[Federal Register Volume 84, Number 144 (Friday, July 26, 2019)]
[Proposed Rules]
[Pages 36304-36371]
[FR Doc No: 2019-14252]

Vol. 84

Friday,

No. 144

July 26, 2019

Part III

 Environmental Protection Agency

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40 CFR Part 63

Reclassification of Major Sources as Area Sources Under Section 112 of
the Clean Air Act; Proposed Rule

Federal Register / Vol. 84 , No. 144 / Friday, July 26, 2019 /
Proposed Rules

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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2019-0282; FRL-9996-00-OAR]
RIN 2060-AM75

Reclassification of Major Sources as Area Sources Under Section
112 of the Clean Air Act

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The Environmental Protection Agency (EPA) is proposing
amendments to the General Provisions to the National Emission Standards
for Hazardous Air Pollutants (NESHAP). The proposed amendments
implement the plain language reading of the ``major source'' and ``area
source'' definitions of section 112 of the Clean Air Act (CAA) and
provide that a major source can reclassify to area source status at any
time by limiting its potential to emit (PTE) hazardous air pollutants
(HAP) to below the major source thresholds of 10 tons per year (tpy) of
any single HAP or 25 tpy of any combination of HAP. The EPA is
proposing that PTE HAP limits must meet the proposed effectiveness
criteria of being legally and practicably enforceable. The proposal
also clarifies the requirements that apply to sources choosing to
reclassify to area source status after the first substantive compliance
date of an applicable NESHAP standard. The EPA is proposing electronic
notification when a source reclassifies. We are also proposing to
revise provisions in specific NESHAP standards that specify the
applicability of General Provisions requirements to account for the
regulatory provisions we are proposing to add through this rule.

DATES:
    Comments. Comments must be received on or before September 24,
2019.
    Public hearing. The EPA is planning to hold at least one public
hearing in response to this proposed action. Information about the
hearing, including location, date, and time, along with instructions on
how to register to speak at the hearing, will be published in a second
Federal Register document and posted at https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112-clean. See SUPPLEMENTARY INFORMATION for information
on registering and attending a public hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2019-0282, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov/
(our preferred method). Follow the online instructions for submitting
comments.
     Email<EMAIL_ADDRESS>Include Docket ID No. EPA-
HQ-OAR-2019-0282 in the subject line of the message.
     Fax:<PHONE_NUMBER>. Attention Docket ID No. EPA-HQ-OAR-
2019-0282.
     Mail: U.S. Environmental Protection Agency, EPA Docket
Center, Docket ID No. EPA-HQ-OAR-2019-0282, Mail Code 28221T, 1200
Pennsylvania Avenue NW, Washington, DC 20460.
     Hand/Courier Delivery: EPA Docket Center, WJC West
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004.
The Docket Center's hours of operation are 8:30 a.m.-4:30 p.m., Monday-
Friday (except Federal holidays).
    Instructions: All submissions received must include the Docket ID
No. for this rulemaking. Comments received may be posted without change
to https://www.regulations.gov/, including any personal information
provided. For detailed instructions on sending comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.

FOR FURTHER INFORMATION CONTACT: For questions about this proposed
action, contact Ms. Elineth Torres, Sector Policies and Programs
Division (D205-02), Office of Air Quality Planning and Standards, U.S.
Environmental Protection Agency, Research Triangle Park, North Carolina
27711; telephone number:<PHONE_NUMBER>; fax number:<PHONE_NUMBER>;
and email address<EMAIL_ADDRESS>
SUPPLEMENTARY INFORMATION:
    Public hearing. The EPA is planning to hold at least one public
hearing in response to this proposed action. Information about the
hearing, including location, date, and time, along with instructions on
how to register to speak at the hearing will be published in a second
Federal Register document.
    Docket. The EPA has established a docket for this rulemaking under
Docket ID No. EPA-HQ-OAR-2019-0282. All documents in the docket are
listed in Regulations.gov. Although listed, some information is not
publicly available, e.g., Confidential Business Information (CBI) or
other information whose disclosure is restricted by statute. Certain
other material, such as copyrighted material, is not placed on the
internet and will be publicly available only in hard copy. Publicly
available docket materials are available either electronically in
Regulations.gov or in hard copy at the EPA Docket Center, Room 3334,
WJC West Building, 1301 Constitution Avenue NW, Washington, DC. The
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 Public
Reading Room is<PHONE_NUMBER>, and the telephone number for the EPA
Docket Center is<PHONE_NUMBER>.
    Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2019-0282. The EPA's policy is that all comments received will be
included in the public docket without change and may be made available
online at https://www.regulations.gov/, including any personal
information provided, unless the comment includes information claimed
to be CBI or other information whose disclosure is restricted by
statute. Do not submit information that you consider to be CBI or
otherwise protected through https://www.regulations.gov/ or email. This
type of information should be submitted by mail as discussed below.
    The EPA may publish any comment received to its public docket.
Multimedia submissions (audio, video, etc.) must be accompanied by a
written comment. The written comment is considered the official comment
and should include discussion of all points you wish to make. The EPA
will generally not consider comments or comment contents located
outside of the primary submission (i.e., on the Web, cloud, or other
file sharing system). For additional submission methods, the full EPA
public comment policy, information about CBI or multimedia submissions,
and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
    The https://www.regulations.gov/ website allows you to submit your
comment anonymously, which means the EPA will not know your identity or
contact information unless you provide it in the body of your comment.
If you send an email comment directly to the EPA without going through
https://www.regulations.gov/, your email address will be automatically
captured and included as part of the comment that is placed in the
public docket and made available on the internet. If you submit an
electronic comment, the EPA recommends that you include your name and
other contact information in

the body of your comment and with any digital storage media you submit.
If the EPA cannot read your comment due to technical difficulties and
cannot contact you for clarification, the EPA may not be able to
consider your comment. Electronic files should not include special
characters or any form of encryption and be free of any defects or
viruses. For additional information about the EPA's public docket,
visit the EPA's Docket Center homepage at https://www.epa.gov/dockets.
    The EPA is expressly soliciting comment on numerous aspects of the
proposed rule. The EPA has indexed each comment solicitation with an
alpha-numeric identifier (e.g., ``C-1,'' ``C-2,'' ``C-3'') to provide a
consistent framework for effective and efficient provision of comments.
Accordingly, the EPA asks that commenters include the corresponding
identifier when providing comments relevant to that comment
solicitation. The EPA asks that commenters include the identifier in
either a heading, or within the text of each comment (e.g., ``In
response to solicitation of comment C-1, . . .'') to make clear which
comment solicitation is being addressed. The EPA emphasizes that the
Agency is not limiting comment to these identified areas and encourages
submission of any other comments relevant to this proposal.
    Submitting CBI. Do not submit information containing CBI to the EPA
through https://www.regulations.gov/ or email. Clearly mark the part or
all of the information that you claim to be CBI. For CBI information on
any digital storage media that you mail to the EPA, mark the outside of
the digital storage media as CBI and then identify electronically
within the digital storage media the specific information that is
claimed as CBI. In addition to one complete version of the comments
that includes information claimed as CBI, you must submit a copy of the
comments that does not contain the information claimed as CBI directly
to the public docket through the procedures outlined in Instructions
above. If you submit any digital storage media that does not contain
CBI, mark the outside of the digital storage media clearly that it does
not contain CBI. Information not marked as CBI will be included in the
public docket and the EPA's electronic public docket without prior
notice. Information marked as CBI will not be disclosed except in
accordance with procedures set forth in 40 Code of Federal Regulations
(CFR) part 2. Send or deliver information identified as CBI only to the
following address: OAQPS Document Control Officer (C404-02), OAQPS,
U.S. Environmental Protection Agency, Research Triangle Park, North
Carolina 27711, Attention Docket ID No. EPA-HQ-OAR-2019-0282.
    Preamble acronyms and abbreviations. We use multiple acronyms and
terms in this preamble. While this list may not be exhaustive, to ease
the reading of this preamble and for reference purposes, the EPA
defines the following terms and acronyms here:

CAA Clean Air Act
CAM compliance assurance monitoring
CBI Confidential Business Information
CEDRI Compliance and Emissions Data Reporting Interface
CEMS continuous emission monitoring system
CFR Code of Federal Regulations
EAV equivalent annualized value
EIA economic impact analysis
EPA Environmental Protection Agency
FESOP federally enforceable state operating permit
FIP Federal Implementation Plan
HAP hazardous air pollutant(s)
MACT maximum achievable control technology
MM2A Major MACT to Area
MRR monitoring, recordkeeping, and reporting
NESHAP national emission standards for hazardous air pollutants
NMA National Mining Association
NSPS new source performance standards
NSR New Source Review
NTTAA National Technology Transfer and Advancement Act
OIAI Once In, Always In
OMB Office of Management and Budget
P2 pollution prevention
PRA Paperwork Reduction Act
PSD prevention of significant deterioration
PTE potential to emit
PV present value
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
RTR risk and technology review
SBA Small Business Administration
SIP State Implementation Plan
TIP Tribal Implementation Plan
tpy tons per year
UMRA Unfunded Mandates Reform Act
VOC volatile organic compound(s)

    Organization of this document. The information in this preamble is
organized as follows:

I. Executive Summary
    A. Purpose of the Regulatory Action
    B. Summary of the Major Provisions of the Regulatory Action
    C. Costs and Benefits
II. General Information
    A. Does this proposed action apply to me?
    B. Where can I get a copy of this document and other related
information?
    C. What should I consider as I prepare my comments for the EPA?
III. Basis for the Proposed Action
    A. Prior Agency Actions
    B. Statutory Authority
    C. Role of the PTE Definition in the Regulation of Major Sources
    D. Issues Not Resolved by the Statute or Existing Regulations
IV. Considerations for Sources Seeking Reclassification From Major
to Area Source Status
    A. PTE Determination Considerations
    B. Criteria for Effective HAP PTE Limits
    C. Permitting Considerations
    D. SIP Considerations
V. Proposed Regulatory Changes
    A. Proposed Changes to 40 CFR Part 63, Subpart A: General
Provisions
    B. Proposed Changes to Individual NESHAP General Provisions
Applicability Tables
    C. Proposed Changes to Individual NESHAP
VI. Impacts of Proposed Amendments
VII. Request for Comments
VIII. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Executive Order 13771: Reducing Regulation and Controlling
Regulatory Costs
    C. Paperwork Reduction Act (PRA)
    D. Regulatory Flexibility Act (RFA)
    E. Unfunded Mandates Reform Act (UMRA)
    F. Executive Order 13132: Federalism
    G. Executive Order 13175: Consultation and Coordination With
Indian Tribal Governments
    H. Executive Order 13045: Protection of Children From
Environmental Health Risks and Safety Risks
    I. Executive Order 13211: Actions Concerning Regulations That
Significantly Affect Energy Supply, Distribution, or Use
    J. National Technology Transfer and Advancement Act (NTTAA)
    K. Executive Order 12898: Federal Actions To Address
Environmental Justice in Minority Populations and Low-Income
Populations
    L. Determination Under CAA Section 307(d)

I. Executive Summary

A. Purpose of the Regulatory Action

    On January 25, 2018, the EPA issued a guidance memorandum titled
``Reclassification of Major Sources as Area Sources Under Section 112
of the Clean Air Act'' (Major Maximum Achievable Control Technology
(MACT) to Area, or MM2A) memorandum. The memorandum discusses the
statutory provisions that govern when a major source subject to a major
source standard under section 112 of the CAA may be reclassified as an
area source, and thereby avoid being subject to major source
requirements. The proposed amendments to the General Provisions of the
NESHAP regulations in 40 CFR part 63, subpart A implement the plain
language reading of the ``major source'' and ``area source''
definitions of section 112 of the CAA and provide that a major

source can reclassify to area source status at any time by limiting its
potential to emit HAP to below the major source thresholds of 10 tpy of
any single HAP or 25 tpy of any combination of HAP. The proposal also
clarifies the requirements that apply to sources choosing to reclassify
to area source status after the first substantive compliance date of an
applicable NESHAP standard (also ``CAA section 112 requirements'' or
``requirements'').
    Further, we propose to amend the definition of ``potential to
emit'' in the General Provisions of the NESHAP regulations to address a
Court decision remanding the definition to the EPA. Under the current
definition in 40 CFR 63.2, any physical or operational limitation on
the capacity of the stationary source to emit a pollutant, including
air pollution control equipment and restrictions on hours of operation
or on the type or amount of material combusted, stored, or processed,
shall be treated as part of its design if the limitation or the effect
it would have on emissions is federally enforceable. In 1995, the
United States Court of Appeals for the District of Columbia Circuit
issued a decision in National Mining Association (NMA) v. EPA, 59 F.3d
1351 (D.C. Cir. 1995), in which it remanded the definition of
``potential to emit'' found in 40 CFR 63.2. In the NMA decision, the
Court stated that the Agency had not adequately explained how ``federal
enforceability'' furthered effectiveness. 59 F.3d at 1363-1365. In this
action, the EPA is proposing specific criteria that HAP PTE limits must
meet for these limits to be effective in ensuring that a source would
not emit above the PTE limits. The EPA is proposing to amend the
definition of ``potential to emit'' in 40 CFR 63.2, accordingly, by
removing the requirement for federally enforceable PTE limits and
requiring instead that HAP PTE limits meet the effectiveness criteria
of being both legally enforceable and practicably enforceable.
    To ensure the EPA and the public is aware of the universe of
sources that reclassify from major source to area source status, we
propose to amend the current notification requirements in 40 CFR
63.9(b) and (j)(9) to require the notifications to be submitted
electronically. This proposal also responds to questions received after
the issuance of the MM2A memorandum and requests comment on issues
relevant to implementation of the plain language reading of the
statute. In addition, this proposal revises the General Provisions
applicability tables in specific NESHAP standards to reflect the
proposed changes to the General Provisions requirements. This proposal
is intended to provide clarity and certainty to stakeholders and the
public regarding the reclassification process.

