  Subpart D contains           C                        Informational. Cross
                                      procedures for obtaining                              references other
                                      an extension of compliance                            parts of the CFR.
                                      with a relevant standard
                                      through an early reduction
                                      of emissions of HAP
                                      pursuant to section
                                      112(i)(5) of the Act.
                                      Refers to subpart D for
                                      extension of compliance
                                      through an early reduction
                                      program pursuant to
                                      Section 112(i)(5).
63.1(a)(12)........................  Time periods or deadlines    C                        Section provided for
                                      may be changed if owner or                            convenience. Not
                                      operator and administrator                            essential to an
                                      agree, according to                                   alternative program.
                                      procedures in notification
                                      requirements (63.9(i)).
63.1(b)(3).........................  Stationary source emitting   B                        Fundamental EPA
                                      HAP, but not subject to                               policy. Needed for
                                      this part, shall keep a                               enforcement
                                      record of applicability                               purposes.
                                      determination on site for                             Flexibility in form
                                      5 years, or until the                                 of applicability
                                      source changes its                                    records possible.
                                      operations.
63.4(a)(1)--Prohibited Activities..  Affected source should not   A                        Key statutory
                                      operate in violation of                               requirements.
                                      provisions of this part
                                      unless granted an
                                      extension of compliance.
63.5(b)(3).........................  Source must obtain written   A                        Approval prior to
                                      approval prior to                                     construction is a
                                      constructing a new or                                 key statutory
                                      reconstructing an existing                            requirement.
                                      major source after
                                      promulgation has occurred,
                                      even if the S/L does not
                                      have an approved permit
                                      program.
63.5(d)(4).........................  Allows the Administrator to  B                        Program must allow
                                      request additional                                    Administrator
                                      information after                                     opportunity to
                                      submittal of application.                             request
                                                                                            clarifications/more
                                                                                            information.
63.5(e)--Approval of Construction    Lists procedures for         B                        Form of program may
 or Reconstruction Procedures.        approval of construction                              vary.
                                      or reconstruction process
                                      if Administrator
                                      determines it will not
                                      violate part 63 standards.
63.6(b)(1)--Compliance Dates.......  If initial startup occurs    A                        Alternative
                                      before effective date of                              compliance dates
                                      part 63 standard, source                              must be no later
                                      must comply by effective                              than the compliance
                                      date of the standard.                                 dates in the NESHAP.
----------------------------------------------------------------------------------------------------------------

    We are seeking comments on ways to streamline the review process
for alternative General Provisions requirements while ensuring that we
will receive sufficient information to conduct a review that results in
the approval of appropriate alternative General Provisions.

XI. How Will the Section 112(r) Accidental Release Program
Provisions of Subpart E Change and How Will These Changes Affect
the Delegation of the RMP Provisions?

    We are proposing revisions to sections 63.90 and 63.95 to reflect
the final rules that have been promulgated to implement the accidental
release program required by section 112(r). When subpart E was
promulgated in 1993, the section 112(r) rules were not yet final. The
section 112(r) rules were subsequently promulgated on January 31, 1994
(list of regulated substances) (59 FR 4478) and June 20, 1996 (risk
management programs or RMP) (61 FR 31668) in 40 CFR part 68. These
rules require the development and implementation of a risk management
program by sources that store or contain onsite more than a threshold
quantity of a hazardous substance listed in Sec. 68.130. This list is
not the same as the section 112(b) hazardous air pollutant list.
    Part 68 also requires that a RMP be submitted to a central location
in a method and format to be specified by us. With help from
representatives of industry, State and local governments, environmental
groups, and academia, we are developing a system for electronic
submission of RMPs to reduce paperwork burdens and facilitate data
management. Under this system, facilities covered by the Risk
Management Program rule would submit their RMPs to us and we would then
distribute the RMPs to the entities that are designated by section
112(r)(7)(B)(iii) to also receive them--S/Ls and the Chemical Safety
and Hazard Investigation Board (established under section 112(r)(6) of
the Act). Further, we would also make the RMPs available to the public
under section 114(c) of the Act, as provided by section
112(r)(7)(B)(iii).
    We are proposing to revise sections 63.90 and 63.95 to make the
requirements for delegation consistent with the final part 68 rules and
our plan for an electronic submission system for RMPs. Specifically, we
are proposing to add to Sec. 63.90 a statement that the authorities in
the RMP provisions of part 68, subpart G, will not be delegated to you.
The system of electronic submission of RMPs is feasible only if all
RMPs include the data elements prescribed by subpart G and are
submitted in the same format.

[[Page 1917]]

    You could still require submission of additional information under
your own program, and could include those additional information
requirements in the program you submit to us for approval under part
63. We will consider your request to include S/L information
requirements in our electronic RMP submission program for use by
covered facilities in that S/L's jurisdiction. Our approval of your
program through a subpart E delegation process would make those
additional requirements federally enforceable. However, inclusion of
additional S/L requirements potentially raises technical and legal
issues that we would need to address in deciding to what extent we
could accommodate such requests. In any event, any of your information
requirements included in our electronic submission program would be in
addition to the standard data required under part 68 subpart G.
    With respect to listing chemicals for coverage by the RMP program,
we are proposing to add Sec. 63.90(c)(1)(ii) to clarify that the
authority to amend the list of chemicals and the related thresholds
will not be delegated to you as part of a section 112(l) delegation.
You may still adopt a risk management program more stringent than ours
that lists additional chemicals or sets lower thresholds for regulated
substances which we could approve if submitted as part of the S/L
delegation request. If, however, a S/L subsequently changes its list of
chemicals or the related thresholds after we have approved their
program, the changes would have to be submitted to us before they could
become part of the program that we have approved and made federally
enforceable.
    We are also proposing to revise Sec. 63.95 to make it consistent
with the requirements of the final RMP rule. The revisions would
eliminate the requirements for your programs to register or receive
RMPs from covered facilities and to make RMPs available to the public
consistent with the provisions of section 114 of the Act. Registration
information has been made part of the RMP prescribed by subpart G, the
authorities of which, as noted above, we are not delegating to you. You
could require additional registration information, but you may not
change the registration information that subpart G requires. You could
also require that covered facilities in your jurisdiction send a copy
of their RMPs to the S/L, as well as to us, but you could not relieve
covered facilities from the obligation in subpart G to send their RMPs
to us. You may also provide public access to RMPs consistent with the
provisions of Act section 114, but since we will be providing such
public access, you need not duplicate that function in order to obtain
approval of your program. You will continue to be required to review
RMPs and provide technical assistance to sources.
    We are also proposing to eliminate the requirements for
coordination mechanisms with the Chemical Safety and Hazard
Investigation Board, state emergency response commissions, local
emergency planning committees, and air permitting authorities. Although
we encourage S/Ls that take delegation to coordinate with these groups,
we do not believe that it should be a requirement for gaining
delegation or for having an equivalency demonstration approved. Part 68
already lists the responsibilities of air permitting agencies in
relation to part 68; coordination between the permitting agency and the
delegated agency will follow naturally from those provisions. We are
also proposing to delete the reference to a ``core program'' in
Sec. 63.95(c) because the elements referenced as the core program have
been deleted.
    The proposed Sec. 63.95 continues to say that you may request
delegation for a full or partial program. Full delegation means you
take over the entire section 112(r) program for all covered sources in
your jurisdiction. Partial delegation means you take the entire section
112(r) program for title V permitted sources only, or the entire
program for some discrete universe of sources covered by the section
112(r) rule. In other words, under partial delegation, you may request
implementation authority for a defined universe of sources, but may not
take less than the entire section 112(r) program for that defined
universe.

XII. Administrative Requirements for This Rulemaking

A. Public Hearing

    A public hearing will be held, if requested, to discuss the
proposed standards in accordance with the Administrative Procedures
Act. Persons wishing to make oral presentations on the proposed
standards should contact EPA (see ADDRESSES). To provide an opportunity
for all who may wish to speak, oral presentations will be limited to 15
minutes each. Any member of the public may file a written statement on
or before March 15, 1999. Written statements should be addressed to the
Air and Radiation Docket and Information Center (see ADDRESSES), and
refer to docket number A-97-29. A verbatim transcript of the hearing
and written statements will be placed in the docket and be available
for public inspection and copying, or be mailed upon request, at the
Air and Radiation Docket and Information Center (see ADDRESSES).

B. Docket

    The docket for this regulatory action is docket number A-97-29. The
docket is an organized and complete file of all the information
considered by the EPA in the development of this rulemaking. The docket
is a dynamic file, because material is added throughout the rulemaking
development. The docketing system is intended to allow members of the
public and industries involved to readily identify and locate documents
so that they can effectively participate in the rulemaking process.
Along with the proposed and promulgated standards and their preambles,
the contents of the docket will serve as the record in case of judicial
review [See section 307(d)(7)(A) of the Act.]

C. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), the EPA
must determine whether the regulatory action is ``significant'' and
therefore subject to review by the Office of Management and Budget
(OMB) on the basis of the requirements of the Executive Order in
addition to its normal review requirements. The Executive Order defines
``significant regulatory action'' as one that is likely to result in a
rule that may:
    (1) Have an annual effect on the economy of $100 million or more or
adversely affect in a material way the economy, a sector of the
economy, productivity, competition, jobs, the environment, public
health or safety, or State, local, or Tribal governments or
communities;
    (2) Create a serious inconsistency or otherwise interfere with an
action taken or planned by another agency;
    (3) Materially alter the budgetary impact of entitlements, grants,
user fees, or loan programs, or the rights and obligations of
recipients thereof; or (4) Raise novel legal or policy issues arising
out of legal mandates, the President's priorities, or the principles
set forth in the Executive Order.
    Although this proposed rule will not have an annual effect on the
economy of $100 million or more, and therefore is not considered
economically significant, EPA has determined that this rule is a
``significant regulatory action'' because it contains novel policy
issues. This action was submitted to OMB for review as required by
Executive Order 12866. Any written comments from OMB to the EPA and any
written EPA response to any of

[[Page 1918]]

those comments will be included in the docket listed at the beginning
of this notice under ADDRESSES. In addition, consistent with Executive
Order 12866, the EPA consulted extensively with S/L's, the parties that
will most directly be affected by this proposal. Moreover, the Agency
has also sought involvement from industry and public interest groups as
described herein.

D. Enhancing the Intergovernmental Partnership Under Executive Order
12875

    Under Executive Order 12875, EPA may not issue a regulation that is
not required by statute and that creates a mandate upon a State, local
or tribal government, unless the Federal government provides the funds
necessary to pay the direct compliance costs incurred by those
governments, or EPA consults with those governments. If EPA complies by
consulting, Executive Order 12875 requires EPA to provide to the Office
of Management and Budget a description of the extent of EPA's prior
consultation with representatives of affected State, local and tribal
governments, the nature of their concerns, copies of any written
communications from the governments, and a statement supporting the
need to issue the regulation. In addition, Executive Order 12875
requires EPA to develop an effective process permitting elected
officials and other representatives of State, local, and tribal
governments ``to provide meaningful and timely input in the development
of regulatory proposals containing significant unfunded mandates.''
    Today's rule does not create a mandate on State, local, or tribal
governments. The rule does not impose any enforceable duties on these
entities. Specifically, they are not required to purchase control
systems to meet the requirements of this rule. Also, in developing this
rule, EPA consulted with States to enable them to provide meaningful
and timely input in the development of this rule. Accordingly, the
requirements of section 1(a) of Executive Order 12875 do not apply to
this rule.

E. Consultation and Coordination With Indian Tribal Governments Under
Executive Order 13084

    Under Executive Order 13084, EPA may not issue a regulation that is
not required by statute, that significantly or uniquely affects the
communities of Indian tribal governments, and that imposes substantial
direct compliance costs on those communities, unless the Federal
government provides the funds necessary to pay the direct compliance
costs incurred by the tribal governments, or EPA consults with those
governments. If EPA complies by consulting, Executive Order 13084
requires EPA to provide to the Office of Management and Budget, in a
separately identified section of the preamble to the rule, a
description of the extent of EPA's prior consultation with
representatives of affected tribal governments, a summary of the nature
of their concerns, and a statement supporting the need to issue the
regulation. In addition, Executive Order 13084 requires EPA to develop
an effective process permitting elected officials and other
representatives of Indian tribal governments ``to provide meaningful
and timely input in the development of regulatory policies on matters
that significantly or uniquely affect their communities.''
    Today's rule does not significantly or uniquely affect the
communities of Indian tribal governments. Because this rule implements
a voluntary program, it imposes no direct compliance costs on these
communities. Accordingly, the requirements of section 3(b) of Executive
Order 13084 do not apply to this rule.

F. Paperwork Reduction Act

    EPA has submitted to OMB requirements for collecting information
associated with the proposed standards (those included in 40 CFR part
63, subpart E) for approval under the provisions of the Paperwork
Reduction Act of 1980, 44 U.S.C. 3501 et seq. EPA has prepared an
Information Collection Request (ICR) (ICR No. 1643.03), and you may get
a copy from Sandy Farmer by mail at OPPE Regulatory Information
Division, U.S. Environmental Protection Agency (2137), 401 M Street,
S.W., Washington, DC 20460, by email at farmer.sandy@epa.gov, or by
calling (202) 260-2740. A copy may also be downloaded off the Internet
at http://www.epa.gov/icr.
    This information is needed and used by EPA to determine if the
State, local or Tribal government submitting an application has met the
criteria established in the 40 CFR Part 63, Subpart E amended rule.
This information is necessary for the Administrator to determine the
acceptability of approving the affected entity's rules or programs in
lieu of the Federal rules or programs. The collection of information is
authorized under 42 U.S.C. 7401-7671q.
    The total 3-year burden of the collection is estimated at 1,468,989
hours. The estimated average annual burden is 489,663 hours, 3,856
hours per respondent, and 104 hours per response. EPA has estimated
that 127 State/local agencies will request delegation of 35 MACT
standards each using the various delegation options. In addition, the
127 agencies will use the accidental release prevention program on a
one-time only basis during the first 2 years of the collection. The
cost burden of this response is limited to the labor costs of agency
personnel to comply with the notification, reporting, and recordkeeping
elements of the proposed rule. These costs are estimated at $45.8
million for the 3-year collection period and $15.3 million on average
for each year of the collection period. There are no capital, startup
or operation costs associated with the proposed rule.
    Burden means the total time, effort, or financial resources
expended by persons to generate, maintain, retain, disclose, or provide
information to or for a Federal Agency. This includes the time needed
to review instructions, process and maintain information, and disclose
and provide information; to adjust the existing ways to comply with any
previously applicable instructions and requirements; to train personnel
to respond to a collection of information; to search existing data
sources; to complete and review the collection of information; and to
transmit or otherwise disclose the information.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information unless it displays a current
OMB control number. The OMB control numbers for EPA's regulations are
listed in 40 CFR part 9 and 48 CFR chapter 15.
    Send comments on the Agency's need for this information, the
accuracy of the provided burden estimates, and any suggesting methods
for minimizing respondent burden, including through the use of
automated collection techniques, to the Director, OPPE Regulatory
Information Division, U.S. Environmental Protection Agency (2137), 401
M Street, Washington, DC 20460, and to the Office of Information and
Regulatory Affairs, Office of Management and Budget, 725 17th Street
NW, Washington, DC 20503, marked ``Attention: Desk Office for EPA.''
Include the ICR number in any correspondence. Since OMB is required to
make a decision concerning the ICR between 30 and 60 days after January
12, 1999, a comment to OMB is best assured of having its full effect if
OMB receives it by February 11, 1999. The final rule will respond to
any OMB or public comments on the information collection requirements
contained in this proposal.

[[Page 1919]]

G. Regulatory Flexibility Act

    Under the Regulatory Flexibility Act (Public Law 96-354, September
19, 1980), whenever an agency publishes a rule of general applicability
for which notice of proposed rulemaking is required, it must, except
under certain circumstances, prepare a Regulatory Flexibility Analysis
that describes the impact of the rule on small entities (i.e., small
businesses, organizations, and governmental jurisdictions). That
analysis is not necessary if the agency certifies that the rule will
not have a significant economic impact on a substantial number of small
entities.
    EPA believes that there will be little or no impact on small
entities as a result of the promulgation of this proposed rule. State
and Local governments are the only entities affected by this action and
EPA expects that most or all of the governments which would have the
authority to accept partial or complete delegation under section 112(l)
of the Act are those whose populations exceed 50,000 persons and are,
thus, not considered ``small.'' Accordingly, because few or none of the
affected entities are expected to be small entities, and because the
regulatory impacts will be insignificant, pursuant to the provisions of
5 U.S.C. 605(b), I hereby certify that this rule will not have a
significant economic impact on a substantial number of small entities.

H. Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on State, local, and Tribal
governments and the private sector. Under section 202 of the UMRA, EPA
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, and Tribal governments, in
the aggregate, or to the private sector of $100 million or more in any
one year. Before promulgating an EPA rule for which a written statement
is needed, section 205 of the UMRA generally requires EPA to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, most cost-effective or least burdensome alternative
that achieves the objects of the rule. The provisions of section 205 do
not apply when they are inconsistent with applicable law. Moreover,
section 205 allows EPA to adopt an alternative other than the least
costly, most cost-effective or least burdensome alternative if the
Administrator publishes with the final rule an explanation why that
alternative was not adopted. Before EPA establishes any regulatory
requirements that may significantly or uniquely affect small
governments, including Tribal governments, EPA must have developed
under section 203 of the UMRA a small government agency plan. The plan
must provide for notifying potentially affected small governments,
enabling officials of affected small governments to have meaningful and
timely input in the development of EPA regulatory proposals with
significant Federal intergovernmental mandates, and informing,
educating, and advising small governments on compliance with the
regulatory requirements.
    This rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for S/L governments or the private
sector. Because the proposed rule, if promulgated, is estimated to
result in the expenditure by S/L governments of significantly less than
$100 million in any one year, EPA has not prepared a budgetary impact
statement or specifically addressed the selection of the least costly,
most effective, or least burdensome alternative. Because small
governments will not be significantly or uniquely affected by this
rule, EPA is not required to develop a plan with regard to small
governments. Moreover, this action proposes amendments to a rule that
is voluntary for S/L governments, so it does not impose any mandates on
those entities. Therefore, the requirements of the Unfunded Mandates
Act do not apply to this section. Nonetheless, the EPA has encouraged
significant involvement by State and local governments, as detailed
throughout this preamble.

I. Protection of Children From Environmental Health Risks and Safety
Risks Under Executive Order 13045

    Executive Order 13045 applies to any rule that EPA determines (1)
economically significant as defined under Executive Order 12866, and
(2) the environmental health or safety risk addressed by the rule has a
disproportionate effect on children. If the regulatory action meets
both criteria, the Agency must evaluate the environmental health or
safety effects of the planned rule on children and explain why the
planned regulation is preferable to other potentially effective and
reasonable alternatives considered by the Agency.
    This proposed rule is not subject to Executive Order 13045,
entitled Protection of Children from Environmental Health Risks and
Safety Risks (62 FR 19885, April 23, 1997), because it is not an
economically significant regulatory action as defined by Executive
Order 12866.

J. National Technology Transfer and Advancement Act

    Section 12(d) of the National Technology Transfer and Advancement
Act of 1995 (``NTTAA''), Pub L. No. 104-113, Sec. 12(d) (15 U.S.C. 272
note) directs EPA to use voluntary consensus standards in its
regulatory activities unless to do so would be inconsistent with
applicable law or otherwise impractical. Voluntary consensus standards
are technical standards (e.g., materials specifications, test methods,
sampling procedures, and business practices) that are developed or
adopted by voluntary consensus standards bodies. The NTTAA directs EPA
to provide Congress, through OMB, explanations when the Agency decides
not to use available and applicable voluntary consensus standards.
    The proposed rule does not involve technical standards. Therefore,
EPA is not considering the use of any voluntary consensus standards.
    The section 112(l) rule is merely a procedural screen through which
substantive air toxics standards are delegated and is not susceptible
to the use of VCS. If any of the Federal air toxics standards delegated
through section 112(l) have VCS, then the section 112(l) rule will
assure that the comparable S/L standard has equivalent requirements.
The section 112(l) rule itself, however, is not a vehicle for the
application of VCS.

XIII. Statutory Authority

    The statutory authority for this proposal is provided by sections
101, 112, 114, 116, and 301 of the Act as amended (42 U.S.C. 7401,
7412, 7414, 7416, and 7601). This rulemaking is also subject to section
307(d) of the Act (42 U.S.C. 7407(d)).

List of Subjects in 40 CFR Part 63

     Environmental protection, Air pollution control, Hazardous
substances, Intergovernmental Relations, Reporting and recordkeeping
requirements.

    Dated: December 22, 1998.
Carol M. Browner,
Administrator.

    For the reasons set out in the preamble title 40, chapter 1 of the
Code of Federal Regulations is proposed to be amended as follows:

PART 63--[AMENDED]

    1. The authority citation for part 63 continues to read as follows:

[[Page 1920]]

    Authority: 42 U.S.C. 7401, et seq.
    2. Amend Sec. 63.90 as follows:
    a. Redesignate paragraph (c) as paragraph (d), paragraphs (d) and
(e) as (e) and (f), respectively, and newly redesignated paragraphs
(d)(1)(iii) through (d)(1)(v) as (d)(1)(iv) through (d)(1)(vi),
respectively;
    b. Add definitions in paragraph (a) in alphabetical order for
``alternative requirements,'' ``intermediate change to monitoring,''
``intermediate change to test method,'' ``major change to monitoring,''
``major change to test method,'' ``minor change to monitoring,''
``minor change to test method,'' ``partial approval,'' ``State
agency,'' and ``title V operating permit programs.'' Also, add
paragraphs (c) and (d)(1)(iii); and
    c. Revise the Sec. 63.90 introductory text, the definitions in
paragraph (a) for ``applicability criteria,'' ``approval,''
``compliance and enforcement measures,'' ``level of control,'' and
``program,'' and newly designated paragraphs (d)(1)(ii), (d)(1)(iv)
through (vi), (e), and (f).

Sec. 63.90  Program overview.

    The regulations in this subpart establish procedures consistent
with section 112(l) of the Clean Air Act (Act) (42 U.S.C. 7401-7671q).
This subpart establishes procedures for the approval of State rules,
programs, or other requirements such as permit terms and conditions to
be implemented and enforced in place of certain otherwise applicable
section 112 Federal rules, emission standards, or requirements
(including section 112 rules promulgated under the authority of the Act
prior to the 1990 Amendments to the Act). The authority to implement
and enforce section 112 Federal rules as promulgated without changes
may be delegated under procedures established in this subpart. In this
process, States may seek approval of a State mechanism for receiving
delegation of existing and future unchanged section 112 standards. This
subpart also establishes procedures for the review and withdrawal of
section 112 implementation and enforcement authorities delegated
through this subpart. This subpart clarifies which General Provisions
authorities can be delegated to States. This subpart also establishes
procedures for the approval of State rules or programs to establish
limitations on the potential to emit pollutants listed or pursuant to
section 112(b) of the Act.
    (a) * * *
    Alternative requirements means the applicability criteria, level of
control requirements, compliance and enforcement measures, test methods
and monitoring requirements, work practice standards, and compliance
dates for a source or source category that a State submits for approval
and, after approval, implements and enforces for affected sources in
lieu of otherwise applicable Federal section 112 requirements.
    Applicability criteria means the regulatory criteria used to define
all affected sources subject to a specific section 112 rule.
    Approval means a determination by the Administrator that a State
rule, program, or requirement meets the criteria of Sec. 63.91 and the
additional criteria of either Sec. 63.92, Sec. 63.93, Sec. 63.94, or
Sec. 63.97 as appropriate. For accidental release prevention programs,
the criteria of Sec. 63.95 must be met in addition to the criteria of
Sec. 63.91. This is considered a ``full approval'' for the purposes of
this subpart. Partial approvals may also be granted as described in
this subpart.
    Compliance and enforcement measures means requirements within a
rule, program, permit, or other enforceable mechanism relating to
compliance and enforcement, including but not necessarily limited to
monitoring methods and procedures, recordkeeping, reporting, compliance
plans, inspection, entry, sampling, or accidental release prevention
oversight.
    Intermediate change to monitoring means a modification to federally
required monitoring involving ``proven technology'' (generally accepted
by the scientific community as equivalent or better) that is applied on
a site-specific basis and that may have the potential to decrease the
stringency of the associated emission limitation or standard. Though
site-specific, an intermediate change may set a national precedent for
a source category and may ultimately result in a revision to the
federally required monitoring. Examples of intermediate changes to
monitoring include, but are not limited to:
    (1) Use of a parameter monitoring approach in lieu of continuous
emission monitoring system (CEMS);
    (2) Decreased frequency for parameter monitoring;
    (3) Changes to quality control requirements for parameter
monitoring; and
    (4) Use of an electronic data reduction system in lieu of manual
data reduction.
    Intermediate change to test method means a within-method
modification to a federally enforceable test method involving ``proven
technology'' (generally accepted by the scientific community as
equivalent or better) that is applied on a site-specific basis and that
may have the potential to decrease the stringency of the associated
emission limitation or standard. Though site-specific, an intermediate
change may set a national precedent for a source category and may
ultimately result in a revision to the federally enforceable test
method. In order to be approved, an intermediate change must be
validated according to EPA Method 301 (Part 63, Appendix A) to
demonstrate that it provides equal or improved accuracy or precision.
Examples of intermediate changes to a test method include, but are not
limited to:
    (1) Modifications to a test method's sampling procedure including
substitution of sampling equipment that has been demonstrated for a
particular sample matrix, and use of a different impinger absorbing
solution;
    (2) Changes in sample recovery procedures and analytical
techniques, such as changes to sample holding times and use of a
different analytical finish with proven capability for the analyte of
interest; and
    (3) ``Combining'' a federally-required method with another proven
method for application to processes emitting multiple pollutants.
    Level of control means the degree to which a rule, program, or
requirement requires a source to limit emissions or to employ design,
equipment, work practice, operational, accident prevention or other
requirements or techniques (including a prohibition of emissions) for:
    (1)(i) Each hazardous air pollutant, if individual pollutants are
subject to emission limitations, and
    (ii) The aggregate total of hazardous air pollutants, if the
aggregate grouping is subject to emission limitations, provided that
the rule, program, or requirement would not lead to an increase in risk
to human health or the environment; and
    (2) Each substance regulated under section 112(r). Test methods and
associated procedures and averaging times are integral to the level of
control.
* * * * *
    Major change to monitoring means a modification to federally
required monitoring that uses unproven technology or procedures or is
an entirely new method (sometimes necessary when the required
monitoring is unsuitable). A major change to a test method may be site-
specific or may apply to one or more source categories and will almost
always set a national precedent. Examples of major changes to a test
method include, but are not limited to:
    (1) Use of a new monitoring approach developed to apply to a
control

