1 Memorandum To: Lynne Tudor and Tom Wall, U. S. EPA From: Liz Strange and Dave Cacela, Stratus Consulting Inc.

Date: 5/ 28/ 02 Subject: Outline of § 316( b) Case Study Evaluation of Impingement and Entrainment Data with Examples Drawn from the Salem Case Study Per your request, this memorandum provides an outline of the links among facility impingement and entrainment ( I& E) data that were inputs to case study analyses, the methods used by Stratus Consulting to evaluate these data, and results of our evaluation. It is intended as an aid to reviewers who have requested clarification of the data evaluation process and related docket entries.

There are two major components of each case study analysis: ( 1) the evaluation of facility I& E data, including the development of metrics that express I& E losses in ways that are suitable inputs to economic analyses ( e. g., the conversion of egg and larval losses to an equivalent number of adult fish); and ( 2) the monetary valuation of I& E losses and the economic benefits expected to result from reducing these losses. This memorandum focuses on the first component, including the steps that Stratus Consulting followed to convert I& E numbers into metrics used in the case study economic analyses, and the corresponding docket entries for input data, methods, and results. Section 1 is an overview of the general approach used to compile and evaluate I& E data, and Section 2 provides an example for a specific case study facility.

1. General Approach Used to Compile and Evaluate I& E Data For each case study, raw I& E data were first compiled from facility documents and entered into an EXCEL workbook. One EXCEL workbook was prepared for each case study facility and labeled according to the name of the facility. Each of these workbooks is a separate docket entry, listed in the docket index under Author, Stratus Consulting Inc. Electronic copies of the files are contained in a CD ROM located at DCN 4 1305, as noted in the Comment field of each workbook docket entry.

The facility I& E data in the EXCEL workbooks were evaluated using the methods presented in Chapter A5 of Part A of the Case Study Document ( this document is DCN 4 0003). Chapter A5 provides the equations used to calculate age 1 equivalents ( Section A5 3.1), foregone fishery yield ( Section A5 3.2), and production foregone ( Section A5 3.3) from the I& E numbers obtained from facility reports. The relationships among facility raw loss data and these metrics are outlined in Figure A5 1 in Chapter A5. Chapter A5 also discusses the approach used to estimate Stratus Consulting 5/ 28/ 02 2 Results Chapter 3 of Case Study Report ( Case Study Reports are Parts B through I of Case Study Document)

DCN 4 0003 Evaluation Methods Chapter A5 of Part A of Case Study Document DCN 4 0003 Input Data Facility I& E Data Species Life History Data DCN 4 1305 reductions in harvested species resulting from the impingement and entrainment of forage species ( Section A5 3.4). Figure A5 2 outlines this procedure.

The results of the calculations discussed in Chapter A5 are presented for each case study in the third chapter of the case study report, entitled " Evaluation of I& E Data" ( case study reports are contained in Parts B through I of the Case Study Document, DCN 4 0003). Tables in the chapter " Evaluation of I& E Data" present facility estimates of numbers of organisms impinged and entrained per year and these numbers expressed as age 1 equivalents, foregone fishery yield, and production foregone. An appendix to this chapter presents species specific life history data used to perform these calculations. The References section of the Case Study Document ( DCN 4 0003) provides a complete listing of all information sources.

In some cases, the I& E data provided by the facilities required some additional manipulation in order to calculate age 1 equivalents, foregone fishery yield, or production foregone ( e. g., conversion of daily or monthly I& E rates to annual rates). Such case study specific analyses are discussed in the chapter " Evaluation of I& E Data" of the corresponding case study report ( contained in the Case Study Document, DCN 4 0003).

The figure below outlines the links among data input files, methods, and results, and the corresponding docket numbers. Stratus Consulting 5/ 28/ 02 3 2. Example of Links Among Data Input Files, Methods, and Results This section provides an example of the links among data input files, methods, and results for the Salem facility, which was evaluated as part of the Delaware case study ( Part B of the Case Study Document, DCN 4 0003). EPA converted Salem's records of annual total numbers of impinged and entrained organisms to age 1 equivalents, foregone fishery yield, and production foregone using the equations presented in Chapter A5 of Part A of the Case Study Document ( DCN 4 0003). The facility I& E data that were used for these calculations are presented in worksheet 1 of the EXCEL workbook " salem. input. data. xls," indexed in the docket as DCN 4 2051. An electronic copy of this workbook is contained in the CD ROM filed under DCN 4 1305. The results of these calculations are provided in the third chapter of the case study report, Chapter B3 of Part B of the Case Study Document ( DCN 4 0003). This chapter is entitled " Evaluation of I& E Data."

The following example gives a detailed elaboration of the steps involved in calculating the number of age 1 equivalents using data for weakfish entrainment at Salem in 1981 and 1982. Section 2.1 presents the equations involved ( discussed in detail in Chapter A5 of Part A of the Case Study Document, DCN 4 0003). Section 2.2 shows how these equations are implemented.

2.1 Equations Used to Calculate Age 1 Equivalents As discussed in Section A5 3.1 of Chapter A5 of Part A of the Case Study Document ( DCN 4 0003), the Equivalent Adult Model is a method for expressing I& E losses as an equivalent number of individuals at some other life stage, referred to as the age of equivalency. EPA used this model to convert facility impingement and entrainment numbers to age 1 equivalents.

The basic equation used by EPA to calculate stage specific age 1 equivalent losses is presented as Equation 5 in Section A5 3.1 of Chapter A5 of Part A of the Case Study Document ( DCN 4 0003), and duplicated below: Stratus Consulting 5/ 28/ 02 4 AE1 j, k = L j, k S j, 1 ( Equation 1)

where:

AE1 j, k = the number of age 1 equivalents killed during life stage j in year k L j, k = the number of individuals killed during life stage j in year k S j, 1 = the cumulative survival rate for individuals passing from life stage j to age 1 ( defined in Equation 4)

The main elements of this equation include L j, k, the numbers of individuals impinged or entrained during life stage j in year k, and S j, 1 the cumulative survival rate for individuals passing from life stage j to age 1.

In general, the loss rates, L j, k , used by EPA for age 1 equivalent calculations in the case studies are the annual impingement and entrainment rates reported by each facility. However, in some cases EPA adjusted facility reported annual loss rates to account for current conditions or to estimate entrainment assuming 100% mortality. Such adjustments are described for particular case studies in the third chapter of the relevant case study report (" Evaluation of I& E Data") ( Parts B through I of the Case Study Document, DCN 4 0003).

In order to calculate S j, 1 for use in Equation 1 above, it is necessary to compile species specific life history data, including stage specific values for natural mortality ( M j), fishing mortality ( F j), and the fraction of individuals vulnerable to fishing mortality ( FV j). In cases where a particular life stage, j, is not fully recruited to the fishery, the effective fishing mortality, F effective is derived from F and FV as F effective, j =  log e( ( FV j * e( Fj)) + ( 1  F j) ) ( Equation 2)

As discussed in Section A5 3.1 of Chapter A5 of Part A of the Case Study Document ( DCN 4 0003), these life history data are used to estimate stage specific survival rates, S j: Stratus Consulting 5/ 28/ 02 5 i j j i j j S S S  + = = max 1 * 1 , S j = e ( Zj), ( Equation 3)

where:

Zj = M j + F effective, j and Z j, M j, are as defined above.

S j, 1, the expected cumulative survival rate from the stage of impingement or entrainment, j, to age 1, is then given by the product of all stage specific survival rates to age 1. The equation used to calculate S j, 1 is presented as Equation 4 in Section A5 3.1 of Chapter A5 of Part A of the Case Study Document ( DCN 4 0003), and duplicated below:

where:

S j, 1 = cumulative survival from stage j until age 1 S j = survival fraction from stage j to stage j + 1 S* j = 2S j e log( 1+ Sj) = adjusted S j j max = the stage immediately prior to age 1 ( Equation 4)

An adjustment to S j, S* j, describes the effective survival rate for the group of organisms entrained at stage j, considering the fact that the individual fish were entrained at various specific ages within stage j. This adjustment is necessary because the amount of time spent in that stage before entrainment occurs is unknown.

The annual total number of age 1 equivalents lost to impingement or entrainment is the sum of age 1 equivalents lost at each life stage during a particular year. The equation used to calculate this total is presented as Equation 6 in Section A5 3.1 of Chapter A5 of Part A of the Case Study Document ( DCN 4 0003), and duplicated below: Stratus Consulting 5/ 28/ 02 6 j, k k AE j j j AE 1 1 max min

= =

where:

AE1 k = the total number of age 1 equivalents derived from losses at all stages in year k ( Equation 5)

Each term in the summation represented by Equation 5 is found using Equation 1.

2.2 Example Calculation of Age 1 Equivalent Weakfish Lost to Entrainment at Salem in 1981 and 1982 This section uses the equations presented above in Section 2.1 to show how EPA calculated age 1 equivalent numbers of weakfish entrained at Salem in 1981 and 1982. Note that these equations are consistent with those used by Salem in its 1999 Permit Renewal Application.

2.2.1 Example Calculation of S j and S* j Table 1 illustrates the calculation of S j and S* j, which are used in Equation 4 to calculate S j, 1, the expected cumulative survival rate from the stage of entrainment, j, through age 1. Each row of Table 1 gives the basic and derived parameters that are specific for each particular life stage of weakfish. The two right most columns in the table present S j and S* j. The life history data presented in Table 1 are found in the docket in worksheets 2 to 4 of the EXCEL workbook " salem. input. data. xls" ( DCN 4 2051). These data were taken from Salem's 1999 Permit Renewal Application. Stratus Consulting 5/ 28/ 02 7 Table 1. Stage specific weakfish life history parameters ( M, F, Feffective) used to derive stagespecific weakfish survival rates ( S j) at Salem.

Life history parameter Life stage ( j) M j F j Fraction of life stage ( j) vulnerable to fishery F effective, j a Z j = M j + F effective, j S j = e Zj S* j b Egg 1.04 0.00 0.00 0.00000 1.0430 0.3524 0.5211 Yolk sac larvae 1.34 0.00 0.00 0.00000 1.3410 0.2616 0.4147 Post yolk sac larvae 6.33 0.00 0.00 0.00000 6.3325 0.0018 0.0035 Juvenile 1 2.44 0.00 0.00 0.00000 2.4399 0.0872 0.1604 Juvenile 2 1.48 0.00 0.00 0.00000 1.4838 0.2268 0.3697 Age 01 0.35 0.25 0.10 0.02237 0.3709 0.6901 0.8166 a. F effective, j represents the stage specific fishing mortality rate ( F) adjusted for fraction of age class vulnerable to fishery. b. S* j represents the stage specific survival rate ( S j) adjusted to account for the fact that the precise within stage age of entrained fish is unknown.

