6560 50 P ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 63, 70, and 71 [ OAR 2004 0010; FRL  ]

RIN 2060 AM31 Exemption of Certain Area Sources from Title V Operating Permit Programs AGENCY: Environmental Protection Agency ( EPA).

ACTION: Final rule.

SUMMARY: The EPA is finalizing permanent exemptions from the title V operating permit program for five categories of nonmajor ( area) sources that are subject to national emission standards for hazardous air pollutants ( NESHAP). The EPA is making a finding for these categories, consistent with the Clean Air Act requirement for making such exemptions, that compliance with title V permitting requirements is impracticable,

infeasible, or unnecessarily burdensome on the source categories. The five source categories are dry cleaners, halogenated solvent degreasers, chrome electroplaters,

ethylene oxide ( EO) sterilizers and secondary aluminum smelters. The EPA declines to make a finding for a sixth category, area sources subject to the NESHAP for secondary lead smelters. A previous deferral from permitting for this category expired on December 9, 2004, subjecting all such sources to the title V program.

EFFECTIVE DATE: This final rule is effective on [ insert date of publication in the Federal Register].

ADDRESSES: Docket. Docket No. OAR 2004 0010, containing supporting information 2 used to develop the proposed and final rules, is available for public inspection and copying between 8: 00 a. m. and 4: 30 p. m., Monday through Friday ( except government holidays)

at the Air and Radiation Docket ( Air Docket) in the EPA Docket Center, ( EPA/ DC) EPA West Building, Room B102, 1301 Constitution Avenue, NW, Washington, D. C. 20004.

FOR FURTHER INFORMATION CONTACT: Mr. Jeff Herring, U. S. EPA, Information Transfer and Program Implementation Division, C304 04, Research Triangle Park, North Carolina 27711, telephone number ( 919) 541 3195, facsimile number ( 919) 541 5509, or electronic mail at herring. jeff@ epa. gov.

SUPPLEMENTARY INFORMATION:

I. General Information A. Does This Action Apply to Me?

The entities affected by this rulemaking are area sources subject to a NESHAP promulgated under section 112 of the Clean Air Act ( Act) since 1990, listed in the table below. An " area source" under the NESHAP regulations is a source that is not a " major source" of hazardous air pollutants ( HAP). A " major source" under the NESHAP regulations is " any stationary source or group of stationary sources located within a contiguous area and under common control that emits or has the potential to emit considering controls, in the aggregate, 10 tons per year or more of any [ HAP] or 25 tons per year or more of any combination of [ HAP]. . ." See definitions of " area source" and " major source" at 40 CFR 63.2.

This final rule affects only whether area sources regulated by certain NESHAP are required to obtain a title V operating permit and whether title V permits may be issued to 3 1 This estimated number includes both major and area sources, even though only area sources will be affected by this rulemaking. Almost all dry cleaners are area sources. Also, EPA believes less than half of EO sterilizers are area sources ( see docket item 106). For other categories listed here, EPA does not have information on the number of area sources.

2 The proposal of March 25, 2005 estimated up to 30,000 dry cleaners would be affected by this rulemaking. Based on new information available to EPA, we now believe up to 28,000 dry cleaners are potentially affected by this rulemaking. these and other area sources once EPA has promulgated exemptions from title V for them.

It has no other effect on any requirements of the NESHAP regulations, nor on the requirements of State or Federal title V operating permit programs.

The affected categories are:

Category NESHAP Estimated number of sources1 Perchloroethylene dry cleaning Part 63, Subpart M 28,0002 Hard and decorative chromium electroplating and chromium anodizing Part 63, Subpart N 5,000 Commercial ethylene oxide sterilization Part 63, Subpart O 100 Halogenated solvent cleaning Part 63, Subpart T 3,800 Secondary aluminum production Part 63, Subpart RRR 1,316 Secondary lead smelting Part 63, Subpart X 3 B. How Can I Get Copies of this Document and other Related Information?

1. Docket. The EPA has established an official public docket for this action under Docket ID No. OAR 2004 0010. The official public docket consists of the documents specifically referenced in this action, any public comments received, and other information related to this action. Although a part of the official docket, the public docket does not 4 include confidential business information ( CBI) or other information whose disclosure is restricted by statute. Documents in the official public docket are listed in the index list in EPA's electronic public docket and comment system, EDOCKET. Documents are available both electronically and in hard copy. Electronic documents may be obtained through EDOCKET. Hard copy documents may be viewed at the Air Docket in the EPA Docket Center, ( EPA/ DC) EPA West Building, Room B102, 1301 Constitution Ave.,

NW, Washington, DC, 20004. This docket facility 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 ( 202) 566 1744, and the telephone number for the Air Docket is ( 202)

566 1742. A reasonable fee may be charged for copying docket materials.

2. Electronic Access. You may access this Federal Register document electronically through the EPA Internet under the " Federal Register" listings at http:// www. epa. gov/ fedrgstr/ or the federal wide eRulemaking site at www. regulations. gov.

An electronic version of a portion of the public docket is available through EDOCKET at http:// www. epa. gov/ edocket/. To view public comments, review the index listing of the contents of the official public docket, and access those documents in the public docket that are available electronically. Publicly available docket materials that are not available electronically may be viewed at the docket facility identified above. Once in the system, select " search," then key in the appropriate docket identification number.

C. Where Can I Obtain Additional Information?

In addition to being available in the docket, an electronic copy of today's notice is 5 also available on the World Wide Web through the Technology Transfer Network ( TTN).

Following signature by the EPA Administrator, a copy of today's notice will be posted on the TTN's policy and guidance page for newly proposed or promulgated rules at http:// www. epa. gov/ ttn/ oarpg. The TTN provides information and technology exchange in various areas of air pollution control. If more information regarding the TTN is needed,

call the TTN HELP line at ( 919) 541 5384.

D. How Is this Preamble Organized?

The information presented in this preamble is organized as follows:

I. General Information A. Does this Action Apply to Me? B. How Can I Get Copies Of this Document and Other Related Information? 1. Docket 2. Electronic Access C. Where Can I Obtain Additional Information? D. How Is this Preamble Organized? II. Background III. What Does Today's Action Involve? A. What Revisions are Being Made to Part 63? B. What Revisions are Being Made to Parts 70 and 71? IV. What are the Reasons for Title V Exemptions? A. General Approach B. Dry Cleaners C. Chrome Electroplaters D. Solvent Degreasers E. EO Sterilizers F. Secondary Aluminum V. What is EPA's Decision for Secondary Lead Smelters? VI. May Title V Permits be Issued to Exempt Area Sources? VII. May General Permits be Issued as an Alternative to Title V Exemptions? VIII. What are EPA's Responses to Significant Comments? A. Is EPA's General Approach to Exemptions Consistent with the Act? B. Does the First Factor Acknowledge Key Title V Requirements? C. Does this Rulemaking Adequately Address Title V Costs? D. What is our Analysis of Factor Four for the Final Rule? E. Are these Exemptions Consistent with the Legislative History of the Act? 6 F. Is it Reasonable for EPA to Rely on the Information Cited in Support of the Proposal? G. Are Permits Necessary to Define Monitoring for Chrome Electroplaters? H. May Degreasers be Exempted when there are Multiple Applicable Requirements? I. Are the Compliance Requirements of the EO Sterilizer and Secondary Aluminum NESHAP Substantially Equivalent to Title V? J. Are the Proposed Revisions to EO Sterilizer NESHAP Appropriate? K. Are Title V Permits Allowed for Area Sources Exempted from Title V? L. Does this Rulemaking Disregard Cost Estimates for General Permits? IX. Effective Date of Today's Final Rule under the Administrative Procedure Act X. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act ( RFA), as Amended by the Small Business Regulatory Enforcement Fairness Act of 1996 ( SBREFA), 5 U. S. C. 601 et seq. D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination with Indian Tribal Governments G. Executive Order 13045: Protection of Children from Environmental Health and Safety Risks H. Executive Order 13211: Actions Covering Regulations That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer Advancement Act J. Congressional Review Act II. Background Section 502( a) of the Clean Air Act ( Act) sets forth the sources required to obtain operating permits under title V. These sources include: ( 1) any affected source subject to the acid deposition provisions of title IV of the Act; ( 2) any major source; ( 3) any source required to have a permit under Part C or D of title I of the Act; ( 4) " any other source ( including an area source) subject to standards or regulations under section 111 [ new source performance standards] or 112 [ NESHAP)]" and ( 5) any other stationary source in a category designated by regulations promulgated by the Administrator. See 40 CFR 7 70.3( a) and 71.3( a). The requirements of section 502( a) are primarily implemented through the operating permit program rules: Part 70, which sets out the minimum requirements for title V operating permit programs administered by State, local, and tribal permitting authorities ( 57 FR 32261, July 21, 1992), and part 71, the federal operating permit program requirements that apply where EPA or a delegate agency authorized by EPA to carry out a Federal permit program is the title V permitting authority ( 61 FR 34228, July 1, 1996). The area sources subject to NSPS under section 111 or NESHAP under section 112 [ addressed in category ( 4) above] are identified in § § 70.3( a)( 2) and ( 3)

and § § 71.3( a)( 2) and ( 3) as among the sources subject to title V permitting requirements.

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

In the part 70 final rule of July 21, 1992, EPA permanently exempted from title V two categories of area sources that are subject to section 111 and 112 standards established prior to the part 70 rule ( pre 1992 standards): New residential wood heaters subject to subpart AAA of part 60 ( NSPS), and asbestos demolition and renovation operations subject to subpart M of part 61 ( NESHAP). See § § 70.3( b)( 4) and 71.3( b)( 4).

The EPA also allowed permitting authorities under part 70 the option to defer permitting 8 for other area sources subject to pre 1992 standards, while for part 71 purposes, we simply deferred issuing permits to them. See 57 FR 32261 32263 ( July 21, 1992), and § §

70.3( b)( 1) and 71.3( b)( 1).

The post 1992 standards, including the NESHAP for area sources that are the subject of today's final rule, previously have been addressed in § § 70.3( b)( 2) and 71.3( b)( 2), which state that EPA will determine whether to exempt from title V permitting any or all area sources subject to post 1992 NSPS or NESHAP at the time each new standard is promulgated. Subsequently, EPA issued title V exemptions for several area sources subject to NESHAP in final rules under part 63:

° All area sources within the NESHAP for publicly owned treatment works ( POTW), Subpart VVV. See § 63.1592 ( 63 FR 64742, October 21, 2002).

° Those area sources conducting cold batch cleaning within the NESHAP for halogenated solvent cleaning, Subpart T. See § 63.468( j) ( 59 FR 61802,

December 2, 1994).

° Three types of area sources within the NESHAP for hard and decorative chromium electroplating and chromium anodizing tanks, Subpart T. See §

63.340( e)( 1) ( 61 FR 27785, June 3, 1996).

The EPA has issued three post 1992 NESHAP that defer the requirement for area sources to obtain title V permits:

° Area sources subject to the NESHAP for perchloroethylene dry cleaning, subpart M; chromium electroplating and anodizing, subpart N; commercial ethylene oxide sterilization, subpart O; and secondary lead smelting, subpart X. See 61 FR 9 27785, June 3, 1996;

° Area sources subject to the NESHAP for halogenated solvent cleaning, subpart T.

See 59 FR 61801, December 2, 1994, as amended by 60 FR 29484, June 5, 1995;

and ° Area sources subject to the NESHAP for secondary aluminum production, subpart RRR. See 65 FR 15690, March 23, 2000.

The first two rules established deferrals of area source permitting, which expired on December 9, 1999. The expiration date for these deferrals was extended to December 9,

2004 in another final rule ( 64 FR 69637, December 14, 1999). The third rule provided deferrals for secondary aluminum area sources, which also expired on December 9, 2004.

Thus, today's final rule addresses all six categories of area sources subject to a post 1992 NESHAP that were subject to deferrals from permitting that expired on December 9,

2004.