B. Summary of the Major Provisions of the Regulatory Action

    The EPA is proposing to amend the applicability section found in 40
CFR 63.1 by adding a new paragraph (c)(6). This paragraph will specify
that a major source can become an area source at any time by limiting
its HAP PTE to below the major source thresholds established in 40 CFR
63.2. The EPA is also proposing to amend the definition of ``potential
to emit'' in 40 CFR 63.2 to remove the requirement that limits on
emissions be federally enforceable and instead require that any
physical or operational limitation on the capacity of the stationary
source to emit a pollutant, including air pollution control equipment
and restrictions on hours of operation or on the type or amount of
material combusted, stored, or processed, shall be treated as part of
its design if the limitation or the effect it would have on emissions
is legally and practicably enforceable (i.e., ``effective''). The EPA
is also proposing to include in 40 CFR 63.2 the definitions of legally
and practicably enforceable. By proposing this amendment, the EPA is
allowing for the use of non-federally enforceable limits (e.g., state
only enforceable limits) to be recognized as effective in limiting a
source's potential to emit for purposes of CAA section 112
applicability provided those limits are legally and practicably
enforceable.
    To address the issue of compliance time frames for sources that
reclassify from major source status to area source status after the
first substantive compliance date of an applicable major source NESHAP
standard, we are proposing regulatory text in the new provision at 40
CFR 63.1(c)(6)(i) under which major sources that reclassify to area
source status become subject to applicable area source requirements in
40 CFR part 63 immediately upon becoming an area source in those
situations where the first substantive compliance date of the area
source requirements has passed. For sources that reclassify from major
to area source status and then revert back to their previous major
source status, the EPA is proposing to add a new provision in 40 CFR
63.1(c)(6)(ii)(A) to specify that upon reverting back to major source
status, a source must meet the major source NESHAP requirements at the
time that those requirements again become applicable to the source. The
EPA is proposing to add a new provision at 40 CFR 63.1(c)(6)(iii) to
address the interaction of the reclassification of sources with
enforcement actions arising from violations that occurred while the
source was a major source subject to major source requirements.
Specifically, we are proposing that status reclassification from major
source to area source does not affect a source's liability or any
enforcement investigations or enforcement actions for a source's past
violations of major source requirements that occurred prior to the
source's reclassification.
    The EPA is proposing to amend the notification requirements in 40
CFR 63.9(b) so that an owner or operator of a facility that
reclassifies must notify the Administrator of any standards to which it
becomes subject. With this amendment, the notification requirements of
40 CFR 63.9 will cover both situations where a source switches from
major to area source status, and where a source switches from major, to
area, and back to major source status. The EPA is also proposing to
clarify that a source that reclassifies must notify the EPA of any
changes in the applicability of the standards that the source was
subject to per the notification requirements of 40 CFR 63.9(j). The EPA
is also proposing to amend the notification requirements in 40 CFR
63.9(b) and (j) to require the notification be submitted electronically
through the Compliance and Emissions Data Reporting Interface (CEDRI).
The EPA is also proposing to amend the General Provisions to add 40 CFR
63.9(k) to include the CEDRI submission procedures. The EPA is also
proposing to remove the time limit for record retention in 40 CFR
63.10(b)(3) so sources that obtain new legally and practicably
enforceable PTE limits are required to keep the required records until
the source becomes subject to major source NESHAP requirements. The EPA
is also proposing to amend 40 CFR 63.12(c) to clarify that a source may
not be exempted from electronic reporting requirements.
    The EPA is proposing to amend the General Provisions applicability
tables contained within most subparts of 40 CFR part 63 to add a
reference to a new proposed paragraph 63.1(c)(6) discussed above. The
EPA has identified one general category of regulatory provisions in
several NESHAP subparts that include a date by which a major source can
become an area source. Accordingly, in this action we are proposing to
revise these provisions by removing such date limitations. The
provisions we are proposing to revise

are: 40 CFR part 63, subpart QQQ at 63.1441; 40 CFR part 63, subpart
QQQQQ at 63.9485; 40 CFR part 63, subpart RRRRR at 63.9581; and Table 2
of 40 CFR part 63, subpart WWWW. We are also proposing to revise
several area source NESHAP subparts that include a specific date for an
existing source to submit the initial notification because the date
specified in the regulations has passed. The provisions we are
proposing to revise are: 40 CFR part 63, subpart HHHHHH at 63.11175; 40
CFR part 63, subpart XXXXXX at 63.11519; 40 CFR part 63, subpart
AAAAAAA at 63.11564; 40 CFR part 63, subpart BBBBBBB at 63.11585; and
40 CFR part 63, subpart CCCCCCC at 63.11603. We request comments on
whether there are other NESHAP subparts that contain the same type of
general provisions of those discussed above that will need to be
revised (Comment C-1).\1\
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    \1\ The EPA notes that the regulatory provisions cited and
discussed in this paragraph continue to be in effect. These
provisions will remain in effect until such time as they are revised
or removed by final agency action.
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C. Costs and Benefits

    The EPA projects that this proposed action may result in
substantial cost savings based on illustrative estimates of its reduced
administrative burden. Other changes in costs, such as from changes in
control device operation and maintenance in response to this proposed
action, are not estimated due to lack of information. To assess
potential changes in emissions, we analyzed the reclassification of 34
sources and also performed an illustrative analysis of six source
categories in detail; however, due to limited information on how
emissions changes could take place across the broad array of HAP
emissions sources, we are unable to provide precise estimates of
changes in emissions for all source categories that could be impacted
by this action. Due to the uncertainties in determining precise
emission impacts, we are providing a qualitative assessment of benefits
that may result from this proposed action. The illustrative cost saving
impacts of this proposed regulation are estimated for all sources that
could potentially reclassify from major source status to area source
status under section 112 of the CAA for the 2 years after promulgation
of this action. The impacts presented in the preamble reflect those
estimated from the illustrative cost saving analysis of the primary
scenario, which for analytical purposes is defined as only those
facilities whose actual emissions are below 75 percent of the major
source thresholds (7.5 tpy for a single HAP and 18.75 tpy for all HAP)
that could potentially reclassify from major to area source status, a
scenario that is further described in section VI of this preamble and
the Regulatory Impact Analysis (RIA) that is available in the docket
for this action. The RIA also presents two other alternative scenarios
to provide a range of estimated cost savings.\2\ All impacts are
estimated compared to a baseline in which all promulgated regulations
to limit HAP emissions under section 112 of the CAA are in place and
includes implementation of the 1995 Once In, Always In (OIAI) policy.
Results are presented as the present value (PV) and equivalent
annualized value (EAV) of the cost savings of the proposed action in
2016 dollars. The PV is the one-time value of a stream of impacts over
time, discounted to the current (or nearly current) day. The EAV is a
measure of the annual cost that is calculated consistent with the PV.
The cost savings of the proposed action in 2014 dollars are also
presented later in this preamble and in the RIA.
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    \2\ Alternative scenario 1 assumes that only those facilities
whose actual emissions are below 50 percent of the major source
thresholds (5 tpy for a single HAP and 12.5 tpy for all HAP) would
reclassify from major to area source status. Alternative scenario 2
assumes that sources below 125 percent of the major source
thresholds (12.5 tpy for a single HAP and 31.25 tpy for all HAP)
would reclassify from major to area source status. Discussion of
these scenarios and results can be found in the RIA for this
proposal.
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    A summary of key results from the proposed action presented as
shown in the RIA can be found in Table 1. This table presents the PV
and EAV, estimated in 2016 dollars using discount rates of 7 and 3
percent, and discounted to 2016, of the cost savings of the proposed
action. Yearly estimates are presented for the second year after
promulgation and subsequent years.

                        Table 1--Annual Cost Savings Compared to the Baseline, For Year 2
                                           [Including following years]
                                               [Billions 2016$] *
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                                                                7%  Equivalent                    3%  Equivalent
                                               Present value      annualized     Present value      annualized
                                                                    value                             value
----------------------------------------------------------------------------------------------------------------
Benefits (Cost Savings).....................           $2.39            $0.17            $6.24            $0.19
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* The analytic timeline begins in 2020 and continues thereafter for an indefinite period. Year 1 impacts are
  those for 1 year after 2020, and Year 2 impacts are those for the second year after 2022 and annually
  afterwards. Impacts for year 2 are representative of impacts in subsequent years. Impacts are for the primary
  scenario analyzed for the proposal.

    To assess the potential for emission changes from the
reclassification of major sources as area sources, the EPA evaluated
the sources that the EPA knows have reclassified to area source status
consistent with the EPA's plain language reading of the CAA section 112
definitions of ``major'' and ``area'' source, since January 2018. The
EPA reviewed permits associated to the reclassification of 34 sources.
The EPA also performed an illustrative analysis of changes in emissions
for six source categories covered by the proposed rule. In addition,
the EPA also performed an illustrative analysis of control cost
estimates under one alternative scenario for five source categories
covered by the proposed rule. The assessment of the reclassifications
and illustrative analyses are summarized in section VI of this preamble
and presented in details in the Emission Impacts Analysis Technical
Support Memorandum (TSM), the illustrative 125% Scenario Cost
Considerations Memorandum and the RIA for the proposal that are
available in the docket for this action.

II. General Information

A. Does this proposed action apply to me?

    Categories and entities potentially impacted by this proposal
include sources subject to NESHAP requirements under section 112 of the
CAA.
    The proposed amendments, if promulgated, will be applicable to

sources that reclassify from major source to area source status under
section 112 of the CAA and sources that revert from their reclassified
status as an area source resulting from this action to their previous
major source status.
    Federal, state, local, and tribal governments may be affected by
this action if they own or operate sources that choose to request
reclassification from major source status to area source status or if
they choose to subsequently revert to their major source status at some
time in the future after such reclassification. The EPA is the
permitting authority for issuing, rescinding, and amending permits for
sources that request reclassification in Indian country, with four
exceptions.\3\ State, local, or tribal regulatory authorities \4\ may
receive requests to issue new permits or make changes to existing
permits for sources in their jurisdiction to address reclassification
related activities (e.g., title V, synthetic minor permits,
establishing limits on a source's PTE).
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    \3\ Two tribes have approved title V programs or delegation of
40 CFR part 71. The tribes may have sources that request to no
longer be covered by title V. Neither of these two tribes have
approved minor source permitting programs but may in the future. In
the meantime, the tribes will need to coordinate with the EPA, who
is the permitting authority in Indian country for these requests. In
addition, two other tribes have approved Tribal Implementation Plans
(TIPs) authorizing the issuance of minor source permits. Only one of
these tribes has a major source that would be eligible to request
reclassification. If that source requests a new permit, the tribe
may issue the minor source permit, but the EPA would need to be made
aware of the request as the EPA is the permitting authority for
title V.
    \4\ The term regulatory authority is intended to be inclusive of
the permitting authority or other governmental agency with authority
to process reclassification requests and issuance of legally and
practicably enforceable HAP PTE limits.
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B. Where can I get a copy of this document and other related
information?