2.2.2 Example Calculation of S j, 1 Table 2 illustrates the calculation of S j, 1, the expected cumulative survival rate from the stage of entrainment, j, to age 1 ( Equation 4 in Section 2.1). The rows of Table 2 give the stage specific values of S j or S* j used in the calculation of S j, 1 for weakfish entrained at Salem. The rows contain different numbers of values for the survival fraction from stage j to stage j + 1 depending on the number of life stages that an organism would have passed through until reaching age 1. The final column of Table 2 is the stage specific cumulative survival rate from entrainment to age 1, S j, 1.

Table 2. Elaboration of Equation 4: Example derivation of S j, 1, the stage specific cumulative survival rate ( as a fraction) from stage at entrainment ( j) to age 1 for weakfish entrained at Salem. The definition of S j, 1 includes accommodation for unknown within stage age at entrainment.

Life stage ( j) Egg Yolk sac larvae Post yolk sac larvae Juvenile 1 Juvenile 2 S j, 1 Egg 0.52114a 0.26158 0.00178 0.08717 0.22678 0.0000048 Yolk sac larvae 0.41469a 0.00178 0.08717 0.22678 0.0000146 Post yolk sac larvae 0.00355a 0.08717 0.22678 0.0000702 Juvenile 1 0.16036a 0.22678 0.0363669 Juvenile 2 0.36971a 0.3697119 a. S* j, stage at entrainment adjusted survival rate. Stratus Consulting 5/ 28/ 02 8 2.3 EPA Procedure for Estimating Annual Entrainment Under an Assumption of 100% Through Plant Mortality As discussed in Section B3 3.2 of Chapter B3 of the Case Study Document ( DCN 4 0003), Salem discounted the number of organisms entrained by species and life stage specific through plant survival rates ( discussed in Appendix F, Attachment 2, of Salem's 1999 Permit Renewal Application). For example, if Salem estimated that 1,000 individuals of a particular species were entrained on a particular day, and they believed that 15% of those fish could survive passage through the facility cooling system, Salem used the survival rate as a discount factor and reported that daily entrainment rate as 850 fish rather than 1,000 fish.

An independent review of Salem's 1999 Application ( ESSA Technologies, Ltd., 2000) concluded that Salem's entrainment rates were most likely underestimated because their assumptions about through plant survival of entrained organisms was not well supported. EPA concurred and therefore based the case study benefits analysis on an assumption of 100% through plant mortality. Thus, EPA recalculated Salem's entrainment losses to disregard the survival factors that Salem had used in its calculations, as discussed below.

2.3.1 Equations used by EPA to Estimate Salem's Entrainment Losses Assuming 100% Through Plant Mortality The basic equation used by EPA to estimate the losses under an assumption of 100% through plant mortality is presented below:

E' = E / F where:

E' = Number of fish entrained assuming 100% through plant mortality E = Number of fish entrained assuming non zero through plant survival ( i. e., Salem records including through plant survival) F = Through plant mortality rate ( from all stresses combined) ( Equation 6)

Records of the discounted number of fish entrained ( E) were provided in Salem's 1999 Application, Appendix L, Tab 8 and duplicated in Table B3 6, Chapter B3 of the Case Study Document ( DCN 4 0003). Through plant mortality ( F) was not explicitly presented in Salem's Stratus Consulting 5/ 28/ 02 9 1999 Application, so EPA estimated these factors based on the stress mortality models presented in the 1999 Application ( Appendix F, Attachment 2). This procedure is discussed below.

2.3.2 Salem's General Model of Through Plant Mortality Salem's 1999 Application used model based estimates of thermal mortality in conjunction with empirical estimates of mechanical mortality to determine the total through plant mortality rate. Mechanical mortality rates were based on studies conducted at the Indian Point Generating Station on the Hudson River in the 1980' s and using data from the 1984 Salem § 316( b) demonstration. Chemical mortality was considered negligible. The general model for the joint effects of these mortality factors is presented in Appendix F, Attachment 2, p. 19 of Salem's 1999 Application and duplicated below:

F i = 1 ( 1  M i) × ( 1  C i) × ( 1  T i) ( Equation 7)

where:

F i = Through plant mortality on the ith day M i = Probability of death resulting from mechanical and physical stresses in the ith day C i = Probability of death resulting from chemical ( i. e., antifouling chemicals) exposure on the ith day T i = Probability of death resulting from exposure to elevated temperatures on the ith day The species and stage specific mechanical mortality factors that apply in Equation 7 are provided in Salem's 1999 Application in Appendix F, Attachment 2, Table 12 and are duplicated in Appendix B1 of the Case Study Document ( DCN 4 0003). Equation 7 is expressed on a daily basis. However, for reasons described below, EPA used this model without consideration of daily variations.

Salem's 1999 application did not provide a complete description of the F factors that were used, nor did it provide explicit records of T. However, because the Application did provide explicit values for M, and because C was considered to be effectively zero, EPA was able to algebraically solve for F using a suitable value of T. The procedure that EPA used to identify T is described below in Section 2.3.3. Stratus Consulting 5/ 28/ 02 10 2.3.3 EPA Procedure for Deducing Salem's Values for Thermal Mortality Parameters Salem's 1999 Application provided values of mortality rates associated with mechanical and chemical stress, and details of species specific regression models used to estimate thermally induced mortality rates. The actual calculations were performed on daily records of entrainment and daily records of thermal conditions at the plant, as indicated by the subscripts i in Equation 7. However, daily numbers of entrained organisms were not available to EPA, which precluded EPA from performing calculations that would back out the effects of non zero through plant survival on a daily basis. Instead, the curve presented in Figure 4 of Attachment 2 of Appendix F of Salem's Application made it possible for EPA to derive values of average thermal conditions at the facility. EPA used the average values estimated in this way with Salem's regression models of thermal mortality provided in the Application to generate estimates of average thermal mortality rates on a species specific basis. This procedure is described in detail below.

In order to calculate the thermal mortality factors ( T i) for use in Equation 7, EPA used the probit models of thermal mortality that were presented in Salem's 1999 Application in Appendix F, Attachment 2, p. 20. As part of this effort, EPA identified a discrepancy within the Application with regard to the model definition. According to Table 13 of Appendix F, Attachment 2, the coefficient B 1 modifies the acclimation effect, and the coefficient B 2 modifies the exposure effect. This representation disagrees with the representation of the equation on p. 20 of Appendix F, Attachment 2. EPA concluded that the discrepancy was due to a clerical error and concluded that the coefficients B 1 and B 2 were inadvertently mislabeled in the equation on p. 20 of Appendix F, Attachment 2 and therefore used the following equation with the coefficients B 0, B 1, B 2, and B 3 as provided in the Application in Appendix F, Attachment 2, Table 13. EPA estimated the acclimation temperature ( T a) from Appendix F, Attachment 2, Figure 3 as 16.7 ° C. The exposure duration ( D) was obtained from the Application, Attachment 2, Table 5 ( Unit 1), and is equal to 2.35 min. :

probit ( T) = B 0 + B 1 T e + B 2 T a + B 3 log 10 D ( Equation 8)

where:

B 0, B 1, B 2, and B 3 = Coefficients estimated using regression analysis in Hudson River studies of thermal tolerance T e = Exposure temperature ( ° C) T a = Acclimation temperature ( ° C) D = Exposure duration ( minutes) T = Fraction killed Stratus Consulting 5/ 28/ 02 11 EPA calculated the exposure temperature ( T e) using the following equation presented in the Application in Appendix F, Attachment 2, p. 20:

T e = T a + T delta ( Equation 9)

where:

T a = Acclimation temperature ( ° C) T delta = Temperature change through condensers ( ° C)

The temperature change through the condensers ( T delta) was obtained from Section II of Appendix F of the Application and was estimated as 9.27 ° C, which is the mean of the reported minimum of 14.8 ° F and maximum of 18.6 ° F. Table 3 provides a complete depiction of the particular regression model and thermal regime values that were combined by EPA to yield an estimate of through plant mortality rates due to thermal mortality for weakfish ( T). The relationship between thermal mortality rates, mechanical mortality rates, and combined mortality ( Equation 7) for weakfish is presented in Table 4.

Table 3. Use of Salem's thermal tolerance model ( Equation 8) and Salem thermal conditions to determine thermal mortality rates among early life stages of weakfish entrained by Salem.

Probit model coefficients Thermal variables Estimates B o B 1 B 2 B 3 T a T e D probit( T) T  9.016  0.092 0.427 1.286 16.7 25.98 2.35 1.0173 0.845 Table 4. EPA's derivation of stage specific through plant mortality rates ( F) from factors associated with mechanical and thermal stress for weakfish.

Life stage Mechanical mortality Thermal mortality ( T) F Egg 1 0.845 1.000 Yolk sac 0.64 0.845 0.944 Post yolk sac 0.64 0.845 0.944 Juvenile 1 0.5 0.845 0.923 Juvenile 2 0.5 0.845 0.923 Stratus Consulting 5/ 28/ 02 12 2.4 Example Calculation of Weakfish Annual Entrainment Assuming 100% Through Plant Mortality This section uses the equations presented in Section 1 above and the mortality factors in Table 4 to show how EPA calculated numbers of weakfish entrained at Salem assuming 100% through plant mortality.

2.4.1 Example Calculation of Annual Total Age 1 Equivalents Table 5 shows how EPA used stage specific entrainment estimates ( number of fish entrained) and stage specific cumulative survival rates ( S j, 1) to calculate stage specific age 1 equivalent losses and the total annual age 1 equivalent losses of weakfish in 1981 and in 1982 at Salem. The rows of Table 5 present stage specific values. Column 1 presents Salem's estimates of entrainment losses in 1981 and 1982 [ presented in Appendix L, Tab 8 of Salem's 1999 Application and duplicated in Table B3 6 of Chapter B3 of Part B of the Case Study Document ( DCN 4 0003)], Column 2 presents EPA's estimates of through plant mortality rates, Column 3 presents Salem's entrainment rates adjusted for 100% through plant mortality ( Table B3 7 of Chapter B3), and Column 4 presents EPA's estimates of S j, 1. Column 5 depicts the stage specific and annual total age 1 equivalent losses as calculated by Equation 1 and Equation 5, respectively. EPA's estimates of annual age 1 equivalent losses of all species are presented in Table B3 8 of Chapter B3 of Part B of the Case Study Document ( DCN 4 0003). Stratus Consulting 5/ 28/ 02 13 Table 5. EPA's calculation of annual age 1 equivalent weakfish entrainment at Salem during 1981 and 1982 assuming 100% through plant survival.