The EPA published a notice of proposed rulemaking on March 25, 2005 ( 70 FR 15250), where we proposed to exempt from title V five categories of area sources subject to NESHAP: Dry cleaners, halogenated solvent degreasers, chrome electroplaters,

ethylene oxide ( EO) sterilizers and secondary aluminum smelters. As support for the proposed exemptions, we discussed why compliance with title V appeared to be impracticable, infeasible, or unnecessarily burdensome on the area sources, consistent with the exemption criteria of section 502( a) of the Act. Also, we discussed a sixth category,

area sources subject to the NESHAP for secondary lead smelters, but we did not propose to exempt them. 10 Today's final rule is unchanged from the proposal, except for a revision to §

63.360( f), which sets forth the title V exemption for area sources subject to the NESHAP for EO sterilizers. The change to the EO sterilizer rule is needed to clarify which sources under the NESHAP are subject to today's title V exemptions, and it is discussed further in section VIII. J of this preamble.

III. What Does Today's Action Involve?

A. What Revisions are Being Made to Part 63?

Today's final rule exempts five categories of area sources from title V by revising certain language in the NESHAP rules under part 63, as we proposed on March 25, 2005 ( 70 FR 15250). This is achieved through two types of changes to the NESHAP rules.

First, we have revised each of the five NESHAP to say that area sources subject to the NESHAP are exempt from the obligation to obtain permits under parts 70 or 71,

unless the source would be required to obtain these permits for another reason, as defined in the part 70 or 71 rules, such as when the source triggers another applicability provision of § § 70.3( a) or 71.3( a). For example, if an exempt area source increases its HAP emissions such that it becomes a major source, the former area source will be required to get a title V permit because it is a major source, consistent with § § 70.3( a)( 1) and 71.3( a)( 1). Consequently, when a former area source becomes a major source, the major source permit must include all NESHAP requirements that apply to the major source,

including the requirements of the NESHAP that formerly provided for the title V 11 3 Note that when an area source becomes a major source, depending on the specific requirements of the NESHAP, the emissions standards may change from generally achievable control technology ( GACT), which may be established for area sources, to maximum achievable control technology ( MACT), which is required for major sources, but also may be established for area sources. Also, see § 63.1( c)( 5). exemption. 3 This is so because § § 70.3( c)( 1) and 71.3( c)( 1) require permits for major source to include " all applicable requirements for all relevant emissions units in the major source." Also, we added a second sentence to each NESHAP to say " notwithstanding the previous sentence," the source " must continue to comply with the provisions of this subpart applicable to area sources." The purpose of this sentence is to explain that area sources that are exempted from title V are not exempted from any emission limitations,

standards, or any other requirements of the NESHAP.

Second, we have revised the table in each NESHAP that shows how the general provisions of subpart A of part 63 apply to that particular NESHAP, except for the dry cleaning NESHAP, which has no such table. For sources other than dry cleaners, the " comment" column for the § 63.1( c)( 2) entry in the tables simply states that area sources subject to the subpart are exempt from title V permitting obligations.

We have made one change to the rule language of the proposal. In the final rule,

we have revised the regulatory language of § 63.360( f), which sets forth the title V exemption for EO sterilizers. For more discussion of the proposed regulatory language and why we are changing it in the final rule, see section VIII. J below.

Also, we are not making any changes to the NESHAP for secondary lead smelters,

consistent with our proposal, because we are not establishing a title V exemption for area sources subject to it. See section V below for a more detailed explanation of our decision 12 regarding lead smelters.

B. What Revisions are being Made to Parts 70 and 71?

Today's final rule also revises parts 70 and 71, as we proposed, to make the rules more consistent with our interpretation that State and local agencies, tribes, and EPA ( permitting authorities) may not issue title V permits to area sources after we promulgate title V exemptions for them. In the proposal, we explained that section 502( a) of the Act provides that only those area sources required to get permits, and not exempted by EPA through notice and comment rulemaking, are properly subject to title V requirements.

Also, we explained that section 506( a) of the Act, which provides that permitting authorities " may establish additional permitting requirements not inconsistent with this Act," does not override the more specific language of section 502( a). We also explained that section 506( a) preserves the ability for permitting authorities to establish additional permitting requirements, such as procedural requirements, for sources properly covered by the program, and that section 116 of the Act allows State and other non federal permitting agencies ( State agencies) to issue non title V permits to area sources that have been exempted from title V. See section VI below for further discussion of our interpretations of the Act in this regard.

First, we proposed to delete the " at least" language of § 70.3( a) that has been interpreted to allow State agencies to require permits from area sources, once we have exempted the area sources from title V, because this language is inconsistent with section 502( a) of the Act. No similar changes are necessary for part 71. Second, we proposed to delete language in § 70.3( b)( 3) and § 71.3( b)( 3) that allows exempt sources to " opt to 13 apply for a permit under a part 70 program," as it is inconsistent with section 502( a) to let exempted area sources volunteer for a title V permit. Third, we proposed to delete the prefatory phrase of § 70.3( b)( 4), " Unless otherwise required by the state to obtain a part 70 permit," because it suggests that States agencies may require title V permits for exempted area sources, such as for residential wood heaters and asbestos demolition and renovation, which would be inconsistent with section 502( a) of the Act. Today's rule makes these revisions final, unchanged from the proposal.

IV. What are the Reasons for the Title V Exemptions?

A. General Approach In the proposal of March 25, 2005 ( 70 FR 15250), we explained our general approach to implementing the exemption criteria of section 502( a) of the Act. Section 502( a) of the Act provides, in part, that the Administrator may " promulgate regulations to exempt one or more source categories ( in whole or in part) from the requirements of this subsection if the Administrator finds that compliance with such requirements is impracticable, infeasible, or unnecessarily burdensome on such categories, except that the Administrator may not exempt any major source from such requirements." In addition,

EPA explained that the legislative history of Section 502( a) suggests that EPA should not grant exemptions where doing so would adversely affect public health, welfare, or the environment. See Chafee Baucus Statement of Senate Managers, Environment and Natural Resources Policy Division 1990 CAA Leg. Hist. 905, Compiled November, 1993 ( in that "[ t] he Act requires EPA to protect the public health, welfare and the environment,

. . . this provision of the permits title prevents EPA from exempting sources or source 14 categories from the requirements of the permit program if such exemptions would adversely affect public health, welfare, or the environment").

In developing this rulemaking, EPA sought and relied on information from State and local agencies on the level of oversight they perform on these area sources. They responded with information on whether they issue permits, perform routine inspections,

provide compliance assistance, and on compliance rates for them. We also received input from State small business ombudsmen and several trade associations representing dry cleaning, metal finishing, solvent cleaning, and the aluminum industry, including information on the sources and the compliance assistance programs currently available for them. In addition, the proposal provided a 60 day public comment period and public citizens, non profit organizations, State agency representatives, and affected industry representatives responded with comments, which are included in the docket.

In the proposal, we discussed on a case by case basis the extent to which one or more of the four factors supported title V exemptions for a given source category, and then we assessed whether considered together those factors demonstrated that compliance with title V requirements would be " unnecessarily burdensome" on the category,

consistent with section 502( a) of the Act. See 70 FR 15253, March 25, 2005.

One commenter said we should have evaluated and discussed all four factors for each category of area sources, suggesting that we ignored factors that did not support title V exemptions for each category of area sources. In response, we have considered, and discuss in this preamble, all four factors for each category of area sources for today's final rule. See the explanation below for an overview of our analysis of each factor. Also, see 15 section IV. B through F for detailed discussion of the four factors for each category of area sources, section VIII. A for detailed EPA response to this comment, and section VIII. D,

which provides detailed EPA response to this comment, and other comments, on proposed factor four.

The first factor discussed in the proposal is whether title V would result in significant improvements to the compliance requirements, including monitoring,

recordkeeping, and reporting, that are already required by the NESHAP. This preamble refers to this evaluation as probing whether title V is " unnecessary" to improve compliance for these NESHAP requirements at area sources. Thus, a finding that title V does not result in significant improvements to compliance, as compared to operating subject to the NESHAP without a title V permit, is described as supporting a conclusion that title V permitting is " unnecessary" for area sources in that category, consistent with the " unnecessarily burdensome" criterion of section 502( a) of the Act. Title V provides authority to add monitoring requirements in permits in appropriate circumstances, and also imposes a number of monitoring, recordkeeping and reporting requirements that are designed to enhance compliance. We analyze below the extent to which Title V could improve compliance for the area sources covered by today's rule.

Part 70 and 71 set forth, in three principal sections, monitoring requirements that may be included in title V permits for area sources. Section 70.6( a)( 3)( i)( A) requires that title V permits include "[ a] ll monitoring and analysis procedures or test methods required under applicable monitoring and testing requirements." This means, for example, that monitoring required by a NESHAP must be included in a title V permit issued to a source 16 4 Similar provisions appear in EPA regulations in Part 71 stipulating monitoring provisions for federally issued title V permits. covered by a NESHAP. Second, § 70.6( a)( 3)( i)( B) goes further, and provides that "[ w] here the applicable requirement does not require periodic testing or instrumental or noninstrumental monitoring ( which may consist of recordkeeping designed to serve as monitoring), periodic monitoring sufficient to yield reliable data from the relevant time period that are representative of the source's compliance with the permit" may be included in a title V permit. Importantly, however, where periodic monitoring exists in the underlying requirement, such as a NESHAP, permit writers are not authorized by this regulation to add additional periodic monitoring in a permit. See Appalachian Power Co.

v. EPA, 208 F. 3d 1015, 1028 ( D. C. Cir. 2000). Finally, § 70.6( c)( 1), provides that permits must contain " consistent with [ the periodic monitoring rule in § 70.6( a)( 3)],

compliance certification, testing, monitoring, reporting, and recordkeeping requirements sufficient to assure compliance with the terms and conditions of the permit." 4 The EPA's interpretation of § 70.6( c)( 1) has evolved over time. In November and December 2000, EPA partially granted two petitions for objections to State issued part 70 permits. See In the Matter of Pacificorp, Petition No. VIII 00 1 ( November 16,

2000); In the Matter of Fort James Camas Mill, Petition No. X 19999 1 ( December 22,

2000). In both decisions, EPA held that § 70.6( c)( 1) empowers State permitting authorities to review, on a case by case basis, the sufficiency of each permittee's monitoring requirements, independent of the authority provided by the periodic monitoring rule. On September 17, 2002, EPA published a proposed rule that would have 17 codified this interpretation of § 70.6( c)( 1). See 67 FR 58561. After considering comments, however, EPA issued a final rule ( the " umbrella monitoring rule") providing that § 70.6( c)( 1) does not allow permit writers to add monitoring requirements beyond those that are authorized by the periodic monitoring rule. See 69 FR 3202, 3204 ( January 22, 2004). This rule was the subject of litigation in the United States Court of Appeals for the District of Columbia Circuit ( DC Circuit), and the Court recently vacated and remanded the rule on the basis that EPA failed to provide adequate notice in its proposal of the option that it adopted in its final rule. See Environmental Integrity Project v. EPA,

205 U. S. App. LEXIS 21930 ( D. C. Cir. 2005).

In EPA's March 25, 2005 proposal to exempt five categories of area sources from title V requirements, EPA explained that " under the umbrella monitoring rule and the periodic monitoring rule, title V permits would not typically add any new monitoring requirements for post 1992 NESHAP, including the NESHAP addressed in today's proposal." See 70 FR 15254. The recent decision in Environmental Integrity Project vacating the umbrella monitoring rule does not change our view that subjecting these area sources to title V will not likely lead to monitoring beyond that required by the underlying NESHAP. All of the NESHAP were issued after the 1990 amendments to the Act, and were therefore designed to meet all of the Act's current monitoring requirements.