    In addition to being available in the docket, an electronic copy of
this proposal is available on the internet. Following signature by the
EPA Administrator, the EPA will post a copy of this proposed action at
https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112-clean. Following
publication in the Federal Register, the EPA will post the Federal
Register version of the proposal and key documents at this same
website.
    A redline version of the regulatory language that incorporates the
proposed changes in this action is available in the docket for this
action (Docket ID No. EPA-HQ-OAR-2019-0282).

C. What should I consider as I prepare my comments for the EPA?

    In 2007, the EPA issued a proposed rule to amend the General
Provisions to the NESHAP. See 72 FR 69 (January 3, 2007). This new
proposal supersedes and replaces the 2007 proposed rule. The EPA will
not be responding to comments received on the 2007 proposal. While some
aspects of this new proposal are similar to some aspects of the 2007
proposal, some aspects also differ from the 2007 proposal. To the
extent that your comments on this new proposal are similar to or the
same as comments submitted in 2007, you can restate those comments in
the document that you prepare and submit on this proposal. Please do
not resubmit 2007 comment documents or attach 2007 comment documents in
what you submit on this proposal.
    The EPA is expressly soliciting comment on numerous aspects of the
proposed rule. The EPA has indexed each comment solicitation with an
alpha-numeric identifier (e.g., ``C-1,'' ``C-2,'' ``C-3'') to provide a
consistent framework for effective and efficient provision of comments.
Accordingly, the EPA asks that commenters include the corresponding
identifier when providing comments relevant to that comment
solicitation. The EPA asks that commenters include the identifier in
either a heading, or within the text of each comment (e.g., ``In
response to solicitation of comment C-1, . . .'') to make clear which
comment solicitation is being addressed. The EPA emphasizes that the
Agency is not limiting comment to these identified areas and encourages
the submission of any other comments relevant to this proposal.

III. Basis for the Proposed Action

A. Prior Agency Actions

    Shortly after the EPA began implementing individual NESHAP
standards resulting from the 1990 CAA Amendments, the Agency received
multiple requests to clarify when a major source of HAP could avoid CAA
section 112 requirements applicable to major sources by taking
enforceable limits on its PTE below the major source thresholds. In
response, the EPA issued, on May 16, 1995, a memorandum from John
Seitz, Director of the Office of Air Quality Planning and Standards, to
the EPA Regional Air Division Directors (the 1995 Seitz Memorandum).\5\
The 1995 Seitz Memorandum provided guidance on three timing issues
related to avoidance of CAA section 112 requirements for major sources:
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    \5\ See ``Potential to Emit for MACT Standards-Guidance on
Timing Issues.'' From John Seitz, Director, Office of Air Quality
Planning and Standards, to the EPA Regional Air Division Directors.
May 16, 1995, https://www.epa.gov/sites/production/files/2018-02/documents/pteguid.pdf.
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     ``By what date must a facility limit its PTE if it wishes
to avoid major source requirements of a MACT standard?''
     ``Is a facility that is required to comply with a MACT
standard permanently subject to that standard?''
     ``In the case of facilities with two or more sources in
different source categories: If such a facility is a major source for
purposes of one MACT standard, is the facility necessarily a major
source for purposes of subsequently promulgated MACT standards?''
    In the 1995 Seitz Memorandum, the EPA stated its interpretation of
the relevant statutory language that facilities that are major sources
of HAP may switch to area source status at any time until the ``first
compliance date'' of the standard.\6\ Under this interpretation,
facilities that are major sources on the first substantive compliance
date of an applicable major source NESHAP were required to comply
permanently with that major source standard even if the source was
subsequently to become an area source by limiting its PTE. This
position was commonly referred to as the ``Once In, Always In'' (OIAI)
policy. The expressed basis for this OIAI policy was that this would
help ensure that required reductions in HAP emissions were maintained
over time. See 1995 Seitz Memorandum at 9 (``A once in, always in
policy ensures that MACT emissions reductions are permanent, and that
the health and environmental protection provided by MACT standards is
not undermined.''). Finally, the 1995 Seitz Memorandum provided that a
source that is major for one MACT standard would not be considered
major for a subsequent MACT standard if the source's potential to emit
HAP emissions was reduced to below major source levels by complying
with the first major source MACT standard. In the 1995 Seitz
Memorandum, the EPA set forth transitional policy guidance that was
intended to remain in effect only until the Agency proposed and
promulgated amendments to the 40 CFR part 63 General Provisions.
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    \6\ The ``first substantive compliance date'' is defined as the
first date a source must comply with an emission limitation or other
substantive regulatory requirement (i.e., leak detection and repair
programs, work practice measures, etc. . . , but not a notice
requirement) in the applicable standard.

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    After issuing the 1995 Seitz Memorandum, the EPA twice proposed
regulatory amendments that would have altered the OIAI policy. In 2003,
the EPA proposed amendments that focused on HAP emissions reductions
resulting from pollution prevention (P2) activities. Apart from certain
provisions associated with the EPA's National Environmental Performance
Track Program, a national voluntary program designed to recognize and
encourage top environmental performers whose program participants go
beyond compliance with regulatory requirements to attain levels of
environmental performance that benefit people, communities, and the
environment, that proposal was never finalized. See 68 FR 26249 (May
15, 2003); 69 FR 21737 (April 22, 2004). In 2007, the EPA issued a
proposed rule to replace the OIAI policy set forth in the May 1995
Seitz Memorandum. 72 FR 69 (January 3, 2007). In that proposal, the EPA
reviewed the provisions in CAA section 112 relevant to the OIAI policy
interpretation, applicable regulatory language, stakeholder concerns,
and potential implications. Id. at 71-74. Based on that review, the EPA
proposed an interpretation of the relevant statutory language that a
major source that is subject to a major source NESHAP would no longer
be subject to that major source standard if the source were to become
an area source through enforceable limitations on its PTE for each HAP.
Id. at 72-73. Under the 2007 proposal, major sources could take such
limits on their PTE and obtain ``area source'' status at any time and
would not be limited to doing so only before the ``first substantive
compliance date,'' as the OIAI policy provided.\7\ Id. at 70. The EPA
did not take final action on this 2007 proposal. This proposal
supersedes and replaces the 2007 proposed rule.
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    \7\ As provided in the 2007 proposal, ``[p]rior to the effective
date of the permit [that limits the emissions of HAP], the source
must comply with the relevant major source MACT standard(s) and
other conditions in its title V permit.'' See 72 FR 76.
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    Many commenters supporting the 2007 proposal expressed the view
that, by imposing an artificial time limit on major sources obtaining
area source status, the OIAI policy created a disincentive for sources
to implement voluntary pollution abatement and prevention efforts, or
to pursue technological innovations that would reduce HAP emissions
further. Stakeholders commented to the EPA that the definitions in CAA
section 112(a)(2) contain a single factor for distinguishing between
major source and area source--the amount of HAP the source ``emits'' or
``has the potential to emit.'' Commenters further stated that the
temporal limitation imposed by the OIAI policy was inconsistent with
the CAA and created an arbitrary date by which sources must determine
whether their HAP PTE will exceed either of the major source
thresholds. These issues were re-emphasized in recent comments received
per Executive Order 13777, Enforcing the Regulatory Reform Agenda
(February 24, 2017), and the Presidential Memorandum on Streamlining
Permitting and Reducing Regulatory Burdens for Domestic Manufacturing
(January 24, 2017).
    On January 25, 2018, the EPA issued a guidance memorandum from
William L. Wehrum, Assistant Administrator of the Office of Air and
Radiation, to the EPA Regional Air Division Directors titled
``Reclassification of Major Sources as Area Sources Under Section 112
of the Clean Air Act'' (MM2A Memorandum).\8\ The MM2A Memorandum
discussed the statutory provisions that govern when a major source
subject to major source NESHAP requirements under section 112 of the
CAA may be reclassified as an area source, and thereby avoid being
subject thereafter to major source NESHAP requirements and other
requirements applicable to major sources under CAA section 112. In the
MM2A Memorandum, the EPA discussed the plain language of CAA section
112(a) regarding Congress's definitions of ``major source'' and ``area
source,'' and determined that the OIAI policy articulated in the 1995
Seitz Memorandum is contrary to the plain language of the CAA and,
therefore, must be withdrawn. In the MM2A Memorandum, the EPA announced
the future publication of a proposed rule to receive input from the
public on adding regulatory text consistent with the plain reading of
the statute as described in the MM2A Memorandum.
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    \8\ See notice of issuance of this guidance memorandum at 83 FR
5543 (February 8, 2018).
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    In this action, the EPA is proposing regulatory text to implement
the plain language reading of the statute as discussed in the MM2A
Memorandum, and this proposal supersedes and replaces the 2007
proposal. See 72 FR 69 (January 3, 2007). This proposal also addresses
questions received after the issuance of the MM2A Memorandum. In the
comments on the 2007 proposal, many stakeholders asserted that the
implementation of this plain reading and withdrawal of the OIAI policy
will incentivize stationary sources that have reduced HAP emissions to
below major source thresholds to reclassify to area source status by
taking enforceable PTE limits and reduce their compliance burden. These
stakeholders also stated that sources with emissions above major source
thresholds after complying with CAA section 112 major source
requirements could be encouraged to evaluate their operations and
consider additional changes that can further reduce their HAP emissions
to below the major source thresholds. Overall, many stakeholders
believed the implementation of the plain language reading of the
statute will encourage sources to pursue pollution abatement efforts,
including innovation in pollution reduction technologies, engineering,
and work practices. Other stakeholders raised the concern that allowing
sources to reclassify could potentially result in emission increases
from sources that have reduced their actual emissions to below the
major source thresholds because they have had to comply with major
source NESHAP requirements.
    We solicit comment on all aspects of this proposal, including the
EPA's position that the withdrawal of the OIAI policy and the proposed
approach gives proper effect to the statutory definitions of ``major
source'' and ``area source'' in CAA section 112(a) and is consistent
with the plain language and structure of the CAA as well as the impacts
of the proposal on costs, benefits, and emissions impacts (Comment C-
2).

B. Statutory Authority

    CAA section 112 distinguishes between major and area sources of HAP
emissions. Major sources are larger sources of air emissions than area
sources and, generally, different requirements apply to major sources
and area sources. For some HAP source categories, the EPA has
promulgated requirements for only major sources, and HAP emissions from
area sources in that source category are not regulated under the NESHAP
program.
    Whether a source is a ``major source'' or an ``area source''
depends on the amount of HAP emitted by the source based on its actual
or potential emissions. Congress defined ``major source'' to mean a
source that emits or has the potential to emit at or above either of
the statutory thresholds of 10 tpy of any one HAP or 25 tpy of total
HAP. CAA section 112(a)(1). An ``area source'' is defined as any source
of HAP that is not a major source. CAA section 112(a)(2). If a source
does not emit or does not have the potential to emit at or above either
of the major source thresholds, then it is an ``area source.'' The
statutory definitions of ``major