[[Page 1921]]

technology not contemplated in the applicable regulation;
    (2) Use of a predictive emission monitoring system (PEMS) in place
of a required continuous emission monitoring system (CEMS);
    (3) Use of alternative calibration procedures that do not involve
calibration gases or test cells;
    (4) Use of an analytical technology that differs from that
specified by a performance specification; and
    (5) Use of alternative averaging times for reporting purposes.
    Major change to test method means a modification to a federally
enforceable test method that uses unproven technology or procedures or
is an entirely new method (sometimes necessary when the required test
method is unsuitable). A major change to a test method may be site-
specific or may apply to one or more source categories and will almost
always set a national precedent. In order to be approved, a major
change must be validated according to EPA Method 301 (Part 63, Appendix
A). Examples of major changes to a test method include, but are not
limited to:
    (1) Use of an unproven analytical finish;
    (2) Use of a method developed to fill a test method gap;
    (3) Use of a new test method developed to apply to a control
technology not contemplated in the applicable regulation; and
    (4) Combining two or more sampling/analytical methods (at least one
unproven) into one for application to processes emitting multiple
pollutants.
    Minor change to monitoring means:
    (1) A modification to federally required monitoring that:
    (i) Does not decrease the stringency of the compliance and
enforcement measures for the relevant standard;
    (ii) Has no national significance (e.g., does not affect
implementation of the applicable regulation for other affected sources,
does not set a national precedent, and individually does not result in
a revision to the monitoring requirements); and
    (iii) Is site-specific, made to reflect or accommodate the
operational characteristics, physical constraints, or safety concerns
of an affected source.
    (2) Examples of minor changes to monitoring include, but are not
limited to:
    (i) Modifications to a sampling procedure, such as use of an
improved sample conditioning system to reduce maintenance requirements;
    (ii) Increased monitoring frequency; and
    (iii) Modification of the environmental shelter to moderate
temperature fluctuation and thus protect the analytical
instrumentation.
    Minor change to test method means:
    (1) A modification to a federally enforceable test method that:
    (i) Does not decrease the stringency of the emission limitation or
standard;
    (ii) Has no national significance (e.g., does not affect
implementation of the applicable regulation for other affected sources,
does not set a national precedent, and individually does not result in
a revision to the test method); and
    (iii) Is site-specific, made to reflect or accommodate the
operational characteristics, physical constraints, or safety concerns
of an affected source. Examples of minor changes to a test method
include, but are not limited to field adjustments in a test method's
sampling procedure, such as a modified sampling traverse or location to
avoid interference from an obstruction in the stack, increasing the
sampling time or volume, use of additional impingers for a high
moisture situation, accepting particulate emission results for a test
run that was conducted with a lower than specified temperature,
substitution of a material in the sampling train that has been
demonstrated to be more inert for the sample matrix, and changes in
recovery and analytical techniques such as a change in quality control/
quality assurance requirements needed to adjust for analysis of a
certain sample matrix.
    Partial approval means that the Administrator approves under this
subpart:
    (1) A State's legal authorities that fully meet the criteria of
Sec. 63.91(b) (2), (3), (4), and (5), and substantially meet the
criteria of Sec. 63.91(b)(1) as appropriate, or
    (2) A State rule or program that meets the criteria of Sec. 63.92,
Sec. 63.93, Sec. 63.94, Sec. 63.95, or Sec. 63.97 with the exception of
a separable portion of that State rule or program which fails to meet
those criteria. A separable portion of a State rule or program is
defined as a section(s) of a rule or a portion(s) of a program which
can be acted upon independently without affecting the overall integrity
of the rule or program as a whole.
    Program means, for the purposes of an approval under this subpart,
a collection of State authorities, resources, and other requirements
that satisfy the criteria of Sec. 63.91(b) and Secs. 63.94(b),
63.95(b), and/or 63.97(b), as appropriate.
    State agency, for the purposes of this rule, includes State and
local air pollution agencies, Indian tribes as defined in Sec. 71.2 of
this chapter, and territories of the United States to the extent they
are or will be delegated NESHAP under the Clean Air Act.
* * * * *
    Title V operating permit programs means the 40 CFR part 70
permitting program and the delegated Indian tribal programs under 40
CFR part 71.
* * * * *
    (c) Tribal authority. (1) A tribal authority may submit a rule or
program under this subpart, provided that the tribal authority has
received approval, under the provisions of part 49 of this chapter, for
administering Federal rules under section 112 of the Act.
    (2) A tribal authority's submittal must be consistent with the
provisions of part 49 of this chapter.
    (d) * * *
    (1) * * *
    (ii) The authority to add or delete substances or to change
threshold quantities from the list of substances in Sec. 68.130 of this
chapter;
    (iii) The authority to add or delete requirements from part 68,
subpart G of this chapter;
    (iv) The authority to delete source categories from the Federal
source category list established under section 112(c)(1) or to
subcategorize categories on the Federal source category list after
proposal of a relevant emission standard;
    (v) The authority to revise the source category schedule
established under section 112(e) by moving a source category to a later
date for promulgation; and
    (vi) Any other authorities determined to be nondelegable by the
Administrator.
* * * * *
    (e) Federally-enforceable requirements. All rules, programs, State
or local permits, or other requirements approved under this subpart and
all resulting title V operating permit conditions are enforceable by
the Administrator and citizens under the Act.
    (f) Standards not subject to modification or substitution. With
respect to radionuclide emissions from licensees of the Nuclear
Regulatory Commission or licensees of Nuclear Regulatory Commission
Agreement States which are subject to part 61, subparts I, T, or W of
this chapter, a State may request that the EPA approve delegation of
implementation and enforcement of the Federal standard pursuant to
Sec. 63.91, but no changes or modifications in the form or content of
the standard will be approved pursuant to Sec. 63.92, Sec. 63.93,
Sec. 63.94, or Sec. 63.97.
    4. Amend Sec. 63.91 as follows:
    a. Revise paragraph (a) introductory text, the first sentence of
(a)(1), (a)(3)

[[Page 1922]]

through (a)(6), (b) introductory text, (b)(1) introductory text,
(b)(1)(i), (b)(2), (b)(3) introductory text, (b)(3)(iii), (b)(4),
(b)(5), and (c);
    b. Add paragraphs (d), (e), and (f); and
    c. Remove paragraph (b)(6).

Sec. 63.91  Criteria common to all approval options.