Interested parties that believed those regulations failed to provide for sufficient monitoring had an opportunity to challenge EPA's rulemaking decisions. Thus, even if § 70.6( c)( 1) is interpreted to allow " sufficiency" monitoring independent of the authority that exists through the periodic monitoring rule, EPA is confident that no such additional monitoring 18 5 It has been EPA's consistent position that post 1990 NESHAP include all monitoring required under the Act. See, e. g., the preamble to EPA's compliance assurance monitoring rule, 64 FR 54940 ( October 22, 1997) and EPA's advance notice of proposed rulemaking soliciting comments on Clean Air Act requirements that may include inadequate monitoring requirements, 70 FR 7905 ( February 16, 2005) ( specifically not soliciting comment on standards promulgated after 1990 because they contain adequate monitoring under the Act). would appropriately be added in title V permits issued to the five categories of area sources we exempt from title V today. 5 Therefore, the monitoring component of the first factor favors title V exemptions for all of the categories of sources for which exemptions are provided in this rule, because title V is " unnecessary" to provide adequate monitoring for them. Also, see EPA response to comment that title V permits are needed to define monitoring for electroplaters, in section VIII. G.

As part of the first factor, we have also considered the extent to which title V could potentially enhance compliance for area sources covered by today's rule through recordkeeping or reporting requirements, including requirements for a six month monitoring report, deviation reports, and an annual compliance certification. See § §

70.6( a)( 3) and 71.6( a)( 3), § § 70.6( c)( 1) and 71.6( c)( 1), and § § 70.6( c)( 5) and 71.6( c)( 5).

In the proposal, we stated that the recordkeeping and reporting requirements of the NESHAP for electroplaters, EO sterilizers, and secondary aluminum smelters are substantially equivalent to those of title V. After considering comments received on the proposal, we continue to believe the compliance requirements for these NESHAP are substantially equivalent to those of title V. Also, see EPA response to comments on issues related to factor one, including section VIII. I, concerning comment that the compliance requirements for EO sterilizers and secondary aluminum are not substantially equivalent to 19 those of title V.

In the proposal, we did not discuss recordkeeping and reporting in the context of factor one for dry cleaners or degreasers, but we do so in today's final rule in response to comment. As mentioned above, these NESHAP have monitoring requirements consistent with the title V monitoring requirements. However, they do not contain reporting requirements that are substantially equivalent to the title V requirements for deviation reports, six month monitoring reports, and annual compliance certification. [ See § §

70.6( a)( 3)( iii) and 71.6( a)( 3)( iii).]

The NESHAP for dry cleaners requires a log to be keep on site to document the dates that weekly leak detection and repair activities are conducted, the results of weekly monitoring of temperature and perchloroethylene concentrations, and a rolling monthly calculation of annual perchlorethylene consumption. It does not require a 6 month monitoring report, " prompt" deviation reports, or annual compliance certification, directly comparable to the compliance requirements of § 70.6( a)( 3)( iii)( A) and ( B), and §

70.6( c)( 5).

The NESHAP for degreasers requires exceedances of monitoring parameters to be reported at least semiannually and it requires an annual compliance report, which for most sources, is composed of a statement that operators have been trained on operation of cleaning machines and their control devices and an estimate of solvent consumption on an annual basis, but it does not require a 6 month monitoring report, " prompt" deviation reports, or annual compliance certification, directly comparable to the requirements of §

70.6( a)( 3)( iii)( A) and ( B), and § 70.6( c)( 5). 20 Although the reporting requirements of these two NESHAP are not substantially equivalent to those of title V, this does not mean that the compliance requirements of these two NESHAP are necessarily inadequate to achieve compliance on their own, or that they are in anyway deficient with respect to the requirements of the Clean Air Act.

Indeed, in issuing the NESHAP for these sources, EPA determined that the recordkeeping and reporting requirements contained therein were adequate, and EPA continues to believe that this is the case. The EPA acknowledges these additional title V reporting measures may provide some marginal compliance benefits, however, they would not be significant, and because the monitoring required by the two NESHAP is consistent with the monitoring requirements of title V, and therefore we concludeconcludes that the first factor does not completely supports a title V exemption for these sources. [ See additional explanation for dry cleaners and degreasers in sections IV. B and D below.]

The second factor considered in determining whether title V is " unnecessarily burdensome" for these categories is whether title V permitting would impose significant burdens on these area sources and whether these burdens would be aggravated by difficulty they may have in obtaining assistance from permitting agencies. We used this factor to assess whether title V satisfies the " burdensome" component of the " unnecessarily burdensome" criterion of section 502( a) of the Act. We discussed this factor in the proposal as supporting our exemption findings for dry cleaners, chrome electroplaters, solvent degreasers, and secondary aluminum smelters, but we did not specifically discuss it with respect to EO sterilizers. However, in the proposal, we stated a belief that title V burdens and costs would be significant for all five categories of area 21 sources, and this statement included EO sterilizers. See discussion of the second factor in the proposal, 70 FR 15254.

To help us assess factor two, we collected information on the burdens and costs of title V and economic data for the area sources, and we placed this information in the docket prior to our proposal. See economic information for the five industry groups ( docket item 04), and information on burdens and costs of title V in the information collection requests ( ICRs) for part 70 and 71 ( docket items 80 and 81). Note that the economic information is for the broad industry group, which includes both area sources and major sources under title V. However, despite this, certain assumptions about their economic characteristics are possible because mostalmost all of them are small businesses with limited resources. For example, many dry cleaners are small " mom and pop" retail establishments, which will have greater difficulty in meeting regulatory demands than large corporations with trained environmental staffs and greater resources. The ICRs for part 70 and 71 describe title V burdens and costs in the aggregate, they are not designed for use in estimating title V burdens and costs for any particular sources. The ICRs do not include specific estimates of burdens and costs for area sources because area sources were subject to title V deferrals at the time the ICRs were approved. However, the ICRs describe in detail various activities undertaken at title V sources, including activities for major sources with standard permits, and certain activities for major sources with general permits, and area sources may be issued either standard or general permits, so many of the same burdens and costs described in the ICRs will also apply to these area sources. See general permit rules, § § 70.6( d) and 71.6( d). In the proposal, we included a list of source 22 activities associated with part 70 and 71 that impose title V burdens and costs, whether the source has a standard or general permit, and we described how permits for area sources may have a somewhat reduced scope, based on § § 70.3( c)( 2) and 71.3( c)( 2),

compared to major source permits. Despite the potential for reduction of burdens for area sources, we proposed finding that the burdens and costs of title V would be significant for these area sources, similar to those for major sources. Thus, we proposed finding that V is " burdensome" for these area sources, consistent with the " unnecessarily burdensome"

criterion of section 502( a) of the Act.

Our review of comments and further consideration of these issues has not led us to a different view for all categories of area sources. For EO sterilizers, as in the proposal,

EPA has no reliable information on the economic resources of area sources but, as described below, believes that a number of area sources are small businesses with limited economic resources. See section IV. E. Given the lack of specific economic information for EO sterilizers, EPA is not making a specific finding as to whether factor two supports an exemption for this source category. Thus, we find today that factor two supports title V exemptions for all categories of area sources, except for EO sterilizers, where other factors support the exemption. See 70 FR 15258 15259 for more on the burdens of general permitting for area sources. Also, see sections VII and VIII. K below for more on our alternative proposal to require general permits for area sources in lieu of exempting them, section VIII. C below for more on title V cost estimates for area sources, and section VIII. L below for more on title V costs estimates for sources with general permits.

EPA's general belief, stated in the proposal, that title V burdens and costs would 23 be significant for EO sterilizers was not based on any particular study or docket support,

but instead on a general assessment of the types of smaller establishments likely to meet the " area source" definition of part 63 and conduct EO sterilization activities, e. g., small contract sterilization businesses, conducting off site sterilization services for manufacturers of medical equipment and supplies, pharmaceuticals, spices, and cosmetics.

See docket items 88 and 106.

In response to the comment that we should consider all four factors in evaluating each category of area sources for exemptions, we note that the docket does not contain reliable information on the economic resources of area sources in this category, but EPA reaffirms the general belief that there are area sources in the EO sterilizer category that would be small businesses or other small establishments with limited economic resources.

Nevertheless, because specific information on the economic resources of EO sterilizers is lacking, EPA is basing its decision to exempt this category from title V on its assessment of the other three factors and additional rationale noted in its evaluation of the legislative history of title V. [ See section IV. D.]. Also, see section VIII. A for more detailed EPA response to the comment that we should consider all four factors in evaluating each category of area sources for exemptions.

The third factor, which is closely related to the second factor, is whether the costs of title V permitting for these area sources would be justified, taking into consideration any potential gains in compliance likely to occur for such sources. We discussed factor three in the proposal as supporting our exemption findings for dry cleaners, but we did not discuss it with respect to the other four categories of area sources we proposed for title V 24 exemption. See more discussion on factor three in the proposal, including a detailed listing of many of the mandatory activities imposed by title V for area sources, 70 FR 15254. As described above in the context of our discussion of factor two, we find that costs of title V are significant for all categories except for EO sterilizer, where sufficient economic data are lacking for such a finding. Nevertheless, the types of enterprises within the EO sterilizer category are strongly suggestive that title V would be an economic burden for some, if not all, of the area sources. Also, through factor one and/ or revised factor four for each category of area sources in the proposal, both of which examine the ability of title V permits to improve compliance over that required by the NESHAP, we established that title V is " unnecessary" for NESHAP compliance. Although there may be some compliance benefits from title V for some area sources, we believe they will be small, and not justified by title V costs and burdens for them.

Accordingly, for all categories of area sources we exempt today, we conclude that title V costs are not justified considering the potential for gains in compliance from title V,

and thus, factor three supports title V exemptions for all five categories of area sources,

consistent with section 502( a) of the Act. See economic data for all industry groups,

docket item 04, and information on title V burdens and costs, docket items 80 and 81.

See section VIII. A for more detailed EPA response to the comment that we should consider all four factors in evaluating each category of area sources for exemptions.

The fourth factor considered in the proposal is whether oversight, outreach, and compliance assistance programs by the EPA, or a delegate State or local agency, primarily responsible for implementing and enforcing the NESHAP, could achieve high compliance 25 with particular NESHAP, without relying on title V permitting. We used this factor to examine whether title V is " unnecessary" for NESHAP compliance for these area sources.

See the discussion of factor four in the proposal, 70 FR 15254, March 25, 2005. We discussed this factor as supporting our exemption findings of the proposal for dry cleaners,

solvent degreasers and EO sterilizers, but we did not discuss it for electroplaters and secondary aluminum.

To help us assess this factor we collected information from State and local air pollution control agencies ( State agencies), summarized in the " State survey" which we placed in the docket for this rulemaking ( docket item 02). The State survey shows that many State agencies have compliance oversight programs that result in high compliance for the dry cleaners, solvent degreasers and EO sterilizers, and that high compliance for them does not necessarily depend on title V. This point was repeated by State and local agencies who submitted comments on the proposal, all of which are in support of the proposed exemptions for the five categories of area sources, see docket items, 11, 16, 59,

61, and 65.

One commenter opined that factor four is inconsistent with Congressional intent concerning the " unnecessarily burdensome" criterion of section 502( a) of the Act, because it examines the future possibility that a State might adopt alternatives to title V that are sufficient to achieve compliance with the NESHAP, without title V, rather than examining whether actual programs are in place to achieve compliance with the NESHAP, without title V permits. In response, we have revised factor four in the final rule, and we have analyzed all five categories of area sources based on the revised factor. Revised factor 26 four is whether there are implementation and enforcement programs in place that are sufficient to assure compliance with the NESHAP for area sources, without relying on title V permits. As further described in section VIII. D below, there are implementation and enforcement programs in place sufficient to assure compliance with the NESHAP for all five categories of area sources addressed in today's final rule, in all parts of the nation,

without title V permits. These programs take several forms, including programs of implementation and enforcement conducted by EPA under the statutory authority of sections 112, 113, and 114, and State delegation of this responsibility under section 112( l)

of the Act, implemented through subpart E of part 63. Second, section 507 of the Act requires a small business assistance program ( SBAP) for each State and for EPA, and these programs are in place, and they may be used to assist area sources subject to NESHAP that have been exempted from title V permitting. Third, States and EPA often conduct voluntary compliance assistance, outreach, and education programs ( compliance assistance programs), which are not required by statute. The statutory requirements for implementation and enforcement of NESHAP in section 112 apply to NESHAP that regulate all sources, including area sources. Thus factor four is satisfied for each of these categories of area sources by the statutory requirements alone. However, additional voluntary programs conducted by State and local agencies supplement the mandated programs and enhance the success of the programs.

