Exemptions of Certain Area Sources From Title V Operating Permits Programs EPA RESPONSE TO COMMENTS RECEIVED DURING PUBLIC COMMENT PERIOD U. S. Environmental Protection Agency Office of Air Quality Planning and Standards Information Transfer and Program Integration Division Operating Permit Group December, 2005 2 TABLE OF CONTENTS Chapter Introduction 1.0 General Reaction to the Proposal 2.0 Is EPA's General Approach to Exemptions Consistent with the Act and Its Legislative History?

2.1 The First Factor   Does Title V Add Significant Compliance Requirements to the NESHAP?

2.2 The Second Factor   Does Title V Impose Significant Burdens on These Area Sources?

2.3 The Third Factor   Are Title V Costs Justified Considering Potential Gains in Compliance?

2.4 The Fourth Factor   Can Adequate Oversight Achieve High Compliance Without Title V?

2.5 The Legislative History   Will These Exemptions Have Adverse Affects on Public Health, Welfare, or the Environment?

2.6 Other Comments on the Factors used in the Proposal 3.0 What Other Factors Did Commenters Believe EPA Should Consider?

4.0 Is it Reasonable for EPA to Rely on the Information Cited in Support of the Proposal?

5.0 May Title V Permits be Issued to Area Sources After EPA Exempts Them?

6.0 Should General Permits be Required as an Alternative to Title V Exemptions?

7.0 Are the Proposed Revisions to the EO Sterilizer NESHAP Appropriate?

8.0 Will EPA Require Permits for Area Sources Subject to the Secondary Lead NESHAP?

9.0 Comments on the Scope of the Title V Exemptions? 3 10.0 Comments on Specific Categories of Area Sources?

10.1 Perchloroethylene Dry Cleaners 10.2 Chromium Electroplaters 10.3 Halogenated Solvent Degreasers 10.4 Ethylene Oxide ( EO) Sterilizers 10.5 Secondary Aluminum Smelters APPENDIX A   Public Comments Received on the Proposal of March 25, 2005 to Exempt Area Sources Subject to Certain NESHAP from State and Federal Operating Permits ( EDocket OAR 2004 0010) i Introduction The Environmental Protection Agency ( EPA) proposed changes to 40 CFR parts 63, 70 and 71 on March 25, 2005 ( 70 FR 15250) to exempt all area ( non major) sources subject to certain national emissions standards for hazardous air pollutants ( NESHAP) from the obligation to obtain and comply with operating permits issued by State and federal agencies under authority of title V of the Clean Air Act ( Act) in certain circumstances. The five NESHAP under part 63 are perchloroethylene dry cleaners ( Subpart M), chromium electroplaters ( Subpart N), commercial ethylene oxide ( EO) sterilizers ( Subpart O), halogenated solvent degreasers ( Subpart T), and secondary aluminum production ( Subpart RRR). Specifically, EPA proposed to revise certain regulatory language in these NESHAP that describe permitting obligations under the part 70 and 71 rules for area sources subject to the NESHAP, and to make certain related revisions to the part 70 and 71 rules consistent with these exemptions.

The opportunity for written public comment on the proposal was announced in the March 25 notice. The 60 day comment period lasted from March 25, 2005 through May 24, 2005. During that period, approximately 32 different public comments were received, composed of 66 separate entries in the docket. All comments, whether received late or not, are included in the comment summaries in this document. Appendix A at the end of this document contains a table identifying each public comment on the proposal. In this document, we identify each commenter by using its document ID from E docket OAR 2004 0010. For example, " commenter 9" identifies the comments contained in document ID 9 in E docket OAR 2004 0010.

The full text of each comment is available for public inspection and copying at the Air Docket in the EPA Docket Center, ( EPA/ DC) EPA West Building, Room B102, 1301 Constitution Ave., NW, Washington, DC, 20004. The EPA Docket Center Public Reading Room is open from 8: 30 a. m. to 4: 30 p. m., Monday through Friday, excluding legal holidays. The telephone number for the Reading Room is ( 202) 566 1744, and the telephone number for the Air Docket is ( 202) 566 1742. Copies also may be mailed on request from the Air Docket by calling ( 202) 260 7548. A reasonable fee may be charged for copying. An electronic version of public comments on the proposal are contained in e docket Id No. OAR 2004 0010, which can be accessed through the federal wide eRulemaking site at www. regulations. gov.

The primary purpose of this document is to respond to comments on the proposal of March 25, 2005. This document contains summaries of the public comments received and EPA responses to those comments. This document responds to all comments received, whereas the preamble of the final rule for this action only responds to significant comments. Also note that many responses in this document are identical to those contained in the preamble of the final rule.

The comments in this document are grouped into categories to reflect major issues discussed in the proposal, including the four factors and other rationale for exemptions, the application of those factors and rationale to specific categories of area sources, the alternative proposal of requiring general permits, among other issues. The scope and range of comments ii received was such that certain comments fell into multiple categories and we have represented such comments in multiple categories, whenever it was useful for giving a fuller response.

This document does not respond to comments that are not relevant to this rulemaking and such comments are not summarized in this document. In general, this document summarizes comments that were supportive of the proposal, but does not provide a response to them. 1 1.0 General Reaction to the Proposal In general, about half of the commenters supported the proposal, and half did not.

Opposing the proposal, in general, were citizens ( commenters 9, 10, 12, and 13), many representatives of the secondary aluminum industry ( commenters 17, 18, 19, 20, 24, 25, 27, 29, and 58), the ethylene oxide ( EO) sterilizer industry ( commenters 23 and 56), and environmental groups ( commenters 55, 57, and 66). Many commenters who opposed exemptions generally, supported issuing general permits instead, and many secondary aluminum industry commenters were concerned that area sources in their industry would get an economic advantage over major sources through the title V exemptions.

The supporters of the proposal included State and local permitting agencies ( commenters 11, 16, 59, 61, and 65), the U. S. Department of Energy ( commenter 14), representatives of the dry cleaning industry ( commenters 21 and 31), the secondary aluminum industry ( commenters 22, 26, and 60), the EO sterilizer industry ( commenters 58 and 62), and of industries that use halogenated solvent degreasing equipment ( commenters 28, 30, and 31). Many State and local permitting agencies ( State agencies) disagreed with the proposal that they may not issue title V permits to area sources after EPA has exempted them from title V.

Finally, whether supporting the proposal or not, commenters on the exemption for EO sterilizers were concerned about the text of the proposed regulatory revisions to § 63.360( f), and asked EPA to revise that language before issuing the final rule.

2.0 Is EPA's General Approach to Exemptions Consistent with the Act and Its Legislative History?

Comment: Commenters 14, 16, 30, 31, 59, 62, and 65 generally agree that the four factors EPA used to analyze exemptions from title V permitting were consistent with the " impracticable, infeasible, or unnecessarily burdensome" criteria of section 502( a) of the Act, and consistent with the legislative history that such exemptions " not adversely affect public health, welfare, or the environment." Commenter 11 more plainly said that permitting these area sources will be impracticable, infeasible, and unnecessarily burdensome. Commenters 11, 30, 31, 61, and 65 expressed support for EPA's finding that exempting these area sources will not adversely affect public health, welfare, or the environment, while commenter 31 added that the four factors are appropriate to determine whether any of these adverse impacts will occur. In support of the proposal, a local title V permitting authority ( commenter 11) said there would be no adverse affects on public health in their jurisdiction from the proposal because they perform inspections at all facilities subject to NESHAP and these facilities are part of their bi annual Compliance Monitoring Strategy Plan, which involves compliance evaluation and enforcement procedures.

On the other hand, commenters 10, 12, 13, 27, 29, 55, and 66 disagreed with the 2 proposed exemptions in general, EPA's findings concerning specific categories of area sources, the four factors and other rationale EPA used to make these findings, or they suggested other factors or rationale EPA should have used to analyze title V exemptions for these area sources. Commenter 55 opined that the proposal disregards the plain language and purposes of the Act, that the proposed justifications for exemptions in the proposal were based on factors that Congress clearly did not intend, that there is no reasoned, record supported explanation for why the proposed exemptions would not negatively impact public health, welfare, and the environment, and that EPA's statutory authority to exempt non major sources is sharply limited by Congress in the legislative history for section 502( a) of the Act.

Response: Section 502( a) of the Clean Air Act ( Act) sets forth the sources required to obtain operating permits under title V. These sources include: ( 1) any affected source subject to the acid deposition provisions of title IV of the Act; ( 2) any major source; ( 3) any source required to have a permit under Part C or D of title I of the Act; ( 4) " any other source ( including an area source) subject to standards or regulations under section 111 [ new source performance standards] or 112 [ NESHAP)]" and ( 5) any other stationary source in a category designated by regulations promulgated by the Administrator. See 40 CFR 70.3( a) and 71.3( a). The requirements of section 502( a) are primarily implemented through the operating permit program rules: Part 70, which sets out the minimum requirements for title V operating permit programs administered by State, local, and tribal permitting authorities ( 57 FR 32261, July 21, 1992), and part 71, the federal operating permit program requirements that apply where EPA or a delegate agency authorized by EPA to carry out a Federal permit program is the title V permitting authority ( 61 FR 34228, July 1, 1996). The area sources subject to NSPS under section 111 or NESHAP under section 112 [ addressed in category ( 4) above] are identified in § § 70.3( a)( 2) and ( 3) and § § 71.3( a)( 2) and ( 3) as among the sources subject to title V permitting requirements.

Section 502( a) of the Act also provides that " the Administrator may, in the Administrator's discretion and consistent with the applicable provisions of [ the Clean Air Act], promulgate regulations to exempt one or more source categories ( in whole or in part) from the requirements [ of title V] if the Administrator finds that compliance with such requirements is impracticable, infeasible, or unnecessarily burdensome on such categories, except that the Administrator may not exempt any major source from such requirements."

In the part 70 final rule of July 21, 1992, EPA permanently exempted from title V two categories of area sources that are subject to section 111 and 112 standards established prior to the part 70 rule ( pre 1992 standards): new residential wood heaters subject to subpart AAA of part 60 ( NSPS), and asbestos demolition and renovation operations subject to subpart M of part 61 ( NESHAP). See § § 70.3( b)( 4) and 71.3( b)( 4). The EPA also allowed permitting authorities under part 70 the option to defer permitting for other area sources subject to pre 1992 standards, while for part 71 purposes, we simply deferred issuing permits to them. See 57 FR 32261 32263 ( July 21, 1992), and § § 70.3( b)( 1) and 71.3( b)( 1).

The post 1992 standards, including the NESHAP for area sources that are the subject of 3 today's final rule, previously have been addressed in § § 70.3( b)( 2) and 71.3( b)( 2), which state that EPA will determine whether to exempt from title V permitting any or all area sources subject to post 1992 NSPS or NESHAP at the time each new standard is promulgated. Subsequently, EPA issued title V exemptions for several area sources subject to NESHAP in final rules under part 63: ° All area sources within the NESHAP for publicly owned treatment works ( POTW), Subpart VVV. See § 63.1592 ( 63 FR 64742, October 21, 2002). ° Those area sources conducting cold batch cleaning within the NESHAP for halogenated solvent cleaning, Subpart T. See § 63.468( j) ( 59 FR 61802, December 2, 1994). ° Three types of area sources within the NESHAP for hard and decorative chromium electroplating and chromium anodizing tanks, Subpart T. See § 63.340( e)( 1) ( 61 FR 27785, June 3, 1996).

The EPA has issued three post 1992 NESHAP that defer the requirement for area sources to obtain title V permits: ° Area sources subject to the NESHAP for perchloroethylene dry cleaning, subpart M; chromium electroplating and anodizing, subpart N; commercial ethylene oxide sterilization, subpart O; and secondary lead smelting, subpart X. See 61 FR 27785, June 3, 1996; ° Area sources subject to the NESHAP for halogenated solvent cleaning, subpart T. See 59 FR 61801, December 2, 1994, as amended by 60 FR 29484, June 5, 1995; and ° Area sources subject to the NESHAP for secondary aluminum production, subpart RRR. See 65 FR 15690, March 23, 2000. The first two rules established deferrals of area source permitting, which expired on December 9, 1999. The expiration date for these deferrals was extended to December 9, 2004 in another final rule ( 64 FR 69637, December 14, 1999). The third rule provided deferrals for secondary aluminum area sources, which also expired on December 9, 2004. Thus, today's final rule addresses all six categories of area sources subject to a post 1992 NESHAP that were subject to deferrals from permitting that expired on December 9, 2004.