source'' and ``area source'' do not contain any language that fixes a
source's status as a major source or area source at any particular
point in time, nor do they otherwise contain any language suggesting
that there is a cut-off date after which a source's status cannot
change.
    Congress did, however, create a distinction based on timing in CAA
section 112 in defining and creating provisions related to ``new
sources'' and ``existing sources.'' Specifically, Congress defined
``new source'' to mean a source that is constructed or reconstructed
after the EPA first proposes regulations covering the source. CAA
section 112(a)(4). An ``existing source'' is defined as any source
other than a new source. CAA section 112(a)(10). A source will be
subject to different requirements depending on whether it is a new
source or an existing source. See, e.g., CAA section 112(d)(3)
(identifying different minimum levels of stringency (known as ``MACT
floors'') for new and existing sources).
    The emissions-based distinction (arising from the definitions of
major source and area source) and the timing-based distinction (arising
from the definitions of new source and existing source) are
independent, and neither is tied to the other. For example, the
statutory definition of ``major source'' does not provide that major
source status is determined based on a source's emissions or PTE as of
the date that the EPA first proposes regulations applicable to that
source or any other point in time. As noted above, the plain language
of the ``major source'' and ``area source'' definitions create a
distinction that is based solely on amount of emissions and PTE, and
not timing. Similarly, with respect to the timing-based distinction, a
source is a ``new source'' or an ``existing source'' based entirely on
the timing of its construction or reconstruction and without
consideration of its actual emissions or PTE. The contrast between the
temporal distinction in the contrasting definitions of existing and new
sources on the one hand, and the absence of any temporal dimension to
the contrasting definitions of major and area sources on the other, is
further evidence that Congress did not intend to place a temporal
limitation on a source's ability to be classified as an area source
(including a source's ability to be classified as an area source
through the permitting authority's ``considering controls'' that may
have been imposed after the source was initially classified as major).
    Notwithstanding the independence of the two distinctions that the
statute created based on amount of emissions and timing (and without
addressing that independence or otherwise addressing the plain language
of the statutory definitions of ``major source'' and ``area source''),
the EPA issued the May 1995 Seitz Memorandum, which set forth the OIAI
policy. Under the OIAI policy, a source's status as a major source for
the purpose of applying a specific major source MACT standard issued
under the requirements of CAA section 112 is unalterably fixed on the
first substantive compliance date of the specific applicable major
source requirements. Thus, a source that was a major source on that
first compliance date would continue to be subject to the major source
requirements for that specific NESHAP even if the source reduced its
PTE to below the statutory thresholds in the definition of ``major
source,'' and, thus, fell within the definition of ``area source.''
    On January 25, 2018, the EPA issued a guidance memorandum titled
``Reclassification of Major Sources as Area Sources Under Section 112
of the Clean Air Act,'' signed by William L. Wehrum, Assistant
Administrator of EPA's Office of Air and Radiation (MM2A Memorandum).
The MM2A Memorandum discussed the statutory definitions of ``major
source'' and ``area source'' and explained that the OIAI policy
articulated in the May 1995 Seitz Memorandum was contrary to the plain
language of the CAA, and, therefore, must be withdrawn.
    As discussed above, Congress expressly defined the terms ``major
source'' and ``area source'' in CAA section 112(a) in unambiguous
language. Nonetheless, under the OIAI policy, a source that reduced its
PTE to below the statutory thresholds for major source status after the
relevant compliance date would nevertheless continue to be subject to
the requirements applicable to major sources. This policy was applied
notwithstanding that the statutory definitions of ``major source'' and
``area source'' lack any reference to the compliance date of major
source requirements or any other text that indicates a time limit for
changing between major source status and area source status. In short,
Congress placed no temporal limitations on the determination of whether
a source emits or has the potential to emit HAP in sufficient quantity
to be a major source under CAA section 112. Because, the OIAI policy
imposed such a temporal limitation (before the ``first compliance
date''), the EPA had no authority for the OIAI policy under the plain
language of the CAA. Under the plain language of the statute, a major
source that takes enforceable limits on its PTE to bring its HAP
emissions below the CAA section 112 major source thresholds, no matter
when it may choose to do so, becomes an area source under the plain
language of the statute. We are proposing to make clear in this
rulemaking that such a source, now having area source status, will not
be subject to the CAA section 112 requirements applicable to the source
as a major source under CAA section 112--so long as the source's actual
and PTE HAP remains below the CAA section 112 thresholds--and will
instead be subject to any applicable area source requirements.
    A discussion of the statutory definitions of ``new source'' and
``existing source'' in CAA section 112(a)(4) and (a)(10) further
demonstrates that the OIAI policy was inconsistent with the language of
the statute. As discussed above, the major source/area source
distinction and the new source/existing source distinction are two
separate and independent features of the statute. Significantly, the
statutory definitions of ``new source'' and ``existing source'' dictate
that the new source/existing source distinction is determined by when a
source commences construction or reconstruction and say nothing about
the source's volume of emissions. No one can reasonably suggest that
this silence concerning volume of emissions indicates that Congress
intended to give the EPA the discretion to conclude that sources should
be classified as new or existing based, in part, on how much they emit.
For example, if the EPA were to say that a source is only a new source
if it both (1) commences construction after regulations are first
proposed (as stated in CAA section 112(a)(4)), and (2) emits more than
20 tpy of any single HAP (which is not stated anywhere in the statute),
that second element would be contrary to the plain language of the
statute. Similarly, the OIAI policy of considering timing matters as
part of the major source/area source distinction is contrary to the
plain language of the statute, because it interjects timing matters
into the major/area distinction when Congress provided that such
distinction would be based only on the source's actual and potential
emissions.
    Some interested parties assert that the EPA's plain language
reading of the definitions of ``major source'' and ``area source'' is
contradicted by CAA section 112(i)(3)(A). Specifically, they contend
that the first phrase in CAA section 112(i)(3)(A) precludes a major
source from reclassifying to area source status

after the source has become subject to a major source standard, and
that this statutory text compels the OIAI policy. The EPA disagrees
with this contention and is taking comment on the following analysis.
The first phrase in CAA section 112(i)(3)(A) states: ``After the
effective date of any emissions standard, limitation or regulation
promulgated under this section and applicable to a source, no person
may operate such source in violation of such standard, limitation or
regulation. . . .'' The EPA reads this phrase to have the same meaning
as similar ``effective date'' provisions in the CAA, such as CAA
section 111(e), notwithstanding that CAA section 112(i)(3)(A) has
somewhat different phrasing. In short, this text simply provides that,
after the effective date of a CAA section 112 rule, sources to which a
standard is applicable must comply with that standard. This text is not
reasonably read to say that, once a standard is applicable to a source,
that standard continues to be applicable to the source for all time,
even if the source's potential to emit changes such that it no longer
meets the applicability criteria for the standard. Such a reading would
produce some odd results. For example, if the first phrase in CAA
section 112(i)(3)(A) were read to say that a source's applicable
requirements are determined at the point in time that a source first
becomes subject to CAA section 112 requirements, then a source that was
initially an area source would continue to be subject to area source
requirements even if that source increased its potential to emit above
either of the major source thresholds. The EPA's reading is that an
area source that actually emits or increases its PTE above either of
the major source thresholds is subject to major source requirements. In
sum, we are proposing to determine that the CAA section 112 definitions
of ``major source'' and ``area source'' and the ``effective date''
provision in CAA section 112(i)(3)(A) are properly read together to say
that sources must comply with the applicable requirements corresponding
to their major source or area source status, and that if this status
changes, then the source becomes subject to the requirements
corresponding to its current status.
    Nothing in the structure of the CAA counsels against the plain
language reading of the statute to allow major sources to become area
sources after an applicable compliance date in a regulation, in the
same way that they have long been able to become area sources before
the applicable compliance date. Congress defined major sources and area
sources differently and established different provisions applicable for
each. The OIAI policy, by contrast, created an artificial time limit
that does not exist on the face of the statute by including a temporal
limitation on when a major source could become an area source by
limiting its PTE HAP.
    Some interested parties have pointed to various provisions in CAA
section 112 in addition to CAA section 112(i)(3)(A) as demonstrating
that the EPA's plain language reading is contrary to the purposes and
structure of CAA section 112. The EPA disagrees that these provisions
are contrary to or inconsistent with EPA's plain language reading, for
the following reasons.
    First, some interested parties have pointed to CAA sections
112(c)(3) and (c)(6) as reflecting a Congressional intent for sources
to be subject to continuous, permanent compliance with major-source
standards and, thus, these provisions are inconsistent with the EPA's
plain language reading. But there is no real inconsistency here. Those
provisions required the EPA to ensure that sources accounting for 90
percent of the emissions of specific pollutants were listed and
regulated by November 2000. The premise of the argument based on CAA
sections 112(c)(3) and (c)(6) is that these provisions do not simply
require the EPA to list and regulate sufficient source categories to
meet the 90 percent requirement at a given point in time; rather, they
require that the EPA's regulations ensure that 90 percent of emissions
are subject to regulation on an ongoing basis. This is not a reasonable
reading of what is required by CAA sections 112(c)(3) and (c)(6), as
demonstrated by the inherent implications of the regulation called for
in these provision and simple math. Once the sources in the categories
that represent 90 percent of the emissions addressed in these
provisions become subject to standards, those sources' emissions will
decrease and those categories will no longer represent 90 percent of
all emissions of the pollutants in question. As a hypothetical example,
if the total emissions of one of the pollutants addressed in CAA
sections 112(c)(3) and (c)(6) were 100 tpy, and if the source
categories emitting 90 tpy were subjected to a standard that called for
a 50 percent reduction in emissions, then those source categories would
now only be emitting 45 tpy, which would be about 82 percent of the new
total emissions of 55 tpy. Under the interested parties' reading of CAA
sections 112(c)(3) and (c)(6), the EPA would then be required to add
source categories to get back to 90 percent and set standards to reduce
the emissions of those sources. This would, once again, reduce the
regulated sources to below 90 percent. In short, this reading of CAA
sections 112(c)(3) and (c)(6) would create a never-ending cycle of
listing and regulation in order to achieve an unattainable goal of
ensuring the 90 percent of emissions are regulated. This is not a
reasonable reading of what CAA sections 112(c)(3) and (c)(6) require.
Further, one would expect the number of sources in a source category to
change over time due to shifts in the economy. For example, one source
category regulated under CAA section 112 is magnetic tape manufacturing
operations. See subpart EE, 40 CFR 63.701-63.708. Since this source
category was first regulated in 1994 (see 59 FR 64596, December 15,
1994), the use of digital recording and data storage has largely
replaced the use of magnetic tape, and, thus, the number of sources in
this source category has declined. As the number of sources in a source
category declined, the total emissions from the source category would
decline, which creates another reason why the total group of source
categories that at one point represented 90 percent of emissions would
fall to less than 90 percent. Thus, again, a reading that the 90
percent requirement is an ongoing requirement that must be continuously
met is not a reasonable reading, because it is not reasonable to think,
and there is nothing in the statute to suggest, that Congress intended
the 90 percent requirement to impose on the EPA the need to endlessly
revisit its 90 percent determination as the implementation of MACT
standards under CAA section 112 achieved reductions in emissions. For
these reasons, there is no conflict between the EPA's plain language
reading of CAA sections 112(a)(1)-(2) and the requirements of CAA
sections 112(c)(3) and (c)(6).
    Second, opponents of the EPA's plain language reading also point to
CAA section 112(f)(2) (commonly referred to as the residual risk
provision) and CAA section 112(d)(6) (commonly referred to as the
technology review provision). These parties suggest that these
provisions demonstrate Congress's ``legislative plan'' that sources
will continually reduce their emissions, and that the EPA's plain
language reading will allow sources to become area sources and, in so
doing, undermine this ``legislative plan.'' This argument, however,
fails to recognize that Congress in CAA section 112 also plainly
distinguished between major sources emitting above the 10/25