We used the compliance rate information in the State survey as a check on our assumption that the statutory programs for implementation and enforcement of NESHAP,

together with other efforts by State agencies would result in adequate compliance for 27 these sources, without relying on title V permits. The State survey lists various State oversight programs, without indicating whether they are conducted voluntarily or under statutory authority. Also, the compliance rate information in the survey suggests that adequate compliance is being achieved in practice for all of these categories of area sources ( with more than half of the agencies that responded reported high compliance for each category). [ See the State survey, docket item 02.]

However, for secondary aluminum, fewer State and local agencies responded with examples of compliance oversight programs and information on compliance rates,

compared to other categories. We believe these data are explained by the timing of the State survey relative to the effective date of the secondary aluminum standard, rather than suggesting any deficiencies in State implementation and enforcement for the NESHAP.

The earliest date that compliance with the secondary aluminum NESHAP was required for sources was about the same time as the data collection phase of the State survey, and thus,

State and local agencies did not have much experience with compliance oversight for them, or much compliance data upon which to base their survey responses for secondary aluminum. The secondary aluminum NESHAP did not require sources to be in compliance until March 24, 2003 ( all other NESHAP were effective much earlier than this), while the majority of State and local input for the State survey occurred from March to June of 2003. [ See the final rule for secondary aluminum, 65 FR 15690, March 23,

2000, docket item 77, and documentation of the data collection phase of the State survey,

docket items 93 and 94.] We believe that State agencies are implementing this NESHAP in the same manner as others and, based on that belief, the statutory program, and the 28 information in the State survey, we conclude that factor four supports title V exemptions for area sources subject to the secondary aluminum NESHAP.

The analysis of factor four we performed for the final rule continues to support title V exemptions for dry cleaners, degreasers, and EO sterilizers, as we proposed, and it additionally supports exemptions for electroplaters and secondary aluminum smelters.

Thus, for the final rule, factor four helps to demonstrate that title V is " unnecessary" for NESHAP compliance, consistent with the " unnecessarily burdensome" criterion of section 502( a) of for all area sources we exempt today. Also, see section VIII. A for more detailed EPA response to the comment that we should consider all four factors in evaluating each category of area sources for exemptions, and section VIII. D for additional EPA responses to comments on proposed factor four.

In the proposal, we stated our belief that exempting these five categories of area sources from title V permitting would not adversely affect public health, welfare, or the environment, consistent with the legislative history of section 502( a). The reasons EPA explained in the proposal were the factors supporting exemptions discussed above and two other reasons: ( 1) that placing all requirements for these sources in permits would do little to help improve their compliance with the NESHAP, because of the simplicity of the sources and the NESHAP, and the fact that these sources are not typically subject to more than one NESHAP, and few other requirements under the Act, and ( 2) because requiring permits for them could, at least in the first few years of implementation, potentially adversely affect public health, welfare, or the environment by shifting State agency resources away from assuring compliance for major sources with existing permits to 29 issuing new permits for these area sources, potentially reducing overall air program effectiveness. For the final rule, we continue to believe that title V exemptions for these five categories of area sources will not adversely affect public health, welfare, or the environment for the same reasons discussed in the proposal. See the proposal, 70 FR 152554 15255, and EPA response to comments on this issue in section VIII. E below.

In conclusion, the four factors and other rationale of the final rule are appropriate to analyze whether title V permitting is " unnecessarily burdensome" for these five categories of area sources, and we finalize title V exemptions for them based on our analyses of these four factors and other rationale. The clarification of the factors we did not discuss in the proposal, including the revision of factor four, contained in today's final rule, does not change our view, as stated in the proposal, that title V is " unnecessarily burdensome" for the five categories of area sources we exempt today. Thus, for these reasons we are exempting from title V area sources subject to the part 63 NESHAP for dry cleaners, halogenated solvent degreasers, chrome electroplaters, EO sterilizers and secondary aluminum smelters. See sections IV. B through F, below for more detail on our analysis of the four factors for each category of area sources we exempt today.

B. Dry Cleaners In the proposal, we described how factors two, three, and four support title V exemptions for area sources subject to the NESHAP for perchlorethylene dry cleaners,

subpart M. We did not discuss factor one for dry cleaners, other than to note that title V would not result in additional monitoring for these sources, but we do so today below in response to comment. See the general discussion of monitoring and the specific 30 discussion of dry cleaners in the proposal, 70 FR 15254 15256, March 25, 2005 First, in the proposal, we explained that title V burdens and costs are significant for dry cleaners ( factor two), and thus title V will be " burdensome" for them. Dry cleaners are typically small " mom and pop" retail establishments employing only five people on average, with extremely limited technical and economic resources, and low profit margins,

and title V costs would represent an excessively high percentage of sales for them. See the economic profile for dry cleaners, docket item 04. In addition, concerning factor two,

the burdens of title V for dry cleaners would not likely be mitigated by assistance from permitting authorities because the authorities would likely not be able to meet the high demand caused by title V permitting for up to 28,000 dry cleaners nationally. Thus, we believe title V costs are significant for dry cleaners, and that title V is " burdensome" for them, because most are small businesses with limited resources, that would be subject to numerous mandatory source activities under part 70 or 71 that would represent significant costs to them in light of their resources, whether they have standard or general permits.

Second, as described in the proposal, factor four, whether adequate oversight by State agencies could achieve high compliance with NESHAP, without relying on title V permits, supports a conclusion that title V will be " unnecessary" for NESHAP compliance,

and thus, that title V exemptions are appropriate for dry cleaners. However, in response to comments, we have revised factor four ( explained below), and revised factor four continues to support the conclusion that title V is " unnecessary" for compliance with the NESHAP for dry cleaners. Revised factor four is whether there are implementation and 31 enforcement programs in place that are sufficient to assure compliance with the NESHAP for area sources, without relying on title V permits. As further described in section VIII. D below, there are implementation and enforcement programs in place sufficient to assure compliance with the dry cleaning NESHAP, without title V, in all parts of the nation.

Also, the State survey ( docket item 02) shows that most States and local agencies report that they conduct State permitting programs, programs of routine inspection, and provide different types of compliance assistance tools to help assure compliance with the NESHAP, often in combination, and that more than half of the agencies that reported compliance rate information reported high compliance for dry cleaners Also, many State and local agencies reported to us that compliance with the dry cleaning NESHAP can best be achieved through compliance assistance efforts, such as compliance outreach and education programs, and compliance tools, including such tools as calendars designed to schedule NESHAP compliance activities, and inspection checklists for the NESHAP,

rather than by using title V permits. See State and local input on compliance assistance programs for area sources, including dry cleaners ( docket items 02, 03, 06, and 08); an example of a compliance calendar for dry cleaners ( docket item 90), and an inspection checklist for dry cleaners ( docket item 95); and State and local agency comments in support of the proposed exemptions ( docket items 11, 16, 59, 61, and 65). The EPA agrees with those commenters who stated that non title V compliance approaches are more likely to be successful for implementing the dry cleaning NESHAP. Also, see section VIII. D below for more on our decision to revise factor four.

Third, in the proposal, we explained that the costs of title V for dry cleaners are 32 not justified taking into consideration the potential gains in compliance likely to occur from title V ( the third factor). Consistent with the explanation above of factor two for dry cleaners, title V costs will be significant for them. Also, consistent with revised factor four for dry cleaners, title V is " unnecessary" for NESHAP compliance for them, so it follows that the potential for gains in compliance is low. Thus, for dry cleaners, title V costs are high and the potential for compliance gains from title V are low. Although there may be some compliance benefits from title V for dry cleaners ( discussed below), we believe they will be small, and not justified by title V costs and burdens for them.

Accordingly, for dry cleaners, we conclude that title V costs are not justified taking into consideration the potential for gains in compliance from title V.

In addition, as we explained in the proposal, the large number of dry cleaners that are area sources ( up to 28,000 nationally) makes it likely that permitting them would strain the resources of State agencies, potentially reducing overall air program effectiveness, and thus, potentially adversely affecting public health, welfare, or the environment.

With respect to factor one for dry cleaners, we explained in the proposal that title V would not result in additional monitoring for these sources, and we have reaffirmed this conclusion today. See section IV. A. We did not discuss the recordkeeping and reporting component of factor one in the proposal, but we do so here in response to comment. As discussed in section IV. A, the dry cleaning NESHAP does not contain reporting requirements that are substantially equivalent to the title V requirements for deviation reports, six month monitoring reports, and annual compliance certification. [ See § §

70.6( a)( 3)( iii) and 71.6( a)( 3)( iii)] Although the reportingcompliance requirements of the 33 NESHAP for dry cleaners are not substantially equivalent to those of title V, this does not mean that the compliance requirements of the NESHAP are necessarily inadequate to achieve compliance on their own, or that they are in anyway deficient with respect to the requirements of the Clean Air Act, such as section 112 requirements. Indeed, EPA believes the recordkeeping and reporting requirements in the NESHAP are adequate under the Act. We acknowledge, however, that the additional recordkeeping and reporting requirements that would be provided through title V have some marginal potential to improve compliance benefits, however, we believe they would not be significant, and because the monitoring required by the NESHAP is consistent with the monitoring requirements of title V; thus, we conclude that factor one only partially supports an exemption for dry cleaners. Also for dry cleaners, factor four ( described above)

independently supports that title V is " unnecessary" for NESHAP compliance.

Consequently, our view of the appropriateness of a title V exemption for dry cleaners is unaffected by our expanded analysis of factor one for them, and we exempt them in today's final rule.

Thus, factors one, two, three, and revised factor four, fully support the exemption findings of the proposal that title V exemptions are appropriate for area sources subject to the NESHAP for dry cleaners, consistent with the " unnecessarily burdensome" criterion of section 502( a) of the Act. In addition, factor one partially supports an exemption.

C. Chrome Electroplaters In the proposal we described how factors one and two support title V exemptions for area sources subject to the NESHAP for hard and decorative chrome electroplating 34 and chromic acid anodizing ( electroplaters), subpart N. We did not discuss factors three and four for electroplaters in the proposal, but we do so below in response to comment.

See the discussion of electroplaters in the proposal, 70 FR 15256, March 25, 2005.

First, in the proposal, we stated that title V would impose significant burdens ( including costs) for electroplaters ( the second factor), and thus, title V will be " burdensome" for them. We based this view on our review of economic information ( docket item 04), and information on title V burdens and costs ( docket items 80 and 81).

After viewing the comments received, and upon further consideration we continue to believe that title V burdens and costs are significant for electroplaters that are area sources because most are small businesses with limited resources, that would be subject to numerous mandatory activities under parts 70 or 71, that would impose significant costs in lights of their resources, whether they had a general or standard permit. Also, see discussion of the second factor in section IV. A above.

Second, in the proposal, we explained that the compliance requirements of title V and the NESHAP for electroplaters are substantially equivalent, so title V will not result in any new significant compliance requirements over those already required by the NESHAP ( the first factor), and thus, title V will be " unnecessary" for NESHAP compliance. We reaffirm this finding today with respect to monitoring, in section IV. A. See section VIII. B for response to a comment that the interpretation of title V's monitoring requirements in the proposal was flawed, and section VIII. G below for EPA response to a comment that title V permits are needed to define monitoring requirements for electroplaters. With respect to recordkeeping and reporting, the electroplating NESHAP requires area sources 35 to submit on going compliance status reports, including a description of the NESHAP emission limitations or work practice standards, the operating parameters monitored to show compliance, information about the results of monitoring, including about excess emissions and exceedances of monitoring parameters, and a certification by a responsible official that work practices are followed. This report is required on an annual or sixmonth basis, depending on the frequency of periods of excess emissions. These reports result in information that is substantially equivalent with respect to assuring compliance as that required in six month monitoring reports, deviation reports, and annual compliance certification reports under title V.