The EPA published a notice of proposed rulemaking on March 25, 2005 ( 70 FR 15250), where we proposed to exempt from title V five categories of area sources subject to NESHAP: dry cleaners, halogenated solvent degreasers, chrome electroplaters, ethylene oxide ( EO) sterilizers and secondary aluminum smelters. As support for the proposed exemptions, we discussed why compliance with title V appeared to be impracticable, infeasible, or unnecessarily burdensome on the area sources, consistent with the exemption criteria of section 502( a) of the Act. Also, we discussed a sixth category, area sources subject to the NESHAP for secondary lead smelters, but we did not propose to exempt them. In addition, EPA explained that the legislative history of Section 502( a) suggests that EPA should not grant exemptions where doing so would adversely affect public health, welfare, or the environment. See Chafee Baucus Statement of Senate Managers, Environment and Natural Resources Policy Division 1990 CAA Leg. Hist. 905, Compiled November, 1993 ( in that "[ t] he Act requires EPA to protect the public health, welfare and the environment, . . . this provision of the permits title prevents EPA from 4 exempting sources or source categories from the requirements of the permit program if such exemptions would adversely affect public health, welfare, or the environment").

In developing this rulemaking, EPA sought and relied on information from State and local agencies on the level of oversight they perform on these area sources. They responded with information on whether they issue permits, perform routine inspections, provide compliance assistance, and on compliance rates for them. We also received input from State small business ombudsmen and several trade associations representing dry cleaning, metal finishing, solvent cleaning, and the aluminum industry, including information on the sources and the compliance assistance programs currently available for them. In addition, the proposal provided a 60 day public comment period and public citizens, non profit organizations, State agency representatives, and affected industry representatives responded with comments, which are included in the docket, and which we respond to in this document.

In the proposal, we discussed on a case by case basis the extent to which one or more of the four factors supported title V exemptions for a given source category, and then we assessed whether considered together those factors demonstrated that compliance with title V requirements would be " unnecessarily burdensome" on the category, consistent with section 502( a) of the Act. See 70 FR 15253, March 25, 2005. The four factors and other rationale referred to in the proposal, and again in the final rule, are not intended to replace the statutory criteria for a title V exemption, but instead assist EPA in evaluating whether the statutory criteria are satisfied. The EPA used the four factors to analyze whether title V would be " unnecessarily burdensome" on the area sources, consistent with section 502( a). ( See the explanation of the four factors and other rationale of the proposal at 70 FR 15253 15255, March 25, 2005.) Factor one was used to analyze whether title V is " unnecessary" for NESHAP compliance by examining whether title V would add substantial compliance requirements over those already required by the NESHAP. Factor two was used to analyze whether title V will impose significant burdens on area sources and whether these burdens will be aggravated by difficulties area sources will experience in obtaining assistance from State agencies. Factor three was used to analyze whether title V costs are justified considering potential gains in compliance from title V. If the costs of title V are high, burdens are also high because costs are burdens; and if potential compliance gains derived from title V are low, title V is more likely to be considered " unnecessary" for NESHAP compliance. Factor four was used in the proposal to analyze whether adequate oversight by State agencies could achieve high compliance with NESHAP without title V permits. If high compliance with NESHAP can be achieved without title V, title V will more likely be considered " unnecessary" for NESHAP compliance. We have revised factor four in response to comments received on the proposal. See more on revised factor four in chapter 2.4 below.

In addition to the four factors, the EPA considered whether exempting these area source from title V permitting could cause adverse effects on public health, welfare, or the environment. We do not believe that exemptions from title V permitting for these area sources will have adverse effects on public health, welfare or the environment for the following reasons. First, as explained above, through our analysis of factors one and/ or four for each of the five categories of 5 area sources we established that title V is " unnecessary" for compliance with the NESHAP for each category of area source. Second, as we explained in the proposal, the vast majority of these area sources are typically subject to no more than one NESHAP, and few other requirements under the Act. Also, the area sources are simple sources with few emissions units and the NESHAP are relatively simple in how they apply to these area sources. Because of these characteristics, the likelihood that multiple NESHAP apply to the same area source is low, and thus the need for a title V permit to clarify multiple or overlapping NESHAP is also low. ( See docket item 08 for State input on the likelihood that multiple requirements will apply and the relative simplicity of these sources.) Also, see EPA response to comments on whether title V permits are needed to define monitoring for electroplaters, in chapter 10.2, and EPA response to comment on whether degreasers should be exempted when there are multiple applicable requirement that apply to them, in chapter 10.3, and the response to the following comment regarding the need for title V permits to clarify SIP requirements..

In addition, we explained in the proposal that requiring permitting of area sources will likely cause, at least in the first few years of implementation, permitting authorities to shift resources away from assuring compliance for major sources with existing permits, to issuing new permits for area sources. This has the potential, at least temporarily, to reduce the overall effectiveness of States' title V permit programs, which could potentially adversely affect public health, welfare, or the environment. See docket item 08, where State officials explain that permitting all the area sources proposed for exemption would triple the number of title V permits issued in the State, and that it would be difficult for them to obtain approval to obtain additional full time employees. Although State title V programs are required to have authority to raise title V fees as necessary to cover the costs of the program, in most States the program must seek budget and fee increases through the State legislature as part of the State budget process, which can lead to significant delays in getting approval to increase fees or resources to meet new demands. Also, see additional EPA response to comments on the legislative history guidance that title V exemptions for area sources should not cause adverse effects on public health, welfare, or the environment, in chapter 2.5 below.

In conclusion, the four factors and other rationale of the final rule are appropriate to analyze whether title V permitting is " unnecessarily burdensome" for these five categories of area sources, and we finalize title V exemptions for them based on our analyses of these four factors and other rationale. The clarification of the factors we did not discuss in the proposal, including the revision of factor four, contained in today's final rule, does not change our view, as stated in the proposal, that title V is " unnecessarily burdensome" for the five categories of area sources we exempt today. Thus, for these reasons we are exempting from title V area sources subject to the part 63 NESHAP for dry cleaners, halogenated solvent degreasers, chrome electroplaters, EO sterilizers and secondary aluminum smelters. See chapters 2.1 through 2.5, below for more general explanation of the four factors we used to justify exemptions, and see chapters 10.1 through 10.5 for more EPA explanation of our analysis of the four factors with respect to each category of area sources. 6 Comment: Commenters 55 and 57 said title V permits must contain State implementation plan ( SIP) requirements in order to better clarify and enforce these requirements, and thus, they are concerned that title V exemptions for these area sources will result in the loss of title V compliance benefits with respect to the SIP requirements that may also apply to these area sources, potentially resulting in adverse affects on public health, welfare, and the environment.

Response: We disagree with this comment for the reasons explained below.

First, the majority of area sources we exempt in the final rule ( all of the dry cleaners and many solvent degreasers), emit HAP that are not a criteria pollutant subject to regulation under a SIP, so such adverse effects for SIP requirements could not occur for these sources. This is the case because § 51.100( s), which defines VOC for purposes of SIP, specifically excludes perchloroethylene ( also known as tetrachloroethylene), methylene chloride ( dichloromethane), and 1,1,1 trichloroethane ( methyl chloroform) from the definition of VOC. Because the only HAP regulated by subpart M is perchloroethylene, all area source dry cleaners regulated under the NESHAP ( estimated at up to 28,000 area sources) do not emit VOC. Also, many degreasers subject to subpart T use perchloroethylene, methylene chloride, or 1,1,1, trichloroethane ( including any combination of these), and if they emit no other HAP that are VOC, then they also would not be subject to SIP requirements for VOC. We estimate that there are up to 3,800 area source degreasers subject to the NESHAP, but we have no estimate of how many of these solely emit HAP that is not VOC. Also, EPA has focused on VOC in this discussion because we are unaware of any other criteria pollutant definitions that would be met by these three HAP.

Second, title V permits for area sources are limited in scope by § § 70.3( c)( 2) and 71.3( c)( 2), which only require the emission units that cause the source to be subject to title V ( in this case the units subject to NESHAP) to be included in the permit. Under these regulations, if SIP requirements apply to an emissions unit, and NESHAP does not, the unit is not required to be included in the area source permit. For example, for a dry cleaner, the permit would only address dry cleaning equipment, not other emissions units that may be collocated at the area source, such as comfort heating systems subject only to SIP requirements. This is quite different than for major sources because § § 70.3( c)( 1) and 71.3( c)( 1) require major source permits to include all emissions units at the source, even those that would not be subject to NESHAP.

Third, in our experience the NESHAP are more stringent than typical SIP requirements that would apply to these area sources. Because of this, if a SIP and NESHAP apply to the same unit, any deficiencies in the SIP requirements are likely to be corrected by the more stringent NESHAP requirements, without the need for title V permits. Also, these NESHAP compliance requirements are consistent with the Act, such that title V permits are not needed to improve the compliance requirements of NESHAP ( this is described in more detail in chapter 2.1 below).

The commenter submitted no specific examples where emission units subject to NESHAP are also subject to SIP requirements, but two scenarios may be helpful in analyzing their claims, which we believe are without merit. Both examples involve the so called " generic applicable 1Note that these are the same emissions under different definitions, so if you control one, you control the other.

2The secondary aluminum NESHAP only regulates dioxin/ furan emissions for a limited set of emission units for area sources, while additional HAP are regulated at additional emission units for major sources. [ See § 63.1500( c).]

7 requirements" that we believe would most commonly apply to these area sources. These are relatively simple requirements that apply identically to all emissions units at a facility. Also, both are examples where the HAP meets the definition of VOC under § 51.100( s) and potentially is subject to regulation under a SIP. The first scenario is where a HAP, such as carbon tetrachloride, is regulated by the degreaser NESHAP, and it is also VOC regulated under the SIP by a pound per hour limit. 1 The second is where a HAP, such as dioxin/ furan, is regulated by the secondary aluminum NESHAP, 2 and it is also PM regulated under the SIP by a process weight limit. In both cases, EPA believes the NESHAP will be far more stringent than the SIP requirements in terms of emission controls and compliance requirements. Because of this, the NESHAP requirements will ensure that the area source also meets the SIP requirements, and the compliance requirements of the NESHAP will be consistent with the compliance requirements of the Act, including title V. In addition, EPA has previously advised States that " generic" requirements of the SIP ( described above), that are less stringent than other applicable requirements addressing the same units and pollutants may be omitted from title V permits, provided that the resulting " streamlined" terms and conditions achieve compliance with all the applicable requirements. [ See discussion of treatment of " generic" requirements in White Paper Number 2 for Improved Implementation of the Part 70 Operating Permits Program, March 6, 1996, docket item 100; and discussion of factor one in chapter 2.1 of this response to comments document.]

Comment: Commenter 55 believes the proposal should have considered each of the four factors for each category of area sources subject to NESHAP that we proposed for exemption from title V permitting. This commenter says that EPA only considered those factors in the proposal that supported exemptions, while ignoring those that did not support them.

Response: We did not discuss all four factors for each category of area sources in the proposal because we thought those factors we identified as present supported a finding that title V was " unnecessarily burdensome," regardless of any determinations that could be made regarding factors not analyzed. Nevertheless, in response to this comment, and to provide a full discussion of all issues potentially relevant to this rulemaking, we discuss the four factors for each category of area sources elsewhere in this document and in the preamble to the final rule. [ See chapters 2.1 through 2.5, where we discuss the four factors we use to justify these exemptions, and chapters 10.1 through 10.5, where we discuss all four factors with respect to each specific category of area sources we exempt in the final rule.] 8 2.1 The First Factor   Does Title V Add Significant Compliance Requirements to the NESHAP?