Column 1 Column 2 Column 3 Column 4 Column 5 Year Life stage ( j) Number of fish entrained Deduced throughplant mortality rate Loss assuming 100% mortality S j, 1 Age 1 equivalent losses 1981 Egg 2,190,647 1.00000 2,190,647 0.00000479 10.5 Yolk sac larvae 15,818,220 0.94438 16,749,874 0.0000146 244.1 Post yolk sac larva 23,921,054 0.94438 25,329,945 0.0000702 1,777.0 Juvenile 1 3,628,034 0.92275 3,931,772 0.0364 142,986.5 Juvenile 2 206,985 0.92275 224,314 0.370 82,931.4 Age 1 0 1.00000 0 0.817 0.0 Total ( 1981) 45,764,940 48,426,552 227,950 1982 Egg 9,723,584 1.00000 9,723,584 0.00000479 46.6 Yolk sac larvae 10,505,108 0.94438 11,123,833 0.0000146 162.1 Post yolk sac larva 44,235,698 0.94438 46,841,071 0.0000702 3,286.2 Juvenile 1 9,902,183 0.92275 10,731,191 0.0364 390,260.5 Juvenile 2 90,332 0.92275 97,895 0.370 36,192.8 Age 1 0 1.00000 0 0.817 0.0 Total ( 1982) 74,456,905 78,517,574 429,948


SF 83 SUPPORTING STATEMENT ENVIRONMENTAL PROTECTION AGENCY NESHAP Subpart KKKK Metal Cans ( Surface Coating)

1 PART A OF THE SUPPORTING STATEMENT 1. Identification of the Information Collection ( a) Title of the Information Collection. " Monitoring, Recordkeeping, and Reporting Requirements for the Metal Can Manufacturing ( Surface Coating) National Emission Standard for Hazardous Air Pollutants." This is a new information collection request ( ICR) and the tracking number is EPA ICR No. 2079.01.

( b) Short Characterization. This ICR is prepared for a U. S. Environmental Protection Agency ( EPA) rulemaking developed under authority of section 112 of the Clean Air Act ( CAA). The rulemaking amends Title 40, Chapter I, Part 63 of the Code of Federal Regulations ( CFR) by adding a new subpart KKKK National Emission Standards for Hazardous Air Pollutants: Surface Coating of Metal Cans. Hereafter, this subpart is referred to as the " metal can NESHAP." The metal can NESHAP includes standards for major sources of hazardous air pollutant ( HAP) emissions. Respondents are owners or operators of facilities that perform surface coating operations on metal cans. Metal can manufacturing surface coating operations include any facilities that coat or print metal cans or metal can parts ( e. g., metal ends for composite cans). It includes the coating/ printing of metal sheets for subsequent processing into cans or can parts, but not the coating of metal coil( s) for cans or can parts. This source category also includes the coating/ printing of metal decorative tins, crowns, and closures ( except for coil coating). It is estimated that 142 major source facilities are subject to the provisions of this NESHAP in the United States and must be in compliance with the requirements of the metal can NESHAP within 3 years of the effective date ( promulgation date) of the rule. No new growth is expected in the metal can surface coating industry.

Respondents to this ICR are required to submit a detailed listing of coatings and solvents used during coating and thinning operations. This report should include the amount of material used, the amount of solids content in the material as a volume percentage, a breakdown of HAPs contained in each material, and an overall average of HAP content expressed in units of mass of organic HAP per volume of solids. For sources using addon control devices to lower HAP emissions, the report must also include the capture and control efficiencies achieved by the add on control device. All information should be collected on a monthly basis and submitted on a semiannual basis, with the requirement that the 12 month rolling average organic HAP emission rate not exceed the limit set forth by this NESHAP. All records should be maintained for a period of 5 years and should be maintained at the source for a period of at least 2 years. 2 The metal can NESHAP also requires existing and new or reconstructed affected sources to submit a one time Initial Notification. This Initial Notification must be submitted no later than 120 calendar days after the promulgation date of the subpart.

Owners and operators of affected sources are subject to the requirements of 40 CFR Part 63, Subpart A, the General Provisions, unless the regulation specifies otherwise.

The metal can NESHAP also requires affected sources to submit a Notification of Compliance Status. This notification must be signed by a responsible company official who certifies its accuracy and certifies that the source has complied with the standards. In addition, the affected sources using add on control devices to meet the requirements of the standard are required by the Administrator to conduct a performance test of the addon control device. The results of the performance test must be submitted to the EPA in the Notification of Compliance Status.

For new or reconstructed and existing sources, the Notification of Compliance Status must be submitted 1 year and 30 days following the compliance date, and must include the results of the performance test ( if performance testing is required).

Periodic reports documenting deviations are also required to be submitted to the EPA semiannually to demonstrate compliance. The periodic reports must also contain documentation of inspections and a statement that no deviations occurred during the reporting period, if appropriate.

The metal can NESHAP requires owners or operators to develop a startup, shutdown, and malfunction plan ( SSMP), documenting procedures that will be taken in the case of any of these events. Startup, shutdown, and malfunction reports also are required to be submitted that demonstrate that the actions taken by an owner or operator during a startup, shutdown, or malfunction event comply with the SSMP. When actions taken are consistent with the plan, reports are required semiannually. When actions taken are inconsistent with the plan, immediate reports are required.

Each facility is required to submit all necessary reports to the respondent's Regional, State, local or tribal agency, whichever has been delegated enforcement authority by EPA. The information is used to determine that all sources subject to the NESHAP are achieving the requirements.

2. Need For and Use of the Collection ( a) Need/ Authority for the Collection. The EPA is charged under Section 112( d) of the CAA to establish standards to limit HAP emissions from stationary sources. In the Administrator's judgment, the metal can manufacturing surface coating industry causes or contributes significantly to air pollution that may reasonably be anticipated to endanger public health or welfare. Metal can 3 manufacturing surface coating operations are listed as an affected source category in a Federal Register notice dated July 16, 1992 ( see 57 FR 31576.)

Section 114 of the CAA gives the EPA authority to collect data and information necessary to enforce standards established under section 112 of the CAA. Certain records and reports are necessary to enable the Administrator to: ( 1) identify new or reconstructed and existing sources subject to the metal can NESHAP, and ( 2) ensure that the metal can NESHAP, based on maximum achievable control technology ( MACT) for major sources, is being achieved.

( b) Use/ Users of the Data. The EPA's enforcement personnel will use the emissions data collected by each metal can surface coating facility to ( 1) identify new or reconstructed and existing organic HAP emission sources subject to the metal can NESHAP, ( 2) identify the emission control devices and control methodologies being applied, and ( 3) ensure that the emission control devices and control methodologies are being properly operated and maintained on a continuous basis.

The records and reports will also be useful in identifying facilities that are out of compliance with the terms of the metal can NESHAP. Based on the reported information, EPA can decide which facilities should be inspected and what records or processes should be inspected at these facilities. The records that facilities maintain indicates to EPA whether facility personnel are operating and maintaining emission control devices and control methodologies properly.

3. Nonduplication, Consultations, and Other Collection Criteria ( a) Nonduplication. A search of the EPA's existing standards and ongoing ICRs revealed no duplication of information gathering efforts. However, certain reports required by State or local agencies may duplicate information required by the metal can NESHAP. In such cases, a copy of the report submitted to the State or local agency can be provided to the Administrator in lieu of the report required by the metal can NESHAP.

( b) Public Notice Required Prior to ICR Submission to OMB. Since this is a rule related ICR, it is not necessary to solicit public comments prior to submittal of this ICR to OMB. However, a public review and comment period will occur after proposal of the metal can NESHAP in the Federal Register.

( c) Consultations. Consultations were conducted with various representatives of industry, coating suppliers, and trade associations during the development of the metal can NESHAP. The following persons provided input during development of the rule: 4 Name Affiliation Telephone Thomas Alcaro Exal Corporation 330 744 2267 Pat Aluotto BASF 513 576 3132 Mike Antry Crown Cork & Seal Company 215 698 5308 Joette Bailey Ball Corporation 303 460 5433 David Bittner Valspar 412 734 8677 Cheryl Bradley Oklahoma Department of Environmental Protection Bob Brady Coors Brewing Company 303 277 2196 Dan Brennan The Glidden Company 440 826 5150 Robert Budway Can Manufacturers Institute 202 232 4677 Ron Butcher Technical Coatings 7 8 786 4334 Stephen Byrne Cytec Industries 908 862 6000 ext 231 Tim Case Ball Corporation 303 460 5239 Glenn Ceckowski J. L. Clark, Incorporated 815 961 5686 William Chelak ARCO Chemical 610 359 7091 Jun Choi Central Can Company 773 254 8700 Stacy Coburn Ohio EPA Division of Air Pollution Control 614 644 4837 John Cook Watson Standard Dennis Cornish Silgan Containers Corporation 818 710 3791 Donna Cosper TNRCC Office of Air Quality, New Source Review Permits Division, COCO Section 512 239 1301 Lee Cox Independent Can Company 410 272 0090 Fran Craner New York State DEC Division of Air Resources 518 457 7688 Geoff Cullen Can Manufacturers Institute 202 232 4677 David Curreri W. R. Grace & Company 617 498 4915 Bill Danielson CCL Container Corp.  Adv. Monobloc Aerosol Div. 724 981 4420 Manish Desai Can Corporation of America, Inc. 610 926 3044 Kirk Drucker Georgia DNR, Air Protection Branch 404 363 7097 Susan Eastridge Shell Chemical Company 713 241 5985 Joseph Eller South Carolina DHEC 516 444 0212 Charles Erikson Campbell Soup Company 609 342 6458 Name Affiliation Telephone 5 Ralph Fasano White Cap Incorporated 773 804 3579 Don Fay AKZO Nobel 847 295 2729 Mark Finch Silgan Containers Corporation 414 569 5240 Barbara Francis CMA 703 741 5609 John Friedman Darco Metal 312 243 3000 Alan Gans U. S. Can Company 847 888 5538 Robert Gere Mostardi Platt Associates, Inc. 630 993 9000 Don Gust Silgan Containers Corporation 414 569 5279 Marc Himmelstein National Environmental Strategies 202 333 2524 Stephanie John Dexter Packaging Products 847 625 4443 Alison Keane National Paint & Coatings Association 202 462 6272, ext. 248 John Koch Watson Standard 412 362 8300 Lee Landauer The Valspar Corporation 501 359 2438 Robert Lanham Metal Container Corporation 314 957 0769 Ron Leisner PPG Industries 513 576 3046 Bob Levanduski PPG Industries 614 363 9610 Michael Levin Leonard Hurt 202 223 2500 Charles Licht Charles Licht Engineering Associates, Inc. 708 333 6669 Joe McCloskey Benjamin Moore & Co. 201 252 2651 Andrew Miles Dexter Packaging Products 205 854 5454 Dwayne Mock Valspar Corporation Packaging Coatings Group 800 873 5575 Tim Moczulewsi AKZO Nobel Coatings 847 872 1000, ext. 269 Elizabeth Munsey Georgia DNR, Air Protection Branch 404 363 7113 Hank Naour Illinois EPA 217 785 4140 Bob Nelson National Paint & Coatings Association 202 462 6272 Dan Nickey Iowa Waste Reduction ( small business) 319 273 2079 Carol Niemi C. J. Consulting 571 631 4923 Venkata Panchakarla Florida DEP 904 488 0114 Leon Parker Bway Corportation 513 388 2219 Name Affiliation Telephone 6 David Pennings PPG Industries 614 363 9610 Sueanne Pfifferling Pfifferling & Associates, Inc. ( CMI Consultant) 202 363 0334 Marlin Plejdrup Smith Environmental Engineering Corporation 909 923 3331 Dean Pusch Anheuser Busch Companies 314 577 4162 Samuel Ragusa CCL Containers Corporation Douglas Raymond Sherwin Williams 216 498 6049 Steve Roosz CCL Containers Corporation 724 837 8558 Alexander Ross RadTech International North America 703 534 9313 Robert Scheibe Peerless Tube Company 973 743 5100 Jason Schnepp Illinois EPA 217 782 7395 Greg Staiti International Technology ( IT) Corporation 423 690 3211 Kris Sterns National Coatings, Inc. 309 342 4184 Robert Strieter The Aluminum Association, Inc. 202 862 5132 Vernon Taylor Reynolds Metals Company 804 743 5174 Terry Taylor Ohio Art Company 419 636 3141 Bob Tragert W. R. Grace & Co. 617 861 6600, ext. 2283 Robert Tucker Sexton Can Company 304 267 8923 Greg Verret ERM North Central office 314 928 0300 Richard Wilson National Environmental Strategies 202 333 2524 Geoff Wortley Rexam Beverage 773 399 3389 Ken Zarker TNRCC EXEC Pollution Prevention & Modeling 512 239 3145 ( d) Effects of Less Frequent Collection. If results were collected less frequently, there would be little assurance that each source was in compliance during the previous 12 month period, as the rule requires. Also, the EPA's authority to take administrative action would be reduced.