threshold and area sources emitting below the 10/25 threshold and
subjected them to different requirements. Perhaps the clearest example
of the differential treatment of major sources and area sources is the
provision in CAA section 112(d)(5) allowing the EPA to set GACT
standards rather than MACT standards for area sources. In short, any
consideration of Congress' ``legislative plan'' has to look at the
entire plan, including the plain language that Congress used to define
major sources and area sources.
    Third, some parties have pointed to the requirements of CAA section
112(d) as requiring that sources that are at any point subjected to
major source standards must continue to be subject to major source
standards permanently and argued that EPA's plain language reading
undermines the protections provided by these CAA 112 standards. Section
112(d)--and in particular, section 112(d)(2) and (d)(3) of the CAA--
addresses how the EPA sets MACT standards for major sources (based on
the maximum degree of emissions reduction the EPA determines is
achievable, which may be a complete prohibition on emissions). As an
initial point, sections 112(d)(2) and (d)(3) are not the only
provisions that govern major source standards, and in some cases, they
are not the controlling provisions. For example, CAA section 112(h)
provides that the EPA, in certain circumstances, can set standards that
are different from the MACT floor-based standards created under CAA
sections 112(d)(2) and (d)(3). More fundamentally, the question of what
standard is applicable to major sources in a source category--whether
MACT floor standards or otherwise--logically cannot control the proper
reading of the statutory text identifying the pool of sources to which
major source requirements apply. In short, once again, these contextual
arguments are misplaced. Congress has spoken by defining ``major
source'' without any temporal limitation. The EPA's plain language
reading honors that unambiguous choice.
    Parties opposed to the EPA's plain language reading also suggest
that the EPA's reading is inconsistent with the purpose and provisions
of CAA section 112 because it will lead major sources that reclassify
to area source status to increase their emissions above what they could
emit if they continued to be major sources. The EPA disagrees that a
sources' reclassification from major source to area source will
necessarily lead to an increase in emissions for the source, for the
following reasons.
    First, as the EPA noted in the MM2A memorandum (at 4) and as
discussed above in section III.A of this preamble, some stakeholders
have stated that some sources with emissions above the major source
thresholds will reduce their emissions below what is required by the
applicable major sources standards and to below the major source
thresholds in order to be able to reclassify as area sources. As
discussed in more detail in section VI of this preamble and in the
EPA's Emissions Impacts Analysis TSM, the EPA has identified three
sources that have reclassified, and as a result will decrease their
emissions. See Emission Impacts Analysis TSM Table 2: (1) City of
Columbia--Municipal Power Plant (Facility #27 on Table 2); (2) Holland
Board of Public Works--James DeYoung Generating Station and Wastewater
Treatment Plant (Facility #28 on Table 2); and (3) MidAmerican Energy
Company--Riverside Generating Station (Facility #29 on Table 2).
    Second, the EPA's analysis of the 34 sources that have reclassified
or are in the process of reclassifying since January 2018 based on the
EPA's plain language reading shows that none of them will increase
their emissions as a result of reclassification. See section VI of this
preamble and the EPA's Emissions Impact Analysis TSM at Table 2,
available in the docket.
    Nonetheless, the EPA recognizes (as discussed below in section IV
at Table 3) that there are possible scenarios in which major sources
might increase emissions after they reclassify to area source status.
However, the EPA does not view such potential emission increase
scenarios as a basis for disregarding the plain language of Congress's
``major source'' and ``area source'' definitions and the lack of any
temporal restriction on sources' opportunity to reclassify. Instead,
the EPA views such scenarios as a matter that needs to be evaluated and
addressed in determining how the agency should implement the plain
language of the statute. Thus, the EPA is seeking comment on (1) to
what extent will theoretical emission increase scenarios actually
occur, including (a) what emissions restrictions will be put in place
as part of the PTE HAP limits that a major source takes to be
reclassified as an area source and (b) whether other regulatory
controls are in place and applicable to sources after reclassification
that will either continue to restrict the source from emitting above
the major source standard or prevent an emissions increase after
reclassification; and (2) whether the EPA should adopt regulatory text
to establish safeguards to prevent emissions increases following
reclassification (Comment C-3).
    With respect to the second issue (whether the EPA should adopt
regulatory text to establish safeguards to prevent emissions
increases), the EPA is seeking comment on what legal basis the agency
would have for requiring such safeguards (Comment C-4). In addition to
seeking comment on this question generally, we are seeking comment on
several specific points.
    First, the EPA is seeking comment on the following rationale for
separating the timing of reclassification from the sufficiency of the
PTE limits that support reclassification (Comment C-5). There are two
related but distinct matters at issue here. The first matter is the
timing of reclassification: Whether sources can reclassify at any time
or are permanently classified as major sources after the first
substantive compliance date. The second matter is what PTE limit is
sufficient to form the basis for a source to reclassify. One aspect of
this ``sufficiency'' matter is enforceability, which is discussed below
in section IV.B of this preamble. Another aspect of ``sufficiency'' is
whether the PTE limit must, in addition to being enforceable, ensure
that the source does not increase emissions as a result of
reclassification. As discussed above, the ``timing'' matter is governed
by the plain language of the statutory definitions of ``major source''
and ``area source.'' The ``sufficiency'' matter is governed by the
phrasing in the major source definition that directs the EPA to compare
a source's ``potential to emit considering controls'' to the 10/25
major source thresholds. The D.C. Circuit has previously looked at a
``sufficiency'' question and the phrase ``potential to emit considering
controls.'' Specifically, in NMA v. EPA, 59 F.3d 1351 (D.C. Cir. 1995),
the Court considered whether a PTE limit had to be federally
enforceable to be a sufficient basis for reclassification and, as part
of its analysis, concluded that the phrase ``considering controls'' was
ambiguous and the EPA's application of those words had to be reviewed
under a Chevron Step 2 analysis. 59 F.3d at 1362-1363 (concluding that
the EPA had not explained why a PTE limit had to be federally
enforceable to be sufficient to support reclassification). Similarly,
whether a PTE limit that allows a source to increase its emissions as a
result of reclassification is sufficient to support reclassification
cannot be determined by the plain language reading of the statute that
governs the timing of reclassification, but must be considered based on
the ambiguous phrase ``potential to emit considering

controls'' and in light of the other provisions in CAA section 112.
    Second, assuming that the above rationale properly frames the
``sufficiency'' matter as a separate question based on how to
reasonably read the phrase ``potential to emit considering controls,''
the EPA is seeking comment on whether a requirement that PTE limits
used to reclassify a major source to area source status must include
safeguards to prevent emissions increases is a reasonable reading of
the ambiguous phrase ``potential to emit considering controls'' in
light of the other provisions in CAA section 112 (Comment C-6). For
example, some interested parties have presented arguments opposing the
EPA's plain language reading on timing based on CAA section 112(d)--
specifically, that major sources must be subject to MACT floor
standards that are at least as stringent as what is achieved by the
best performing sources, as provided under CAA section 112(d)(2) and
(d)(3). The EPA is seeking comment on whether the arguments presented
in opposition to EPA's plain language reading on timing are
appropriately considered on the question of the sufficiency of the PTE
limit and support the conclusion that PTE limits used to support
reclassification must not allow sources to increase emissions as a
result of reclassification (Comment C-7).
    Third, assuming that requiring safeguards against emission
increases in PTE limits is a reasonable reading of the statute, the EPA
is seeking comment on what safeguards should be required (Comment C-8).
Possible safeguards include requiring that: (1) PTE limits include a
limit of the same type as the major source standard and at least as
stringent, (2) PTE limits include the requirement that the source
continue to implement the measures that it is taking to meet the major
source requirement (i.e., the source must continue to operate the same
control device and at the same level of effectiveness), or (3) the
permitting authority determine that the source will implement the same
measures that are being used to meet major source requirements in order
to meet the PTE limit--even if such use is not mandated--and thus that
emissions will not increase.
    Fourth, and finally, the EPA is seeking comment generally on
whether it is reasonable and appropriate to require safeguards against
emission increases following reclassification (Comment C-9).
    As discussed above, the EPA reads the plain language of the statute
to allow reclassification of a source's status from major source to
area at any time. However, even if the statutory definitions of ``major
source'' and ``area source'' were to be read as containing an ambiguity
that would allow an interpretation under which the EPA could set a cut-
off point (as it did in the OIAI policy), the EPA's reading that there
is no such cut-off point is a reasonable reading of the statute, and
indeed is the best reading. First, the statutory definitions do not
specify any particular cut-off point after which Congress said that a
source's status was fixed. Second, the statutory definitions contain no
text in which Congress directed or suggested that the EPA create a cut-
off point. Third, even if Congress's silence is read to create an
ambiguity that the EPA can address by creating a cut-off date for
fixing a source's status, that is, at most, only a permissible way to
address such an ambiguity and does not undermine the conclusion that
the statute can be reasonably read--and indeed is best read--as not
requiring a cut-off date. In short, even if the statutory text were
found to contain an ambiguity on the question of a cut-off date for
setting a source's status, the absence of any cut-off date or cut-off
language in the statutory definitions enacted by Congress is best read
as allowing a source to change from a major source to area source or
vice versa at any time.
    Further, such a reading is consistent with the statutory structure
and goals of the CAA. In addition to the points discussed above in
support of the EPA's plain language reading, and as discussed in more
detail below in sections IV and VI, there are various reasons why a
major source's reclassification to area source status, in some cases,
may result in a decrease in HAP emissions rather than an increase in
that source's HAP emissions. First, when the corresponding regulatory
authority reviews the application for a new or revised permit that will
incorporate enforceable limits on a source's PTE of HAP below the major
source thresholds, the regulatory authority will consider the specifics
of each source. Among other things, the regulatory authority will
consider the current and proposed HAP emissions levels, the type of
limits proposed and whether such limits are legally and practicably
enforceable, any newly applicable area source NESHAP subparts, and if
other requirements are needed to ensure that the source complies with
the CAA. Second, some major sources have undergone facility and
operational modifications since they became subject to the major source
NESHAP requirements, and these modifications may prevent the HAP
emissions from increasing even without the sources remaining subject to
major source NESHAP requirements (e.g., a source that has eliminated
the use of HAP binders or coatings from their operations or has
switched to low-HAP or no-HAP products). Third, as discussed below in
sections IV and VI, some sources with actual emissions just above one
or both of the major source thresholds under their current major source
NESHAP requirements might choose to accept HAP PTE limits that are
lower than their current emissions and further reduce their emissions
consistent with the PTE limits in order to achieve area source status
and reduce their regulatory burden. In those cases, allowing sources to
reclassify as area sources even after they are subject to major source
NESHAP requirements can provide an incentive for them to reduce their
emissions below what is required under the CAA section 112 major source
requirements.
    The EPA invites interested persons to comment on the EPA's plain
language reading discussed above. The EPA is interested in specific
examples of sources that would reclassify consistent with the EPA's
reading and whether those sources' emissions would increase, decrease,
or stay the same after reclassification, and in any additional
information on whether allowing major sources to reclassify as areas
sources would or would not increase emissions from such sources or lead
to a reduction in their emissions (Comment C-10). Further, the EPA
invites comments on whether the Agency's reading is a permissible
interpretation of the statute even if it is not the only possible
reading (Comment C-11).

C. Role of the PTE Definition in the Regulation of Major Sources

    Section 112 of the CAA defines a major source not only in terms of
a source's actual emissions of an air pollutant, but also in terms of
its potential emissions of an air pollutant or any combination of air
pollutants. The definition of PTE in the General Provisions of the
NESHAP regulations interprets the statutory term ``potential to emit''
found in the definition of major source of section 112 of the CAA and
provides a legal mechanism for sources that wish to restrain their
emissions to avoid triggering major source requirements. 40 CFR part
63.2 defines ``potential to emit'' to mean the maximum capacity of a
stationary source to emit a pollutant under its physical and
operational design. Under the current definition in 40 CFR 63.2, any
physical or operational limitation

on the capacity of the stationary source to emit a pollutant, including
air pollution control equipment and restrictions on hours of operation
or on the type or amount of material combusted, stored, or processed,
shall be treated as part of its design if the limitation or the effect
it would have on emissions is federally enforceable.\9\
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    \9\ See 40 CFR 63.2 definition of ``federally enforceable''
available at https://ecfr.io/Title-40/se40.11.63_12.
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    Accordingly, a source that has the physical and operational design
allowing it to potentially emit HAP above the statutorily specified
thresholds (i.e., 10 tpy or more of an individual HAP, or 25 tpy or
more of total HAP) is a major source of air pollution unless the source
limits its maximum capacity to emit HAP under its physical and
operational design by obtaining restrictions that have the effect of
limiting the amount of emissions (referred to as ``HAP PTE limits'' or
``PTE limits'') the source can legally emit. Further, as explained in
more detail below in section IV.B, to ensure that sources do not
disregard their PTE limits, the EPA's definition of ``potential to
emit'' in 40 CFR 63.2 required that limitations on a source's
operations can only be taken into account in determining PTE if the
limitation was federally enforceable. In 1995, the United States Court
of Appeals for the District of Columbia Circuit issued a decision in
National Mining Association (NMA) v. EPA, 59 F.3d 1351 (D.C. Cir.
1995), in which it remanded the definition of ``potential to emit''
found in 40 CFR 63.2 to the EPA to justify the requirement that
physical or operational limits be ``federally enforceable.'' The NMA
Court decision confirmed that the EPA has an obligation to ensure that
limits considered in determining a source's PTE are effective, but it
stated that the Agency had not adequately explained how ``federal
enforceability'' furthered effectiveness. 59 F.3d at 1363-1365. In this
action, the EPA is proposing specific criteria that HAP PTE limits must
meet for these limits to be effective in ensuring that a source would
not emit above the PTE limits. The EPA is proposing to amend the
definition of ``potential to emit'' in 40 CFR 63.2, accordingly, by
removing the requirement for federally enforceable PTE limits and
requiring instead that HAP PTE limits meet the effectiveness criteria
of being both legally enforceable and practicably enforceable. The EPA
is also proposing to amend 40 CFR 63.2 to include the definitions of
``legally enforceable'' and ``practicably enforceable'' as described in
this proposal. These proposed amendments will facilitate such effective
HAP PTE limits to be issued by the EPA and by state, local, and tribal
regulatory agencies. The EPA is taking comment in this proposal on the
criteria required for effective HAP PTE limits for purposes of
determining whether a source is a major source under 40 CFR 63.2 and
whether the EPA's proposed criteria are necessary and sufficient to
ensure HAP PTE limits are effective to support reclassification of a
major source to an area source (Comment C-12). In this action, the EPA
is not proposing to change our approach to any PTE limits other than
those for HAP for purposes of NESHAP applicability. See section IV.B
for a discussion on the criteria for effective HAP PTE limits,
enforceability considerations, and requests for comments on specific
issues.