Comment: State and local agencies ( commenters 11, 61, and 65) agreed that the first factor, whether title V adds significant compliance requirements beyond those required by a NESHAP, was appropriate for determining whether title V permits would be " unnecessarily burdensome" and they agreed that title V requirements for these area sources would not result in new or different compliance requirements likely to significantly improve compliance for the NESHAP. Commenter 65 added that any improvements in compliance from title V permits for these sources would be " marginal" compared to the financial and emotional burdens that the regulated community would experience, which would disrupt progress in the area source NESHAP program by damaging the working relationship the Agency has cultivated with the area sources.

Commenter 55 opined that EPA's discussion of the first factor in the proposal fails to acknowledge key title V requirements lost under an exemption, which is directly at odds with the statute and legislative intent, citing sections 504( a) and 504( c) of Act. Also citing section 112( l)( 9) of Act (" Nothing in this subsection [ describing State section 112 programs] shall affect the authorities and obligations of the Administrator or the State under subchapter V of this chapter."). Commenter 55 said that Congress viewed Title V as adding compliance mechanisms beyond those provided by the NESHAP, and that the legislative history shows that Congress intended for Title V to play a key role in implementing and enforcing the NESHAP, citing S. Rep. 101 228, at 348 ( 1989). Also, commenter 55 believes the proposal fails to consider whether the title V requirement for a schedule of compliance under sections 504( a) and 501( 3) of the Act [ § § 70.6( b)( 3), 70.5( c)( 8)( iii)] is met by the NESHAP, and that none of these NESHAP contain requirements for a schedule of compliance equivalent to that of title V. They add that Congress viewed the compliance schedule as a key mechanism for assuring compliance with an applicable requirement, citing H. Rep. 101 490, at 351 ( 1990).

Commenter 55 believes the proposal relies on an illegal interpretation of title V's monitoring requirements in the umbrella monitoring rule ( 69 FR 3202, January 22, 2004), which affects the first factor. Disagreeing with the umbrella rule, the commenter stated that title V requires supplemental monitoring sufficient to assure compliance, beyond periodic monitoring, and beyond the monitoring required by the NESHAP, such that title V would add additional monitoring for these standards.

Response: The first factor discussed in the proposal is whether title V would result in significant improvements to the compliance requirements, including monitoring, recordkeeping, and reporting, that are already required by the NESHAP. This evaluation probes whether title V is " unnecessary" to improve compliance for these NESHAP requirements at area sources. Thus, a finding that title V does not result in significant improvements to compliance, as compared to operating subject to the NESHAP without a title V permit, is described as supporting a conclusion that title V permitting is " unnecessary" for area sources in that category, consistent with the " unnecessarily burdensome" criterion of section 502( a) of the Act. Title V provides 9 authority to add monitoring requirements in permits in appropriate circumstances, and also imposes a number of monitoring, recordkeeping and reporting requirements that are designed to enhance compliance. The proposal's discussion of factor one focused on the key compliance requirements of title V that are most likely to add significant compliance benefits for area sources subject to NESHAP. We explained that title V imposes a number of monitoring, recordkeeping, and reporting requirements for compliance. We focused our review on the requirements for monitoring, and the recordkeeping/ reporting requirements for prompt reports of deviations from permit requirements ( deviation reports) and for reports of required monitoring every six months ( six month monitoring reports) under § § 70.6( a)( 3)( iii) and 71.6( a)( 3)( iii), and the requirement for an annual compliance certification by a responsible official under § § 70.6( c)( 5) and 71.6( c)( 5). Nevertheless, to provide a more complete response to the comment in the final rule, we describe below several other compliance aspects of title V that we were silent on in the proposal, including the requirements of section 504( a) for the permit to include " a schedule of compliance," and " such other conditions as necessary to assure compliance with applicable requirements of the Act, including the requirements of the applicable implementation plan [ e. g., SIP]," and the requirement of section 504( c) for permits to contain " inspection" and " entry . . . requirements to assure compliance with the permit terms and conditions."

Concerning the requirement of section 504( a) for schedules of compliance [ defined in section 501( 3)], there is independent authority for establishing schedules of compliance to bring noncompliant sources back into compliance under the general enforcement authority of section 113 of the Act, which applies to these NESHAP. Also, the approval criteria for delegation requests for NESHAP requires the Attorney General's written finding to say that the delegate agency has enforcement authorities that meet the requirements of § 70.11, which requires them to have authority to obtain an order, pursue a suit in court, or seek injunctive relief for violations, and this may result in a schedule of compliance, where appropriate, equivalent to any that may be obtained through title V. Thus, a title V permit is not necessary to establish a schedule of compliance for any of the area sources we exempt today, in the event of noncompliance with these NESHAP.

Concerning the requirement of section 504( a) that permits contain " enforceable emission limitations and standards," the five NESHAP addressed in today's final rule establish such emission limitations and standards, and they are independently enforceable outside of title V permits. Also, title V does not contain authority for creating new emission limitations and standards under section 112 in title V permits, so no such emission limitations or standards would be lost through title V exemptions for these area sources.

Concerning the requirement of section 504( a) that permits include conditions to assure compliance with the requirements of the applicable implementation plan ( the SIP, for example), we described in chapter 2.0 above why exempting these area sources from title V would not significantly affect compliance with SIP requirements that may also apply to such area sources. Also, we add that these SIP requirements are independently enforceable under the authority of section 110 of the Act, so their implementation and enforcement does not depend on title V. 10 Concerning the requirements of section 504( c) for permits to contain inspection and entry requirements, when EPA is responsible for implementation and enforcement of the NESHAP such requirements would be met under the authority granted EPA by section 114 of the Act. State and local agencies or tribes are required to have such authority as a condition of approval for any delegation request they make, consistent with section 112( l) of the Act. For example, agencies requesting delegation of NESHAP are required to submit, as part of their delegation request, a written finding by the State Attorney General ( or General Counsel for local agencies and tribes) that they have legal authority " to request information from regulated sources regarding their compliance status," under § 63.91( d)( 3)( i)( B), and " to inspect sources and any records required to determine a source's compliance status," under § 63.91( d)( 3)( i)( C). In addition, as part of their delegation requests, agencies are required to submit a plan that " assures expeditious compliance by all sources," including a description of " inspection strategies."

In addition, EPA agrees that Congress assumed title V would play a role in implementing and enforcing NESHAP in general, however, EPA disagrees that Congress intended for all these area sources to get title V permits without exception, because of the specific language of section 502( a) of the Act, which allows exemptions for them, based on certain findings.

Comment: Commenter 55 believes the proposal relies on an illegal interpretation of title V's monitoring requirements in the umbrella monitoring rule ( 69 FR 3202, January 22, 2004), which affects the first factor. Disagreeing with the umbrella rule, the commenter stated that title V requires supplemental monitoring sufficient to assure compliance, beyond periodic monitoring, and beyond the monitoring required by the NESHAP, such that title V would add additional monitoring for these standards.

Response: Part 70 and 71 set forth, in three principal sections, monitoring requirements that may be included in title V permits for area sources. Section 70.6( a)( 3)( i)( A) requires that title V permits include "[ a] ll monitoring and analysis procedures or test methods required under applicable monitoring and testing requirements." This means, for example, that monitoring required by a NESHAP must be included in a title V permit issued to a source covered by a NESHAP. Second, § 70.6( a)( 3)( i)( B) goes further, and provides that "[ w] here the applicable requirement does not require periodic testing or instrumental or noninstrumental monitoring ( which may consist of recordkeeping designed to serve as monitoring), periodic monitoring sufficient to yield reliable data from the relevant time period that are representative of the source's compliance with the permit" may be included in a title V permit. Importantly, however, where periodic monitoring exists in the underlying requirement, such as a NESHAP, permit writers are not authorized by this regulation to add additional periodic monitoring in a permit. See Appalachian Power Co. v. EPA, 208 F. 3d 1015, 1028 ( D. C. Cir. 2000). Finally, § 70.6( c)( 1), provides that permits must contain " consistent with [ the periodic monitoring rule in § 70.6( a)( 3)], compliance certification, testing, monitoring, reporting, and recordkeeping requirements sufficient 3 Similar provisions appear in EPA regulations in Part 71 stipulating monitoring provisions for federally issued title V permits.

4 It has been EPA's consistent position that post 1990 NESHAP include all monitoring required under the Act. See, e. g., the preamble to EPA's compliance assurance monitoring rule, 64 FR 54940 ( October 22, 1997) and EPA's advance notice of proposed rulemaking soliciting comments on Clean Air Act requirements that may include inadequate monitoring requirements, 70 FR 7905 ( February 16, 2005) ( specifically not soliciting comment on standards promulgated after 1990 11 to assure compliance with the terms and conditions of the permit." 3 The EPA's interpretation of § 70.6( c)( 1) has evolved over time. In November and December 2000, EPA partially granted two petitions for objections to State issued part 70 permits. See In the Matter of Pacificorp, Petition No. VIII 00 1 ( November 16, 2000); In the Matter of Fort James Camas Mill, Petition No. X 19999 1 ( December 22, 2000). In both decisions, EPA held that § 70.6( c)( 1) empowers State permitting authorities to review, on a caseby case basis, the sufficiency of each permittee's monitoring requirements, independent of the authority provided by the periodic monitoring rule. On September 17, 2002, EPA published a proposed rule that would have codified this interpretation of § 70.6( c)( 1). See 67 FR 58561. After considering comments, however, EPA issued a final rule ( the " umbrella monitoring rule") providing that § 70.6( c)( 1) does not allow permit writers to add monitoring requirements beyond those that are authorized by the periodic monitoring rule. See 69 FR 3202, 3204 ( January 22, 2004). This rule was the subject of litigation in the United States Court of Appeals for the District of Columbia Circuit ( DC Circuit), and the Court recently vacated and remanded the rule on the basis that EPA failed to provide adequate notice in its proposal of the option that it adopted in its final rule. See Environmental Integrity Project v. EPA, 205 U. S. App. LEXIS 21930 ( D. C. Cir. 2005).

In EPA's March 25, 2005 proposal to exempt five categories of area sources from title V requirements, EPA explained that " under the umbrella monitoring rule and the periodic monitoring rule, title V permits would not typically add any new monitoring requirements for post 1992 NESHAP, including the NESHAP addressed in today's proposal." See 70 FR 15254. The recent decision in Environmental Integrity Project vacating the umbrella monitoring rule does not change our view that subjecting these area sources to title V will not likely lead to monitoring beyond that required by the underlying NESHAP. All of the NESHAP were issued after the 1990 amendments to the Act, and were therefore designed to meet all of the Act's current monitoring requirements. Interested parties that believed those regulations failed to provide for sufficient monitoring had an opportunity to comment on the proposed NESHAP and to challenge EPA's rulemaking decisions in court. Any such opportunity has now passed. Thus, even if § 70.6( c)( 1) is interpreted to allow " sufficiency" monitoring independent of the authority that exists through the periodic monitoring rule, EPA is confident that no such additional monitoring would appropriately be added in title V permits issued to the five categories of area sources we exempt from title V today. 4 Therefore, the monitoring component of the first factor favors title V because they contain adequate monitoring under the Act).

12 exemptions for all of the categories of sources for which exemptions are provided in this rule, because title V is " unnecessary" to provide adequate monitoring for them. Also, see EPA response to comment that title V permits are needed to define monitoring for electroplaters, chapter 10.2.

Comment: Concerning reporting requirements, commenter 55 suggests that none of the NESHAP requires substantially equivalent reporting compared to title V, such as prompt reports of deviations, 6 month monitoring reports and annual compliance certification, and that these requirements must be considered before exemptions are finalized.

Response: As part of the first factor, we have also considered the extent to which title V could potentially enhance compliance for area sources covered by today's rule through recordkeeping or reporting requirements, including requirements for a six month monitoring report, deviation reports, and an annual compliance certification. See § § 70.6( a)( 3) and 71.6( a)( 3), § § 70.6( c)( 1) and 71.6( c)( 1), and § § 70.6( c)( 5) and 71.6( c)( 5). In the proposal, we stated that the recordkeeping and reporting requirements of the NESHAP for electroplaters, EO sterilizers, and secondary aluminum smelters are substantially equivalent to those of title V. After considering comments received on the proposal, we continue to believe the compliance requirements for these three NESHAP are substantially equivalent to those of title V. Also, see more detailed response for electroplaters, chapter 10.2, for EO sterilizers, chapter 10.4, and for secondary aluminum, chapter 10.5.