( e) General Guidelines. None of the monitoring, recordkeeping, or reporting requirements contained in 40 CFR Part 63 Subpart KKKK or otherwise pertinent to this request violate any of the regulations established by OMB in 5 CFR 1320.5. 7 ( f) Confidentiality Confidential business information will be handled using Agency guidelines on confidentiality, set forth in Title 40 Chapter 1, Part 2 Subpart B  Confidentiality of Business Information ( see 40 CFR 2; 41 FR 36902, September 1, 1976; amended by 43 FR 40000, September 8, 1978; 43 FR 42251, September 20, 1978; 44 FR 17674, March 23, 1979).

( g) Sensitive Questions. Information to be reported consists of emission data and other information that are not of a sensitive nature. No sensitive personal or proprietary data are being collected.

4. The Respondents and the Information Requested ( a) Respondents/ NAICS Codes. Respondents are owners or operators of facilities that surface coat metal cans. The following is a list of North American Industrial Classification System ( NAICS) codes associated with the metal can industry. Respondents in these NAICS codes are only affected if surface coating operations are performed on site.

The NAICS codes for the respondents affected by this standard include: 332431  Metal Can Manufacturing 332115  Crown and Closure Manufacturing 332116  Metal Stamping 332812  Metal Coating, Engraving ( except Jewelry and Silverware), and Allied Services to Manufacturers 332999  All Other Miscellaneous Fabricated Metal Product Manufacturing This list is not meant to be exhaustive; other NAICS codes could be included if the facility fulfills the definition of a metal can and performs surface coating.

( b) Information Requested. ( i) Data items, including recordkeeping requirements All data in this ICR that is recorded and/ or reported is required by 40 CFR Part 63 Subpart KKKK. All major sources must fulfill these requirements. 8 Notifications Initial Notification 63.3510 ( b), 63.5( d), 63.9( b)

Notification of Compliance Status 63.3510 ( c), 63.9( h)

Notification of Intent to Conduct Performance Test 63.7( b)( 1), 63.8( e)( 2), 63.9( e)

Performance test and evaluation 63.3510 ( c)( 9)( ii), 63.7( a), 63.7( c), 63.7( d), 63.7( e), 63.7( g), 63.8( e)

Rescheduled initial performance test 63.7( b)( 2)

Notification of alternative monitoring method 63.8( f)( 4)

Waiver of monitoring, recordkeeping, or reporting requirements 63.10( f)

Additional notifications 63.9( c), 63.9( d), 63.9( g)( 1), 63.9( g)( 2), 63.9( j)

Reports Startup, shutdown, malfunction reports 63.3520 ( c), 63.6( e)( 3), 63.10( d)( 5)( i), 63.10( d)( 5)( i)

Semiannual compliance report 63.3520 ( a), 63.10( e)

Deviation and CMS performance reports 63.10( a)

Performance test reports 63.3520( b), 63.10( d)( 2), 63.10( e)

Monitoring and Recordkeeping Startups, shutdowns, malfunctions, periods where the continuous monitoring system is inoperative 63.10( b)( 2)

Emission test results and other data needed to determine emissions, operating parameters, etc. 63.3530( b), 63.3530 ( c), 63.3530 ( d), 63.3530( e), 63.3530( f), 63.3530 ( g), 63.3530 ( h), 63.3530 ( k)

All reports and notifications 63.10( b)

Record of applicability 63.10( b)( 3)

Records for sources with continuous monitoring systems 63.3530( c)( 5), 63.10( b), 63.10( c)

Records of maintenance 63.10( b)( 2)

Startup, shutdown, and malfunction records 63.10( b)( 2)( i)  ( iv)

Records for initial notification and notification of compliance status 63.10( b)( 2)( xiv) 9 Records are required to be retained for 5 years. All MACT standards require 5 years of record retention. The first 2 years of records must be kept onsite.

( ii) Respondent Activities Read regulation. Apply for waiver, if applicable. Technical activities: Train coating related personnel. Set up and maintain coating data spreadsheet for regulation compliance. Supervise performance test. Write Initial Notification. Write Notification of Intent to Conduct Performance Test. Write Performance Test Report. Write Compliance Status Report.

5. Agency Activities, Collection Methodology, and Information Management ( a) Agency Activities. Attend add on control device performance testing. Repeat performance test. A. Retesting preparation. B. Attend retesting. Deviations enforcement activities. Reporting requirements. A. Review regulation. B. Review waivers. C. Review Initial Notification. D. Review performance test report.

( b) Collection Methodology and Management. Following notification of startup, the reviewing authority might inspect the source to determine whether the pollution control devices are properly installed and operated. Performance test reports are used by the Agency to discern a source's initial capability to comply with the emission standard, and note the operating conditions under which compliance was achieved. Data and records maintained by the respondents are tabulated and published for use in compliance and enforcement programs. The semiannual reports are used for problem identification, as a check on source operation and maintenance, and for compliance determinations.

Information contained in the reports will be entered into the Aerometric Information Retrieval System ( AIRS) Facility Subsystem ( AFS) that is maintained and operated by the EPA's Office of Air Quality Planning and Standards ( OAQPS). The AIRS is EPA's database for the collection, maintenance, and retrieval of compliance and annual emission inventory data for over 100,000 industrial and government owned facilities. The EPA uses AIRS for tracking air pollution compliance and enforcement by local and State 10 regulatory agencies, and EPA Regional Offices and Headquarters. The EPA and its delegated authorities can edit, store, retrieve, and analyze the data. The records required by this regulation must be retained by the owner or operator for 5 years and maintained at the site for 2 years.

( c) Small Entity Flexibility. This industry, including small businesses, should routinely track the amount of coatings and thinning solvents used for costing purposes, via purchase orders or receipts. The monitoring, recordkeeping, and reporting burden is the same for all entities, regardless of size. The requirements are viewed by the agency as the minimum needed to ensure compliance and cannot reduce them further for small entities.

( d) Collection Schedule. Collection of data will begin after the promulgation date of the metal can NESHAP, tentatively scheduled for The schedule for reports required by the metal can NESHAP and the General Provisions is detailed below.

The Initial Notification is due not later than 120 calendar days after the promulgation date of the subpart for all existing affected sources.

The Notification of Compliance Status must be submitted 1 year and 30 days following the compliance date. The Notification of Compliance Status includes performance test results and deviation reports, if applicable.

Major sources are required to submit periodic reports on a semiannual basis. Major sources using add on control devices to comply with the NESHAP must submit startup, shutdown, and malfunction reports semiannually when actions taken in the event of a startup, shutdown, or malfunction are consistent with the source's SSMP. If actions taken are not consistent with the source's plan, an immediate deviation report must be submitted.

6. Estimating the Burden and Cost of the Collection ( a) Estimating Respondent Burden. The existing major source annual burden estimates for monitoring, recordkeeping, and reporting are presented in Tables 1 through 3. These costs are incurred during the first, second, and third year following the promulgation date, respectively. The annual burden estimates are based on an estimated 142 major affected sources in the metal can manufacturing surface coating industry. All assumptions made in the labor estimates are included as footnotes to the tables. Tables 4 and 5 summarize the operation and maintenance costs necessary to implement the standard. These costs include photocopying, postage, and filing cabinets. Table 6 summarizes the respondent costs and calculates the average annual respondent burden. 11 As shown in Table 6, overall burden for the first three years is estimated to be 6,184 hours and $ 1.63 million for all 142 major source facilities. The annual average burden is 1,815 hours and $ 544,837.

( b) Estimating Respondent Costs. ( i) Estimating Labor Costs This ICR uses labor rates calculated for the affected SIC codes listed in 4( a) of this supporting statement. The labor rates for technical, management, clerical, and coating operations staff were calculated using Bureau of Labor Statistics data for SIC code 341. The fully burdened labor rate, which includes overhead, profit, and all employee benefits, was found by summing the base labor rate and 110% of the base labor rate, per guidance from EPA's Regulatory Information Department ( RID). The hourly rates used for technical, managerial, clerical, and " coating, painting and spraying machine operator" were $ 73.35, $ 83.58, $ 27.93, and $ 30.26, respectively. These labor rates were then applied to the activities required in 4( b)( ii). The total labor cost for the entire industry of 142 major source facilities is estimated to be $ 375,425 for the first three years after the effective date of the standard.

( ii) Estimating Capital Costs ( computer equipment) Monitoring, recordkeeping, and reporting costs assume the use of a computer and software for tracking the coating usages for each facility. Assumptions were made concerning the cost of computer equipment and the number of respondents required to buy the equipment. A cost of $ 2000 for the equipment was estimated, including spreadsheet software. Facilities using more than 100,000 gallons per year were excluded because of the assumption that computer equipment is readily available. Of the estimated industry of 142 major source facilities, an estimated 35 facilities will require computer equipment. Assuming that a new computer will be bought every five years and the interest rate is 7%, the capital recovery factor is 0.2439. Multiplying the capital investment cost of $ 2000 by the capital recovery factor yields an annualized computer equipment cost of $ 488 per facility, bringing the total annualized industry cost for computer equipment to approximately $ 17,000.

It was assumed that the computer equipment will be purchased in the second year after promulgation, so that the computer system will be functional before the compliance date. Since this cost is annualized over five years, the capital costs are shown in Tables 2 and 3.