In the proposal, we did not discuss factor three, whether title V costs are justified,

for electroplaters, taking into consideration any potential gains in compliance likely to occur through title V, but our analysis of factor three for the final rule is that it supports title V exemptions for them. Consistent with the explanation above of factor two, title V costs are significant for electroplaters. Also, for electroplaters, consistent with factors one ( discussed above) and revised factor four ( discussed below), both of which examine the ability of title V permits to improve compliance over that required by the NESHAP, title V is " unnecessary" for NESHAP compliance, so it follows that the potential for gains in compliance from title V will be low. Thus, for electroplaters, title V costs are high and the potential for gains in compliance from title V is low. Although there may be some compliance benefits from title V for electroplaters, we believe they will be small, and not justified by title V costs and burdens for them. Accordingly, for electroplaters, we conclude that title V costs are not justified considering the potential for gains in 36 compliance from title V.

Also, in the proposal, we did not discuss factor four, whether adequate oversight by State agencies could achieve high compliance with NESHAP, without relying on title V permits, for electroplaters. In response to comments, we have revised factor four, and revised factor four supports the title V exemption findings of the proposal for electroplaters. Revised factor four is whether there are implementation and enforcement programs in place that are sufficient to assure compliance with the NESHAP for area sources, without relying on title V permits. As further described in section VIII. D below,

there are implementation and enforcement programs in place sufficient to assure compliance with the electroplating NESHAP, in all part of the nation, without title V.

Also, the State survey ( docket item 02) shows that most States and local agencies report that they conduct State permitting programs, programs of routine inspection, and provide different types of compliance assistance tools to help assure compliance with the electroplating NESHAP, often in combination, and that more than half of the agencies that reported compliance rate information reported high compliance for electroplaters. Also,

many State and local agencies reported to us that compliance with the NESHAP for area sources, including for the electroplating NESHAP, can best be achieved through compliance assistance efforts, such as compliance outreach and education programs, and compliance tools, rather than by using title V permits. See State and local input on compliance assistance programs for area sources ( docket items 02, 03, 06 and 08); and State and local agency comments on the proposal, all of which are in support of the proposed title V exemptions for the five categories of area sources ( docket Items, 11, 16, 37 59, 61, and 65). Also, see section VIII. D below for EPA response to comments on factor four.

Thus, factors one, two, three, and revised factor four, support the exemption findings of the proposal, and consequently, title V exemptions are appropriate for area sources subject to the NESHAP for electroplating, consistent with the " unnecessarily burdensome " criterion of section 502( a) of the Act.

D. Solvent Degreasers In the proposal, we discussed how factors two and four support title V exemptions for area sources subject to the NESHAP for halogenated solvent degreasing, subpart T.

With respect to factor one, we explained that title V would not result in additional monitoring for these sources, and we have reaffirmed this conclusion today. See Section IV. A.. We did not discuss the recordkeeping and reporting component of factor one or factor three for degreasers, but we do so below in response to comment. See the discussion of degreasers in the proposal, 70 FR 15256 15257, March 25, 2005 First, in the proposal, we explained that requiring title V permits would impose a significant burden on degreasers that they will have difficulty meeting with current resources ( factor two), and thus, title V will be " burdensome" for them. Area source degreasers are typically small operations employing only a few people, with limited technical and economic resources, and little experience in environmental regulations.

Also, unlike the larger major sources, area source degreasing operations typically have no staff trained in environmental requirements and are generally unable to afford to hire outside professionals to assist them with understanding and meeting the permitting 38 requirements. See the economic profile for degreasers, docket item 04. We received comment supporting this view ( see docket item 31), and now we conclude that degreasers are small businesses with limited resources, subject to numerous mandatory activities under parts 70 or 71, that will be burdensome for them to meet, whether they have a general or standard permit; and that this means title V is " burdensome" for them. Also,

see discussion of the second factor in section IV. A above.

Second, in the proposal, we explained that factor four, whether adequate oversight by State agencies could achieve high compliance with NESHAP, without relying on title V permits, supports title V exemptions for degreasers. In response to comments, we have revised factor four and revised factor four is whether there are implementation and enforcement programs in place that are sufficient to assure compliance with the solvent degreasing NESHAP for area sources, without relying on title V permits. The EPA concludes that there are implementation and enforcement programs in place sufficient to assure compliance with the degreasing NESHAP, in all parts of the nation, without title V ( further described in section VIII. D below). Also, the State survey ( docket item 02)

shows that most States and local agencies report that they conduct State permitting programs, programs of routine inspection, and provide different types of compliance assistance tools to help assure compliance with the degreasing NESHAP, often in combination, and that more than half of the agencies that reported compliance rate information reported high compliance for degreasers. In addition, many State and local agencies reported to us that compliance with the degreaser NESHAP can best be achieved through compliance assistance efforts, such as compliance outreach and education 39 programs, and compliance tools, rather than by using title V permits. [ For example, see docket item 92, an inspection checklist for degreasers developed by a local air pollution control agency.] Thus, for the final rule, revised factor four supports that title V is " unnecessary" for NESHAP compliance for degreasers. See State and local agency input on compliance assistance programs ( docket items 02. 03, 06, and 08), and State and local agency comments submitted in support of the proposed exemptions ( docket items 11, 16,

59, 61, and 65). Also, see section VIII. D below for more on our decision to revise factor four; and section VIII. H below for EPA's response to comment on the appropriateness of title V exemptions when multiple applicable requirements apply to degreasers.

We did not thoroughly discuss factor one for degreasers in the proposal, but we do so here in response to comment. For the reasons explained in section IV. A, the degreasing NESHAP contains monitoring requirements for area sources that satisfy the requirements of the Act, and are sufficient to assure compliance with the NESHAP.

However, as discussed in section IV. A, the degreasing NESHAP does not contain reporting requirements that are substantially equivalent to the title V requirements for deviation reports, six month monitoring reports, and annual compliance certification. [ See § § 70.6( a)( 3)( iii) and 71.6( a)( 3)( iii)] Although the compliance requirements of the NESHAP for degreasers are not substantially equivalent to those of title V, this does not mean that compliance requirements of the NESHAP are necessarily inadequate to achieve compliance on their own, or that they are in anyway deficient with respect to the requirements of the Clean Air Act, such as section 112 requirements. In fact, as mentioned in Section IV. A, EPA believes the recordkeeping and reporting requirements in 40 the degreaser NESHAP are adequate, and satisfy the requirements of the Act.

Nevertheless, the additional title V recordkeeping and reporting requirements have some potential to improve compliance, so EPA concludes that factor one does not completely support an exemption for degreasers. Indeed, in issuing the NESHAP for these sources,

EPA determined that the recordkeeping and reporting requirements contained therein were adequate, and EPA continues to believe that this is the case. The EPA acknowledges these additional title V reporting measures may provide some marginal compliance benefits, however, they would not be significant, and because the monitoring required by the NESHAP is consistent with the monitoring requirements of title V, we conclude that the first factor supports a title V exemption for degreasers. Also, factor four ( described above) independently supports the conclusion that title V is " unnecessary"

for NESHAP compliance for degreasers, and thus, that a title V exemption is appropriate for them.

Also, in the proposal, we did not discuss factor three, whether title V costs are justified, taking into consideration any potential gains in compliance likely to occur for degreasers, but our analysis of factor three for the final rule is that it supports title V exemptions for them. Consistent with our analysis of factor two for degreasers ( discussed above), title V costs are significant for them. Also, for degreasers, revised factor four ( discussed above), which examines the ability of title V permits to improve compliance over that required by the NESHAP, supports that title V is " unnecessary" for NESHAP compliance, so it follows that the potential for gains in compliance from title V are low.

Although there may be some compliance benefits from title V for degreasers, we believe 41 they will be small, and not justified by title V burdens and costs for them. Accordingly,

for degreasers, title V costs are not justified taking into consideration the potential for gains in compliance from title V, and thus, factor three also supports title V exemptions for degreasers.

Thus, factors two, three, and four fully support the exemption findings of the proposal, and factor one partially does. EPA concludes that title V exemption is appropriate for area sources subject to the NESHAP for solvent degreasing, consistent with the " unnecessarily burdensome" criterion of section 502( a) of the Act.

E. EO Sterilizers In the proposal, we described how factors one and four support a title V exemption for area sources subject to the NESHAP for EO sterilizers, subpart O. We did not discuss factors two and three for EO sterilizers, but we do so below in response to comments. See the discussion of EO sterilizers in the proposal, 70 FR 15256, March 25,

2005.

First, in the proposal, we compared the monitoring and reporting requirements of the EO sterilizer NESHAP with those of title V, and we stated that the requirements are substantially equivalent ( the first factor), when sources employ continuous monitoring methods to assure proper operation and maintenance of control equipment, such as thermal oxidizers. Also, we said that sources that use scrubbers employ noncontinuous monitoring methods ( e. g., weekly readings of glycol levels in tanks), and thus, the recordkeeping and reporting requirements for them would not be substantially equivalent to title V. Although we were not certain of the number of area sources that employ 42 continuous monitoring methods under the NESHAP, we stated a belief that most sources would employ such methods, and we asked for comment on the percentage of sources that employ them. In addition, we noted that the EO sterilizer NESHAP does not require an annual compliance certification ( as does title V), and we asked for comment on the extent to which the lack of an annual compliance certification report requirement in the NESHAP would negatively affect compliance with the NESHAP.

For the final rule, we reviewed the EO sterilizer NESHAP once again, and we now conclude that sources with scrubbers are required to conduct " continuous" monitoring under the NESHAP, and therefore, that the recordkeeping and reporting requirements of title V and the NESHAP are substantially similar for all sources in the category. The EO sterilizer NESHAP at § 63.363( f) requires all sources to demonstrate continuous compliance, and it sets forth the monitoring requirements for demonstrating continuous compliance when the source employs scrubbers as emissions controls at § 63.364( b). [ See Table 1 of § 63.360, for a list of the general provisions, subpart A of part 63, including definitions and reporting requirements, that apply for this NESHAP.] Because they conduct " continuous" monitoring, they are required to submit excess emissions and continuous monitoring system performance report and summary reports, to assess their compliance status on a semiannual basis, consistent with § 63.10( e)( 3), the same as sources that use thermal oxidizers as emissions controls under the NESHAP. These reports provides compliance information that is substantially equivalent to that of § §

70.6( a)( 3)( iii) and 71.6( a)( 3)( iii) for deviation reports and six month monitoring reports ( see explanation below). 43 The EO sterilizer NESHAP requires sources to submit considerable information to EPA, or its delegate agency, to assess compliance with its emission limitations and standards. Section 63.366( a)( 3) requires an excess emissions and continuous monitoring system performance report and summary report of all sources with a continuous monitoring system ( CMS), on a semiannual basis, consistent with § 63.366( e)( 3). The excess emissions and continuous monitoring system performance report requires information on periods when the CMS is inoperative, periods of excess emissions and parameter monitoring exceedances, the nature and cause of each malfunction, any corrective actions taken, including repairs or adjustment made, and a certification of accuracy by a responsible official. The summary report, consistent with § 63.10( e)( 3), is required to include an emissions data summary for control system parameters and a CMS performance summary, which provides detailed information on periods of monitoring system downtime and the reasons the system was inoperative, including a certification of accuracy by a responsible official. [ See 63.10( c)( 5) through ( 13); and Table 1 of §

63.360.]

As described above, the compliance information already required to be reported by the EO sterilizer NESHAP is substantial, and it is similar to that required for annual compliance certification under title V [ see § § 70.6( c)( 5) and 71.6( c)( 5)]. Also, the compliance reports required by the NESHAP require certification by a responsible official,

which is defined similarly in the two programs ( see § 63.2, and § § 70.2 and 71.2). For these reasons, we conclude that the lack of an annual compliance certification report under title V will not have a significant impact on compliance for the EO sterilizer NESHAP. In 44 addition, as described in section IV. A, title V would not add any monitoring requirements for these sources.

Accordingly, we conclude that the EO sterilizer NESHAP provides compliance information that is substantially equivalent to the information required under title V. Thus,

our analysis of factor one for the final rule is that it supports that title V is " unnecessary"

for NESHAP compliance for EO sterilizers. Also, see section VIII. I below for EPA response to comments on EPA's analysis of the compliance requirements of the EO sterilizer NESHAP.