D. Issues Not Resolved by the Statute or Existing Regulations

    As discussed in section III.B above, the EPA's read of the
statutory definitions of ``major source'' and ``area source'' in
section 112(a) of the CAA is that these are not dependent on timing and
do not contain any language concerning when a source may change its
status from major source to area source. The General Provisions section
of 40 CFR part 63, subpart A, addresses compliance with standards when
an area source subsequently increases its emissions of HAP such that
the source becomes a major source subject to requirements established
under section 112 of the CAA. But these existing regulations do not
address the issue of compliance time frames for sources that reclassify
from major source status to area source status. This action proposes to
amend 40 CFR part 63, subpart A to address the issues not resolved by
the current General Provisions requirements with regard to the
reclassification of major sources as area sources under section 112 of
the CAA and to clarify existing requirements that apply to sources that
reclassify. This action proposes to amend the General Provisions
applicability tables contained within most subparts of 40 CFR part 63
to reflect the proposed amendments to subpart A. See section V.A and
V.B for proposed amendments to 40 CFR part 63, subpart A, and for
proposed changes to individual NESHAP General Provisions applicability
tables.
    In addition to the provisions that the EPA is proposing to amend in
the 40 CFR part 63 General Provisions, the EPA has identified a number
of provisions in the 40 CFR part 63 subparts that reflect the 1995 OIAI
policy by stating the date after which a major source can no longer
become an area source. In this action, we are proposing to remove these
provisions because they are contrary to the plain language of the
statute as discussed above. See section V.C for proposed amendments to
specific NESHAP subparts.\10\
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    \10\ In the meantime, and unless and until the EPA takes final
action to remove or revise such provisions, the provisions in part
63 subparts that reflect the 1995 OIAI policy continue to control
when major sources subject to those subparts may reclassify to area
sources status.
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IV. Considerations for Sources Seeking Reclassification From Major to
Area Source Status

    As explained above in section III.A, the EPA reads the definitions
of major source and area source in section 112 of the CAA to impose no
time constraint for when a major source can be reclassified as an area
source. Given the statutory definitions, a major source that takes
enforceable limits \11\ on its PTE HAP can be reclassified as an area
source at any time.\12\ The decision by a source to be reclassified as
an area source would be voluntary. We expect that the process for
reclassification to area source status for HAP will rely on existing
programs (e.g., minor source programs, title V permitting procedures,
and/or approved programs for issuing PTE limits under CAA section
112(l)). It is also possible for state, local, and tribal regulatory
authorities to develop new programs for issuing HAP PTE limits.
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    \11\ The concept ``enforceable limits'' incorporates legal
enforceability and practical enforceability. Throughout this
proposed rulemaking, we use the term ``enforceable limits'' to mean
limitations that satisfy both of these criteria.
    \12\ Note, however, that reclassification does not affect a
source's responsibility to comply with the major source requirements
prior to the time the source reclassifies. Further, even after a
source reclassifies from major source to area source, it may be
subject to requirements under a consent decree or permit that
obligates it to continue to comply with the major source
requirements.
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    After the issuance of the MM2A Memorandum, the EPA received
questions from stakeholders about the reclassification of sources that
already emit at levels lower than the major source thresholds but have
major source NESHAP requirements in their permits because of the OIAI
policy. Stakeholders also inquired about public notice requirements
associated with the issuance of enforceable HAP PTE limits. We address
specific stakeholders' questions regarding permitting and procedural
steps associated with reclassification in more detail in section IV.B
and IV.C of this preamble. The following discussion presents some
general considerations for sources that

will be seeking reclassification from major source to area source
status.
    Sources seeking status reclassification from major source to area
source can generally be grouped in three categories: (1) Existing major
sources that would need to obtain enforceable limits on their HAP PTE
that are below major source thresholds; (2) existing sources previously
classified as major sources for a specific major source NESHAP that
already have obtained enforceable limits on all their HAP emissions
such that the source's PTE, as well as actual emissions, are currently
below major source thresholds for each individual HAP and any
combination of HAP; and (3) existing sources previously classified as
major sources for a specific major source NESHAP that are no longer
physically or operationally able to emit HAP in amounts that exceed the
major source thresholds (commonly known as true or natural area
sources).\13\
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    \13\ See definition of true area in memorandum titled
``Potential to Emit (PTE) Guidance for Specific Source Categories.''
From John S. Seitz, Director, Office of Air Quality Planning and
Standards, page 2, April 14, 1998.
---------------------------------------------------------------------------

    The third category includes former major sources that no longer
have the ability to emit at major source levels because they have
either permanently removed equipment, changed their processes, or for
other reasons. Pursuant to the plain language of the statute, the
sources in this third category are area sources because their maximum
capacity to emit HAP under the physical or operational design is less
than the thresholds for a major source under CAA section 112(a)(1).
These true area sources do not rely on such things as State
Implementation Plan (SIP)-imposed limits or pollution control equipment
to constrain their emissions. Any source that needs a physical or
operational limit on its maximum capacity to emit, including
requirements for the use of air pollution control equipment or
restrictions on the hours of operations or on the type or amount of
material combusted, stored, or processed, is not in this third
category.
    Sources in any of these three categories who are seeking to
reclassify to area source status will apply to their corresponding
regulatory authority \14\ and follow the corresponding regulatory
authority's procedures for reclassifying and, if needed, for obtaining
enforceable limits on their HAP PTE. A source proposing to reclassify
to area source status must identify any applicable area source NESHAP
requirements in its request. Upon submission, the regulatory authority
will review the source's proposed enforceable limitations and, if
approved, the regulatory authority will incorporate the enforceable HAP
PTE limitations and other applicable CAA requirements, such as any
applicable area source NESHAP requirements, in a revised title V permit
or a minor source permit. In lieu of an individual permit, a source may
be eligible for coverage under a general permit or registration program
under a specific regulatory authority program. Depending on the
regulatory authority rules for minor source programs, sources that no
longer have the capacity to emit HAP above the major source thresholds,
unaided by added controls or operational limitations, may have
additional options.
---------------------------------------------------------------------------

    \14\ The term regulatory authority is intended to be inclusive
of the permitting authority or other governmental agency with
authority to process reclassification requests and issuance of
legally and practicably enforceable HAP PTE limits.
---------------------------------------------------------------------------

    After a source completes the process to reclassify to area source
status, the source must comply with any applicable area source NESHAP
requirements and would no longer be subject to major source NESHAP
requirements or other major source requirements that were applicable to
it as a major source under CAA section 112.\15\ A source that
reclassifies will need to update the information already provided to
the Administrator per the notification requirements of 40 CFR 63.9(j).
The permitting programs have procedures in place for processing changes
to a source's applicable requirements and the ability to coordinate any
notification required under 40 CFR part 63. See section V.A of this
preamble for proposed changes to notification requirements of 40 CFR
63.9(b) and (j).
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    \15\ A source that reclassifies from major source to area source
may be subject to major source requirements under a consent decree,
permit, or other enforceable vehicle that obligates it to continue
to comply with the major source requirements for a specified amount
of time. This rule is not intended to affect any of those existing
obligations. Any changes to those obligations would need to be made
through the appropriate processes (e.g., modification of the consent
decree with the Court, or revisions of the permit with the permit
authority).
---------------------------------------------------------------------------

    Below are some general considerations for sources contemplating
seeking reclassification from major to area source status. An improved
understanding of these considerations should serve to alleviate the
concerns that have been expressed regarding the reclassification of
major sources as area sources under section 112 of the CAA.

A. PTE Determination Considerations

    The definition of ``major source'' in section 112(a) of the CAA
includes ``any stationary source or group of sources located within a
contiguous area and under common control that emits or has the
potential to emit considering controls [HAP emissions that exceed the
thresholds].'' Regulatory authorities (i.e., permitting authorities)
and sources have a long history of evaluating HAP PTE calculations,
developing HAP PTE limits, and making applicability determinations.
That said, the HAP PTE calculations and determination are critical
steps for (1) any source seeking to understand whether it is subject to
major source requirements and (2) for any source that is seeking to
cease being subject to major source requirements by reclassifying from
major source to area source status. Following the issuance of the MM2A
Memorandum, we received many questions concerning the requirements for
sources to obtain PTE limits, including requests for clarity regarding
the minimum requirements that a request for reclassification must meet.
While this proposed action does not propose any new requirements
regarding the process for completing a HAP PTE calculation and
determination for sources seeking reclassification from major to area
source status, the EPA is requesting comments on whether it would be
appropriate to include in the General Provisions of 40 CFR part 63 the
minimum requirements that a major source of HAP must submit to its
regulatory authority when seeking to obtain HAP PTE limitations to
reclassify as area sources under section 112 of the CAA (Comment C-13).
    A source seeking to obtain enforceable limits on its HAP PTE to
below the major source thresholds will follow the established process
and submit to the regulatory authority any required documentation and
demonstration. For example, the discussion below presents the
requirements a source seeking to obtain HAP PTE limits under the
established regulations for the Federal Minor New Source Review Program
in Indian Country must follow. 40 CFR 49.158(a)(1) provides that the
application for a synthetic minor source permit must include the
following information:
    (1) Identifying information, including name and address (and plant
name and address if different) and the name and telephone number of the
plant manager/contact;
    (2) For each regulated New Source Review (NSR) pollutant and/or HAP
and for all emissions units to be covered by an emissions limitation,
the following information: (a) The proposed emission limitation and a
description of its effect on actual emissions or the PTE. Proposed
emission limitations must

have a reasonably short averaging period, taking into consideration the
operation of the source and the methods to be used for demonstrating
compliance; (b) proposed testing, monitoring, recordkeeping, and
reporting requirements to be used to demonstrate and assure compliance
with the proposed limitation; (c) a description of the production
processes; (d) identification of the emissions units; (e) type and
quantity of fuels and/or raw materials used; (f) description and
estimated efficiency of air pollution control equipment under present
or anticipated operating conditions; (g) estimates of the current
actual emissions and current PTE, including all calculations for the
estimates; (h) estimates of the allowable emissions and/or PTE that
would result from compliance with the proposed limitation, including
all calculations for the estimates; and
    (3) Any other information specifically requested by the reviewing
authority.
    As described above, for the Federal Minor New Source Review Program
in Indian Country, a source seeking to obtain HAP PTE limits, as part
of its PTE evaluation, will show that it has accounted for emissions of
all HAP, from all emission points, including fugitive HAP emissions,
and HAP emissions from insignificant activities 16 17 from
the stationary source or group of sources located within a contiguous
area and under common control. The source also provides the current and
proposed HAP emissions levels, the type of limitations or controls
proposed, and a demonstration that the emission reductions are
achievable in practice.
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    \16\ As part of its PTE evaluation, sources must account for
emissions of all HAP, from all emission points, including fugitive
HAP emissions. ``. . . An application may not omit information
needed to determine the applicability of, or to impose, any
applicable requirement . . .'' See 40 CFR 70.5(c). ``Insignificant
Activities--Section 70.5(c) allows the Administrator to approve as
part of a State program a list of insignificant activities which
need not be included in permit applications. For activities on the
list, applicants may exclude from part 70 permit applications
information that is not needed to determine (1) which applicable
requirements apply, (2) whether the source is in compliance with
applicable requirements, or (3) whether the source is major.'' See
``White Paper for Streamlined Development of Part 70 Permit
Applications.'' From Lydia N. Wegman, Deputy Director, Office of Air
Quality Planning and Standards, to the EPA Regional Air Division
Directors. July 10, 1995; https://www.epa.gov/sites/production/files/2015-08/documents/fnlwtppr.pdf.
    \17\ See order granting in part and denying in part petition for
objection to permit for Hu Honua Bioenergy, at https://www.epa.gov/sites/production/files/2015-08/documents/hu_honua_decision2011.pdf.
---------------------------------------------------------------------------