( iii) Estimating Capital Costs ( performance testing costs) All major sources that purchase and install new capture and control equipment to comply with the NESHAP will also have to conduct performance testing. Performance testing on a regenerative thermal oxidizer ( RTO) was estimated to require 160 hours per air pollution control device ( APCD). Testing of the associated capture device( s) or enclosure( s) using method 204 was estimated to require 80 hours per device, for a total of 240 hours per APCD. Contract labor was estimated at $ 80 per hour for conducting the performance testing, resulting in a total cost estimate of $ 19,200 per APCD ( 240 hours x $ 80/ hr). Since performance testing is expected to occur once with each title V permit 12 renewal and renewals typically occur once every 5 years, performance testing costs are annualized using a 5 year life cycle and 7 percent interest rate, giving a cost recovery factor of 0.2439. This results in an annualized cost of $ 4,683 per control device. The total annualized industry cost for performance testing is $ 1.1 million.

It was assumed that the performance testing would occur during the third year after promulgation, so that the add on control equipment would be functional before the compliance date. Therefore, these capital costs are shown in Table 3.

( iv) Estimating Capital Costs ( monitoring equipment) All major sources that purchase and install new capture and control equipment to comply with the NESHAP will also be required to purchase monitoring equipment. We assumed that the RTO combustion temperature would be monitored using a continuous parameter monitoring system ( CPMS) to meet the standard. The cost of a data acquisition system was estimated to be $ 4,000, which includes $ 3,000 for a data logger and $ 1,000 for software and necessary accessories ( i. e., thermocouples, electrical wiring, etc.). We also estimated a 10 year equipment life cycle for the monitoring equipment and 7 percent interest rate, resulting in a cost recovery factor of 0.1424. Since we estimate that 122 of the 142 major source facilities will require monitoring equipment, the total annualized cost per facility is approximately $ 570 per year. The total annualized industry cost for monitoring equipment is approximately $ 70,100.

It was assumed that the monitoring equipment will be purchased in the third year after promulgation, so that the monitoring equipment can be tested along with the add on control equipment during the performance test. Therefore, this capital cost is shown in Table 3.

( v) Estimating Operation and Maintenance Costs ( photocopying and postage) Operation and maintenance covers the costs associated with the paperwork requirement incurred continuously over the life of the ICR. For rules that require respondents to submit notifications and reports to EPA and maintain records of these reports, costs are estimated for photocopying and postage. Photocopying costs per response were estimated at 0.5 hour of clerical labor at a labor rate of $ 27.93/ hr. First class postage was estimated at $ 7.63 per response for mailing to regulatory agencies. Photocopying and postage costs will be applied to the 143 responses submitted during the first year. Since there are no other reports or notification due until year 4, the total industry cost for operation and maintenance is $ 1,006 for the first three years after the effective date. These costs are shown in Tables 1 through 4 and 6.

( vi) Estimating Capital Costs ( file cabinets) The capital costs associated with file cabinets for storing collected data and reports include the purchase of one standard four drawer file cabinet for each source. Assuming $ 235 per file cabinet, the annualized capital cost per file cabinet is $ 35. The total annualized industry cost for file cabinets is $ 4,970. 13 It was assumed that the filing cabinets would be purchased in the third year after promulgation so that storage space would be available for future recordkeeping. These costs are shown in Tables 3 and 5.

( c) Estimating Agency Burden and Cost. Because the information collection requirements were developed as an incidental part of the metal can NESHAP, no costs can be attributed to the development of the information collection requirements.

Because monitoring, recordkeeping, and reporting requirements on the part of the respondents are required under section 112 of the CAA, no operational costs will be incurred by the Federal government. Publication and distribution of the information are part of the AFS operated and maintained by the EPA's OAQPS, with the result that no Federal costs can be directly attributed to the ICR.

Examination of records to be maintained by the respondents will occur incidentally as part of the periodic inspection of sources that is part of the EPA's overall compliance and enforcement program and, therefore, is not attributable to the ICR. The only costs that the Federal government will incur are user costs associated with the analysis of the reported information, as shown in 5( a). Labor rates and associated costs are based on 2000 labor rates from the U. S. Office of Personnel Management ( OPM). The estimated wage rates are $ 67.44/ hr ( GS 15/ 3 level) for management, $ 40.80/ hr ( GS 12/ 3 level) for technical, and $ 22.99/ hr ( GS 6/ 3 level) for clerical. These hourly rates include a factor of 1.6 to account for employee benefits.

The activities shown in 5( a) are divided among the first, second, and third years after promulgation. The costs and related assumptions are shown in Tables 5 through 7, respectively. The total agency burden for the first three years following promulgation of subpart KKKK is 2,500 hours and $ 121,000. The annual agency average is 825 hours and $ 40,000. These burden estimates are shown in Table 10.

( d) Estimating Respondent Universe and Total Burden Cost. The number of existing major sources subject to MACT Subpart KKKK is 142. No growth is expected in this industry. The total average annual cost for the industry is estimated to be 1,815 hours and $ 544,837 for the 142 major sources during the first three years after the effective date. This cost includes labor, capital equipment costs ( computers, monitoring equipment, filing cabinets), performance testing, and operation and maintenance costs.

( e) Bottom Line Burden Hours and Cost Tables. Please refer to Table 6 and Table 10.

( f) Reasons for Change in Burden. This section does not apply because this is a new collection. 14 ( g) Burden Statement. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and 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 currently valid OMB control number. The OMB control numbers for EPA's regulations are listed in 40 CFR Part 9.

Send comments on the Agency's need for this information, the accuracy of the provided burden estimates, and any suggested methods for minimizing a respondent burden, including through the use of automated collection techniques to Ms Susan Auby, Collection Strategies Division ( Mail Code 2822T), Office of Environmental Information, United States Environmental Protection Agency, 1200 Pennsylvania Avenue, NW, Washington, D. C. 20460 0001; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, 725 17th Street, NW, Washington, D. C. 20503, Attention: Desk Officer for EPA. Include the EPA ICR and OMB Control Number in any correspondence. 15 PART B OF THE SUPPORTING STATEMENT This part is not applicable because no statistical methods were used in collecting this information. 16 TABLE 1. ONE TIME RESPONDENT BURDEN AND COST TO INDUSTRY TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP FIRST YEAR FOLLOWING THE EFFECTIVE DATE Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

Person hours per respondent per year ( C = A x B) ( D) Respondents per year ( E) Technical person hours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical person hours per year ( G = E x 0.1) ( H) Cost,

$ a 1. Applications N/ A 2. Surveys and studies N/ A 3. Reporting requirements A. Read regulation 4 1 4 142b 568 28 57 $ 45,623 B. Apply for waiver 6c 1 6 1d 6 0 1 $ 482 C. Required activities D. Create information Incl. in 3B $ 0 E. Gather existing information Incl. in 3B $ 0 F. Write reports/ notifications Write initial notification 2 1 2 142 284 14 28 $ 22,811 TOTAL ONE TIME BURDEN AND COST 858 43 86 $ 68,916 OPERATION AND MAINTENANCE COSTe 71 $ 5,991 TOTAL BURDEN AND COST 858 43 157 $ 74,907 AVERAGE ONE TIME BURDEN AND COST PER FACILITY: 6 0 1 $ 528 a Costs are based on the following hourly rates: technical at $ 73.35, management at $ 83.58, and clerical at $ 27.93.

b Assumes all 142 major source facilities will read the regulation.

c From ESD manual Table 3 " Burden of NSPS and NESHAP Notification Reports, Excess Emission Reports and Recordkeeping."

d Assumes 1% of 142 major source facilities will apply for a waiver.

e See Table 4 for more details. 17 TABLE 2. ONE TIME RESPONDENT BURDEN AND COST TO INDUSTRY TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP SECOND YEAR FOLLOWING THE EFFECTIVE DATE Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

Person hours per respondent per year ( C = A x B) ( D) Respondents per year ( E) Technical person hours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical person hours per year ( G = E x 0.1) ( H) Cost,

$ a 1. Applications N/ A 2. Surveys and studies N/ A 3. Reporting requirements A. Read regulation B. Apply for waiver C. Required activities Technical Set up and maintain coating data spreadsheet for regulation compliance 4 1 4 142 568 28 57 $ 45,623 D. Create information Incl. in 3B $ 0 E. Gather existing information Incl. in 3B $ 0 F. Write reports/ notifications TOTAL ONE TIME BURDEN AND COST ( LABOR) 568 28 57 $ 45,623 TOTAL CAPITAL EQUIPMENT COSTS ( COMPUTER COSTS) c $ 17,000 TOTAL ONE TIME BURDEN AND COST 568 28 57 $ 62,623 AVERAGE ONE TIME BURDEN AND COST PER FACILITY: 4 0 0 $ 441 a Costs are based on the following hourly rates: technical at $ 73.35, management at $ 83.58, and clerical at $ 27.93.

b Assumes 122 of 142 major source facilities will use add on control devices to comply with the NESHAP.

c The use of computer equipment is based on the coating usage of each facility and is costed at $ 2000 per facility with an interest rate of 7 percent and an equipment life of 5 years.

d See Table 4 for more details. 18 TABLE 3. ONE TIME RESPONDENT BURDEN AND COST TO INDUSTRY TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP THIRD YEAR FOLLOWING THE EFFECTIVE DATE Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

Person hours per respondent per year ( C = A x B) ( D) Respondents per year ( E) Technical person hours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical person hours per year ( G = E x 0.1) ( H) Cost,

$ a 1. Applications N/ A 2. Surveys and studies N/ A 3. Reporting requirements A. Read regulation B. Apply for waiver C. Required activities Technical Training of coating related personnel each year 4 4e 16 142 2,272 114 227 $ 182,492 Supervise performance test 20 0.20b 4 122c 488 24 49 $ 39,197 D. Create information Incl. in 3B $ 0 E. Gather existing information Incl. in 3B $ 0 F. Write reports/ notifications Write performance test report 20 0.20b 4 122c 488 24 49 $ 39,197 TOTAL ONE TIME BURDEN AND COST ( LABOR) 3,248 162 325 $ 260,886 TOTAL CAPITAL COSTS ( MONITORING EQUIPMENT) d $ 70,100 TOTAL CAPITAL EQUIPMENT COSTS ( COMPUTER COSTS) e $ 17,000 TOTAL COSTS FOR PERFORMANCE TESTING OF CONTROL EQUIPMENTf $ 1,147,000 TOTAL CAPITAL EQUIPMENT COSTS ( FILING CABINETS) g $ 4,970 TOTAL ONE TIME BURDEN AND COST 3,248 162 325 $ 1,499,956 AVERAGE ONE TIME BURDEN AND COST PER FACILITY: 23 1 2 $ 10,563 a Costs are based on the following hourly rates: technical at $ 73.35, management at $ 83.58, clerical at $ 27.93, and " coating, painting and spraying machine operator" at $ 30.26.

b Assumes one test every 5 years or 0.20 test reports per year.