In the proposal, we did not discuss recordkeeping and reporting in the context of factor one for dry cleaners or degreasers, but we do so today's in response to comment. As mentioned above, these NESHAP have monitoring requirements consistent with the title V monitoring requirements. However, they do not contain reporting requirements that are identical to the title V requirements for deviation reports, six month monitoring reports, and annual compliance certification. [ See § § 70.6( a)( 3)( iii) and 71.6( a)( 3)( iii).] The NESHAP for dry cleaners requires a log to be keep on site to document the dates that weekly leak detection and repair activities are conducted, the results of weekly monitoring of temperature and perchloroethylene concentrations, and a rolling monthly calculation of annual perchlorethylene consumption. It does not require a 6 month monitoring report, " prompt" deviation reports, or annual compliance certification, directly comparable to the compliance requirements of § 70.6( a)( 3)( iii)( A) and ( B), and § 70.6( c)( 5). The NESHAP for degreasers requires exceedances of monitoring parameters to be reported at least semiannually and it requires an annual compliance report, which for most sources, is composed of a statement that operators have been trained on operation of cleaning machines and their control devices and an estimate of solvent consumption on an annual basis, but it does not require a 6 month monitoring report, " prompt" deviation reports, or annual compliance certification, directly comparable to the requirements of § 70.6( a)( 3)( iii)( A) and ( B), and § 70.6( c)( 5). 13 Although the reporting requirements of these two NESHAP are not directly comparable to those of title V, this does not mean that the compliance requirements of these two NESHAP are inadequate to achieve compliance on their own. Indeed, in issuing the NESHAP for these sources, EPA determined that the recordkeeping and reporting requirements contained therein were adequate, and EPA continues to believe that this is the case. The EPA acknowledges these additional title V reporting measures may provide some marginal compliance benefits. However, EPA believes they would not be significant. Because the monitoring required by the two NESHAP is consistent with the monitoring requirements of title V, and because each NESHAP has adequate recordkeeping and reporting requirements tailored to the NESHAP, we conclude that the first factor supports a title V exemption for these sources. [ See more detailed explanation for dry cleaners, chapter 10.1, and degreasers, chapter 10.3.]

2.2 The Second Factor   Does Title V Impose Significant Burdens on These Area Sources?

Comment: State and local agencies ( commenters 61 and 65) agreed with EPA that the costs and burdens of title V for these area sources are significant and higher than alternative State programs would impose. Commenter 12 estimates, based on his experience in his industry, that the costs would be $ 10,000 per year, and that this would be " unnecessarily burdensome" for the sources.

On the other hand, commenters 6, 17, 18, 19, 24, and 55 thought the costs of title V permitting would not be significant for these area sources for various reasons. Commenters 17, 18, 19, 24 and 25 opined that the costs of title V permitting for area sources would be a fraction of the costs for major sources because area sources have fewer emission units, their operations are less complex, and they are simpler to permit, while commenter 55 suggests that EPA's cost estimates are inflated and not representative for area sources.

Response: The second factor considered in determining whether title V is " unnecessarily burdensome" for these categories is whether title V permitting would impose significant burdens on these area sources and whether these burdens would be aggravated by difficulty they may have in obtaining assistance from permitting agencies. We used this factor to assess whether title V satisfies the " burdensome" component of the " unnecessarily burdensome" criterion of section 502( a) of the Act. We discussed this factor in the proposal as supporting our exemption findings for dry cleaners, chrome electroplaters, solvent degreasers, and secondary aluminum smelters, but we did not specifically discuss it with respect to EO sterilizers. However, in the proposal, we stated a belief that title V burdens and costs would be significant for all five categories of area sources, and this statement included EO sterilizers. See discussion of the second factor in the proposal, 70 FR 15254.

To help us assess factor two, we collected information on the burdens and costs of title V and economic data for the area sources, and we placed this information in the docket prior to our proposal. See economic information for the five industry groups ( docket item 04), and 14 information on burdens and costs of title V in the information collection requests ( ICRs) for part 70 and 71 ( docket items 80 and 81). Note that the economic information is for the broad industry group, which includes both area sources and major sources under title V. However, despite this, certain assumptions about their economic characteristics are possible because almost all of them are small businesses with limited resources. For example, many dry cleaners are small " mom andpop retail establishments, which will have greater difficulty in meeting regulatory demands than large corporations with trained environmental staffs and greater resources. The ICRs for part 70 and 71 describe title V burdens and costs in the aggregate, they are not designed for use in estimating title V burdens and costs for any particular sources. The ICRs do not include specific estimates of burdens and costs for area sources because area sources were subject to title V deferrals at the time the ICRs were approved. However, the ICRs describe in detail various activities undertaken at title V sources, including activities for major sources with standard permits, and certain activities for major sources with general permits, and area sources may be issued either standard or general permits, so many of the same burdens and costs described in the ICRs will also apply to these area sources. See general permit rules, § § 70.6( d) and 71.6( d). In the proposal, we included a list of source activities associated with part 70 and 71 that impose title V burdens and costs, whether the source has a standard or general permit, and we described how permits for area sources may have a somewhat reduced scope, based on § § 70.3( c)( 2) and 71.3( c)( 2), compared to major source permits. Despite the potential for reduction of burdens for area sources, we proposed finding that the burdens and costs of title V would be significant for these area sources, similar to those for major sources. Thus, we proposed finding that V is " burdensome" for these area sources, consistent with the " unnecessarily burdensome" criterion of section 502( a) of the Act.

Our review of comments and further consideration of these issues has not led us to a different view for all categories of area sources. For EO sterilizers, as in the proposal, EPA has no reliable information on the economic resources of area sources but, as described below, believes that a number of area sources are small businesses with limited economic resources. See chapter 10.4. Given the lack of specific economic information for EO sterilizers, EPA is not making a specific finding as to whether factor two supports an exemption for this source category. Thus, we find today that factor two supports title V exemptions for all categories of area sources, except for EO sterilizers, where other factors support the exemption. See 70 FR 15258 15259 for more on the burdens of general permitting for area sources. Also, see chapter 6.0 below for more on our alternative proposal to require general permits for area sources in lieu of exempting them and for more on title V costs estimates for sources with general permits. The EPA's general belief, stated in the proposal, that title V burdens and costs would be significant for EO sterilizers was not based on any particular study or docket support, but instead on a general assessment of the types of smaller establishments likely to meet the " area source" definition of part 63 and conduct EO sterilization activities, e. g., small contract sterilization businesses, conducting off site sterilization services for manufacturers of medical equipment and supplies, pharmaceuticals, spices, and cosmetics. See docket items 88 and 106.

In response to the comment that we should consider all four factors in evaluating each 15 category of area sources for exemptions, we note that the docket does not contain reliable information on the economic resources of area sources in the EO sterilizer category, but EPA reaffirms the general belief that there are area sources in the EO sterilizer category that would be small businesses or other small establishments with limited economic resources. Nevertheless, because specific information on the economic resources of EO sterilizers is lacking, EPA is basing its decision to exempt this category from title V on its assessment of the other three factors and additional rationale noted in its evaluation of the legislative history of title V. [ See chapter 10.4.] Also, see chapter 2.0 for more detailed EPA response to the comment that we should consider all four factors in evaluating each category of area sources for exemptions.

In the discussion of factor two above, we described the information we used for the proposal, including economic information on the five industry groups ( docket item 04) and information on title V burdens and costs from the ICRs for part 70 and 71 ( docket items 80 and 81), to evaluate the impact of title V on these categories of area sources, including limitations on this information, and the assumptions we made for them concerning title V burdens and costs. Also, in the proposal, we acknowledged that these sources would generally have fewer emissions units, that their operations are less complex, and they would be simpler to permit, and we took these facts into consideration in our analyses. During the public comment period, no one submitted any information related to the area source categories to substantiate their claims that title V burdens and costs would not be significant for these area sources. Our review of comments and further consideration of these issues has not led us to a contrary view from the proposal. Thus, we find that factor two supports title V exemptions for the categories of area sources addressed in today's final rule.

Comment: Commenter 55 said that EPA ignores Act provisions designed to limit title V costs for small sources, while Commenter 57 said States are expected to have resources to meet this workload and fees to offset costs.

Response: Section 502( b)( 3)( A) of the Act requires title V sources to pay annual fees, while section 507( f) of the Act, concerning SBAP, provides that the permitting authority may reduce any fee required under this Act to take into account the financial resources of small business stationary sources. In response, title V fees vary greatly from State to State, but because area sources have small emissions by definition and most State agencies charge emissions based fees ( on a per ton basis), fees would not comprise a substantial portion of the overall costs and burdens for these area sources. As the EPA explained in the proposal, there are many other burdens and costs of title V, unrelated to fees, such that whether fees are reduced or not, significant burdens and cost of title V would remain for these area sources. Section 502( b)( 3)( A) of the Act requires fees to be charged that are sufficient to cover all reasonable ( direct and indirect) costs required to develop and administer the title V program. However, there are practical limitations on the ability of State agencies, tribes, and EPA to increase fees and provide additional resources for title V implementation, especially in a relatively short period of time. In many States, fee increases must typically be approved by the State legislature within the State budget process, and this may lead to significant delays in implementing new fee schedules to meet 16 new demands. This limitation could lead to significant, albeit temporary, impairment of the title V programs for major sources, given the large workload a requirement to permit these area sources would impose on State agencies. For example, if all these area sources were required to be permitted, up to 38,000 title V permit applications would be due by December 9, 2005, and title V permits for these sources would have to be issued or denied within 18 months of receipt of the applications, as required by section 503( a) and 503( c) of the Act. See similar response in chapter 2.5.

Comment: Commenter pointed out that difficulties in obtaining compliance assistance from States will be temporary. Also, the commenter said that this rationale is an improper rationale for weakening public health protections, and that delays in compliance are not desirable, but they are preferable to complete exemptions.

Response: EPA notes that even though such difficulties may be temporary, they would come at a critical time for sources and permitting authorities alike. For example, an area source required to obtain an operating permit would have to quickly become familiar with the critical step of preparing and submitting a timely and complete permit application, consistent with § 70.5 and § 71.5, during a relatively short time frame ( the Act generally gives a source one year to submit a permit application after it becomes subject to title V, but it allows States to set earlier deadlines). Similarly, upon a requirement for a large number of sources to obtain title V permits ( up to 38,000 area sources nationally are addressed by this final rule), a typical permitting authority would quickly have to ready itself to review and take action on a large number of permit applications, which are all likely to be submitted within a short period of time, and which would likely be many times the number of permit applications they would typically process in an average year under their title V program. Since such applications are provided by individual permitting agencies, access to the agency to obtain assistance and guidance on completing the forms will be essential for area sources in order for them to complete and submit them by the mandatory deadline. In addition, before applications are distributed to area sources, certain agencies may need to translate forms and other information into foreign languages, which in the EPA's experience, is often needed for small businesses, such as dry cleaners, in large urban communities, but not typically necessary for major sources. [ For example, see a fact sheet developed for dry cleaners in Vietnamese, docket item 96 and the equivalent form in English, docket item 97.] Although the permitting agencies and sources have had a year since the deferrals expired to prepare for permitting, EPA believes that many may have assumed that EPA would finalize its March 25, 2005 proposal to exempt the sources from title V.

EPA disagrees with the comment that this rationale is an improper rationale for weakening public health protections, and that delays in compliance are preferable to complete exemptions. This rationale is not being used by EPA in this rulemaking to weaken health protections, as we explain more thoroughly in chapter 2.5. Also, the final rule also relies on other rationale that independently justify exemptions, consistent with section 502( a) of the Act. The commenter's belief that delays in title V compliance would be superior to complete exemptions for these area sources, is not shared by EPA. EPA considered the likely difficulty for area sources to obtain 17 assistance if exemptions are not issued as part of our consideration of the burdens that title V would impose on them. We have found that the compliance benefits associated with issuing title V permits for such sources are at best small, so that the burdens imposed by title V are unnecessary.

Comment: Commenter 65 thinks the title V costs would not be significant for sources because they would merely be passed on to consumers.