    While the PTE calculations and supporting evaluation for large and
complex sources might require data collection and validation and
accounting for a larger number of emission points, the process is not
different than what is already required within some source category
rules \18\ or under the recordkeeping requirements for applicability
determinations of 40 CFR 63.10(b)(3). In the Federal Minor New Source
Review Program in Indian Country regulations at 40 CFR
49.158(a)(2),\19\ the EPA provided a hierarchy of acceptable data and
methods to determine a source's PTE for a source seeking to obtain a
synthetic minor source permit, including a synthetic minor permit for
purposes of 40 CFR part 63. The hierarchy in 40 CFR 49.158(a)(2)
presents the procedures that are generally acceptable for estimating
emissions from air pollution sources: (1) Source-specific emission
tests; (2) mass balance calculations; (3) published, verifiable
emission factors that are applicable to the source; (4) other
engineering calculations or (5) other procedures to estimate emissions
specifically approved by the reviewing authority. We request comment on
whether the EPA should include in the General Provisions to 40 CFR part
63 the hierarchy of acceptable data and methods a source seeking
reclassification would use to determine the source PTE (Comment C-14).
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    \18\ See, as example, 40 CFR part 63, subpart F at 63.100,
Applicability and designation of source.
    \19\ See 40 CFR part 49 subpart C, Synthetic minor source
permits under the Federal Indian Country Minor New Source Review
Rule at 40 CFR 49.158, and Potential to Emit A Guide for Small
Business. October 1998. US EPA, OAQPS. https://www3.epa.gov/airtoxics/1998sbapptebroc.pdf.
---------------------------------------------------------------------------

    As described above, the best approach uses source specific test
data (on-site measurements) or continuous emission monitoring system
(CEMS) data where available. Where these data are not available, the
next best approach uses a material-balance approach (comparing inputs
and outputs). Where these data are not available, the next best
approach uses source-specific models (based on information about the
source's operations). Finally, where these data are not available, the
approach uses emission factors (based on industry-average emission
rates).\20\ The responsibility for using the best data available in
preparing the source's PTE calculations and analyses is with the owner
and operator of a source. The data should be accurate and
representative of the source's emissions. A source's efforts to be
reclassified from major source to area source may be unsuccessful if it
does not use the best data.
---------------------------------------------------------------------------

    \20\ ``Use of emission factors as source-specific permit limits
and/or as emission regulation compliance determinations are not
recommended by the EPA. Because emission factors essentially
represent an average of a range of emission rates, approximately
half of the subject sources will have emission rates greater than
the emission factor and the other half will have emission rates less
than the emission factor. As such, a permit limit using an AP-42
emission factor would result in half of the sources being in
noncompliance. See ``Compilation of Air Pollutant Emission Factors,
Introduction,'' January 1995.
---------------------------------------------------------------------------

    The EPA requests comments on whether adding the same or similar
requirements that are now in 40 CFR 49.158(a)(1) to 40 CFR 63.10 would
be appropriate to create the minimum requirements that a major source
of HAP must submit to its regulatory authority when seeking to obtain
PTE HAP limitations to reclassify as area sources under section 112 of
the CAA (Comment C-15). We also request comments on whether the EPA
should also include the hierarchy of acceptable data and methods a
source seeking reclassification would use to determine the source PTE.
This hierarchy could be the same or similar to the one provided in 40
CFR 49.158(a)(2) (Comment C-16).
    In response to the 2007 proposal, the EPA received multiple
comments regarding sources that have reduced their HAP emissions to
below major source thresholds because of the implementation of major
source NESHAP requirements. Some stakeholders were concerned that if
these sources were to reclassify to area source status and were no
longer subject to major source NESHAP requirements, they could stop
using the emission controls or emission reduction practices implemented
for major source NESHAP compliance or no longer maintain the same level
of control as before.\21\ This concern was also raised by stakeholders
after the issuance of the MM2A Memorandum. A source seeking
reclassification because it has reduced its HAP emissions to below the
major source thresholds through use of control devices or emission
reduction practices implemented for compliance with major source NESHAP
requirements will need to demonstrate to the regulatory authority
issuing the HAP PTE limits, the degree to which the control devices and
emission reduction practices are needed to restrict the source's PTE.
If the source relies on its existing control devices and/or emission
reduction practices to limit its HAP PTE below the major source
thresholds, under the proposed effectiveness criteria, the use of the
control devices and/or emission

reduction practices must be made legally and practicably enforceable in
the absence of the applicability of the major source NESHAP
requirements. Alternatively, if a source intends not to retain the
control device equipment or emission reduction practices used to comply
with a previously applicable major source NESHAP requirement, the
source must demonstrate that other limits exist or can be imposed that
will restrict the source's maximum capacity to emit HAP, and that these
limits are or can be made legally and practicably enforceable to ensure
that the source will not emit HAP at or above the major source
thresholds. A blanket emissions limit on HAP generally (e.g., no more
than 10 tpy of an individual HAP or no more than 25 tpy of total HAP)
is not sufficient as it fails to meet the practicably enforceable
criteria of being a technically accurate limitation of short duration
with adequate monitoring (i.e., there is no monitoring method for
``HAP'' in the aggregate).\22\ See section IV.B of this preamble,
Criteria for Effective HAP PTE Limits, for a full discussion of
proposed criteria for effective HAP PTE limits.
---------------------------------------------------------------------------

    \21\ These stakeholders are concerned that these sources could
increase their emissions to just below the major source thresholds
of 10/25 tpy of HAP. See section IV for a discussion of the
assessment of potential emission changes from the reclassification
of major sources as area sources.
    \22\ There is substantial body of EPA guidance and
administrative decisions relating to PTE and PTE limits. E.g., see
generally, Terrell E. Hunt and John S. Seitz, ``Limiting Potential
to Emit in New Source Permitting'' (June 13, 1989); John S. Seitz,
``Options for Limiting the Potential to Emit (PTE) of a Stationary
Source Under Section 112 and Title V of the Clean Air Act'' (January
25, 1995); Kathie Stein, ``Guidance on Enforceability Requirements
for Limiting Potential to Emit through SIP and Sec.  112 Rules and
General Permits'' (January 25, 1995); John Seitz and Robert Van
Heuvelen, ``Release of Interim Policy on Federal Enforceability of
Limitations on Potential to Emit'' (January 22, 1996); ``In the
Matter of Orange Recycling and Ethanol Production Facility, Pencor-
Masada Oxynol, LLC,'' Order on Petition No. II-2001-05 (April 8,
2002) at 4-7.
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B. Criteria for Effective HAP PTE Limits

    In this action, the EPA is proposing that a major source that
reduces its PTE HAP emissions to below the major source thresholds by
taking HAP PTE limits that meet the proposed criteria for effective PTE
limits may request and, upon approval, be reclassified to area source
status. In the past, the EPA concluded that federal enforceability was
required for the effectiveness of PTE limits; \23\ hence, the
requirement is in the current regulations for the HAP programs (see PTE
definition in 40 CFR 63.2). Since the issuance of the MM2A Memorandum,
stakeholders have raised the question of whether HAP PTE limitations
still need to be federally enforceable. By proposing to establish
criteria for effective HAP PTE limits in this action, we will respond
to this question from stakeholders.
---------------------------------------------------------------------------

    \23\ The EPA concluded that Federal enforceability was required
for issuing effective PTE limits in a June 28, 1989, rule that
amended the Federal enforceability requirement and created federally
enforceable operating permits. See 54 FR 27274.
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    In the context of HAP PTE limits, the term federally enforceable
under 40 CFR 63.2, refers to the legal authority granted under the CAA
(i.e., under section 113 and section 304(a) of the statute) to the EPA
Administrator and citizens to enforce in Federal court all limitations
and conditions that implement requirements under the CAA (e.g., issued
under an approved program under section 112(l) of the CAA or a SIP or
another statute administered by the EPA.). Given that sources that rely
on state or local PTE limitations cease to be subject to major source
CAA requirements, in the past the EPA concluded that these PTE
limitations must be federally enforceable \24\ to be consistent with
the enforcement structure of the CAA. The EPA also linked effectiveness
of PTE limits to programs that followed the EPA's specific procedures
for issuance of PTE limits (e.g., program requirements and
implementation).\25\ To recognize the state or local PTE limitations as
federally enforceable, the EPA then imposed various administrative
requirements on SIP programs issuing limitations.\26\ These program
requirements specified procedures, meant to ensure that a source's PTE
limitations included in a permit have the intended effect of reducing
the amount of emissions, and that sources could not disregard their PTE
limits without enforcement consequences. For implementing the air
toxics program under CAA section 112, the EPA adopted the SIP federal
enforceability framework for PTE limits. The original 40 CFR part 63
General Provisions preamble explains that federal enforceability was
required: (1) To confirm that PTE HAP limits were included as part of
the source's physical and operational design, and that any claimed
limitations will be observed; (2) to ensure that a permitting authority
had strong enforcement capability and the legal and practical means to
make sure that such commitments are carried out; and (3) to support the
goal of the CAA to enforce all relevant features of the air toxics
program.\27\ Following litigation on the 40 CFR part 63 General
Provisions, on July 21, 1995, the Court issued a decision in National
Mining Association v. EPA (59 F. 3d 1351 (D.C. Cir. 1995)), in which,
after examining the question of whether HAP PTE limits must be
federally enforceable, it remanded, but did not vacate, the definition
of ``potential to emit'' found in 40 CFR 63.2. The Court found that the
EPA had not adequately explained why only federally enforceable
measures should be considered as effective limits on a source's HAP
PTE.
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    \24\ See 54 FR 27274 (June 28, 1989).
    \25\ In the past, the EPA held the view that it could be certain
that only programs reviewed and approved by the EPA had adequate
procedures for issuance of effective PTE limits.
    \26\ Id.
    \27\ See, National Emission Standards for Hazardous Air
Pollutants for Source Categories: General Provisions. March 16,
1994. 59 FR 12430.
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    After the NMA decision, the EPA extended a pre-existing policy
allowing the use of non-federally enforceable limits (e.g., state-only
enforceable limits) for limiting PTE provided those limits are legally
enforceable and practicably enforceable.\28\ Also, on March 23, 2001,
the EPA added recordkeeping requirements for applicability
determinations for sources with a maximum capacity to emit HAP in
amounts greater than major source thresholds but with PTE limits to
avoid applicability of a standard. See 40 CFR 63.10(b)(3).\29\ At that
time, the EPA also confirmed that until the rules are clarified to
address various PTE issues, consistent with the NMA Court decision, any
determination of HAP PTE under 40 CFR 63.2 should consider the
regulations and also take into consideration the EPA transition policy
guidance memoranda. 66 FR 16342 (March 23, 2001).
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    \28\ See memorandum, ``Third Extension of January 25, 1995
Potential to Emit Transition Policy'' from John S. Seitz and Eric V.
Schaeffer, to Regional Offices, December 20, 1999. Also, see
memorandum, ``Options for Limiting the Potential to Emit (PTE) of a
Stationary Source Under Section 112 and Title V of the Clean Air
Act,'' from John S. Seitz and Robert I. Van Heuvelen, to Regional
offices, January 25, 1995; and ``Extension of January 25, 1995,
Potential to Emit Transition Policy,'' from John S. Seitz and Robert
I. Van Heuvelen, to Regional offices, August 27, 1997.
    \29\ These requirements became final April 5, 2002. See 67 FR
16582, also, 66 FR 16342 (March 23, 2001).
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    Our experience shows that while many states have programs for
issuing HAP PTE limits that have been reviewed by the EPA and have
become federally enforceable through the EPA's approval (e.g., CAA
section 112(l)/40 CFR 63.91 programs to limit HAP PTE, federally
enforceable state operating permit (FESOP), or title V permitting
programs), many state and local agencies also implement programs that
have the proper legal authority but are not subject to the EPA's review
either because these programs reflect state-only initiatives or are not
otherwise required under other CAA provisions (e.g., state permitting
programs for air toxics). These state-only or local-only programs are
implemented in