    (a) Approval process. To obtain approval under this subpart of a
rule, program, or requirement that is different from the Federal
section 112 rule or requirement, the criteria of this section and the
criteria of either Sec. 63.92, Sec. 63.93, Sec. 63.94, or Sec. 63.97
must be met. For approval of State programs to implement and enforce
Federal section 112 rules as promulgated without changes (except for
accidental release programs), only the criteria of this section must be
met. This includes State requests for up-front approval of their
mechanism for taking delegation of future unchanged Federal section 112
standards and requirements as well as approval to implement and enforce
unchanged Federal section 112 standards and requirements on a rule-by-
rule basis. To obtain partial approval under this subpart, a State
request must meet the criteria in paragraph (d) of this section. This
includes State requests for up-front approval of their mechanism for
taking delegation of future unchanged Federal section 112 standards and
requirements as well as approval to implement and enforce unchanged
Federal section 112 standards and requirements on a rule-by-rule basis.
For approval of State rules or programs to implement and enforce the
Federal accidental release prevention program as promulgated without
changes, the requirements of this section and Sec. 63.95 and either
Sec. 63.92 or Sec. 63.93 must be met. The Administrator may, under the
authority of section 112(l) and this subpart, also approve a State
program designed to establish limits on the potential to emit of
pollutants listed pursuant to section 112(b) of the Act. For a State's
initial request for approval, and except as otherwise specified under
Sec. 63.92, Sec. 63.93, Sec. 63.94, Sec. 63.95 or Sec. 63.97, for a
State's subsequent requests for approval, the approval process will be
the following:
    (1) Upon receipt of a request for approval, the Administrator will
review the request for approval and notify the State within 30 days of
receipt whether the request for approval is complete according to the
criteria in this subpart. * * *
* * * * *
    (3) If, after review of public comments and any State responses to
comments submitted to the Administrator within 21 days of the close of
the public comment period, the Administrator finds that the criteria of
this subpart are met, the Administrator will approve the State rule,
program, or requirement, publish it in the Federal Register, and
incorporate it directly or by reference, in the appropriate subpart of
part 63. Authorities approved under Sec. 63.95 will be incorporated
pursuant to requirements under section 112(r).
    (4) Within 180 days of receiving a complete request for approval,
the Administrator will either approve, partially approve, or disapprove
the State rule, program, or requirement.
    (5) If the Administrator finds that any of the criteria of this
section are not met, or any of the criteria of Sec. 63.92, Sec. 63.93,
Sec. 63.94, Sec. 63.95, or Sec. 63.97 under which the request for
approval was made are not met, the Administrator will disapprove the
State rule, program, or requirement. If a State rule, program, or
requirement is disapproved, the Administrator will notify the State of
any revisions or additions necessary to obtain approval. Any
resubmittal by a State of a request for approval will be considered a
new request under this subpart.
    (6) If the Administrator finds that all of the criteria of this
section are met and all of the criteria of Sec. 63.92, Sec. 63.93,
Sec. 63.94, Sec. 63.95, or Sec. 63.97 are met, the Administrator will
approve the State rule, program, or requirement. This approval
delegates to the State the authority to implement and enforce the
approved rule, program, or requirement in lieu of the otherwise
applicable Federal rules, emission standards or requirements. The
approved State rule, program, or requirement shall be federally
enforceable from the date of publication of approval, except for
Sec. 63.94 where the approved State permit terms and conditions shall
be federally enforceable on the date of issuance or revision of the
title V permit. In the case of a partial approval under paragraph
(d)(1) of this section, only those authorities of the State request
found to meet the requirements of this section will be approved; the
remaining Federal authorities remain in full force and effect. For
partial approvals under paragraph (d)(2) of this section, only the
portion of the State rule that is approved will be federally
enforceable; the remainder continues to be State enforceable only. When
a State rule, program, or requirement is approved by the Administrator
under this subpart, applicable title V permits shall be revised
according to the provisions of Sec. 70.7(f) of this chapter. When a
State program is approved, partially or in whole, operating permit
conditions resulting from any otherwise applicable Federal section 112
rules, emission standards or requirements will not be expressed in the
State's title V permits or otherwise implemented or enforced by the
State or by the EPA unless and until authority to enforce the approved
State rule, program, or requirement is withdrawn from the State under
Sec. 63.96. In the event approval is withdrawn under Sec. 63.96, all
otherwise applicable Federal rules and requirements shall be
enforceable in accordance with the compliance schedule established in
the withdrawal notice and relevant title V permits shall be revised
according to the provisions of Sec. 70.7(f) of this chapter.
    (b) Criteria for approval. Any request for approval under this
subpart shall meet all section 112(l) approval criteria specified by
the otherwise applicable Federal rule, emission standard, or
requirements, all of the approval criteria of this section, and any
additional approval criteria in the section in this subpart under which
the State's request for approval is made. If any of the State documents
that are required to support an approval under this subpart are readily
available to the EPA and to the public, the State may cite the relevant
portions of the documents or indicate where they are available (e.g. by
providing an Internet address) rather than provide copies. The State
shall provide the Administrator with the following items:
    (1) A written finding by the State Attorney General (or for a local
agency or tribal authority, the General Counsel with full authority to
represent the local agency or tribal authority) that the State has the
necessary legal authority to implement and to enforce the State rule,
program, or requirement upon approval and to assure compliance by all
sources within the State with each applicable section 112 rule,
emission standard, or requirement. For full approval, the State must
have the following legal authorities concerning enforcement and
compliance assurance:
    (i) The State shall have enforcement authorities that meet the
requirements of Sec. 70.11 of this chapter, except that tribal
authorities shall have enforcement authorities that meet the
requirements of part 49 of this chapter, the Tribal Air Rule.
* * * * *
    (2) A copy of State statutes, regulations and requirements that
contain the appropriate provisions granting authority to implement and
enforce the State rule, program, or requirement upon approval.
    (3) A demonstration that the State has adequate resources to
implement and

[[Page 1923]]

enforce all aspects of the rule, program, or requirement upon approval
(except for authorities explicitly retained by the Administrator, such
as those pursuant to paragraph (d) of this section or pursuant to part
49 of this chapter), which includes:
* * * * *
    (iii) A description of the agency's capacity to carry out the State
program, including the number, occupation, and general duties of the
employees.
    (4) A schedule demonstrating expeditious State implementation of
the rule, program, or requirement upon approval.
    (5) A plan that assures expeditious compliance by all sources
subject to the State rule, program, or requirement upon approval. The
plan should include at a minimum a complete description of the State's
compliance tracking and enforcement program, including but not limited
to inspection strategies.
    (c) Revisions. Within 90 days of any State amendment, repeal or
revision of any State rule, program, or requirement supporting an
approval, the State must provide the Administrator with a copy of the
revised authorities and meet the requirements of either paragraph
(c)(1) or (c)(2) of this section.
    (1)(i) The State shall provide the Administrator with a written
finding by the State Attorney General (or for a local agency or tribal
authority, the General Counsel with full authority to represent the
local agency or tribal authority) that the State's revised legal
authorities are adequate to continue to implement and to enforce all
previously approved State rules and the approved State program (as
applicable) and adequate to continue to assure compliance by all
sources within the State with approved rules, the approved program, or
other requirements (as applicable) and each applicable section 112
rule, emission standard or requirement.
    (ii) If the Administrator determines that the written finding is
not adequate, the State shall request approval of the revised rule,
program, or requirement according to the provisions of paragraph (c)(2)
of this section.
    (2) The State shall request approval under this subpart for any
revised rule, program, or requirement.
    (i) If the Administrator approves the revised rule, program, or
requirement, the revised rule, program, or requirement will replace the
previously approved rule, program, or requirement.
    (ii) If the Administrator disapproves the revised rule, program, or
requirement, the Administrator will initiate procedures under
Sec. 63.96 to withdraw approval of any previously approved rule,
program, or requirement that may be affected by the revised
authorities.
    (iii) Until such time as the Administrator approves or withdraws
approval of a revised rule, program, or requirement, the previously
approved rule, program, or requirement remains federally enforceable
and the revised rule, program, or requirement is not federally
enforceable.
    (3)(i) If the EPA amends, or otherwise revises a promulgated
section 112 rule, emission standard, or requirement for which the State
has received delegation to implement and enforce unchanged or for which
the State has an approved alternative rule, program, or other
requirement under this subpart E, then the State shall submit to the
EPA a revised equivalency demonstration within 90 days.
    (ii) The revised equivalency demonstration will be reviewed and
approved or denied according to the procedures set forth in this
section and Sec. 63.91, Sec. 63.92, Sec. 63.93, Sec. 63.94, Sec. 63.95,
or Sec. 63.97, whichever are applicable.
    (d) Partial approval. (1) If a State's legal authorities submitted
under this subpart substantially meet the requirements of paragraph
(b)(1) of this section, but are not fully approvable, the Administrator
may grant a partial approval with the State's consent. The State should
specify which authorities in paragraph (b)(1) of this section are not
fully approvable. The EPA will continue to implement and enforce those
authorities under paragraph (b)(1) of this section that are not
approved. If a State fails to satisfy any of the other requirements in
paragraph (b) of this section, the submittal will be disapproved.
    (2) If a rule or program submitted under this subpart meets the
requirements of Sec. 63.92, Sec. 63.93, Sec. 63.94, Sec. 63.95, or
Sec. 63.97 as appropriate, with the exception of a separable portion of
that rule or program, a State may remove that separable portion of its
rule or program. The State must specify which aspect of the rule or
program is deficient. Alternatively, the Administrator may remove that
separable portion with the State's consent. The Administrator may then
grant a partial approval of the portion of the rule or program that
meets the requirements of this subpart.
    (3) If EPA determines that there are too many areas of deficiency
or that separating the responsibilities between Federal and State
government would be too cumbersome and complex, then the EPA may
disapprove the submittal in its entirety. The EPA is under no duty to
approve rules or programs in part. The EPA reserves the right to
disapprove rules and programs entirely if, in the EPA's judgement,
partial approval is not workable.
    (e) Delegable Authorities. A State may exercise certain
discretionary authorities granted to the Administrator under subpart A
of this part, but may not exercise others, according to the following
criteria:
    (1)(i) A State may ask the appropriate EPA Regional Office to
delegate any of the authorities listed as ``Category I'', in paragraph
(e)(1)(ii) of this section, below. The EPA Regional Office will
delegate any such authorities at their discretion. The EPA Regional
Office may request to review an opportunity to review any State
decision pursuant to the authorities listed in paragraph (e)(1)(ii) of
this section.
    (ii) ``Category I'' shall consist of the following authorities:
    (A) Section 63.1, Applicability Determinations,
    (B) Section 63.6(e), Operation and Maintenance Requirements--
Responsibility for Determining Compliance,
    (C) Section 63.6(f), Compliance with Non-Opacity Standards--
Responsibility for Determining Compliance,
    (D) Section 63.6(h), Compliance with Opacity and Visible Emissions
Standards--Responsibility for Determining Compliance,
    (E) Sections 63.7(c)(2)(i) and (d), Approval of Site-Specific Test
Plans,
    (F) Section 63.7(e)(2)(i), Approval of Minor Alternatives to Test
Methods,
    (G) Section 63.7(e)(2)(ii) and (f), Approval of Intermediate
Alternatives to Test Methods,
    (H) Section 63.7(e)(iii), Approval of Shorter Sampling Times and
Volumes When Necessitated by Process Variables or Other Factors,
    (I) Sections 63.7(e)(2)(iv), (h)(2), and (h)(3), Waiver of
Performance Testing,
    (J) Sections 63.8(c)(1) and (e)(1), Approval of Site-Specific
Performance Evaluation (monitoring) Test Plans,
    (K) Section 63.8(f), Approval of Minor Alternatives to Monitoring,
    (L) Section 63.8(f), Approval of Intermediate Alternatives to
Monitoring, and
    (M) Section 63.9 and 63.10, Approval of Adjustments to Time Periods
for Submitting Reports.
    (2)(i) A State may not exercise any of the discretionary
authorities listed as ``Category II'' in Sec. 63.91(e)(3)(ii).
    (ii) ``Category II'' shall consist of the following authorities:
    (A) Section 63.6(g), Approval of Alternative Non-Opacity Emission
Standards,
    (B) Section 63.6(h)(9), Approval of Alternative Opacity Standards,