Second, in the proposal, we explained that factor four, whether adequate oversight by State agencies could achieve high compliance with NESHAP, without relying on title V permits, supports title V exemptions for EO sterilizers. In response to comment, we have revised factor four ( explained below), and revised factor four continues to support that title V is " unnecessary" for compliance with the NESHAP for EO sterilizers, and thus, it supports title V exemptions for them. In the final rule, revised factor four is whether there are implementation and enforcement programs in place that are sufficient to assure compliance with the NESHAP for area sources, without relying on title V permits. As further described in section VIII. D below, there are implementation and enforcement programs in place sufficient to assure compliance with the EO sterilizer NESHAP, in all parts of the nation, without relying on title V permits. Also, the State survey ( docket item 02) shows that most States and local agencies report that they conduct State permitting programs, programs of routine inspection, and provide different types of compliance assistance tools to help assure compliance with the EO sterilizer NESHAP, often in 45 combination, and that more than half of the agencies that reported compliance rate information reported high compliance for EO sterilizers. Also, many State and local agencies reported that compliance with the EO sterilizer NESHAP can best be achieved through compliance assistance efforts, such as compliance outreach and education programs, and compliance tools, rather than by using title V permits. See State and local input on compliance assistance programs ( docket items 02, 03, 06, and 08); and comments submitted by State and local agencies, all of which are in support the proposed exemptions for the five categories of area sources ( docket items 11,16, 59, 61, and 65). Also, see section VIII. D below for more on our decision to revise factor four, and section VIII. H and VIII. J below for EPA responses to comments on the proposed exemption for EO sterilizers.

In the proposal, concerning factor two, whether title V is a significant burden for these area sources, we stated a general belief that title V burdens and costs would be significant for all five categories of area source, and this statement included EO sterilizers.

For EO sterilizers, this general belief was not based on any particular study or docket support, but instead on a general assessment of the types of smaller establishments likely to meet the " area source" definition of part 63 and conduct EO sterilization activities, e. g.,

libraries and museums conducting fumigation of books and artifacts for conservation purposes, and small contract sterilization businesses, conducting off site sterilization services for manufacturers of medical equipment and supplies, pharmaceuticals, spices,

and cosmetics. See docket items 88 and 106.

In response to the comment that we should consider all four factors in evaluating 46 each category of area sources for exemptions, we note that the docket does not contain reliable information on the economic resources of area sources in the EO sterilizer category, but EPA reaffirms the general belief that these types of sources are likely to include relatively small businesses or other establishments with limited economic resources. EPA is basing its decision to exempt EO sterilizer area sources from title V on a consideration of the limited information in the record on the types of establishments subject to the area source rule, and on its assessment of the other three factors and additional rationale noted in its evaluation of the legislative history of title V. [ See section IV. D.] EPA believes title V would be " unnecessarily burdensome" for EO sterilizer area sources, because title V would impose burdens that EPA believes would significantly outweigh the small compliance benefits expected from title V permitting for this category,

satisfying the exemption criterion in section 502( a).

Also, in the proposal, we did not discuss factor three, whether title V costs are justified, taking into consideration any potential gains in compliance likely to occur, for EO sterilizers, but we clarify in today's final rule that factor three supports title V exemptions for them. We described above in the context of factor one and revised factor four, both of which examine the ability of title V permits to improve compliance over that required by the NESHAP, why we believe that title V is " unnecessary" for NESHAP compliance for them, so it follows that the potential for gains in compliance is low.

Although there may be some compliance benefits from title V for EO sterilizers, we believe they will be small, and not justified by title V costs and burdens for them.

Although we do not have reliable data on the economic resources of EO sterilizers, the 47 costs of title V will be the same for these sources as other area sources addressed in this rule. In light of the low compliance benefits provided by title V for these sources, we do not believe that those costs are justified. Accordingly, for EO sterilizers, we conclude that title V costs are not justified taking into consideration the potential for gains in compliance from title V, and thus, factor three supports title V exemptions for them.

Thus, factors one, three, and four support the title V exemption findings of the proposal for area sources subject to the EO sterilizers NESHAP. There is insufficient information to conclude that factor two supports an exemption for EO sterilizers, but regardless of the financial resources of EO sterilizers, any burdens associated with title V compliance will be unnecessary, since title V will not provide any significant compliance benefits for them. Therefore, a title V exemption is appropriate for them, consistent with the " unnecessarily burdensome" criterion of section 502( a) of the Act.

F. Secondary Aluminum In the proposal, we described how factors one and two support title V exemptions for area sources subject to the NESHAP for secondary aluminum, subpart RRR. We did not discuss factors three and four for them, but we do so below in response to comment.

See the discussion of secondary aluminum in the proposal, 70 FR 15258, March 25, 2005.

First, in the proposal, we compared the recordkeeping and reporting requirements of the secondary aluminum NESHAP with those of title V, and we stated that the requirements are substantially equivalent ( the first factor), when sources employ continuous monitoring methods to assure proper operation and maintenance of control equipment, such as when sources use thermal oxidizers for emission controls. Also, we 48 said that sources that use scrubbers as emissions control do not employ continuous methods, and thus, the compliance requirements for them are not substantially equivalent to title V. Although we were not certain of the number of area sources that employ continuous monitoring methods under the NESHAP, we stated a belief that most sources would employ such methods, and we asked for comment on the percentage of sources that employ them. In addition, we noted that the secondary aluminum NESHAP does not require an annual compliance certification ( as does title V), and we asked for comment on the extent that the lack of an annual compliance certification report requirement in the NESHAP would negatively affect compliance with the NESHAP.

For the final rule, we reviewed the secondary aluminum NESHAP once again and we now conclude that sources with scrubbers are required to conduct " continuous"

monitoring under the NESHAP. The secondary aluminum NESHAP requires CMS for each add on control device, including for scrubbers, when they are approved as an alternative monitoring method [ e. g., § 63.1510( w)]. [ See Appendix A of subpart RRR,

for a list of the general provisions of subpart A of part 63, including definitions and reporting requirements, that apply for this NESHAP; and the preamble for the final secondary aluminum NESHAP, 65 FR 15693, March 23, 2000, for more on the requirement for continuous compliance under the NESHAP.] Because they conduct " continuous" monitoring, they are required to submit excess emissions/ summary reports to assess their compliance status, on a semiannual basis, consistent with § 63.10( e)( 3), the same as other sources that use add on controls, such as thermal oxidizers, under the NESHAP. These reports provide compliance information that is substantially equivalent 49 to the requirements of § § 70.6( a)( 3)( iii) and 71.6( a)( 3)( iii) for deviation reports and sixmonth monitoring reports ( see detailed explanation below).

The secondary aluminum NESHAP requires sources to submit considerable information to EPA, or its delegate agency, to assess compliance with its emission limitations and standards. Section 63.1516( b) of the NESHAP requires an excess emissions/ summary report for all sources with a CMS, on a semiannual basis, consistent with § § 63.10( e)( 3) and 63.10( c). The excess emissions report requires all monitoring data, information on periods when the CMS is inoperative, periods of excess emissions and parameter monitoring exceedances, the nature and cause of each malfunctions, any corrective actions taken, including repairs or adjustment made, certifications by a responsible official that certain work practices were performed, and the results of any performance tests conducted during the reporting period. The summary report, consistent with § 63.10( e)( 3), is required to include an emissions data summary for control system parameters and a CMS performance summary, which provides detailed information on periods of monitoring system downtime and the reasons the system was inoperative,

including a certification of accuracy by a responsible official. [ See § § 63.1516( b)( 2) and ( 3); and § 63.1518].

As described above, the compliance information already required to be reported by the secondary aluminum NESHAP is substantial, and similar to that required for annual compliance certification under title V [ see § § 70.6( c)( 5) and 71.6( c)( 5)]. Also, the compliance reports required by the NESHAP require certification by a responsible official,

which is defined similarly in the two programs ( see § 63.2; and § § 70.2 and 71.2). 50 Because of the substantial information concerning compliance required to be reported by the secondary aluminum NESHAP, the lack of an annual compliance certification report under title V will not have a significant impact on compliance for the NESHAP, and we are satisfied that the recordkeeping and reporting component of factor one supports an exemption for area sources subject to this NESHAP. [ Also, see docket item 89, a summary in tabular form of the monitoring, recordkeeping, reporting, and other compliance requirements of the secondary aluminum NESHAP.] As discussed in Section IV. A., the monitoring component of factor one also supports a title V exemption for secondary aluminum smelters.

Accordingly, we conclude that the secondary aluminum NESHAP provides compliance information that is substantially equivalent to the information required under title V. Thus, our analysis of factor one for the final rule is that it supports that title V is " unnecessary" for NESHAP compliance for secondary aluminum. [ Also, see section VIII. I below for EPA's response to significant comments on the proposed exemption for secondary aluminum smelters.]

Second, in the proposal, we discussed that title V permitting would impose a significant burden on these area sources that would be difficult for them to meet with current resources ( the second factor). In 2001, there were over 1,300 facilities in the secondary aluminum industry. Half of these facilities employed fewer than 20 employees.

These small sources will likely lack the technical resources needed to comprehend and comply with permitting requirements and the financial resources needed to hire the necessary staff or outside consultants. Accordingly, we conclude that title V is 51 " burdensome" for them because mostalmost all of them are small businesses with limited resources, and they will be subject to numerous mandatory sources activities under part 70 and 71, that it will be burdensome for them to meet, whether they have a standard or general permit. Thus, for the final rule, we believe factor two supports title V exemptions for secondary aluminum smelters.

We did not discuss factor three in the proposal, whether title V costs are justified,

taking into consideration any potential gains in compliance likely to occur, for area sources subject to the NESHAP for secondary aluminum, but we clarify in today's final rule that factor three supports title V exemptions for them. We explained above that title V imposes significant burdens and costs on these area sources ( factor two). Also, for secondary aluminum area sources, consistent with factor one ( described above) and revised factor four ( discussed below), both of which examine the ability of title V permits to improve compliance over that required by the NESHAP, title V is " unnecessary" for NESHAP compliance, so it follows that the potential for gains in compliance for them is low. Although there may be some compliance benefits from title V for secondary aluminum area sources, we believe they are small, and not justified by title V costs and burdens for them. Accordingly, for secondary aluminum, title V costs are not justified for area sources taking into consideration the potential for gains in compliance from title V,

and thus, factor three supports title V exemptions for them.

In the proposal, we did not discuss factor four for secondary aluminum smelters,

whether adequate oversight by State agencies could achieve high compliance with NESHAP, without relying on title V permits, for secondary aluminum. In response to 52 comments, we have revised factor four, and revised factor four supports the conclusion that title V is " unnecessary" for compliance with the NESHAP for secondary aluminum,

and thus, it supports a finding that title V exemptions are appropriate for them. Revised factor four is whether there are implementation and enforcement programs in place that are sufficient to assure compliance with the NESHAP for area sources, without relying on title V permits. As further described in section VIII. D below, there are implementation and enforcement programs in place sufficient to assure compliance with the secondary aluminum NESHAP, in all parts of the nation, without relying on title V. These programs take several forms, including programs conducted under the statutory authority of sections 112, 113, and 114 of the Act, State delegations under section 112( l), SBAP under section 507, and voluntary compliance assistance, outreach, and education programs. Factor four is satisfied for this category by the statutory requirement for implementation and enforcement of NESHAP in section 112, which applies to all NESHAP, including this one.

For secondary aluminum, the State survey confirms that adequate compliance is being achieved in practice by States ( more than half of the agencies that reported compliance rate information reported high compliance), but there were fewer examples of compliance oversight programs and fewer responses to the compliance rate question for this category,

compared to other categories. We believe these data are explained by the timing of the State survey relative to the effective date of the secondary aluminum standard, rather than suggesting any deficiencies in State implementation and enforcement for the NESHAP.