Response: No economic data for these categories of area sources were submitted by the commenter or otherwise available to the EPA to support this point, and any such assertion is entirely speculative. Costs cannot necessarily be passed on to consumers in highly competitive industries, or where there are highly price responsive consumers. EPA believes that these situations may exist for these sources, and that passing prices on to consumers may, therefore, not be feasible for them. The commenter provided no information on competition in these industries, or on price responsiveness of their consumers to support his assertions.

Comment: Commenter 16 said that these area sources would not be burdened by difficulties in obtaining assistance from States because other assistance mechanisms exist, such as MACT implementation guidance, SBAP, and consulting firms.

Response: The EPA is aware of these mechanisms but we do not believe they can significantly reduce burden, including costs, enough for these area sources to change our findings for the final rule. First, NESHAP implementation guidance is designed to help implement the NESHAP, not title V, so it will not significantly reduce the costs or burdens of title V permitting. Second, SBAP may be able to reduce title V burdens to some extent, but the remaining burdens would continue to be significant. The SBAP is responsible for providing counseling to title V sources to help them meet their part 70 requirements, including help with applicability determinations, help explaining part 70 requirements, and offering referrals to professionals, such as compliance auditors. State SBAP, at their option, may also directly help sources conduct compliance audits. State SBAP do not assume the majority of burdens and cost placed on owners and operators by the permitting rules. For example, owners and operators are responsible for reading and understanding permit program guidance and regulations; obtaining and understanding permit application forms; answering follow up questions from permitting authorities after the application is submitted; reviewing and understanding the permit; collecting records; preparing and submitting monitoring reports on a six month or more frequent basis; preparing and submitting prompt deviation reports, as defined by the State, which may include a combination of written, verbal, and other communications methods; collecting information, preparing, and submitting the annual compliance certification; preparing applications for permit revisions every five years; and, as needed, preparing and submitting applications for permit revisions. Although SBAP may help area sources with some of the burdens of title V, EPA believe significant burdens and costs would remain that the SBAP would not address. Third, if an area source were to rely on private consultants, such expenditures would not decrease the number of source activities required, but this would increase costs as labor is shifted from in house wage rates to more expensive 18 consultant wage rates. [ See section 6.3.1 of the current ICR, where the fully loaded hourly wage for industry hired consultants is $ 268.7 and the in house hourly wage is $ 32.] Thus, the overall result would be an increase in burdens for the sources because costs would increase and costs are burdens.

Comment: Commenter 29 said that permitting burdens already exist for these area sources because they are required to get " are source" permits and title V permits, and that the level of effort needed to comply with these permits is not different.

Response: The commenter appears to assume that all area sources are potentially subject to both " areas source" permitting and title V permitting. There are no permit requirements for these area sources under the NESHAP. Thus, at the federal level, the only permit requirement that would exist for these area sources arises under title V. States may require permits of these area sources under non title V State permitting programs. However, EPA disagrees that in such situations there would be no significant additional burdens associated with title V permitting for these area sources. Each permit program will have its own individual requirements, including application content and submittal requirements, and title V permitting is likely to be particularly unnecessary where a duplicative State permitting program exists.

Comment: Representatives of the secondary aluminum industry ( commenters 17, 18, 19, 24 and 25) believe costs are not significant because States may issue State and local permits anyway, and cost savings for these sources may be swallowed by these new State permits.

Response: The commenter may be correct that some States may require permitting under State law of area sources that EPA exempts today from title V. EPA's decision today is based on a nation wide assessment that title V is unnecessarily burdensome for the area sources covered by the rule, consistent with section 502( a). Where States adopt unnecessarily burdensome requirements for area sources under non title V State permit programs, sources subject to such requirements should pursue avenues available within the State for appropriate relief.

Comment: Commenter 57 said that "[ EPA] cannot argue legitimately that relatively simple requirements apply to the sources and simultaneously maintain that the sources themselves would be hopelessly burdened in seeking to assemble the necessary information for the title V application."

Response: EPA did not propose a finding that the area sources address by today's final rule would be " hopelessly burdened" by title V. Instead, we proposed to find that title V burden exists, and that the burden is unnecessary in light of the small potential for compliance gains associated with title V for these area sources. The " simple requirements" EPA speaks of are those that exist under the NESHAP for these sources, not those of title V. We find that the additional burdens associated with title V, described elsewhere, are not warranted for these area sources when compared to the expected compliance benefits of title V. Also, as we explain elsewhere in this response to comments, title V imposes many other on going burdens in addition 19 to those for the preparation and submittal of permit applications.

2.3 The Third Factor   Are Title V Costs Justified Considering Potential Gain in Compliance?

Comments: A State agency ( commenter 65) said any improvements in compliance from permits for these sources would be " marginal," not justifying the financial and emotional burdens that the regulated community would experience and disruption to the State's area source NESHAP program. Commenter 30 said that for sources like electroplaters, title V will not result in further gains in compliance because the sources are already subject to a comprehensive set of compliance requirements of the NESHAP, thus, the costs of permitting cannot be justified in the absence of compliance gains.

Response: The third factor, which is closely related to the second factor, is whether the costs of title V permitting for these area sources would be justified, taking into consideration any potential gains in compliance likely to occur for such sources. We discussed factor three in the proposal as supporting our exemption findings for dry cleaners, but we did not discuss it with respect to the other four categories of area sources we proposed for title V exemption. See more discussion on factor three in the proposal, including a detailed listing of many of the mandatory activities imposed by title V for area sources, 70 FR 15254. As described above in the context of our discussion of factor two, we find that costs of title V are significant for all categories except for EO sterilizer, where sufficient economic data are lacking for such a finding. Nevertheless, the types of enterprises within the EO sterilizer category are strongly suggestive that title V would be an economic burden for some, if not all, of the area sources. Also, through factor one and/ or revised factor four for each category of area sources in the proposal, both of which examine the ability of title V permits to improve compliance over that required by the NESHAP, we established that title V is " unnecessary" for NESHAP compliance. Although there may be some compliance benefits from title V for some area sources, we believe they will be small, and not justified by title V costs and burdens for them.

Accordingly, for all categories of area sources we exempt in the final rule, we conclude that title V costs are not justified considering the potential for gains in compliance from title V, and thus, factor three supports title V exemptions for all five categories of area sources, consistent with section 502( a) of the Act. See economic data for all industry groups, docket item 04, and information on title V burdens and costs, docket items 80 and 81. See chapter 2.0 for more detailed EPA response to the comment that we should consider all four factors in evaluating each category of area sources for exemptions.

2.4 The Fourth Factor   Can Adequate Oversight Achieve High Compliance Without Title V? 20 Comment: Commenter 16 concurs with EPA that adequate oversight by States will achieve high compliance without title V, and that compliance rates are maximized when inspectors monitor area sources and give practical compliance advice. A State permitting agency ( commenter 65) said it permits these area sources in its existing State ( non title V) operating permit program, so it will have no problem ensuring high compliance without title V, and thus, there will be little to gain from title V. Another State agency ( commenter 61) believes outreach programs, such as inspection checklists, applicability charts, and brochures in different languages, will be more effective for compliance than title V permits for these area sources. They also report that they undertake various compliance assistance activities and informational programs for them, which has resulted in 100 percent compliance recorded over the past three years.

Commenter 55 believes EPA's findings were based on an informal survey of States that only represents a small percentage of all States, that a substantial percentage of these reported they were not currently achieving high compliance with NESHAP, and some agencies reported high compliance, but they did not explain the basis for their conclusion. Commenter 55 also thinks EPA failed to explain how it can assume high compliance when all States did not respond to the survey.

Response: The fourth factor considered in the proposal is whether oversight, outreach, and compliance assistance programs by the EPA, or a delegate State or local agency, primarily responsible for implementing and enforcing the NESHAP, could achieve high compliance with particular NESHAP, without relying on title V permitting. We used this factor to help examine whether title V is " unnecessary" for NESHAP compliance for these area sources. See the discussion of factor four in the proposal, 70 FR 15254, March 25, 2005. We discussed this factor as supporting our exemption findings of the proposal for dry cleaners, solvent degreasers and EO sterilizers, but we did not discuss it for electroplaters and secondary aluminum.

To help us assess this factor we collected information from State and local air pollution control agencies ( State agencies), summarized in the " State survey" which we placed in the docket for this rulemaking ( docket item 02). The State survey shows that many State agencies have compliance oversight programs that result in high compliance for the dry cleaners, solvent degreasers and EO sterilizers, and that high compliance for them does not necessarily depend on title V.

In response to the comment that factor four should more closely examine whether actual programs are in place to achieve compliance with the NESHAP, without title V permits, we have revised factor four in the final rule, and we have analyzed all five categories of area sources based on the revised factor. Revised factor four is whether there are implementation and enforcement programs in place that are sufficient to assure compliance with the NESHAP for area sources, without relying on title V permits. As explained in more detail in this chapter below, there are implementation and enforcement programs in place sufficient to assure compliance with the NESHAP for all five categories of area sources addressed in today's final rule, in all parts of the nation, without title V permits. These programs take several forms, including programs of 21 implementation and enforcement conducted by EPA under the statutory authority of sections 112, 113, and 114, and State delegation of this responsibility under section 112( l) of the Act, implemented through subpart E of part 63. Second, section 507 of the Act requires a small business assistance program ( SBAP) for each State and for EPA, and these programs are in place, and they may be used to assist area sources subject to NESHAP that have been exempted from title V permitting. Third, States and EPA often conduct voluntary compliance assistance, outreach, and education programs ( compliance assistance programs), which are not required by statute. The statutory requirements for implementation and enforcement of NESHAP in section 112 apply to NESHAP that regulate all sources, including area sources. Thus factor four is satisfied for each of these categories of area sources by the statutory requirements alone. However, additional voluntary programs conducted by State and local agencies supplement the mandated programs and enhance the success of the programs.

We used the compliance rate information in the State survey as a check on our assumption that the statutory programs for implementation and enforcement of NESHAP, together with other efforts by State agencies would result in adequate compliance for these sources, without relying on title V permits. The State survey lists various State oversight programs, without indicating whether they are conducted voluntarily or under statutory authority. Also, the compliance rate information in the survey suggests that adequate compliance is being achieved in practice for all of these categories of area sources ( with more than half of the agencies that responded reported high compliance for each category). [ See the State survey, docket item 02.]

However, for secondary aluminum, fewer State and local agencies responded with examples of compliance oversight programs and information on compliance rates, compared to other categories. We believe these data are explained by the timing of the State survey relative to the effective date of the secondary aluminum standard, rather than suggesting any deficiencies in State implementation and enforcement for the NESHAP. The earliest date that compliance with the secondary aluminum NESHAP was required for sources was about the same time as the data collection phase of the State survey, and thus, State and local agencies did not have much experience with compliance oversight for them, or much compliance data upon which to base their survey responses for secondary aluminum. The secondary aluminum NESHAP did not require sources to be in compliance until March 24, 2003 ( all other NESHAP were effective much earlier than this), while the majority of State and local input for the State survey occurred from March to June of 2003. [ See the final rule for secondary aluminum, 65 FR 15690, March 23, 2000, docket item 77, and documentation of the data collection phase of the State survey, docket items 93 and 94.] We believe that State agencies are implementing this NESHAP in the same manner as others and, based on that belief, the statutory program, and the information in the State survey, we conclude that factor four supports title V exemptions for area sources subject to the secondary aluminum NESHAP.

The analysis of factor four we performed for the final rule continues to support title V exemptions for dry cleaners, degreasers, and EO sterilizers, as we proposed, and it additionally supports exemptions for electroplaters and secondary aluminum smelters. Thus, for the final rule, 22 factor four helps to demonstrate that title V is " unnecessary" for NESHAP compliance, consistent with the " unnecessarily burdensome" criterion of section 502( a) of for all area sources we exempt today.