[[Page 1924]]

    (C) Sections 63.7(e)(2)(ii) and (f), Approval of Major Alternative
Test Methods, and
    (D) Section 63.10(f), Waiver of Recordkeeping--all.
    (f) Relationship to Other Standards. No rule shall be approved
under the provisions of this subpart that would override the
requirements of any other applicable program or rule under the Clean
Air Act or under State law.
    5. Amend Sec. 63.92 by revising the first sentence of paragraph
(a)(1) and paragraph (a)(2) to read as follows:

Sec. 63.92  Approval of a State rule that adjusts a section 112 rule.

* * * * *
    (a) Approval process.
    (1) If the Administrator finds that the criteria of this section
and the criteria of Sec. 63.91 are met, the Administrator will approve
the State rule, publish it in the Federal Register and incorporate it,
directly or by reference, in the appropriate subpart of part 63,
without additional notice and opportunity for comment. * * *
    (2) If the Administrator finds that any one of the State
adjustments to the Federal rule is in any way ambiguous with respect to
the stringency of applicability, the stringency of the level of
control, the stringency of the compliance and enforcement measures, or
the stringency of the compliance dates for any affected source or
emission point, the Administrator will disapprove the State rule.
* * * * *
    6. Amend Sec. 63.93 by revising the first sentence of paragraph
(a)(2), paragraphs (a)(3), (a)(4), (a)(5), (b)(4) introductory text,
and (b)(4)(ii) to read as follows:

Sec. 63.93  Approval of State authorities that substitute for a section
112 rule.

* * * * *
    (a) * * *
    (2) If, after review of public comments and any State responses to
comments submitted to the Administrator within 21 days of the close of
the public comment period, the Administrator finds that the criteria of
this section and the criteria of Sec. 63.91 are met, the Administrator
will approve the State authorities under this section, publish the
approved authorities in the Federal Register, and incorporate them
directly or by reference, in the appropriate subpart of part 63. * * *
    (3) If the Administrator finds that any of the requirements of this
section or Sec. 63.91 have not been met, the Administrator will
partially approve or disapprove the State authorities. For any
disapprovals, the Administrator will provide the State with the basis
for the disapproval and what actions the State can take to make the
authorities approvable.
    (4) Authorities submitted for approval under this section shall
include State rules or other requirements enforceable under State law
that would substitute for a section 112 rule.
    (5) Within 180 days of receiving a complete request for approval
under this section, the Administrator will either approve, partially
approve, or disapprove the State request.
    (b) * * *
    (4) At a minimum, the approved State rule(s) must include the
following compliance and enforcement measures. (For rules addressing
the accidental release prevention program, minimum compliance and
enforcement provisions are described in Sec. 63.95.)
* * * * *
    (ii) If a standard in the approved rule is not instantaneous, a
maximum averaging time must be established.
 * * * * *
    7. Revise Sec. 63.94 to read as follows:

Sec. 63.94  Approval of State permit terms and conditions for a section
112 rule.

    Under this section a State may seek approval of a State program to
be implemented and enforced in lieu of specified existing and future
Federal emission standards or requirements promulgated under section
112(d), section 112(f) or section 112(h), for those affected sources
permitted by the State under part 70 or part 71 of this chapter.
    (a) Up-front approval process. (1) Within 21 days after receipt of
a complete request for approval of a State program under this section
the Administrator will seek public comment for 21 days on the State
request for approval. The Administrator will require that comments be
submitted concurrently to the State.
    (2) If, after review of all public comments, and State responses to
comments submitted to the Administrator within 14 days of the close of
the public comment period, the Administrator finds that the criteria of
paragraph (b) of this section and the criteria of Sec. 63.91 are met,
the Administrator will approve the State program. The approved program
will be published in the Federal Register and incorporated directly or
by reference in the appropriate subpart of part 63.
    (3) If the Administrator finds that any of the criteria of
paragraph (b) of this section or Sec. 63.91 have not been met, the
Administrator will partially approve or disapprove the State program.
For any disapprovals, the Administrator will provide the State with the
basis for the disapproval and what action the State can take to make
the programs approvable.
    (4) Within 90 days of receiving a complete request for approval
under this section, the Administrator will either approve, partially
approve, or disapprove the State request.
    (b) Criteria for up-front approval. Any request for program
approval under this section shall meet all of the criteria of this
paragraph and Sec. 63.91 before approval. The State shall provide the
Administrator with:
    (1)(i) An identification of all specific sources in source
categories listed pursuant to subsection 112(c) for which the State is
seeking authority to implement and enforce alternative requirements
under this section. The State's list may not exceed five sources in any
single source category.
    (ii) If the identified sources in any source category comprise a
subset of the sources in that category within the State's jurisdiction,
the State shall request delegation for the remainder of the sources in
that category that are required to be permitted by the State under part
70 or part 71 of this chapter. The State shall request delegation for
the remainder of the sources in that category under another section of
this subpart.
    (2) An identification of all existing and future section 112
emission standards for which the State is seeking authority under this
section to implement and enforce alternative requirements.
    (3) A demonstration that the State has an approved title V
operating permit program and that the program permits the affected
sources.
    (c) Approval process for alternative requirements. (1) After
promulgation of a Federal emission standard for which the State has
program approval to implement and enforce alternative requirements in
the form of title V permit terms and conditions, the State shall
provide the Administrator with draft permit terms and conditions that
are sufficient, in the Administrator's judgement, to allow the
Administrator to determine equivalency. The permit terms and conditions
shall reflect all of the requirements of the otherwise applicable
Federal section 112 emission standard(s) including any alternative
requirements that the State is seeking to implement and enforce.
    (2) The Administrator will notify the State within 30 days of
receipt of a request for approval of alternative requirements under
this paragraph as to whether the request for approval is complete
according to the criteria in paragraph (d) of this section. If a
request

[[Page 1925]]