The timing of the State survey explains the response to questions concerning secondary aluminum because the earliest date that compliance with the secondary aluminum 53 NESHAP was required was about the same time as the data collection phase of the State survey. Thus, State and local agencies did not have much experience with compliance oversight for secondary aluminum, or much compliance data upon which to base their survey responses for this category at the time the State survey was conducted. The secondary aluminum NESHAP did not require sources to be in compliance until March 24, 2003 ( all other NESHAP were effective much earlier than this), while the majority of State and local input for the State survey occurred from March to June of 2003. [ See the final rule for secondary aluminum, 65 FR 15690, March 23, 2000, docket item 77, and documentation of the data collection phase of the State survey, docket items 93 and 94.]

Also, many State and local agencies reported to us that compliance with the NESHAP for area sources, including for the secondary aluminum NESHAP, can best be achieved through compliance assistance efforts, such as compliance outreach and education programs, and compliance tools, rather than by using title V permits. See State and local input on compliance assistance programs for area sources ( docket items 02, 03, 06 and 08); and State and local agency comments on the proposal, all of which are in support of the proposed title V exemptions for the five categories of area sources ( docket Items, 11,

16, 59, 61, and 65). For these reasons, we conclude in the final rule that factor four supports title V exemptions for area sources subject to the secondary aluminum NESHAP.

[ Also, see section VIII. D for EPA response to comments on proposed factor four.]

Thus, factors one, two, three, and four support the title V exemption findings, and,

consequently, title V exemptions are appropriate for area sources subject to the NESHAP for secondary aluminum, consistent with the " unnecessarily burdensome" criterion of 54 section 502( a) of the Act.

V. What is EPA's Decision for Secondary Lead Smelters?

In the proposal, we declined to make a finding that title V permitting for area sources subject to the NESHAP for secondary lead smelting would be impracticable,

infeasible, or unnecessarily burdensome, and we asked for comment to help us determine if we should make such a finding. We considered the same factors for these area sources as we did for other categories of area sources, but we did not have a basis for finding that an exemption was warranted, as for the other area sources addressed in this rulemaking. We did not receive any information or data during the comment period sufficient to support a finding that permitting these area sources would be " impracticable, infeasible, or unnecessarily burdensome" on such sources or that exemptions would " not adversely affect public health, welfare, or the environment," nor did we receive any comments in opposition to our proposal to exempt secondary lead area sources. For these reasons, the final rule will not exempt these area sources from title V requirements. See 70 FR 15259.

Any area source subject to the secondary lead NESHAP that has not already applied for a title V permit is required to submit a title V permit application by December 9, 2005, as provided in § 63.541( c) of subpart X. Also, as provided in § 70.3( c)( 2) and §

71.3( c)( 2), assuming the source is an area source and not subject to title V for another reason, the permit must include the requirements of subpart X and all other applicable requirements that apply to emissions units affected by subpart X, while any units not subject to subpart X may be excluded from the permit. ( See 68 FR 57518, October 3,

2003, footnote # 7 on page 57534.) 55 VI. May Title V Permits be Issued to Exempt Area Sources?

In the proposal, we explained and sought comment on our proposed interpretation of the Act as allowing only those area sources required to be permitted under section 502( a), and not exempted by EPA through notice and comment rulemaking to be subject to title V requirements. We are finalizing that interpretation in today's final rule. Thus,

after the effective date of today's final rule, permitting authorities, including State and local agencies, tribes, and EPA, title V permits, including general permits, to the area sources we exempt in today's final rule. This interpretation of the Act means that permitting authorities must stop issuing new title V permits to area sources we exempt today, unless they are subject to title V for another reason, and any existing title V permits for such sources must be revoked or terminated after the effective date of an exemption.

The exact procedures and schedules necessary to end the effectiveness of such title V permits will vary from State to State. The EPA believes State agencies have some discretion on how to do this, as long as it is done consistent with title V. The EPA believes that State issuance of title V permits to area sources that EPA has exempted from title V permitting requirements would conflict with Congress's intent that EPA define the universe of sources subject to title V, and through inappropriate focus on sources that qualify for an exemption, would be an obstacle to implementation of the title V program.

Even if the statute were ambiguous in this regard, EPA would exercise its discretion to interpret it this way to promote effective title V implementation. The proposal included a discussion of these issues, and in the final rule, EPA's interpretation of the Act in this regard is unchanged from the proposal. See section VI below for more on EPA's 56 interpretation of these Act provisions. Note, however, that EPA interprets Section 116 of the Act to allow permitting authorities to issue non title V permits to area sources that we have exempted from title V permitting.

VII. May General Permits be Issued as an Alternative to Title V Exemptions?

The EPA has decided not to adopt the alternative, discussed in the proposal, of allowing permitting authorities to issue general permits to these area sources. The proposal discussed general permitting as a streamlined process for issuing title V permits to a large number of similar sources, and it stated that these area sources may be good candidates for such permits. The proposal also analyzed the factors and other rationale we used for title V exemptions against the requirements for general permits, and we stated our belief that potential reductions in costs and burdens from requiring general permits would not be sufficient to alter our findings. [ See this discussion in the proposal at FR 15258 15259.] With respect to the first factor, the proposal said that general and standard permits are subject to the same permit content requirements under § § 70.6 and 71.6, so title V would affect units to which the NESHAP applies in the same manner for general permits, as for standard permits. For the second factor, the proposal stated that general permits would potentially simplify the permit application process, but general permits would require area sources to conduct many of the same mandatory activities as sources with standard permits, and thus, impose many of the same title V burdens and costs as standard permits. [ See the list of source activities in the discussion of factor two in the proposal, 70 FR 15254.] For the third factor, the proposal observed that general permits may reduce the costs of applying for a permit, but the remaining costs to meet the permit 57 requirements will continue to be a burden for these area sources. This is so because general permits reduce some burdens, but other significant burdens remain. And, we explained that EPA's outreach in recent years has shown that most State agencies generally do not believe that implementing NESHAP for area sources through permits will result in increased compliance, and that this would be true for general permits, as with standard ones. This point was also made in comments submitted by State and local agencies, all of which are in support of the proposed title V exemptions for the five categories of area sources, see docket items, 11, 16, 59, 61, and 65. For the fourth factor discussed in the proposal, we said the permit content requirements of § § 70.6 and 71.6 are identical for general and standard permits, and the ability of State agencies to ensure NESHAP compliance outside of the title V programs will apply with equal force for general permits. Nevertheless, we offered general permitting as an alternative to title V exemptions in the proposal, and we sought comment on this alternative.

Some commenters expressed the view that general permitting should be required as an alternative to title V exemptions because they believe title V is critical for compliance with the NESHAP. Today's final rule does not require general permits for these area sources as an alternative to exempting them for several reasons. First, through factors one and revised factor four, which we use to examine the ability of title V permits to improve compliance over that required by the NESHAP, we established that title V is " unnecessary" for NESHAP compliance for these area sources, whether they have a general or standard permit. [ See detailed analysis of the factors one and four in sections IV. A, VIII. A, and VIII. D.] Second, under section 504( d) of the Act, issuing general 58 permits to sources subject to title V is an option for State and local agencies; an EPA decision not to exempt these sources does not provide a means of ensuring that they would then receive general permits. Also, because general permits are an option, State and local permitting authorities would not be required to issue them to area sources that request them. Because of this, the best course of action to avoid unnecessary burdens for these area sources, and to promote a focus by regulatory agencies on the type of oversight we believe will be most effective in achieving compliance, is to exempt them from title V in today's final rule. See section VII below for more on EPA's decision to not require general permits for these area sources.

VIII. What Are EPA's Responses to Significant Comments?

This section of today's preamble discusses the more significant comments received on our March 25, 2005 proposal that are not addressed elsewhere in today's preamble,

and EPA's responses to these comments. The EPA's response to all comments ( significant comments and other comments) is included in a response to comment document which is in the docket for this rulemaking.

A. Is EPA's General Approach to Exemptions Consistent with the Act?

Many commenters disagreed with the proposed title V exemptions because they did not agree that the four factors and other rationale we used to justify the exemptions were consistent with the Act. In response, the four factors and other rationale referred to in the proposal, and again in this final rule, are not intended to replace the statutory criteria for a title V exemption, but instead assist EPA in evaluating whether the statutory criteria are satisfied. Section 502( a) of the Act gives EPA discretion to exempt from title 59 V area sources subject to NESHAP, if permitting them would be " impractical, infeasible or unnecessarily burdensome" on the area sources, while the legislative history for this provision suggests the EPA should also consider whether an exemption would " adversely affect public health, welfare, or the environment." The EPA used the four factors to analyze whether title V would be " unnecessarily burdensome" on the area sources,

consistent with section 502( a). ( See the explanation of the four factors and other rationale of the proposal at 70 FR 15253 15255, March 25, 2005.)

Factor one was used to analyze whether title V is " unnecessary" for NESHAP compliance by examining whether title V would add substantial compliance requirements over those already required by the NESHAP. Factor two was used to analyze whether title V will impose significant burdens on area sources and whether these burdens will be aggravated by difficulties area sources will experience in obtaining assistance from State agencies. Factor three was used to analyze whether title V costs are justified considering potential gains in compliance from title V. If the costs of title V are high, burdens are also high because costs are burdens; and if potential compliance gains derived from title V are low, title V is more likely to be considered " unnecessary" for NESHAP compliance.

Factor four was used in the proposal to analyze whether adequate oversight by State agencies could achieve high compliance with NESHAP without title V permits. If high compliance with NESHAP can be achieved without title V, title V will more likely be considered " unnecessary" for NESHAP compliance. We have revised factor four in response to comments received on the proposal. See more on revised factor four below.

In addition to the four factors, the EPA considered whether exempting these area 60 source from the need for title V permits could cause adverse effects on public health,

welfare, or the environment, at least on a temporary basis, or whether requiring title V permitting could have such adverse effects because of shifts in the resources of State agencies away from assuring compliance for major sources with existing permits to issuing new permits for these area sources. We do not believe that exemptions from title V permitting for these area sources will have adverse effects on public health, welfare or the environment. First, as we explained in section IV above, through our analysis of factors one and/ or four for each of the five categories of area sources, we established that title V is " unnecessary" for compliance with the NESHAP, for each category of area source.

Second, as we explained in the proposal, the vast majority of these area sources are typically subject to no more than one NESHAP, and few other requirements under the Act. Also, the area sources are simple sources with few emissions units and the NESHAP are relatively simple in how they apply to these area sources. Because of these characteristics, the likelihood that multiple NESHAP apply to the same area source is low,

and thus the need for a title V permit to clarify multiple or overlapping NESHAP is also low. ( See docket item 08 for State input on the likelihood that multiple requirements will apply and the relative simplicity of these sources.) Also, see EPA response to comments on whether title V permit are needed to define monitoring for electroplaters, section VIII. G, and EPA response to comment on whether degreasers should be exempted when there are multiple applicable requirement that apply to them, section VIII. H. In sum, EPA believes that the factors and additional rationale that it has considered in evaluating whether title V exemptions should be issued for the area sources covered by today's rule 61 appropriately probe whether title V is " unnecessarily burdensome" for the area sources,

and whether an exemption could cause adverse effects on public health, welfare or the environment.

Several commenters were concerned that title V exemptions for these area sources would result in the loss of certain title V benefits with respect to State implementation plan ( SIP) requirements, and that this would result in adverse affects on public health,

welfare, and the environment. We disagree with this comment because we do not believe title V exemptions for these area sources will have the effects suggested by the commenter to any significant extent for the reasons explained below.

First, the majority of area sources we exempt today ( all of the dry cleaners and many solvent degreasers), emit HAP that are not a criteria pollutant subject to regulation under a SIP, so such adverse effects for SIP requirements could not occur for these sources. This is the case because § 51.100( s), which defines VOC for purposes of SIP,

specifically excludes perchloroethylene ( also known as tetrachloroethylene), methylene chloride ( dichloromethane), and 1,1,1 trichloroethane ( methyl chloroform) from the definition of VOC. Because the only HAP regulated by subpart M is perchloroethylene,

all area source dry cleaners regulated under the NESHAP ( estimated at up to 28,000 area sources) do not emit VOC. Also, many degreasers subject to subpart T use perchloroethylene, methylene chloride, or 1,1,1, trichloroethane ( including any combination of these), and if they emit no other HAP that are VOC, then they also would not be subject to SIP requirements for VOC. We estimate that there are up to 3,800 area source degreasers subject to the NESHAP, but we have no estimate of how many of these 62 solely emit HAP that is not VOC. Also, EPA has focused on VOC in this discussion because we are unaware of any other criteria pollutant definitions that would be met by these three HAP.