c Assumes 122 of 142 major source facilities will use add on control devices to comply with the NESHAP.

d Assumes data acquisition system consists of $ 3000 for data logger and $ 1000 for software annualized over 5 years at 7% interest.

e Computer equipment is based on the coating usage of each facility and is annualized at $ 2000 per facility for 5 years with an interest rate of 7 percent.

f Performance testing assumes the use of a contractor for 240 hours at a rate of $ 80 per hour annualized over 5 years at 7% interest.

g See Table 5 for more details. 19 TABLE 4. OPERATION AND MAINTENANCE COSTS FOR PHOTOCOPYING AND POSTAGE FOR THE FIRST 6 YEARS FOLLOWING THE EFFECTIVE DATE Cost item Photocopy cost/ report Postage cost/ report Reports/ respondent Respondents/

year Reports/

year Photocopy cost Postage cost Application for waiver Year 1 $ 13.47 $ 7.63 1 1 1 $ 13 $ 8 Year 2 3 $ 13.47 $ 7.63 1 0 0 $ 0 $ 0 Initial Notification Year 1 $ 13.47 $ 7.63 1 142 142 $ 1,912 $ 1,083 Years 2 3 $ 13.47 $ 7.63 1 0 0 0 0 Notification of compliance status ( with performance test)

Years 1 3, 5, 6 $ 13.47 $ 7.63 1 0 0 $ 0 $ 0 Year 4 $ 13.47 $ 7.63 1 122 122 $ 1,643 $ 931 Notification of compliance status ( without performance test)

Years 1 3, 5, 6 $ 13.47 $ 7.63 1 0 0 $ 0 $ 0 Year 4 $ 13.47 $ 7.63 1 20 20 $ 269 $ 153 Semi annual compliance report Year 1 3 $ 13.47 $ 7.63 2 0 0 $ 0 $ 0 Year 4 $ 13.47 $ 7.63 1 142 142 $ 1,912 $ 1,083 Year 5 6 $ 13.47 $ 7.63 2 142 284 $ 3,824 $ 2,167 TOTAL ( Year 1) 143 $ 1,925 $ 1,091 TOTAL ( Year 2) 0 $ 0 $ 0 TOTAL ( Year 3) 0 $ 0 $ 0 TOTAL ( Year 4) 284 $ 3,824 $ 2,167 TOTAL ( Year 5) 284 $ 3,824 $ 2,167 TOTAL ( Year 6) 284 $ 3,824 $ 2,167 AVERAGE ( Years 1 3) 48 $ 642 $ 364 AVERAGE ( Years 4 6) 284 $ 3,824 $ 2,167 20 TABLE 5. FILE CABINET COSTS FOR THE FIRST 3 YEARS FOLLOWING THE EFFECTIVE DATE Capital cost/

respondent Annualized capital cost/

respondent Capital cost respondents/ yr Annual cost respondents/ yr Capital cost Annualized capital cost Year 1 $ 235 $ 35 0 0 $ 0 $ 0 Year 2 $ 235 $ 35 0 0 $ 0 $ 0 Year 3 $ 235 $ 35 142 142 $ 33,370 $ 4,970 TABLE 6. SUMMARY OF RESPONDENT BURDEN HOURS AND COSTS TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP Year Technical hours Management hours Clerical hours Total hours Labor costs Non labor costs Total costs Capital costs O& M costs Year 1 858 43 157 1,058 $ 68,916 $ 0 $ 5,991 $ 74,907 Year 2 568 28 57 653 $ 45,623 $ 17,000 $ 0 $ 62,623 Year 3 3,248 162 325 3,735 $ 260,886 $ 1,239,070 $ 0 $ 1,499,956 Totals 4,674 234 538 5,446 $ 375,425 $ 1,256,070 $ 5,991 $ 1,637,486 Average burden 1,815 $ 125,142 $ 418,690 $ 1,997 $ 545,829 21 TABLE 7. ESTIMATED AGENCY BURDEN AND COST TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP FIRST YEAR FOLLOWING THE EFFECTIVE DATE Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

EPA hours per facility per year ( C = A x B) ( D) Facilities per year ( E) Technical person hours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical person hours per year ( G = E x 0.1) ( H) Cost,

$ a 1. Attend add on control device performance testing 2. Repeat performance test 3. Deviations enforcement activities 4. Reporting requirements A. Review regulation 2 2 4 1 4 0 0 $ 186 B. Review waivers 2 2 4 1b 4 0 0 $ 186 C. Review reports/ notifications Review initial notification 2 2 4 142 568 28 57 $ 26,396 ANNUAL AVERAGE TOTAL BURDEN AND COST ( SALARY) NATIONWIDE 576 29 58 $ 26,767 a Costs are based on the following hourly rates: technical at $ 40.80, management at $ 67.44, and clerical at $ 22.99. These costs are based on 2000 wages listed by U. S. Office of Personnel Management for GS Level 12, Step 5; GS Level 15, Step 5; and GS Level 7, Step 5, respectively.

b Assumes 1% of 142 major source facilities will apply for a waiver. 22 TABLE 8. ESTIMATED AGENCY BURDEN AND COST TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP SECOND YEAR FOLLOWING THE EFFECTIVE DATE Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

EPA hours per facility per year ( C = A x B) ( D) Facilities per year ( E) Technical person hours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical person hours per year ( G = E x 0.1) ( H) Cost,

$ a 1. Attend add on control device performance testing 2. Repeat performance test 3. Deviations enforcement activities 4. Reporting requirements A. Review regulation 2 2 4 1 4 0 0 $ 186 B. Review waivers C. Review reports/ notifications Review notification of intent to conduct performance test 2 2 4 122b 488 24 49 $ 22,678 ANNUAL AVERAGE TOTAL BURDEN AND COST ( SALARY) NATIONWIDE 492 25 49 $ 22,864 a Costs are based on the following hourly rates: technical at $ 40.80, management at $ 67.44, and clerical at $ 22.99. These costs are based on 2000 wages listed by U. S. Office of Personnel Management for GS Level 12, Step 5; GS Level 15, Step 5; and GS Level 7, Step 5, respectively.

b Assumes 122 of 142 major source facilities will use add on control devices to comply with NESHAP. 23 TABLE 9. ESTIMATED AGENCY BURDEN AND COST TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP THIRD YEAR FOLLOWING THE EFFECTIVE DATE Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

EPA hours per facility per year ( C = A x B) ( D) Facilities per year ( E) Technical person hours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical person hours per year ( G = E x 0.1) ( H) Cost,

$ a 1. Attend add on control device performance testing 32 1b 32 24c 768 38 77 $ 35,690 2. Repeat performance test A. Retesting preparation 12 1b 12 6d, e 72 4 7 $ 3,346 B. Attend retesting 32 1b 32 6 192 10 19 $ 8,922 3. Deviations enforcement activities 4. Reporting requirements A. Review regulation 2 2 4 1 4 0 0 $ 186 B. Review waivers $ 0 C. Review reports/ notifications Review performance test report 2 0.2f 0 122g 49 2 5 $ 2,268 ANNUAL AVERAGE TOTAL BURDEN AND COST ( SALARY) NATIONWIDE 1,085 54 108 $ 50,412 ANNUAL AVERAGE TRAVEL EXPENSESh $ 21,000 AVERAGE TOTAL COST = ANNUAL AVERAGE COST + ANNUAL AVERAGE TRAVEL EXPENSES 1,085 54 108 $ 71,412 a Costs are based on the following hourly rates: technical at $ 40.80, management at $ 67.44, and clerical at $ 22.99. These costs are based on 2000 wages listed by U. S. Office of Personnel Management for GS Level 12, Step 5; GS Level 15, Step 5; and GS Level 7, Step 5, respectively.

b Assumes 1 add on control device per facility.

c Assumes EPA will attend 20% of performance tests for 122 facilities using add on control devices.

d Assumes 20% of facilities will fail the initial performance test and all those who fail will repeat it.

e Assumes EPA will attend 25% of the retests.

f Assumes one performance test per facility with add on control devices every five years ( or 0.20 reports per year).

g Assumes 122 of 142 major source facilities will use add on control devices to comply with NESHAP.

h Assumes performance tests require 4 days per facility: ( Travel costs= [( 1 person x ( 24+ 6) facilities/ yr x 4 d/ facility x $ 50/ d) + ($ 500/ round trip x ( 24+ 6)

round trips/ yr)]) 24 TABLE 10. SUMMARY OF AGENCY BURDEN HOURS AND COSTS TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP Total burden ( hours) Total costs ($)

First year following the effective date 662 $ 26,767 Second year following the effective date 566 $ 22,864 Third year following the effective date 1,247 $ 71,412 Total 2,475 $ 121,043 Bottom line annual burden 825 $ 40,348 25 ATTACHMENT 1 Burden and Cost of Monitoring, Recordkeeping, and Reporting Requirements For the Fourth, Fifth, and Sixth Years Following the Effective Date 26 BURDEN AND COST OF MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR THE FOURTH, FIFTH, AND SIXTH YEARS FOLLOWING THE EFFECTIVE DATE 1. The Information Collected    Respondent Activities and Agency Activities ( a) Respondent Activities As shown in the Supporting Statement, there are many activities that occur in the three years between the effective date and the compliance date of the regulation. These include the Initial Notification, the Notification of Intent to Conduct a Performance Test, performance test report, buying computer equipment, buying monitoring equipment, buying filing cabinets, setting up a spreadsheet tracking system, and training the coating personnel to accurately track coating usages.

In the three years following the compliance date, there are recurrent activities that are required of the respondents. These include training, coordinating the transfer of information between departments, checking spreadsheets for accuracy, compiling and maintaining records of coatings data each week, adjusting process to comply with standard, calculating 12 month rolling average organic HAP emissions, entering data into spreadsheet, tracking coating usage in spreadsheet or log book, writing semiannual reports, writing compliance status reports, writing reports of no deviations, and writing deviation reports ( if necessary).

( b) Agency Activities As shown in the Supporting Statement, the agency burden include many activities during the three years between the effective date and the compliance date. These include reviewing the notifications, and attending the performance testing and re testing, if needed.

During the three years following the compliance date, the agency burden increases with recurrent activities such as responding to deviations through enforcement activities, reviewing regulation, reviewing semiannual reports, reviewing compliance status reports, reviewing reports of no deviations, and reviewing deviation reports.

2. Estimating the Burden and Cost of the Collection ( a) Estimating Respondent Burden and Costs ( i) Estimating respondent burden and labor costs. This ICR uses labor rates calculated for the affected Standard Industrial Classification ( SIC) code 3411. The labor rates for technical, management, clerical, and coating operations staff were calculated using Bureau of Labor Statistics data for SIC code 341. The fully burdened labor rate, which includes overhead, profit, and all employee benefits, was found by summing the base labor rate and 110% of the base labor rate, per guidance from EPA's Regulatory Information Department ( RID). The hourly rates used for technical, managerial, clerical, and " coating, painting and spraying machine operator" were $ 73.35, $ 83.58, $ 27.93, and $ 30.26, respectively. 27 Since the respondent activities are recurrent for years four, five, and six, the information is shown in Table 1, along with all assumptions made. For these three years, the total burden to the 142 major sources is estimated to be $ 7.5 million. The labor requirements total 169,402 hours.