coordination with federally approved programs and share infrastructure
and resources, as well as program management and personnel, and create
HAP PTE limits that are structurally similar to their federally
enforceable counterparts. In sum, for purposes of determining HAP PTE
under 40 CFR 63.2, the EPA's PTE definition and current policies make
clear that an enforceability requirement remains in place until we
finalize a rule addressing the remand, but that HAP PTE limits that are
both (1) legally enforceable (that is, either federally enforceable or
legally enforceable by a state, local, or tribal authority) and (2)
practicably enforceable are allowed in the interim as effective limits
restraining emissions.
    Consistent with the Court's decision in NMA, the EPA views
``effectiveness'' as both a foundation and a constraint on the EPA's
discretion in defining PTE under 40 CFR 63.2. As a foundation,
effectiveness is a minimum element of limitations on a source's HAP
PTE, and the EPA has an obligation to ensure that limits considered in
determining a source's HAP PTE are effective. 59 F.3d at 1362. As a
constraint, promoting effectiveness must be the purpose for any
conditions the EPA would require before considering a limit valid for
HAP PTE purposes, and the Court indicated it would not uphold
requirements that were extraneous to that goal. Id. at 1364-65. In NMA
the Court concluded that the EPA had not explained why the federal
enforceability requirement was necessary to ensure the
``effectiveness'' the Court viewed as essential. For example, the Court
expressed concern that the EPA has ``proposed conditions for achieving
`federal enforceability' that go beyond the mere effectiveness of a
particular constraint as a practical matter.'' Id. at 1363. Although it
is clear from this that effectiveness as a practical matter must be
preserved in some way, the Court was not convinced that federal
enforceability was necessarily a prerequisite to ``effectiveness.'' The
discussion below presents the criteria the EPA is proposing as
necessary for HAP PTE limits to be ``effective'' in ensuring that a
source does not emit HAP above the legally enforceable PTE level. The
EPA views these proposed criteria as sufficient to effectively
constrain a source's emissions for purposes of calculating HAP PTE
under section 112 of the CAA and, if met, support reclassification of
major sources as area sources under CAA section 112. The EPA requests
comments on the proposed effectiveness criteria and whether these
criteria are sufficient to support reclassification (Comment C-17). At
the same time, the EPA invites comments on whether there are additional
criteria that must be included to ensure that HAP PTE limits are
effective (Comment C-18). The Agency's overarching goal in proposing
these criteria is to achieve a clear and simple implementation process
to motivate area sources to maintain reduced HAP emissions and ensure
that sources of HAP comply with CAA requirements. Avoiding unreasonable
burden on industry or states is also an important objective under this
goal.
    The EPA is proposing that to be effective, HAP PTE limits must meet
the criteria of legal enforceability and practical enforceability as
explained below. We request comments on these proposed effectiveness
criteria and the elements discussed below (Comment C-19). The EPA is
also requesting comments on whether there are other criteria that
should be required for ensuring effectiveness of HAP PTE limits,
including whether public notice and comment procedures should be part
of the required effectiveness criteria (Comment C-20). At the end of
this section, we discuss some considerations regarding the issuance of
HAP PTE limits and public notice and comment procedures. In this
action, the EPA is not proposing to change our approach to establishing
PTE limits other than those used for CAA section 112 NESHAP
applicability.
1. Legal Enforceability
    The EPA proposes that to be effective, HAP PTE limits must be
legally enforceable. The legal enforceability of a HAP PTE limit is
composed of two parts: (a) The authority to establish the HAP PTE
limits and (b) the authority to enforce the HAP PTE limits. Each of
these parts is discussed below.
a. Authority To Establish the Limits
    To be effective, HAP PTE limits must be required by law and legally
binding on the source. To that end, the first aspect of the legally
enforceable criterion for effective HAP PTE limits must address the
adequacy of the legal authority to issue the PTE limits. This first
aspect of legal enforceability ensures that the HAP PTE limits are
issued under governmental regulatory authority and are not merely
voluntary. Accordingly, we propose that to be effective, HAP PTE limits
must identify the legal authority under which the HAP PTE limits are
being issued. The proper identification of legal authority ensures that
the issued HAP PTE limits are required by law and legally binding on
the source and not merely voluntary. The EPA is requesting comments
both on the appropriateness of this requirement and on whether there
are other considerations that warrant being part of the criterion of
legal authority to issue HAP PTE limits (Comment C-21).
b. Legal Authority To Enforce the PTE Limits
    The second aspect of legal enforceability for effective HAP PTE
limits refers to the legal authority to enforce the limits. A PTE limit
may appear to be effective in every technical sense yet fail to be
effective if no governmental authority has sufficient legal authority
to enforce against violations of the limit once issued. There is a
benefit to compliance oversight by a governmental entity that has the
expertise in air pollution control and requisite authority to enforce a
PTE limit. The EPA proposes that for HAP PTE limits to be effective,
the regulatory authority issuing the limits must also have the
authority to enforce the limits. The EPA recognizes that to be
effective, PTE limits must carry with them a credible risk for
enforcement if they are violated, that sources be on notice of their
legal obligation to comply, and that sources are cognizant of the
consequences of non-compliance. As part of that, the EPA is taking
comment on whether state-only or local-only enforcement authority alone
is sufficient to impose a credible risk of enforcement and, therefore,
ensure compliance with the HAP PTE limits or whether to be effective,
the EPA and/or citizens through the enforcement authorities in the CAA
must also have the authority to enforce the HAP PTE limits that are
being used to avoid a Federal requirement (Comment C-22). In addition,
we request comments on whether enforceability of a PTE limit by the EPA
and/or citizens reduces the implementation burden for all parties and
provides a level of compliance incentive unmatched by enforcement by
only a state or local authority that warrants it to be part of the
effectiveness criteria (Comment C-23).
2. Practical Enforceability
    The second criterion for effective HAP PTE limits is that the
limits must be enforceable as a practical matter, i.e., practicably
enforceable. The EPA proposes that to be practicably enforceable, HAP
PTE limits must be written so that it is possible to readily verify
compliance and to document violations when enforcement action is
necessary. We are proposing that to meet this criterion, PTE limits
must specify: (1) A technically accurate limitation and identify the
portions of the source subject to the limitation; (2)

the time period for the limitation (hourly, daily, monthly, and annual
limits such as 12-month rolling limits); and (3) the method to
determine compliance, including appropriate monitoring, recordkeeping,
and reporting (MRR).\30\ Below, the EPA presents specific guidance
regarding MRR requirements, as well as a discussion of technically
accurate limitations so that HAP PTE limits will be compliant with the
proposed criteria of being practicably enforceable.
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    \30\ See discussion of principles of enforceability in
Attachment 4 of the January 25, 1995, EPA Memorandum, ``Options for
Limiting the Potential to Emit (PTE) of a Stationary Source Under
Section 112 and Title V of the Clean Air Act.'' See, also, e.g.,
https://www.epa.gov/sites/production/files/2015-08/documents/masada_decision2000.pdf at page 9.
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a. Technically Accurate Limits That Identify the Portions of the Source
Subject to the Limitations
    A technically accurate limit is one that accounts for each
emissions unit contributing to the maximum capacity of the source to
emit HAP and must be based on the physical and operational design of
the emission units. A technically accurate limit is also one that is
capable of being monitored, regardless of whether the monitoring is
accomplished by means of monitoring individual units or monitoring a
common point for multiple sources. For example, a blanket emission
limit on a single HAP or on total HAP (e.g., no more than 10 tpy of an
individual HAP or no more than 25 tpy of total HAP) is not technically
accurate because it does not contain any analysis on the physical or
operational design of the emission unit or units under consideration.
Such a blanket emission limit is also not generally capable of being
monitored as there is no emission testing techniques for ``HAP'' in
general. In the case of monitoring usage of materials, a limit on the
HAP emissions must be based in the formulations of the materials used
and the specific HAP content, even if a limit eventually taken to avoid
a major source classification is a limit on the collection of specific
HAP used at the facility. If a single pollutant or class of pollutants
is used as a surrogate for HAP emissions from a source, this
correlation needs to be provided to the regulatory authority reviewing
the limits, and not just assumed by the source through use of a
monitoring technique, such as a total hydrocarbons CEMS for volatile
organic compounds (VOC).
b. Time Periods for Limitations
    The time periods for the limitations will depend on the type of
limits proposed. Limits ``should be as short term as possible and
should generally not exceed one month.'' \31\ However, a limit longer
than 1 month may be appropriate if it is a rolling limit for sources
with ``substantial or unpredictable annual variations in production,''
not exceeding an annual limit rolled on a monthly basis. In other
words, although the emissions may be totaled for a 12-month period,
they should be measured and ``checked'' more frequently to ensure the
source is maintaining compliance. Typically, with longer term periods,
the emissions for the shorter-term period are ``rolled'' with those in
the previous periods to get the total for the longer compliance period.
For example, a 365-day rolling limit requires a source to calculate its
emissions and/or operational parameters relevant to any operational
restriction, daily, and then add that total to the totals for the
previous 364 days to determine whether the source is in compliance.
When a control device or other ongoing operating parameter limits,
which indirectly indicate emissions, are required for meeting the PTE
limit, much shorter time periods are necessary. These may include
limits such as the minimum operating temperature of a thermal oxidizer
measured hourly, where this shorter period is necessary in order to
ensure the proper operation of the control device. These shorter limits
may be either block or rolling averages as appropriate.
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    \31\ ``Guidance on Limiting Potential to Emit in New Source
Permitting,'' available at https://www.epa.gov/sites/production/files/2015-08/documents/lmitpotl.pdf. See also ``Time Frames for
Determining Applicability for New Source Review,'' March 13, 1986;
``Clarification of New Source Review Policy on Averaging Times for
Production Limitations,'' April 8, 1987; ``Use of Long Term Rolling
Averages to Limit Potential to Emit,'' February 24, 1992.
---------------------------------------------------------------------------

    Also, time periods should be frequent enough to allow a source to
rapidly identify periods of deviation and bring operations back into
normal operating conditions expeditiously. Periods longer than once per
day may be appropriate if the limits do not consider the use of a
control device. For restrictions on content or usage of raw materials,
coatings, or fuels, the EPA recommends a frequency of record (i.e.,
certified product data sheets traceable to EPA or American Society for
Testing and Materials (ASTM) methods or formulation data, or fossil
fuel analytical data reports traceable to EPA or ASTM methods)
collection of once per batch of material used or for each separate
delivery of material or fuel, as appropriate. This frequency is
consistent with procedures specified in several EPA regulations (e.g.,
40 CFR part 63, subpart NNNN, NESHAP: Surface Coating of Large
Appliances, 40 CFR part 63, subpart OOOO, NESHAP: Printing, Coating,
and Dyeing of Fabrics and Other Textiles, and 40 CFR part 63, subpart
RRRR, NESHAP: Surface Coating of Metal Furniture), the General
Provisions to both 40 CFR parts 60 and 63, and 40 CFR part 75. For
other types of limitations, such as restrictions on operating hours,
conduct of certain work practices, fugitive emissions control measures,
and equipment integrity inspections, unless circumstances justify
otherwise, a limit frequency of once per week or once per operating
period (if operated less frequently than weekly) is appropriate and may
be justified, but should not be assumed.
c. MRR Requirements
    MRR requirements are necessary components of the proposed
practicably enforceable criterion for effective PTE HAP limits. MRR
requirements prescribe the collection of data necessary to verify that
the requirements and conditions that are part of the PTE limits are
checked at the frequency needed to avoid deviations, and, thus, they
are crucial to compliance and providing transparency and accountability
to the public as well as enabling the EPA and other state, local, and
tribal regulatory agencies to determine whether emissions remain below
the PTE limits and the major source thresholds. The MRR requirements
associated with the HAP PTE limits enable the EPA to carry out the
provisions of CAA section 112 to ensure that sources are complying with
the appropriate requirements with respect to HAP emissions. Appropriate
MRR requirements are dependent on site-specific variables such as the
nature of the facility and the type of control device(s) installed at
that facility. To meet the proposed criterion of being practicably
enforceable a HAP PTE limit must provide for the collecting,
maintaining, and reporting of the information necessary to determine
the emissions of each HAP, which is necessary to determine whether the
source's emissions are compliant with the source's PTE limits, as well
as compliance with any other requirements that are part of the PTE
limit (such as operating parameters). Appropriate MRR requirements
serve to assure that the source is continuously complying with HAP PTE
limits and any associated requirements as required by the CAA, as well