Comment: Commenter 55 believes Congressional intent was that these exemptions would only apply when a reasonable alternative to title V permitting is actually in place and achieving results, specifically citing the 1990 Senate Report explanation that EPA " is authorized to exempt sources from the new permit program if the exemption would be consistent with the Act's purposes. For example, EPA may exempt certain small but numerous sources from the requirement to obtain a permit if a reasonable alternative is developed." S. Rep. No. 101 228, at 349 ( 1990). Commenter 12 believes all States will be able to utilize non title V permit programs as an alternative to title V. Commenters 17, 18, 19, 24, and 25 said that there is no evidence in the record that States already have adequate compliance assurance procedures for these area sources.

Three State or local agencies provided examples of alternative programs they have in place to achieve compliance with NESHAP. Commenter 11 said they issue federally enforceable State permits to operate ( non title V) to these sources that includes NESHAP and assures compliance without title V, they perform inspections at all facilities subject to NESHAP, and these facilities are part of their bi annual compliance monitoring strategy plan, which is submitted to EPA, and which involves compliance evaluation and enforcement procedures. Commenter 30 said that title V is not necessary to ensure high compliance for the electroplating industry because States have compliance assistance, enforcement, and oversight abilities for the chrome electroplating NESHAP, including EPA New England's metal finishing assistance program, and EPA's national metal finishing strategic goals program. Commenter 65 said they have an existing State operating permits program, separate from title V, that will continue to apply to these sources, whether or not EPA promulgates title V exemptions. Also, they have a State NESHAP program that has more stringent standards than part 63 for area sources, they undertake various outreach efforts, and they conduct compliance inspection of each source each year, which has resulted in significant improvements in compliance.

Commenter 55 believes States that don't have delegation for section 112 programs for these area sources could not achieve high compliance with NESHAP using alternative State mechanisms. Commenters 17, 18, 19, 24 and 25 remarked that States who lack delegation of NESHAP, but implement and enforce NESHAP through title V permits, like Ohio, will not be able to enforce permits after exemptions are finalized, while a local permitting authority in Ohio ( commenter 11), apparently responding directly to this comment, say that Ohio issues federally enforceable State permits ( non title V operating permits) to these sources that includes NESHAP requirements and assure compliance, and they can enforce these permits.

Response: The proposal explained that information in the docket, including the State survey, shows that many permitting authorities have alternative compliance oversight programs that result in high NESHAP compliance without title V. During the public comment period, the EPA received comments from State and local agencies confirming this point. [ See docket items 11, 16, 23 59, 61, and 65]. The EPA undertook the survey to collect information we thought would be relevant in our consideration of possible title V exemptions, and we believe State and local agencies made reasonable efforts to complete it. There is no definition for " high" compliance in the Act or EPA regulations, nor did the EPA suggest one to State agencies. States are primarily responsible for enforcement of the vast majority of Act requirements, including NESHAP, through delegation of EPA responsibilities, approved State programs, the SIP process, and other mechanisms, and we give considerable weight to their judgement on questions concerning the compliance status of sources. Moreover, even without such input from States, the EPA would have reached the same conclusion regarding high compliance absent title V because NESHAP are based on section 112 of the Act, which imposes stringent compliance requirements, independent of title V, and because States and EPA have adequate authority and actual implementation and enforcement programs in place sufficient to assure compliance with NESHAP, independent of title V.

In response to the comment that the legislative history is that a reasonable alternative to title V permitting must actually be in place and achieving results for title V exemptions to be appropriate, the plain wording of the Senate Report is that it is an " example" of a justification for a title V exemption. Title V does not require EPA to develop such alternative programs as a prerequisite to granting exemptions. In any event, as described below, we believe there is existing authority in the Act and actual implementation and enforcement programs in place, as required under section 112, that are sufficient to assure compliance with these NESHAP, and thus, high compliance can be achieved with the NESHAP without title V in all jurisdictions where such sources may reside in the nation.

First. Statutory programs of implementation and enforcement of NESHAP are conducted by EPA under the authority of sections 112, 113, and 114 of the Act, while State and local agencies or tribes may be granted delegation of this responsibility under section 112( l) of the Act ( implemented through subpart E of part 63). The EPA has primary responsibility for implementation and enforcement of all NESHAP under section 112 of the Act in all parts of the nation. Section 112( l) allows EPA to delegate to State or local agencies or tribes certain of its implementation and enforcement duties for NESHAP, based on a State request to do so, and satisfaction of certain criteria. There are several types of delegations, including " straight delegation," which is adoption of the NESHAP without change, or the delegate agency may establish a program or rules to operate in place of the NESHAP, provided the program or rules are " no less stringent" than the NESHAP, and the delegate agency has adequate authority and resources to implement and enforce the delegated NESHAP ( under all delegation options). Section 63.91( d) defines criteria that State and local agencies or tribes are required to meet prior to approval of requests for any type of NESHAP delegation, including that the request contain: ( 1) written findings from the Attorney General ( or General Counsel for local agencies and tribes) that they have certain legal authorities concerning enforcement and compliance, ( 2) a copy of the State statutes, regulations, and requirements that grant authority for them to implement and enforce the NESHAP, ( 3) a demonstration that they have adequate resources to implement and enforce all aspects of their NESHAP program, except for authorities retained by EPA, and ( 4) a 5 For more on the use of matching grants, see a August 4, 1993 memorandum from John S. Seitz, Director, Office of Air Quality Planning and Standards, U. S. EPA, " Reissuance of Guidance on Agency Review of State Fee Schedules for Operating Permit Programs under Title V," and a July 21. 1994 memorandum from Mary D Nichols, Assistant Administrator for Air and Radiation, U. S. EPA, " Transition to Funding Portions of State and Local Air Programs with Permit Fees Rather 24 plan that assures expeditious compliance by all sources subject to the program. Also, depending on the type of delegation requested, § § 63.92 through 63.95, and § 63.97 specify additional approval criteria. [ Also, see section 112( l)( 5), and the final rule for subpart E, 58 FR 62262, November 26, 1993, amended by 65 FR 55810, September 14, 2000]. In addition, under section 112( l)( 6) EPA has authority to withdraw its approval of a delegation, or approval of an equivalent program or rule, if the delegate agency is not adequately implementing or enforcing the NESHAP; and under section 112( l)( 7) EPA may enforce any NESHAP, including those it has delegated. Thus, even if a State does not have adequate authority to implement and enforce any NESHAP in their jurisdiction, EPA does have such authority, consequently, there can be no gap in implementation and enforcement for NESHAP that apply to area sources in any jurisdiction. [ For example, see EPA's final rule approving the request of Indiana for delegation of all NESHAP for all sources not covered by the State's part 70 program, 62 FR 36460, July 8, 1997, docket item 98.]

Second. The EPA has general authority for enforcement of NESHAP under section 113, including authority to ( 1) issue an order requiring compliance or assessing an administrative penalty; ( 2) bring a civil action seeking to enjoin violations or the assessment of penalties; or ( 3) bring a criminal action to punish knowing violations. Section 114 allows the EPA to determine if violations have occurred through inspection, auditing, monitoring, recordkeeping, reporting, and entry onto premises.

Third. All States have established non title V permitting programs, which may include operating and preconstruction permitting programs for minor sources, under section 110( a)( 2)( C) of the Act. However, the EPA notes that several States have reported that their non title V permits do not currently include NESHAP, so such permits would not always be immediately available for this purpose. Although some State agencies have established permitting programs under State law that include NESHAP for area sources, some have not, either because they do not have explicit State authority, or they have State authority, but they have chosen to not implement such a program so far. See the State survey ( docket item 02), where States noted that they issue non title V permits for certain of these area sources.

Fourth. All States and EPA are required to establish a small business assistance program ( SBAP) under section 507 of the Act. These programs are required to assist small business with technical and environmental compliance assistance, and they are not limited to title V sources. Any activities for non title V sources conducted by a SBAP may be funded by non title V fees at State option, and EPA matching grants under section 105 of the Act may also be used for this purpose. 5 State SBAP programs are required by section 507 to provide information on than Federal Grants."

25 compliance methods, to have a small business ombudsman, to provide assistance in determining applicable requirements and permitting requirements under the Act, and to refer sources to compliance auditors, or at State option, provide auditors for small sources. [ For example, see docket item 91, a fact sheet concerning an SBAP implemented by a local air pollution control district.]

Finally. States may have voluntary compliance assistance programs in place for NESHAP requirements, such as the environmental results programs ( ERP) or other similar programs. The EPA has encouraged States to adopt voluntary programs in the past, and the ERP, in particular, has been successful in assisting small sources with compliance in fourteen States across nine business dominated sectors, including dry cleaners in Massachusetts and Michigan. See 70 FR 15260. In addition to the State survey, which includes information concerning State permitting programs, inspection, and compliance assistance programs, several permitting agencies submitted comments to describe their alternative programs for non title V sources in additional detail. [ See State and local comments, docket items 11, 16, 59, 61, and 65.] Importantly, no comments were received from State agencies saying that they would not be able to ensure compliance for these area sources if we promulgate title V exemptions for them.

Comment: Commenter 12 opines that the proposal does not demonstrate that emission reductions will occur without title V, so there cannot be high compliance.

Response: As described above, there are alternatives to title V in place to assure compliance with NESHAP, and as EPA describes more thoroughly in its response in Chapter 2.5 of this document, the Act does not assign emission reduction responsibilities to title V.

Comment: Commenter 12 believes the proposal will result in uneven oversight rather than high compliance. Commenters 17, 18, 19, 24 and 25 said the proposal will result in inconsistent enforcement across the country because there is variation in state authority, state permitting systems, and state resources for secondary aluminum, and that different State ( non title V) permits will lead to different answers on NESHAP implementation questions.

Response: Oversight and enforcement of NESHAP may vary somewhat from place to place for reasons unrelated to title V, and this is consistent with the Act, which relies on State and local government to achieve Clean Air Act goals. For example, see § 63.91, which grants considerable discretion to non federal agencies to design programs to implement and enforce NESHAP under an EPA delegation, while ensuring that they meet certain criteria to ensure adequate implementation and enforcement of NESHAP prior to EPA approval of their delegation request. Also, see section 101( a)( 3) of the Act which states that " air pollution control at its source is the primary responsibility of States and local governments." Furthermore, it is not clear whether such variation would be eliminated if the NESHAP were implemented through State title V permits, rather than other State permits. 26 2.5 The Legislative History   Will These Exemptions Have Adverse Affects on Public Health, Welfare, or the Environment?

Comment: Commenter 13 opposes the proposal because he thinks it will weaken air quality standards, while commenter 12 thinks it will result in increased emissions, higher morbidity in human populations, and shifts in medical costs to States. Commenters 27 and 29 opine that the proposal disregards other EPA policy decisions and stated goals, such as the national priority strategy for air toxics and EPA's stated long term commitment to air toxic enforcement. Commenter 29 added that the whole permanent deferral of area sources is an attempt by EPA to reduce its own internal work load and has little if any consideration being given to the secondary aluminum industry or the citizens of this great country. Commenter 55 believes the proposal will adversely affect public health, and is inconsistent with the Act because these area sources emit highly toxic pollutants that pose serious threats to public health, citing the legislative history for section 502( a). This commenter then went on to cite numerous documents, including Chemical Fact Sheets and other references for each HAP regulated by each NESHAP addressed by the proposal to show the HAP are hazardous, potentially hazardous, potential human carcinogens, and in other ways harmful to human health. Commenter 57 simply stated that the proposal will result in failure to achieve HAP reductions, particularly in urban areas. Commenters 17, 18, 19, 24 and 25 thought the national strategy required by section 112( k), and area source programs, will be weakened by the proposal for the secondary aluminum sector.

Response: In the proposal, we stated our belief that exempting these five categories of area sources from title V permitting would not adversely affect public health, welfare, or the environment, consistent with the legislative history of section 502( a). The reasons EPA explained in the proposal were the factors supporting exemptions discussed above and two other reasons: ( 1) that placing all requirements for these sources in permits would do little to help improve their compliance with the NESHAP, because of the simplicity of the sources and the NESHAP, and the fact that these sources are not typically subject to more than one NESHAP, and few other requirements under the Act, and ( 2) because requiring permits for them could, at least in the first few years of implementation, potentially adversely affect public health, welfare, or the environment by shifting State agency resources away from assuring compliance for major sources with existing permits to issuing new permits for these area sources, potentially reducing overall air program effectiveness. For the final rule, we continue to believe that title V exemptions for these five categories of area sources will not adversely affect public health, welfare, or the environment for the same reasons discussed in the proposal. See the proposal, 70 FR 152554 15255, and EPA response to comments on this issue in chapter 2.5 below.