for approval is incomplete, in his or her notification to the State,
the Administrator will specify the deficient elements of the State's
request.
    (3) If, after evaluation of the draft permit terms and conditions
that were submitted by the State, the Administrator finds that the
criteria of paragraph (d) of this section have been met, the
Administrator will approve the State's alternative requirements (by
approving the draft permit terms and conditions) and notify the State
in writing of the approval. The Administrator may approve the State's
alternative requirements on the condition that the State makes certain
changes to the draft permit terms and conditions and includes the
changes in the complete draft, proposed, and final title V permits for
the affected sources. If the Administrator approves the alternative
requirements on the condition that the State makes certain changes to
them, the State shall make those changes or the alternative
requirements will not be federally enforceable when they are included
in the final permit, even if the Administrator does not object to the
proposed permit. Unless and until the Administrator affirmatively
approves the State's alternative requirements (by approving the draft
permit terms and conditions) under this paragraph, and those
requirements (permit terms) are incorporated into the final title V
permit for any affected source, the otherwise applicable Federal
emission standard(s) remain the federally enforceable and federally
applicable requirements for that source. The approved alternative
requirements become federally enforceable for that affected source from
the date of issuance (or revision) of the source's title V permit. The
Federal emission standard(s) remain in full force and effect for any
covered source that does not have an alternative permit approved by the
Administrator.
    (4) If, after evaluation of the draft permit terms and conditions
that were submitted by the State, the Administrator finds that the
criteria of paragraph (d) of this section have not been met, the
Administrator will disapprove the State's alternative requirements and
notify the State in writing of the disapproval. In the notice of
disapproval, the Administrator will specify the deficient or
nonapprovable elements of the State's alternative requirements. If the
Administrator disapproves the State's alternative requirements, the
otherwise applicable Federal emission standard(s) remain the
applicable, federally enforceable requirements for those affected
sources.
    (5) Within 90 days of receiving a complete request for approval
under this paragraph, the Administrator will either approve, partially
approve, or disapprove the State's alternative requirements.
    (6) Nothing in this section precludes the State from submitting
alternative requirements in the form of title V permit terms and
conditions for approval under this paragraph at the same time the State
submits its program to the Administrator for up-front approval under
paragraph (a) of this section, provided that the Federal emission
standards for which the State submits alternative requirements are
promulgated at the time of the State's submittal. If the Administrator
finds that the criteria of Sec. 63.91 and the criteria of paragraphs
(b) and (d) of this section are met, the Administrator will approve
both the State program and the permit terms and conditions within 90
days of receiving a complete request for approval. Alternatively,
following up-front approval, the State may submit alternative
requirements in the form of title V permit terms and conditions for
approval under this paragraph at any time after promulgation of the
Federal emission standards.
    (d) Approval criteria for alternative requirements. Any request for
approval under this paragraph shall meet the following criteria. Taken
together, the criteria in this paragraph describe the minimum contents
of a State's equivalency demonstration for a promulgated Federal
section 112 emission standard. To be approvable, the State submittal
must contain sufficient detail to allow the Administrator to make a
determination of equivalency between the State's alternative
requirements and the Federal requirements. Each submittal of
alternative requirements in the form of draft permit terms and
conditions for an affected source shall:
    (1) Identify the specific, practicably enforceable terms and
conditions with which the source would be required to comply upon
issuance or revision of the title V permit. The State shall submit
permit terms and conditions that reflect all of the requirements of the
otherwise applicable Federal section 112 emission standard(s) including
any alternative requirements that the State is seeking to implement and
enforce. The State shall identify for the Administrator the specific
permit terms and conditions that contain alternative requirements.
    (2) Identify specifically how the alternative requirements in the
form of permit terms and conditions are the same as or differ from the
requirements in the otherwise applicable Federal emission standard(s)
(including any applicable requirements in subpart A or other subparts
or appendices of this part). The State shall provide this
identification in a side-by-side comparison of the State's requirements
in the form of permit terms and conditions and the requirements of the
Federal emission standard(s).
    (3) The State shall provide the Administrator with detailed
documentation that demonstrates the State's belief that the alternative
requirements meet the criteria specified in Sec. 63.93(b), i.e., that
the alternative requirements are at least as stringent as the otherwise
applicable Federal requirements.
    (e) Incorporation of permit terms and conditions into title V
permits. (1) After approval of the State's alternative requirements
under this section, the State shall incorporate the approved permit
terms and conditions into title V permits for the affected sources. The
State shall issue or revise the title V permits according to the
provisions contained in Sec. 70.7 or Sec. 71.7 of this chapter.
    (2) In the notice of draft permit availability, and in each draft,
proposed, and final permit, the State shall indicate prominently that
the permit contains alternative section 112 requirements. In the notice
of draft permit availability, the State shall specifically solicit
public comment on the alternative requirements. In addition, the State
shall attach all documents supporting the approved equivalency
determination for those alternative requirements to each draft,
proposed, and final permit.
    8. Revise Sec. 63.95 to read as follows:

Sec. 63.95  Additional approval criteria for accidental release
prevention programs.

    (a) A State submission for approval of a 40 CFR part 68 program
must meet the criteria and be in accordance with the procedures of this
section, Sec. 63.91, and, where appropriate, either Sec. 63.92 or
Sec. 63.93.
    (b) The State part 68 program application shall contain the
following elements consistent with the procedures in Sec. 63.91 and,
where appropriate, either Sec. 63.92 or Sec. 63.93:
    (1) A demonstration of the State's authority and resources to
implement and enforce regulations that are no less stringent than the
regulations 40 CFR part 68, subparts A through F and Sec. 68.200;
    (2) Procedures for:
    (i) Reviewing risk management plans; and
    (ii) Providing technical assistance to stationary sources,
including small businesses.

[[Page 1926]]

    (3) A demonstration of the State's authority to enforce all part 68
requirements including an auditing strategy that complies with 40 CFR
part 68.220.
    (c) A State may request approval for a complete or partial program.
    9. Amend Sec. 63.96 by revising paragraphs (a)(1) introductory
text, (a)(1)(i) through (a)(1)(v), (a)(2), the first sentence of
(b)(1), the last sentence of (b)(2) introductory text, (b)(2)(ii),
(b)(2)(iii), (b)(3), the first sentence of (b)(4), the first sentence
of (b)(4)(i) introductory text, (b)(4)(ii) through (b)(4)(iv), (b)(6),
(b)(7) introductory text, (b)(7)(i), and (b)(7)(ii) to read as follows:

Sec. 63.96  Review and withdrawal of approval.

    (a) * * *
    (1) The Administrator may at any time request any of the following
information to review the adequacy of implementation and enforcement of
an approved rule, program, or other section 112 requirement and the
State shall provide that information within 45 days of the
Administrator's request:
    (i) Copies of any State statutes, rules, regulations, authorities,
or other requirements that have amended, repealed or revised the
approved State rule, program, or requirement since approval or since
the immediately previous EPA review;
    (ii) Information to demonstrate adequate State enforcement and
compliance monitoring activities with respect to all approved State
rules, programs, or requirements and with all section 112 rules,
emission standards, or requirements;
    (iii) Information to demonstrate adequate funding, staff, and other
resources to implement and enforce the State's approved rule, program,
or requirement;
    (iv) A schedule for implementing the State's approved rule,
program, or requirement that assures compliance with all section 112
rules and requirements that the EPA has promulgated since approval or
since the immediately previous EPA review,
    (v) A list of title V or other permits issued, amended, revised, or
revoked since approval or since the immediately previous EPA review,
for sources subject to a State rule, program, or requirement approved
under this subpart.
* * * * *
    (2) Upon request by the Administrator, the State shall demonstrate
that each State rule, program, or requirement applied to an affected
source or category of sources is achieving equivalent or greater
emission reductions as the otherwise applicable Federal rule, emission
limitation, or standard.
    (b) * * *
    (1) If the Administrator has reason to believe that a State is not
adequately implementing or enforcing an approved rule, program, or
requirement according to the criteria of this subpart or that an
approved rule, program, or requirement is not achieving emission
reductions that are equivalent to or greater than the otherwise
applicable Federal rule, emission standard or requirements, the
Administrator will so inform the State in writing and will identify the
reasons why the Administrator believes that the State's rule, program,
or requirement is not adequate. * * *
    (2) * * * If the State does not correct the identified deficiencies
within 90 days after receiving revised notice of deficiencies, the
Administrator shall withdraw approval of the State's rule, program, or
requirement upon a determination that:
* * * * *
    (ii) The State is not adequately implementing or enforcing the
approved rule, program, or requirement, or
    (iii) An approved rule, program, or requirement is not achieving
emission reductions that are equivalent to or greater than the
otherwise applicable Federal rule.
    (3) The Administrator may withdraw approval for part of a rule,
program, or requirement, or for an entire rule, program, or
requirement.
    (4) Any State rule, program, or requirement, or portion thereof for
which approval is withdrawn is no longer federally enforceable. * * *
    (i) Upon withdrawal of approval, the Administrator will publish an
expeditious schedule for sources subject to the previously approved
State rule, program, or requirement to come into compliance with
applicable Federal requirements. * * *
    (ii) Upon withdrawal, the State shall reopen, under the provisions
of Sec. 70.7(f) or Sec. 71.7(l) of this chapter, the title V permit of
each source subject to the previously approved rules, programs, or
requirements in order to assure compliance through the permit with the
applicable requirements for each source.
    (iii) If the Administrator withdraws approval of State rules,
programs, or requirements applicable to sources that are not subject to
title V permits, the applicable State rules, programs, or requirements
are no longer federally enforceable.
    (iv) If the Administrator withdraws approval of a portion of a
State rule, program, or requirement, other approved portions of the
State rule, program, or requirement that are not withdrawn shall remain
in effect.
* * * * *
    (6) A State may submit a new rule, program, or requirement, or
portion thereof for approval after the Administrator has withdrawn
approval of the State's rule, program, or requirement, or portion of a
rule, program, or requirement. The Administrator will determine whether
the new rule, program, or requirement or portion thereof is approvable
according to the criteria and procedures of Sec. 63.91 and Sec. 63.92,
Sec. 63.93 or Sec. 63.94, Sec. 63.95, or Sec. 63.97, as appropriate.
    (7) A State may voluntarily withdraw from an approved State rule,
program, or requirement or portion thereof by notifying the
Administrator and all affected sources subject to the rule, program, or
requirement and providing notice and opportunity for comment to the
public within the State.
    (i) Upon voluntary withdrawal by a State, the Administrator will
publish a timetable for sources subject to the previously approved
State rule, program, or requirement to come into compliance with
applicable Federal requirements.
    (ii) Upon voluntary withdrawal, the State must reopen and revise
the title V permits of all sources affected by the withdrawal as
provided for in this section and Sec. 70.7(f) and Sec. 71.7(f) of this
chapter, and the Federal rule, emission standard, or requirement that
would have been applicable in the absence of approval under this
subpart will become the applicable requirement for the source.
* * * * *
    10. Add Sec. 63.97 to read as follows:

Sec. 63.97  Approval of a State program that substitutes for section
112 requirements.