Second, title V permits for area sources are limited in scope by § § 70.3( c)( 2) and 71.3( c)( 2), which only require the emission units that cause the source to be subject to title V ( in this case the units subject to NESHAP) to be included in the permit. Under these regulations, if SIP requirements apply to an emissions unit, and NESHAP does not,

the unit is not required to be included in the area source permit. For example, for a dry cleaner, the permit would only address dry cleaning equipment, not other emissions units that may be collocated at the area source, such as comfort heating systems subject only to SIP requirements. This is quite different than for major sources because § § 70.3( c)( 1) and 71.3( c)( 1) requires major source permits to include all emissions units at the source, even those that would not be subject to NESHAP. Thus, the extent that title V exemptions for area sources would result in loss of compliance benefits for SIP requirements is quite limited by the permit content requirements for area sources, as compared to major sources.

Third, in our experience the NESHAP are more stringent than typical SIP requirements that would apply to these area sources. Because of this, if a SIP and NESHAP apply to the same unit, any deficiencies in the SIP requirements are likely to be corrected by the more stringent NESHAP requirements, without the need for title V permits. Also, these NESHAP compliance requirements are consistent with the Act, such that title V permits are not needed to improve the compliance requirements of NESHAP 63 6Note that these are the same emissions under different definitions, so if you control one, you control the other.

7The secondary aluminum NESHAP only regulates dioxin/ furan emissions for a limited set of emission units for area sources, while additional HAP are regulated at additional emission units for major sources. [ See § 63.1500( c).] ( this is described in more detail in section VIII. B below).

The commenter submitted no specific examples where emission units subject to NESHAP are also subject to SIP requirements, but two scenarios may be helpful in analyzing their claims, which we believe are without merit. Both examples involve the socalled " generic applicable requirements" that we believe would most commonly apply to these area sources. These are relatively simple requirements that apply identically to all emissions units at a facility. Also, both are examples where the HAP meets the definition of VOC under § 51.100( s) and potentially is subject to regulation under a SIP ( although we are not sure all SIPs regulate such units). The first scenario is where a HAP, such as carbon tetrachloride, is regulated by the degreaser NESHAP, and it is also VOC regulated under the SIP by a pound per hour limit. 6 The second is where a HAP, such as dioxin/ furan, is regulated by the secondary aluminum NESHAP, 7 and it is also PM regulated under the SIP by a process weight limit. In both cases, EPA believes the NESHAP will be far more stringent than the SIP requirements in terms of emission controls and compliance requirements. Because of this, the NESHAP requirements will ensure that the area source also meets the SIP requirements, and the compliance requirements of the NESHAP will be consistent with the compliance requirements of the Act, including title V. In addition, EPA has previously advised States that " generic" 64 requirements of the SIP ( described above), that are less stringent than other applicable requirements addressing the same units and pollutants may be omitted from title V permits, provided that the resulting " streamlined" terms and conditions achieve compliance with all the applicable requirements. [ See discussion of treatment of " generic"

requirements in White Paper Number 2 for Improved Implementation of the Part 79 Operating Permits Program, March 6, 1996, docket item 100; and discussion of factor one in section IV. A of this preamble.]

In addition, we explained in the proposal that requiring permitting of area sources will likely cause, at least in the first few years of implementation, permitting authorities to shift resources away from assuring compliance for major sources with existing permits, to issuing new permits for area sources. This has the potential, at least temporarily, to reduce the overall effectiveness of States' title V permit programs, which could potentially adversely affect public health, welfare, or the environment. See docket item 08, where State officials explain that permitting all the area sources proposed for exemption would triple the number of title V permits issued in the State, and that it would be difficult for them to obtain approval to obtain additional full time employees. Although State title V programs are required to have authority to raise title V fees as necessary to cover the costs of the program, in most States the program must seek budget and fee increases through the State legislature as part of the State budget process, which can lead to significant delays in getting approval to increase fees or resources to meet new demands.

Also, see EPA response to comments on the legislative history guidance that title V exemptions for area sources should not cause adverse effects on public health, welfare, or 65 the environment, in section VIII. E below.

One commenter said we should have discussed all four factors for each category of area sources, suggesting that we ignored factors that did not support the proposed title V exemptions for each category of area sources. In response, we did not discuss all four factors for each category of area sources in the proposal because we thought those factors we identified as present supported a finding that title V was " unnecessarily burdensome,"

regardless of any determinations that could be made regarding factors not analyzed.

Nevertheless, in response to this comment, and to provide a full discussion of all issues potentially relevant to this rulemaking, we discuss the four factors for each category of area sources elsewhere in the preamble for today's final rule.

B. Does the First Factor Acknowledge Key Title V Requirements?

One commenter thought the first factor, whether title V adds significant compliance requirements beyond those required by a NESHAP, was not appropriate for analyzing the exemption criterion of section 502( a) of the Act because it fails to acknowledge key title V requirements that would be lost under a title V exemption,

directly at odds with sections 504( a) and 504( c) of Act.

In response, we believe the proposal's discussion of factor one was adequate because it focused on the key compliance requirements of title V that are most likely to add significant compliance benefits for area sources subject to NESHAP. We explained that title V imposes a number of monitoring, recordkeeping, and reporting requirements for compliance. We focused our review on the requirements for monitoring, and the recordkeeping/ reporting requirements for prompt reports of deviations from permit 66 requirements ( deviation reports) and for reports of required monitoring every six months ( six month monitoring reports) under § § 70.6( a)( 3)( iii) and 71.6( a)( 3)( iii), and the requirement for an annual compliance certification by a responsible official under § §

70.6( c)( 5) and 71.6( c)( 5). Nevertheless, to provide a more complete response to the comment in the final rule, we describe below several other compliance aspects of title V that we were silent on in the proposal, including the requirements of section 504( a) for the permit to include " a schedule of compliance," and " such other conditions as necessary to assure compliance with applicable requirements of the Act, including the requirements of the applicable implementation plan [ e. g., SIP]," and the requirement of section 504( c) for permits to contain " inspection" and " entry . . . requirements to assure compliance with the permit terms and conditions."

Concerning the requirement of section 504( a) for schedules of compliance, there is independent authority for establishing schedules of compliance to bring noncompliant sources back into compliance under the general enforcement authority of section 113 of the Act, which applies to these NESHAP. Also, the approval criteria for delegation requests for NESHAP requires the Attorney General's written finding to say that the delegate agency has enforcement authorities that meet the requirements of § 70.11, which requires them to have authority to obtain an order, pursue a suit in court, or seek injunctive relief for violations, and this may result in a schedule of compliance, where appropriate, equivalent to any that may be obtained through title V. Thus, a title V permit is not necessary to establish a schedule of compliance for any of the area sources we exempt today, in the event of noncompliance with these NESHAP. 67 Concerning the requirement of section 504( a) that permits contain " enforceable emission limitations and standards," the five NESHAP addressed in today's final rule establish such emission limitations and standards, and they are independently enforceable outside of title V permits. Also, title V does not contain authority for creating new emission limitations and standards in title V permits, so no such emission limitations or standards would be lost through title V exemptions for these area sources.

Concerning the requirement of section 504( a) that permits include conditions to assure compliance with the requirements of the applicable implementation plan ( the SIP,

for example), we described in section VIII. A above why exempting these area sources from title V would not significantly affect compliance with SIP requirements that may also apply to such area sources. Also, we add that these SIP requirements are independently enforceable under the authority of section 110 of the Act, so their implementation and enforcement does not depend on title V.

Concerning the requirements of section 504( c) for permits to contain inspection and entry requirements, when EPA is responsible for implementation and enforcement of the NESHAP such requirements would be met under the authority granted EPA by section 114 of the Act. State and local agencies or tribes are required to have such authority as a condition of approval for any delegation request they make, consistent with section 112( l)

of the Act. For example, agencies requesting delegation of NESHAP are required to submit, as part of their delegation request, a written finding by the State Attorney General ( or General Counsel for local agencies and tribes) that they have legal authority " to request information from regulated sources regarding their compliance status," under § 68 63.91( d)( 3)( i)( B), and " to inspect sources and any records required to determine a source's compliance status," under § 63.91( d)( 3)( i)( C). In addition, as part of their delegation requests, agencies are required to submit a plan that " assures expeditious compliance by all sources," including a description of " inspection strategies."

Also related to the comment and response above, several commenters said our analysis of factor one in the proposal was inadequate because we relied on an illegal interpretation of the Act's monitoring requirements through our reliance on the " umbrella monitoring" rule of January 22, 2004. These commenters argue that § § 70.6( c)( 1) and 71.6( c)( 1) impose an additional case by case monitoring review called " sufficiency monitoring," that is independent from the requirement for " periodic monitoring" under § §

70.6( a)( 3)( i)( B) and 71.6( a)( 3)( i)( B). Also, they believe that if EPA conducted such a review, the result would be a determination that the compliance requirements of title V and the NESHAP are not substantially equivalent.

We disagree with this comment. As described more fully in section IV. A, even if " sufficiency monitoring" were required, additional monitoring requirements would not be imposed in title V permits for the area sources addressed by today's rule, because the NESHAP for them were all promulgated after the 1990 Clean Air Act amendments, and therefore contain all monitoring necessary to meet current requirements under the Act. In finalizing each of the NESHAP under part 63, EPA solicited and responded to comments on the adequacy of the monitoring, reporting, and recordkeeping provisions required by the NESHAP. Any opportunity to challenge the compliance requirements imposed through the five NESHAP has passed, and this rulemaking does not create new grounds 69 for such challenges.

C. Does this Rulemaking Adequately Address Title V Costs?

Several commenters thought the costs of title V permitting for these area sources described in the proposal, relevant to factors two and three, were inflated and not representative, and instead, that the true costs of title V permitting for them would be much lower and not significant for them. Also, these commenters stated that the costs for title V for area sources would be a fraction of the costs for major sources because area sources have fewer emissions units, their operations are less complex, and they are simpler to permit.

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

Also relevant to factor two and three in the proposal, one commenter said that the EPA ignored Clean Air Act provisions designed to limit title V costs for small sources,

while another commenter said States agencies are expected to have resources to meet this workload and fees to offset costs. Section 502( b)( 3)( A) of the Act requires title V sources to pay annual fees, while section 507( f) of the Act, concerning SBAP, provides that the permitting authority may reduce any fee required under this Act to take into account the financial resources of small business stationary sources. In response, title V fees vary greatly from State to State, but because area sources have small emissions by definition and most State agencies charge emissions based fees ( on a per ton basis), fees would not comprise a substantial portion of the overall costs and burdens for these area sources. As the EPA explained in the proposal, there are many other burdens and costs of title V, unrelated to fees, such that whether fees are reduced or not, significant burdens and cost of title V would remain for these area sources. Section 502( b)( 3)( A) of the Act requires fees to be charged that are sufficient to cover all reasonable ( direct and indirect)

costs required to develop and administer the title V program. However, there are practical limitations on the ability of State agencies, tribes, and EPA to increase fees and provide additional resources for title V implementation, especially in a relatively short period of time. In many States, fee increases must typically be approved by the State legislature within the State budget process, and this may lead to significant delays in implementing new fee schedules to meet new demands. This limitation could lead to significant, albeit temporary, impairment of the title V programs for major sources, given 71 the large workload a requirement to permit these area sources would impose on State agencies. For example, if all these area sources were required to be permitted, up to 38,000 title V permit applications would be due by December 9, 2005, and title V permits for these sources would have to be issued or denied within 18 months of receipt of the applications, as required by section 503( a) and 503( c) of the Act.