In response to concerns that title V exemptions from these area sources would adversely affect public health, welfare, or the environment by weakening air quality standards, increasing HAP emissions, by increasing morbidity in human populations, or by shift medical costs to States, section 112 of the Act, which authorizes NESHAP, is the primary vehicle under the Act for HAP reduction, not title V. See sections 112( b)( 2), 112( c)( 3), 112( d), 112( f), and 112( k) of the Act. 27 For an overview of the EPA's national effort to regulate air toxics under section 112, see a July 19, 1999 notice ( 64 FR 38705), which includes a description of the EPA's integrated urban air toxics strategy, a strategy to address public health risks posed by air toxics from the large number of smaller area sources in urban areas. Today's rulemaking is not exempting any area sources from any section 112 requirements, such as those described in the July 19 notice, and section 112 gives the EPA, or its delegate agency, responsibility to implement and enforce section 112 standards, independent of title V. Thus, consistent with the legislative history and the EPA's analysis for each category of area sources addressed in this rulemaking, title V exemptions for these particular area sources will not thwart or in any way interfere with the implementation and enforcement of section 112 of the Act, and today's action should not adversely affect public health or otherwise increase medical costs or shift them to States.

The EPA does not believe HAP increases will occur from title V exemptions for these area sources. The Act does not require emission reductions through title V permits. As we explained in the proposal ( 70 FR 15255), the EPA's outreach in recent years has shown that several State agencies believe, in their experience, implementing emissions standards for area sources through permits did not result in increased compliance with the emissions standards. EPA has evaluated the extent to which title V could improve compliance for these NESHAP, and EPA believes that successful implementation at such sources is better achieved through compliance assistance efforts, such as compliance outreach and education programs, rather than title V permits.

In response to the comment that the purpose of this rulemaking is to reduce EPA's own internal workload, EPA agrees that today's rule will reduce EPA's internal work load, but disagrees that this is the reason for its action, or that this action is inconsistent with any prior decision or stated goal. [ Note that several commenters submitted specific examples of purported inconsistent statements by EPA, and EPA response to such examples are addressed more thoroughly elsewhere in this document.] The rule will eliminate necessary burdens on the area sources, will promote a proper focus by permitting agencies on major sources and non exempt area sources, and is consistent with our past decisions to defer permitting for these sources while EPA gathered additional information necessary to determine whether permanent exemptions are warranted.

Comment: State and local agencies ( commenters 11, 61, and 65) believe title V permitting for these area sources could cause adverse affects on public health, welfare, or the environment because it would lead to a shift in resources away from compliance assurance for major sources with existing title V permits to issuing new title V permits for area sources. Commenters 11 and 61 said this was chiefly due to the number of sources that would seek permits if there were no exemptions, while commenter 11 said this would also be true because of deterioration in current funding and resource levels they are experiencing anyway.

To the contrary, commenter 55 asserts that title V permitting will not divert resources from more significant sources because the Act requires State and local agencies to charge adequate fees to cover the costs of the title V program, including the costs of SBAP under section 28 507 of the Act, and adequate personnel to administer the program, and because fees may be reduced for small sources.

Response: EPA disagrees with the assertion that title V permitting for these area source will not divert resources from more significant sources, at least temporarily, because there are practical limitations on the ability of State agencies, tribes, and EPA to increase fees and provide additional resources for title V implementation, especially in a relatively short period of time. As we described in the proposal ( 70 FR 15255), in many States, fee increases must typically be approved by the State legislature within the State budget process, and this may lead to significant delays in implementing new fee schedules to meet new title V demands. This limitation could lead to significant, albeit temporary, impairment of the title V program for major sources, given the large workload a requirement to permit these area sources would impose on State agencies. For example, if all these area sources were required to be permitted, up to 38,000 title V permit applications would be due by December 9, 2005, and title V permits for these sources would have to be issued or denied within 18 months of receipt of the applications, as required by section 503( a) and 503( c) of the Act. We disagree that the fee provisions of title V will ensure that resource would not be shifted if area sources are required to get permits, and we disagree that reducing fees for small sources may significantly reduce title V burdens. Also, see similar response in chapter 2.2 of this document.

Comment: A State permitting agency ( commenter 65) said there was little likelihood that the proposed exemptions would cause adverse affects, because in their State, these sources would not be subject to any other NESHAP not addressed in the proposal, while another State permitting agency ( commenter 61) agreed that these sources are typically subject to a single NESHAP and they do not fit the primary purpose of title V to consolidate various and complex requirements in a single document.

Commenters 55 and 57 cited the legislative history of title V as requiring EPA to consider the need for title V permits to contain NESHAP and general SIP requirements in order to better clarify and enforce these requirements. Commenter 55 pointed to EPA's assertion that title V exemptions will not adversely affect public health because title V permits are not needed to help enforce and clarify requirements for these area sources, and they said this is in sharp contrast with prior EPA statements in the part 70 final rule, and the dry cleaner and chrome electroplating NESHAP rules that title V permits would enable sources, States, EPA and the public to better understand the requirements to which the source is subject, and whether the source is meeting those requirements. See 57 FR 32250 ( July 21,1992) for part 70, 58 FR 49354 ( September 22, 1992) for dry cleaners, and 58 FR 65768 ( December 16, 1993) for chrome electroplaters.

Response: EPA explains [ elsewhere] why placing NESHAP and any SIP requirements for these sources in permits is not likely to result in increased compliance for these sources. Also, EPA believes the compliance benefits of title V for these area sources would be small, and not justified taking into consideration the burdens and costs that title V would impose on them. As for the statements made in the final dry cleaning and chrome electroplating NESHAP rules concerning 29 the appropriateness of title V exemptions for these area sources, those statements were based on a different record than that available to the agency today, and were not intended to foreclose further investigation and alternative findings in the future.

2.6 Other Comments on Factors Used in the Proposal?

Comment: Commenter 12 opined that if the emissions of an area source, such as secondary aluminum, can move from State to State, interstate commerce is at stake, and the " commerce clause" of the U. S. Constitution allows EPA to preempt States from permitting such sources ( See Gibbons vs. Ogden). He also says that this is not the case for the other four categories of area sources proposed for exemption because they would have localized emissions. He asserts based on this commerce clause analysis ( and other arguments responded to elsewhere in this document) that EPA should not finalize the proposed exemptions from title V.

Response: The commenter effectively argues that EPA cannot foreclose State issuance of title V permits to dry cleaners, degreasers, EO sterilizers and chrome electroplaters because federal regulation of these sources is not authorized under the U. S. Constitution since their emissions are not likely to have significant interstate impact. Nevertheless, the commenter strongly asserts that EPA should not issue title V exemptions for them, and should regulate them under Title V. The comment is internally inconsistent. Moreover, whether these sources are appropriately regulated under the Act was addressed in issuance of the NESHAP for these source categories. Any opportunity to challenge these NESHAP has now passed.

Comment: Commenter 55 asserts that the structure of section 502( a), which provides that listed sources are subject to title V permitting unless certain findings are made, contrasts sharply with other CAA programs, such as CAA § 112( n)( 1)( a) that only require regulation if the Administrator determines that regulation is needed. The commenter believes that this " emphasizes the significance of EPA's burden under section 502( a) to require title V permitting for area sources unless the statutorily required findings are made.

Response: The construction of section 502( a) of the Act may differ from other statutory provisions, but that is irrelevant because the plain language of section 502( a) allows EPA to promulgate title V exemptions, based on certain findings. EPA makes the findings required under section 502( a) for each of the area sources exempted in today's rulemaking.

3.0 What Other Factors Did Commenters Believe EPA Should Consider?

Comment: Commenters 17, 18, 19, 24 and 25 observed that EPA did not address how States that have delegation for NESHAP only through the Title V program will enforce the NESHAP through the State permit process. In addition, commenter 55 requested a detailed table in the rulemaking showing the delegation status of all NESHAP affected by this rulemaking for all 30 States, including whether the State has full or partial delegation, the nature of the partial delegation, why full delegation was not granted, and citation to all such delegations.

Response: Section 112( l) does not require States to take delegation of NESHAP for area or major sources, instead, it gives them the option of requesting delegation of NESHAP, or certain portions of NESHAP. If the situation posited by the commenter exists, and the State is not willing to retain its delegation through other mechanisms, then EPA would implement and enforce these standards. Thus, there will never be any gaps in NESHAP implementation and enforcement in any State, because either the State or EPA will be responsible for all portions of all NESHAP in that State.

Concerning the request for a detailed table of delegation status for each NESHAP for each State, EPA believes this request is beyond the scope of this rulemaking. However, EPA already provides similar information in this regard in Subpart E of part 63 ( § 63.99), and this information will be updated on an on going basis to reflect changes in delegation status long after this rulemaking action is complete. For example, see 70 FR 36515, June 24, 2005, a notice, in part, of delegation of implementation and enforcement authority for certain NESHAP for Iowa and Kansas. Moreover, as explained above, information on State delegation status is irrelevant because there are no gaps in implementation and enforcement authority for NESHAP in any State.

Comment: Commenter 9 believes better criteria for exempting these sources would be the accuracy and precision of compliance monitoring.

Response: The Act sets forth the criteria for exempting area sources from title V. EPA has considered any benefits that title V may provide vis a vis monitoring in determining wether title V is " unnecessarily burdensome" on the areas sources it is exempting. Also, see chapter 2.1 for more on why we believe these NESHAP have monitoring consistent with the Act.

Comment: Commenter 30 suggests that the permitting burdens placed on State and local agencies would also render such permits " infeasible."

Response: In the proposal, EPA considered how burdens on permitting authorities would create burdens for area sources, and could lead to at least a temporary counterproductive shift of attention away form more significant sources. First, in the discussion of the second factor, EPA discussed difficulties these area sources would have in getting title V permitting assistance from States, and second, in the discussion of the legislative history of section 502( a) of the Act, where we said title V permitting for these area sources could, at least temporarily, shift resources at the State agencies away from assuring compliance for major sources with existing title V permits to issuing new title V permits to these area sources. We chose not to probe the " infeasible" criterion of section 502( a).

Comment: Commenter 10 thinks EPA should not exempt these area sources because the sources have had 10 years to learn the permitting scheme and develop expertise for complying with it. 31 Response: The EPA does not agree with this comment. The commenter submitted no information to confirm that the majority of area sources have actually developed expertise with title V or been issued such a permit. On the contrary, EPA believes the majority of these area sources have not been required to get title V permits to date. During the deferral, EPA estimates only about 5 percent of these area sources ( assuming around 1,300 permitted by Florida, and perhaps several hundred others in a few other States, or no more than 1,800 out of 38,000 area sources nationwide) were required to obtain title V permits, with the remaining area sources deferred by the States and not subject to title V permitting requirements. Thus because the majority of these area sources have not been required to obtain title V permits to date, the majority of them have not developed expertise with title V. EPA also expects that most, if not all, area sources subject to this rulemaking have assumed that EPA would finalize the proposed exemptions, and have not used the intervening time period to familiarize themselves with title V.

Comment: Commenters 27 and 29 remarked that title V permitting is necessary because the public process requirements of the permitting programs will ensure consistency and fairness for the sources, while commenter 55 was concerned that public access to compliance obligations that vary from source to source, such as control device methodology and acceptable parameter ranges to show compliance, particularly for the chrome electroplating NESHAP, would be lost with title V exemptions. Also, commenter 57 said that an important public benefit of title V is that it is much more likely that a concerned citizen will learn of the compliance status of a facility and the existence of monitoring reports and deviations from emission standards through a review of the title V permit than otherwise.