    Under this section, a State may seek approval of a State program to
be implemented and enforced in lieu of specified existing or future
Federal emission standards or requirements promulgated under sections
112(d), 112(f), or 112(h). A State may not seek approval under this
section for a program that implements and enforces section 112(r)
requirements.
    (a) Up-front approval process. (1) Within 21 days after receipt of
a complete request for approval of a State program submitted only under
paragraph (b)(1) of this section, the Administrator will seek public
comment for 21 days on the State request.
    (2) Within 45 days after receipt of a complete request for approval
of a State program submitted under both paragraphs (b)(1) and (b)(2) of
this

[[Page 1927]]

section, the Administrator will seek public comment for a minimum of 21
days on the State request.
    (3) The Administrator will require that comments be submitted
concurrently to the State.
    (4) If, after review of all public comments, and State responses to
comments submitted to the Administrator within 14 days of the close of
the public comment period in the case of submittals only under
paragraph (b)(1), or 30 days of the close of the public comment period
in the case of submittals under both paragraphs (b)(1) and (b)(2), the
Administrator finds that the criteria of paragraph (b) of this section
and the criteria of Sec. 63.91 are met, the Administrator will approve
or partially approve the State program. The approved State program will
be published in the Federal Register and incorporated, directly or by
reference, in the appropriate subpart of part 63.
    (5) If the Administrator finds that any of the criteria of
paragraph (b) of this section or Sec. 63.91 have not been met, the
Administrator will partially approve or disapprove the State program.
    (6) The Administrator will either approve, partially approve, or
disapprove the State request:
    (i) Within 90 days after receipt of a complete request for approval
of a State program submitted under paragraph (b)(1) of this section; or
    (ii) Within 180 days after receipt of a complete request for
approval of a State program submitted under both paragraphs (b)(1) and
(b)(2) of this section.
    (b) Criteria for up-front approval. Any request for program
approval under this section shall meet all of the criteria of this
paragraph and Sec. 63.91 before approval.
    (1) For every request for program approval under this section, the
State shall provide the Administrator with an identification of the
specific source categories listed pursuant to section 112(c) and an
identification of all existing and future section 112 emission
standards or other requirements for which the State is seeking
authority to implement and enforce alternative requirements under this
section.
    (2) In addition, the State may provide the Administrator with one
or more of the following program elements for approval under this
paragraph:
    (i) Alternative requirements in State rules, regulations, or
general permits (or other enforceable mechanisms) that apply
generically to one or more categories of sources and for which the
State seeks approval to implement and enforce in lieu of specific
existing Federal section 112 emission standards or requirements. The
Administrator may approve or disapprove the alternative requirements in
these rules, regulations, or permits when she approves or disapproves
the State's up-front submittal under this paragraph. In the future,
after new Federal emission standards or requirements are promulgated,
the State may extend the applicability of approved generic alternative
requirements to additional source categories by repeating the approval
process specified in paragraph (a) of this section. To be approvable,
any request for approval of generic alternative requirements during the
up-front approval process shall meet the criteria in paragraph (d) of
this section.
    (ii) A description of the mechanism(s) that is (are) enforceable as
a matter of State law that the State will use to implement and enforce
alternative requirements for area sources. The mechanisms that may be
approved under this paragraph include, but are not limited to, rules,
regulations, and general permits that apply to categories of sources.
The State shall demonstrate to the Administrator that the State has
adequate resources and authorities to implement and enforce alternative
section 112 requirements using the State mechanism(s).
    (c) Approval process for alternative requirements. (1) After
promulgation of a Federal emission standard or requirement for which
the State has program approval under this section to implement and
enforce alternative requirements, the State shall provide the
Administrator with alternative requirements that are sufficient, in the
Administrator's judgement, to allow the Administrator to determine
equivalency under paragraph (d) of this section. The alternative
requirements shall reflect all of the requirements of the otherwise
applicable Federal section 112 emission standard or requirement,
including any alternative requirements that the State is seeking to
implement and enforce. Alternative requirements submitted for approval
under this paragraph shall be contained in rules, regulations, general
permits, or other mechanisms that apply to and are enforceable under
State law for categories of sources. State policies are not approvable
under this section unless and until they are incorporated into
specific, enforceable, alternative requirements in rules, permits, or
other mechanisms that apply to categories of sources.
    (2) The Administrator will notify the State within 30 days of
receipt of a request for approval under this paragraph as to whether
the request for approval is complete according to the criteria in
paragraph (d) of this section. If a request for approval is incomplete,
in his or her notification to the State, the Administrator will specify
the deficient elements of the State's request.
    (3) Within 45 days after receipt of a complete request for approval
under this paragraph, the Administrator will seek public comment for a
minimum of 21 days on the State request for approval. The Administrator
will require that comments be submitted concurrently to the State.
    (4) If, after review of public comments and any State responses to
comments submitted to the Administrator within 21 days of the close of
the public comment period, the Administrator finds that the criteria of
paragraph (d) of this section and the criteria of Sec. 63.91 are met,
the Administrator will approve the State's alternative requirements.
The approved alternative requirements will be published in the Federal
Register and incorporated, directly or by reference, in the appropriate
subpart of part 63.
    (5) If the Administrator finds that any of the requirements of
paragraph (d) of this section or Sec. 63.91 have not been met, the
Administrator will partially approve or disapprove the State's
alternative requirements. For any disapprovals, the Administrator will
provide the State with the basis for the disapproval and what action
the State can take to make the alternative requirements approvable.
    (6) Within 180 days of receiving a complete request for approval
under this paragraph, the Administrator will either approve, partially
approve, or disapprove the State request.
    (7) Nothing in this section precludes the State from submitting
alternative requirements for approval under this paragraph at the same
time the State submits its program to the Administrator for up-front
approval under paragraph (a) of this section, provided that the Federal
emission standards or requirements for which the State submits
alternative requirements are promulgated at the time of the State's
submittal. If the State submits alternative requirements for approval
at the same time the State submits its program for approval, the
Administrator will have 45 days, rather than 30 days, after receiving a
complete request for approval to seek public comment on the State
request. If the Administrator finds that the criteria of Sec. 63.91 and
the criteria of paragraphs (b) and (d) of this section are met, the
Administrator will approve both the State program and the alternative
requirements within 180 days of receiving a complete request for
approval. Alternatively, following up-

[[Page 1928]]

front approval, the State may submit alternative requirements for
approval under this paragraph at any time after promulgation of the
Federal emission standards or requirements.
    (d) Approval criteria for alternative requirements. Any request for
approval under this paragraph shall meet the following criteria. Taken
together, the criteria in this paragraph describe the minimum contents
of a State's equivalency demonstration for a promulgated Federal
section 112 emission standard or requirement. To be approvable, the
State submittal must contain sufficient detail to allow the
Administrator to make a determination of equivalency between the
State's alternative requirements and the Federal requirements. Each
submittal of alternative requirements for a category of sources shall:
    (1) Include copies of all State rules, regulations, permits,
implementation plans, or other enforceable mechanisms that contain the
alternative requirements for which the State is seeking approval. These
documents shall also contain requirements that reflect all of the
requirements of the otherwise applicable Federal section 112 emission
standard(s) or requirement(s) for which the State is not submitting
alternatives. The State shall identify for the Administrator the
specific requirements with which sources in a source category are
required to comply including the specific alternative requirements.
    (2) Identify specifically how the alternative requirements are the
same as or differ from the requirements in the otherwise applicable
Federal emission standard(s) or requirement(s) (including any
applicable requirements in subpart A or other subparts or appendices of
this part). The State shall provide this identification in a side-by-
side comparison of the State's requirements and the requirements of the
Federal emission standard(s) or requirement(s).
    (3) The State shall provide the Administrator with detailed
documentation that demonstrates the State's belief that the alternative
requirements meet the criteria specified in Sec. 63.93(b) of this
subpart, i.e., that the alternative requirements are at least as
stringent as the otherwise applicable Federal requirements.

[FR Doc. 99-8 Filed 1-11-99; 8:45 am]
BILLING CODE 6560-50-P