( ii) Estimating capital costs. There are no capital costs estimated for the three years following the compliance date.

( b) Estimating Agency Burden and Costs Labor rates and associated costs are based on 2000 labor rates from the U. S. Office of Personnel Management ( OPM). The estimated wage rates are $ 67.44/ hr ( GS 15/ 3 level) for management, $ 40.80/ hr ( GS 12/ 3 level) for technical, and $ 22.99/ hr ( GS 6/ 3 level) for clerical. These hourly rates include a factor of 1.6 to account for employee benefits.

Since the agency activities are recurrent for years four, five, and six, the information is shown in Table 2, along with all assumptions made. For these three years, the total agency burden is estimated to be $ 61,081 annually. The labor requirements total 1,408 hours annually. 28 TABLE 1. ESTIMATED RECURRENT BURDEN AND COST TO INDUSTRY TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

Person hours per respondent per year ( C = A x B) ( D) Respondents per year ( E) Technical personhours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical personhours per year ( G = E x 0.1) ( H)

Cost, $ a 1. Applications N/ A 2. Surveys and studies N/ A 3. Reporting requirements A. Read regulation 1 1 1 142b 142 7 14 11,406 B. Required activities Technical Training of coating related personnel each year 4 4c 15.2 142 2,158 108 216 173,367 Coordinate purchasing, operations and clerical for information transfer each month 1 12 12 142 1,704 85 170 136,869 Check spreadsheet for data entry errors weekly 1 50d 50 142 7,100 355 710 570,286 Compile and maintain records of coatings data each week 1.5e 50d 75 142 10,650 533 1,065 855,429 Using compiled data, adjust process to comply with standard every quarter 2 4 8 142 1,136 57 114 91,246 Clerical Enter data into spreadsheet to tabulate information each day 1f 250g 250 142 0 0 35,500h 991,515 Operations Track coating usage in spreadsheet or log book each shift 1i 500j 500 142 71,000 0 0 2,148,460k Periodic checking of monitoring equipment 0.5l 500j 250 122m 30,500 0 0 922,930k Maintenance of monitoring equipment 2n 4 8 122m 976 0 0 29,534k Calibration of CPMS 8o 1 8 122m 976 0 0 29,534k D. Create information Incl. in 3B 0 E. Gather existing information Incl. in 3B 0 F. Write semi annual report Write compliance status report 4e 2 8 135p 1,080 54 108 86,748 Report of no deviations 8e 2 16 135p 2,160 108 216 173,496 Write report of excess emissions 16e 2 32 7q 224 11 22 17,992 TOTAL RECURRENT BURDEN AND COST 129,806 1,318 38,135 6,238,811 TOTAL CAPITAL COSTS ( MONITORING EQUIPMENTr 70,100 TOTAL CAPITAL COSTS ( COMPUTER EQUIPMENT) s 17,000 TOTAL CAPITAL EQUIPMENT COSTS ( FILING CABINETS) 4,970 TOTAL COSTS FOR PERFORMANCE TESTING OF CONTROL EQUIPMENTt 1,147,000 OPERATION AND MAINTENANCE COSTu 142 5,991 TOTAL RECURRENT BURDEN AND COST ( ALL) 129,806 1,318 38,277 7,483,872 AVERAGE RECURRENT BURDEN AND COST PER FACILITY: 914v 9 270 52,703 a Costs are based on the following hourly rates: technical at $ 73.35, management at $ 83.58, clerical at $ 27.93, and " coating, painting and spraying machine operator" at $ 30.26.

b Assumes all 142 major source facilities will read the regulation.

c Training will occur quarterly with 9 trainees per session.

d Assumes 50 weeks per year.

e From ESD manual Table 3 " Burden of NSPS and NESHAP Notification Reports, Excess Emission Reports and Recordkeeping."

f Assumes 1 minute per entry.

g Assumes 50 weeks per year and 5 days per week.

h Assumes clerical instead of technical labor rate for data entry. ( G= C x D)

i Assumes 2 minutes per entry per shift.

j Assumes 2 shifts per day, 5 days per week, and 50 weeks per year.

k Cost is based on a Coating, Painting and Spraying Machine Operator weighted labor rate of $ 30.26.

l Assumes one 15 minute monitor check per shift and 2 shifts per day.

m Assumes 122 of 142 major source facilities will use add on control devices to comply with the NESHAP.

n Assumes 2 hours of preventative maintenance on a quarterly basis.

o Assumes 8 hours of calibration occurs once per year.

p Assumes 95 percent of 142 major source facilities will be in compliance.

q Assumes 5 percent of 142 major source facilities will be out of compliance r Assumes data acquisition system consists of $ 3000 for data logger and $ 1000 for software and accessories annualized over 5 years at 7% interest.

s The use of computer equipment is based on the coating usage of each facility and is costed at $ 2000 per facility with an interest rate of 7 percent and an equipment life of 5 years.

t Performance testing assumes the use of a contractor for 240 hours at a rate of $ 80 per hour annualized over 5 years at 7% interest.

u Operation and maintenance costs include photocopying and postage costs for 284 reports per year using a postage of $ 7.63 per report and 0.5 hours of clerical labor for photocopying.

v Includes 186 hours of technical labor at $ 73.35 per hour and 729 hours of a machine operator at $ 30.26 per hour. TABLE 2. ESTIMATED RECURRENT BURDEN AND COST TO THE AGENCY TO IMPLEMENT MONITORING, RECORDKEEPING, AND REPORTING REQUIREMENTS FOR METAL CAN MANUFACTURING ( SURFACE COATING) NESHAP Burden item ( A)

Personhours per occurrence ( B) Number of occurrences per year ( C)

EPA hours per facility per year ( C = A x B) ( D) Facilities per year ( E) Technical person hours per year ( E = C x D) ( F) Management person hours per year ( F = E x 0.05) ( G) Clerical person hours per year ( G = E x 0.1) ( H) Cost,

$ a 1. Attend add on control device performance testing 2. Repeat performance test A. Retesting preparation B. Attend retesting 3. Deviations enforcement activities 16b 1 16 7c 112 6 11 $ 5,205 4. Reporting requirements A. Review regulation 2 2 4 1 4 0 0 $ 186 B. Review waivers C. Review semi annual reports Review compliance status report 2 2 4 135d 540 27 54 $ 25,094 Review performance test report Review report of no deviations 2 2 4 135d 540 27 54 $ 25,094 Review deviation report 2 2 4 7c 28 1 3 $ 1,301 ANNUAL AVERAGE TOTAL BURDEN AND COST ( SALARY) NATIONWIDE 1,224 61 122 $ 56,881 ANNUAL AVERAGE TRAVEL EXPENSESd $ 4,200 AVERAGE TOTAL COST = ANNUAL AVERAGE COST + ANNUAL AVERAGE TRAVEL EXPENSES 1,224 61 122 $ 61,081 a Costs are based on the following hourly rates: technical at $ 40.80, management at $ 67.44, and clerical at $ 22.99. These costs are based on 2000 wages listed by U. S.

Office of Personnel Management for GS Level 12, Step 5; GS Level 15, Step 5; and GS Level 7, Step 5, respectively.

b Assumes an EPA follow up visit of 2 days per deviation report.

c Assumes 5% of 142 major source facilities will be out of compliance.

d Assumes 95% of 142 major source facilities will be in compliance.

e Assumes enforcement visits require 2 days per facility:

[ Travel costs= [( 1 person x 7 facilities/ yr x 2 d/ facility x $ 50/ d) + ($ 500/ round trip x 7 round trips/ yr)]


[Federal Register Volume 78, Number 87 (Monday, May 6, 2013)]
[Notices]
[Pages 26410-26412]
[FR Doc No: 2013-10607]

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SECURITIES AND EXCHANGE COMMISSION

[Investment Company Act Release No. 30497; 812-14135]

Beverly Hills Bancorp Inc.; Notice of Application

April 30, 2013.
AGENCY: Securities and Exchange Commission (the ``Commission'').

ACTION: Notice of application for an order under sections 6(c) and 6(e)
of the Investment Company Act of 1940 (``Act'') for an exemption from
all provisions of the Act, except sections 9, 17(a), 17(d), 17(e),
17(f), 36 through 45, and 47 through 51 of the Act and the rules
thereunder, modified as discussed in the application.

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SUMMARY: Summary of Application: The requested order would exempt the
applicant, Beverly Hills Bancorp Inc. (``BHBC''), from certain
provisions of the Act until the earlier of one year from the date of
the requested order or such time as BHBC would no longer be required to
register as an investment company under the Act. The requested
exemption would extend an exemption originally granted until May 15,
2013.\1\
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    \1\ Beverly Hills Bancorp Inc., Investment Company Act Release
Nos. 30036 (April 18, 2012) (notice) and 30064 (May 15, 2012)
(order) (``Original Order'').

DATES: Filing Dates: The application was filed on March 15, 2013 and
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amended on April 26, 2013.

HEARING OR NOTIFICATION OF HEARING: An order granting the application
will be issued unless the Commission orders a hearing. Interested
persons may request a hearing by writing to the Commission's Secretary
and serving applicants with a copy of the request, personally or by
mail. Hearing requests should be received by the Commission by 5:30
p.m. on May 23, 2013 and should be accompanied by proof of service on
applicants, in the form of an affidavit or, for lawyers, a certificate
of service. Hearing requests should state the nature of the writer's
interest, the reason for the request, and the issues contested. Persons
who wish to be notified of a hearing may request notification by
writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090. Applicant, Post Office Box 8280,
Calabasas, CA 91372.

FOR FURTHER INFORMATION CONTACT: Deepak Pai, Senior Counsel, at (202)
551-6876, or Mary Kay Frech, Branch Chief, at<PHONE_NUMBER> (Division
of Investment Management, Exemptive Applications Office).

SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or an applicant
using the Company name box, at http://www.sec.gov/search/search.htm or
by calling<PHONE_NUMBER>.