Response: Public participation may theoretically cause indirect improvements in compliance with NESHAP, however, we don't know the extent that this would actually occur under title V or other statutory authorities. In this rulemaking, instead, we have analyzed the potential effects from the loss of title V compliance requirements, such as monitoring, recordkeeping, and reporting, which are more likely to directly affect compliance with the NESHAP. In addition, independent from title V, section 114( c) of the Act requires records, reports, or information obtained under section 114( a) authority to be made available to the public, unless doing so would divulge trade secrets, and this applies to NESHAP related information as well, whether required to be submitted to permitting agencies or kept on site. Thus, there is independent authority for the public to obtain NESHAP compliance information outside of title V. The compliance information required to be gathered, stored, and reported under the NESHAP is clearly set forth in the NESHAP standards in 40 CFR part 63, so it is hard to see how a title V permit would clarify that such information exists for these sources. Also, the commenter did not submit any information to show that there are any additional burdens to the public from getting compliance information under section 114( c) authority, compared to title V, but even if such burdens exists for the public, EPA believes such burdens would be small. However, EPA explains in the final rule why exemptions for these area sources are appropriate, and EPA's analysis focuses on the burdens of title V for the area sources, consistent with section 502( a) of the Act. Also, we describe elsewhere in this document why these exemptions will not adversely affect public health, welfare, or the environment. For a detailed response on how the public can determine the 32 monitoring selected and the parameter ranges used to show compliance with the chrome electroplating NESHAP without relying on a title V permit, see Chapter 10.2 of this document.

Comment: Commenter 66 thinks title V permits would not be burdensome for the sources for which title V exemptions were proposed because " additional monitoring and recordkeeping  such as bi annual reports, prompt notice of deviations, and annual compliance certification which may be required under title V would seem to be a part of the due diligence required of any business."

Response: The EPA does not understand this comment because the commenter did not describe the source of the referenced " due diligence" requirement. However, as described in section 2.3, EPA believes that any recordkeeping and reporting beyond what is required in the NESHAP is unnecessary, and will impose a burden on these area sources that can be avoided without significant consequences. Also, even if the monitoring, recordkeeping and reporting requirements of the NESHAP are substantially equivalent to those of title V, they may not be identical, thus, title V may impose additional recordkeeping, monitoring, and reporting requirements that would be unnecessary. In addition, title V imposes many other burdens and costs in addition to those related to monitoring, recordkeeping, and reporting ( e. g., application preparation and submittal). [ See docket items 80 and 81, the ICRs for parts 70 and 71]. Other comments about monitoring and recordkeeping under title V are discussed primarily in Chapter 2.1 of this document, and the burdens and costs of title V are discussed in sections 2.2 and 2.3.

Comment: Many commenters expressed concern that exempting area sources would cause an un level playing field or economic disadvantage for major sources. Commenters 17, 18, 19, 20, 24, 25, 27, and 29 said this for the secondary aluminum industry, while commenter 66 said this in general. Commenter 66 said that if the regulation is federal and, therefore, applies to all, the playing field is level. Commenter 12 stated that dry cleaning and secondary aluminum area sources would not be leaving for other counties if title V permits are required, but chromium electroplaters would, and he concluded that the nation would be better off without their emissions.

Response: The EPA disagrees that it should consider whether title V exemptions create an unlevel playing field and economic disadvantage for major source sources. This is not one of the issues that Congress directed EPA to consider in issuing title V exemptions.

Comment: Commenter 12 was concerned that domestic security will be compromised by exemptions for these sources because of unreported releases of toxic chemicals that could be cause false alarms for the department of homeland security in its effort to monitoring for airborne toxic chemical attacks.

Response: The commenter submitted no evidence, there any evidence available to EPA, and it seems unlikely to EPA that the relatively small HAP emissions from area sources dry cleaners or similar small businesses would have characteristics that would make them likely to be interpreted as a terrorist attack by the Department of Homeland Security. 33 4.0 Is it Reasonable for EPA to Rely on the Information Cited in Support of the Proposal?

Comment: Commenter 59 stated that the proposal is consistent with section 502( a) of the Act and supported by the facts presented in the preamble. Commenters 12, 55, and 57 complained about the information EPA collected to support its proposal, which is in the record ( docket) for the rulemaking, and cited in the proposal. Commenter 55 opined that to survive judicial review, any EPA exemption finding must be supported by " substantial evidence, not mere assertions, " citing several decisions in the D. C. Circuit. Continuing on, commenter 55 says that despite EPA's commitment over the past ten years to evaluate State/ local implementation and information on area source NESHAP, the likely benefits of permitting such sources, and the costs, and other burdens associated with title V permits, EPA has failed to undertake even the most minimal steps needed to evaluate the burdens and benefits of title V permits for them, relying instead on unsupported assertions and anecdotes. See 61 FR 27785, June 2, 1996 and 64 FR 69637, 69641 ( December 14, 1999). Commenter 12 cited a lack of solid data supporting the proposal, especially for secondary aluminum area sources. Commenter 57 said that the proposal was based on insufficient evidence, including inadequate statistical data, focused on presumed impacts on business, with little emphasis on the impacts on the public, such that it is arbitrary and capricious. Also, EPA's conclusion that compliance would be high in the absence of title V was based on the input of a small minority of States, including the input of the State of Georgia ( see document # 08 in the docket), which was repeatedly used as a model for the nation without explanation, nor is there any explanation suggesting EPA has determined that the Georgia model is a particularly efficient and well implemented program. Also, commenter 57 said that it is not resolved that the fact that 13 out of 25 permitting authorities report high compliance rates without title V permits means that one may reasonably conclude that the other half believed rates of compliance without title V were not suitably high." Commenter 12 said that docket Items 02 and 08 do not constitute a majority opinion of industry or States that title V permitting would be unnecessarily burdensome. Commenters 17, 18, 19, 24 and 25 said the State survey shows that States are not prepared for greater oversight of NESHAP compliance at these area sources because the State survey is inaccurate and incomplete, especially for EPA Region 5, where many of these sources are concentrated. They also said the State survey shows that not all sources are being inspected or permitted through State programs, and because all States did not respond to the survey, the compliance rate data is incomplete and the number of sources is incorrect. For example, South Coast Air Quality Management District has a high concentration of sources, but inspections are few, even though they say source testing is a high priority. Commenters 27 and 29 said that EPA Region 5 has sought enforcement or fined over half of all major secondary aluminum sources in the Region, so it seems " high compliance" can't be achieved even with title V permits for these sources and this suggests a high level of non compliance nationally.

Response: In developing the proposal, EPA sought and relied on information from State agencies on the level of oversight and compliance rates for the area sources addressed in today's proposal. The results are summarized for each category of area sources in the State survey 34 ( docket item 02). The EPA also sought input from State small business ombudsmen and several trade associations, and they responded with information on the area sources and compliance assistance programs currently available to them. This information is also in the docket. See docket items 03, 06, and 08.

We have collected information we believe is useful and appropriate under the statute to establish a rational basis for evaluating whether the area sources addressed in today's rule satisfy the exemption criteria of section 502( a) of the Act. We summarized our outreach efforts and we collected cost and economic data, which we placed in the docket prior to the proposal. We considered all information available to us for this rulemaking, including that submitted during the public comment period, in making our exemption findings. Also see section X of the preamble for the final rule for this rulemaking for additional discussion of how this rulemaking satisfies administrative rulemaking requirements.

As to comments that the State survey is not complete, we believe much of the missing information can be explained by two factors: ( 1) State agency participation was voluntary, and ( 2) some States have more or less of these area sources, so experience with them varies. We did not base our decisions on missing data but on the data we have and our judgement as air quality experts, and we did not assume any particular meaning for missing data. Commenters had an opportunity to submit what they consider to be more complete or accurate information on compliance rates and the oversight activities of State agencies for these area sources during the comment period, but they did not do so.

States used various ways to categorize source compliance with the MACT standards for area sources when responding to the State survey, variously describing it as " high," " medium, or " low," and often providing specific percentages of area sources in compliance, and these differences were taken into account in our analysis of the data in the State survey. Also, the Act does not require us to prove that " high compliance" exists for every area source in the nation prior to our finalizing title V exemptions for them. In this final rule and response to comments, EPA has shown that title V would be " unnecessarily burdensome" for these area sources and that there would not be adverse affects on public health, welfare, and the environment" from such exemptions, consistent with the Act.

In formulating the proposal, EPA did consider the input of the State of Georgia to any greater extent that any other State input, nor did we disregard other input and data available to us at that time. Also, we did not say that we thought Georgia's title V programs should serve as a model for the nation, thus there was no need for us to explain why it should serve as such. We cited a letter from this State in the preamble in several instances, but we also cited other documents and data available to us for the proposal, and we placed all documents we considered and discussed in the proposal in the docket prior to the proposal.

The commenters submitted no information to support their allegations regarding inspection deficiencies at the South Coast Air Quality Control District and noncompliance for 35 secondary aluminum major sources in Region 5. It is not clear whether compliance difficulties for major sources in Region V are relevant for purposes of EPA's proposed exemption of area sources from title V. In any event, EPA believes that the exemptions provided today will enable regulatory agencies to focus their efforts in ways best designed to lead to compliance with the NESHAP.

Also, concerning information on burdens and costs of title V, for the current ICR, we provided the public with our draft analysis of burdens and costs under title V, including for general permits, and we received no comments.

We relied on data from major sources to a limited extent, usually only when there was no data specific to area sources, and when we did so we discussed the limitations of such data. EPA recognizes that information specific to major sources is not appropriate in most cases for characterizing area sources, because major sources are much more complex, their permits are more complex, they are more able to handle economic burdens, and they typically have trained environmental staff.

We are puzzled by the comment about the proposal's emphasis on the presumed impacts on business, rather than impacts on the public, because section 502( a) of the Act requires us to consider whether permitting would be " impracticable, infeasible, or unnecessarily burdensome" on the area sources, and presumably all of these sources are businesses. If the commenter is concerned about possible adverse affects on public health, we address this issue in Chapter 2.5 of this document.

5.0 May Title V Permits be Issued to Area Sources After EPA Exempts Them?

Comment: Commenters 14, 23, 30, and 31 supported EPA's interpretation that permitting authorities may not require title V permits for exempt area sources. Commenter 14 said it would be inconsistent with the Act for States to require title V permits for exempt area sources. Commenters 30 and 31 said that Congress in section 502( a) of the Act granted EPA alone authority to establish the universe of sources subject to title V, and that once EPA has made such determinations, States must abide by it. Commenter 30 said that he supports EPA policy on this because some chrome electroplaters have been required to get permits during the deferral period.

Commenters 12, 16, and 57 believe section 116 of the Act allows States to have more stringent part 70 permits and this means States are allowed to issue title V permits to exempt area sources ( also citing § 70.1). Commenter 55 believes EPA's interpretation violates the plain language of section 506( a) of the Act, and the more general provisions of section 116 of the Act, and instead, under section 502( b), that EPA's role is to establish the " minimum elements of a permit program to be administered by any air pollution control agency," to allow State flexibility, and not disrupt existing State permit programs. 36 Response: In the proposal, we explained and sought comment on our proposed interpretation of the Act as allowing only those area sources required to be permitted under section 502( a), and not exempted by EPA through notice and comment rulemaking to be subject to title V requirements. We are finalizing that interpretation in today's final rule. Thus, after the effective date of today's final rule, permitting authorities, including State and local agencies, tribes, and EPA, may not issue title V permits, including general permits, to the area sources we exempt in today's final rule, unless they are subject to title V for another reason. Also, this means that any existing title V permits for such exempted area sources must be revoked or terminated after the effective date of today's final rule. However, to avoid disruptions to State programs, States may wait until renewal to end the effectiveness of such permits, unless an area source requests that this be done expeditiously. The EPA believes that State issuance of title V permits to area sources that EPA has exempted from title V permitting requirements would conflict with Congress's intent that EPA define the universe of sources subject to title V, and through inappropriate focus on sources that qualify for an exemption, would be an obstacle to implementation of the title V program. Even if the statute were ambiguous in this regard, EPA would exercise its discretion to interpret it this way to promote effective title V implementation. Note, however, that EPA interprets Section 116 of the Act to allow permitting authorities to issue non title V permits to area sources that we have exempted from title V permitting. Such permits may include preconstruction permits, FESOPS or other State operating permits, or other permits not issued pursuant to an approved part 70 program. The proposal included a discussion of these issues, and in the final rule, EPA's interpretation of the Act in this regard is unchanged from the proposal.