Applicant's Representations

    1. BHBC is a bank holding company that conducted its banking and
lending

operations through its wholly-owned subsidiary First Bank of Beverly
Hills, a California banking corporation (the ``Bank''). From its
incorporation in 1996 until April 24, 2009, the Bank was the source of
substantially all of BHBC's revenues and income. The Bank sustained
substantial losses in its real estate loan and mortgage-backed
securities portfolios, and as of December 31, 2008, it no longer met
applicable regulatory capital requirements. As a result, on February
13, 2009, the Federal Deposit Insurance Corporation (``FDIC'') and the
California Department of Financial Institutions (the ``CDFI'') issued
an order requiring the Bank to increase its regulatory capital within
60 days. Because the Bank was unable to increase its regulatory capital
within the specified time period, on April 24, 2009, the CDFI closed
the Bank and the FDIC was appointed as the Bank's receiver.
    2. BHBC has one class of common stock outstanding, which it
voluntarily delisted from the NASDAQ Global Select Market on February
12, 2009. On February 19, 2009, BHBC deregistered its common stock
under Section 12(g) of the Securities Exchange Act of 1934, as amended
(the ``Exchange Act''), and on March 13, 2009, its reporting
obligations under Section 15(d) of the Exchange Act were suspended. As
such, BHBC is no longer subject to the reporting requirements of the
Exchange Act and its common stock is traded on the Pink Sheets. As of
February 28, 2013, BHBC had 79 holders of record.
    3. BHBC has options outstanding under an equity incentive plan, the
2002 Equity Participation Plan (the ``Plan''). All outstanding awards
under the Plan were granted prior to the FDIC's appointment as receiver
for the Bank. As of February 28, 2013, the only options outstanding
under the Plan are options to purchase 120,000 shares of BHBC common
stock, all of which are held by four persons, each of whom is a
director and/or officer of BHBC. BHBC will not issue any additional
awards under the Plan.
    4. As of January 31, 2013, on a consolidated basis, for financial
reporting purposes BHBC has assets of $7.9 million, liabilities of
$40.4 million, and a stockholders' equity of negative $32.5 million. On
a non-consolidated basis, BHBC's assets total approximately $6.3
million. BHBC currently has invested the assets in Permitted Securities
(as defined below) since the Original Order.
    5. BHBC has several direct or indirect wholly owned subsidiaries,
none of which has any ongoing business or operations. As of January 31,
2013, the following assets were held by BHBC subsidiaries: (i) Wilshire
Acquisitions Corporation (``Wilshire Asquisitions'') has assets with a
book value of $161,936 consisting of accrued interest and prepaid
expenses related to a subsidiary trust; (ii) WFC Inc. has assets with a
book value of $331,589 consisting of approximately 16 small consumer
and residential mortgage loans, cash, and prepaid expenses; and (iii)
BH Commercial Capital I, Inc. has assets with a book value of
$1,084,799 consisting of two secured commercial real estate loans
(collectively, the ``Subsidiary Assets''). In addition, BHBC also
either directly or indirectly owns the common securities of two
subsidiary trusts that were formed in connection with offerings of
trust preferred securities in which the trust subsidiaries issued their
common securities to BHBC or Wilshire Acquisitions and their preferred
securities to third party investors. The subsidiary trusts then loaned
all the proceeds of the sale of trust preferred securities to BHBC or
Wilshire Acquisitions in exchange for junior subordinated debentures
(the ``Subordinated Debentures''). The subsidiary trusts have no assets
other than the Subordinated Debentures.
    6. BHBC's liabilities consist principally of $25.8 million of the
Subordinated Debentures issued to its two direct trust subsidiaries and
$10.3 million of Subordinated Debentures issued to its indirect trust
subsidiary. In the aggregate, interest in an approximate amount of
$900,000 accrues on a yearly basis pursuant to these three series of
Subordinated Debentures. BHBC states that there is no public market for
the Subordinated Debentures or the trust preferred securities. Under
the terms of the Subordinated Debentures, BHBC may defer interest
payments for up to 20 consecutive quarters.\2\ On January 29, 2009,
BHBC elected to exercise this right and no payments are due under the
Subordinated Debentures until March, 2014.
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    \2\ During the period when interest payments are being deferred,
interest continues to accrue, compounding quarterly, at an annual
rate equal to the interest in effect for such period and must be
paid at the end of the deferral period.
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    7. BHBC may be subject to contingent liabilities of uncertain
amounts related to claims associated with its former operations, as
well as regulatory and stockholder claims in connection with the
failure of the Bank. In addition, current and former directors and
officers of the Bank are subject to two pending actions (the
``Actions'') in connection with the failure of the Bank. These are: (a)
An administrative action brought by the FDIC in 2011 against two former
officers (one of whom has settled) seeking certain administrative
sanctions and penalties; and (b) a lawsuit brought by the FDIC in
April, 2012 against the Bank's former directors (including all four
current members of the board of directors of BHBC) and several former
officers of the Bank for negligence, gross negligence, and breach of
fiduciary duty in connection with their activities with the Bank. The
latter action seeks $100.6 million in damages related to losses
allegedly incurred by the Bank on certain loans.
    8. BHBC states that it is subject to indemnification and expense
obligations in connection with various actions brought against its
current and former directors, officers, employees or agents. As a
result, BHBC is indemnifying these directors and officers in connection
with the Actions. The potential amount of the indemnification claim is
unknown.
    9. Since the Bank was placed into receivership, BHBC has had no
active business or operations. Within several months of the
receivership, BHBC terminated all employees, and since that time has
paid two consultants on an hourly basis primarily for administrative
and accounting services. BHBC does not maintain an office and is
managed by its four member board of directors, which has considered
various alternatives, including liquidation and acquisition of an
operating business, while preserving its assets. BHBC states that
because of its financial condition and contingent liabilities, pursuing
these courses of action has not been feasible.

Applicant's Legal Analysis

    1. Section 3(a)(1)(A) of the Act defines an investment company as
any issuer who ``is or holds itself out as being engaged primarily . .
. in the business of investing, reinvesting or trading in securities.''
Section 3(a)(1)(C) of the Act further defines an investment company as
an issuer who is engaged in the business of investing in securities
that have a value in excess of 40% of the issuer's total assets
(excluding government securities and cash).
    2. Section 6(c) of the Act provides that the Commission may exempt
any person from any provision of the Act if such exemption is necessary
or appropriate in the public interest and consistent with the
protection of investors and the purposes fairly intended by the policy
and provisions of the Act. Section 6(e) provides that, in connection
with any order exempting an investment company from any provision of
section 7, certain provisions of the Act, as specified by the
Commission, shall apply to the company and other persons

dealing with the company, as if such company were a registered
investment company.
    3. BHBC acknowledges that it may be deemed to fall within one of
the Act's definitions of an investment company. Accordingly, BHBC
requests an order of the Commission pursuant to sections 6(c) and 6(e)
of the Act exempting it from all provisions of the Act, subject to
certain exceptions described below. BHBC requests an exemption until
the earlier of one year from the date of the requested order or such
time as it would no longer be required to register as an investment
company under the Act. During the term of the proposed exemption, BHBC
states that it will comply with sections 9, 17(a), 17(d), 17(e), 17(f),
36 through 45, and 47 through 51 of the Act and the rules thereunder,
subject to certain modifications described in the application.
    4. BHBC requests exemptive relief to the extent necessary to permit
it to hold certain types of instruments that may be considered
``securities'', as defined in section 2(a)(36) under the Act, such as
short-term U.S. government securities, certificates of deposit and
deposit accounts with banks that are insured by the FDIC, shares of
registered money market funds, and any instruments that are eligible
for investment by money market funds consistent with rule 2a-7 under
the Act (collectively, ``Permitted Securities'') without being required
to register as an investment company under the Act. BHBC requests this
relief in order to permit it to preserve the value of its assets for
the benefit of its security holders, and submits that this relief is
necessary and appropriate for the public interest.
    5. In determining whether to grant relief for a company in an
extended transition period, the following factors are considered: (a)
Whether the failure of the company to become primarily engaged in a
non-investment business or excepted business or to liquidate within one
year was due to factors beyond its control; (b) whether the company's
officers and employees during that period tried, in good faith, to
effect the company's investment of its assets in a non-investment
business or excepted business or to cause the liquidation of the
company; and (c) whether the company invested in securities solely to
preserve the value of its assets. BHBC believes that it meets these
criteria.
    6. BHBC believes its failure to become primarily engaged in a non-
investment business or to liquidate within a year following the
receivership of the Bank is due to factors beyond its control. The
board of directors of BHBC has regularly considered the feasibility of
liquidating or engaging in an operating non-investment business and
concluded that it is not feasible to commence or acquire a non-
investment business or liquidate as a result of BHBC's negative net
worth and the uncertainties associated with actual and potential
litigation and regulatory claims. BHBC states that the contingent
liabilities make it impossible to liquidate BHBC and distribute its
assets to creditors and make it imprudent to utilize any substantial
part of its assets in an operating business. BHBC states that these
circumstances are unlikely to change over the requested one-year period
in light of the nature of the actual and contingent liabilities. BHBC
states that it has invested its liquid assets solely to preserve the
value of its assets and has invested solely in Permitted Securities
since the Original Order. BHBC does not believe its current ownership
of certain loans acquired prior to its receivership is inconsistent
with its purpose of preserving the value of its assets for the benefit
of its security holders. BHBC thus believes that the public interest
will be best served by permitting it to continue to invest in Permitted
Securities while its liabilities are resolved.

Applicant's Conditions

    Applicant agrees that the requested order will be subject to the
following conditions:
    1. BHBC will not purchase or otherwise acquire any securities other
than Permitted Securities, except that BHBC may acquire equity
securities of an issuer that is not an ``investment company'' as
defined in section 3(a) of the Act or is relying on an exclusion from
the definition of ``investment company'' under section 3(c) of the Act
other than section 3(c)(1) or 3(c)(7), in connection with the
acquisition of an operating business as evidenced by a resolution
approved by BHBC's board of directors. BHBC may continue to hold the
Subsidiary Assets.
    2. BHBC will not hold itself out as being engaged in the business
of investing, reinvesting, owning, holding, or trading in securities.
    3. BHBC will not make any primary or secondary public offerings of
its securities, and it will notify its stockholders that an exemptive
order has been granted pursuant to sections 6(c) and 6(e) of the Act
and that BHBC and other persons, in their transactions and relations
with BHBC, are subject to sections 9, 17(a), 17(d), 17(e), 17(f), 36
through 45, and 47 through 51 of the Act, and the rules thereunder, as
if BHBC were a registered investment company, except as permitted by
the order requested hereby.
    4. Notwithstanding sections 17(a) and 17(d) of the Act, an
affiliated person (as defined in section 2(a)(3) of the Act) of BHBC
may engage in a transaction that otherwise would be prohibited by these
sections with BHBC:
    (a) If such proposed transaction is first approved by a bankruptcy
court on the basis that (i) the terms thereof, including the
consideration to be paid or received, are reasonable and fair to BHBC,
and (ii) the participation of BHBC in the proposed transaction will not
be on a basis less advantageous to BHBC than that of other
participants; and
    (b) in connection with each such transaction, BHBC shall inform the
bankruptcy court of: (i) The identity of all of its affiliated persons
who are parties to, or have a direct or indirect financial interest in,
the transaction; (ii) the nature of the affiliation; and (iii) the
financial interests of such persons in the transaction.

    For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Kevin M. O'Neill,
Deputy Secretary.
[FR Doc. 2013-10607 Filed 5-3-13; 8:45 am]
BILLING CODE 8011-01-P