# National Emission Standards for Hazardous Air Pollutants: Surface Coating of Wood Building Products

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URL: https://www.frixlaw.com/law-library/documents/fr%3A02-14034

## Record

- **Collection:** Federal Register
- **Document type:** Proposed Rule
- **Published:** June 21, 2002
- **Citation:** 67 FR 42400

## Text

ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 63
[FRL-7223-7]
RIN 2060-AH02
National Emission Standards for Hazardous Air Pollutants: Surface Coating of Wood Building Products

AGENCY:

Environmental Protection Agency (EPA).

ACTION:

Proposed rule.

SUMMARY:

This action proposes national emission standards for hazardous air pollutants (NESHAP) for wood building products surface coating operations. The EPA estimates that there are approximately 205 major source facilities in the wood building products (surface coating) source category that emit hazardous air pollutants (HAP), such as xylene, toluene, ethyl benzene, ethylene glycol butyl ether (EGBE), other glycol ethers, methyl ethyl ketone (MEK), methyl isobutyl ketone (MIBK), methanol, styrene, and formaldehyde. As proposed, the standards are estimated to reduce HAP emissions by 3,200 megagrams per year (Mg/yr) (3,500 tons per year (tpy)) or by 61 percent. The reduction in HAP emissions would be achieved by requiring all major source facilities that apply a surface coating to a wood building product to meet the HAP emission standards reflecting the application of the maximum achievable control technology (MACT).

DATES:

Comments.
Submit comments on or before August 20, 2002.

Public Hearing.
If anyone contacts the EPA requesting to speak at a public hearing, they should do so by July 11, 2002. If requested, a public hearing will be held within approximately 30 days following publication of this notice in the
Federal Register
.

ADDRESSES:

Comments.
By U.S. Postal Service, send comments (in duplicate if possible) to: Air and Radiation Docket and Information Center (6102), Attention Docket Number A-97-52, U.S. EPA, 1200 Pennsylvania Avenue, NW, Washington, DC 20460. In person or by courier, deliver comments (in duplicate if possible) to: Air and Radiation Docket and Information Center (6102), Attention Docket Number A-97-52, U.S. EPA, 401 M Street, SW, Room M-1500, Washington, DC 20460. The EPA requests a separate copy also be sent to the contact person listed in
FOR FURTHER INFORMATION CONTACT.

Public Hearing.
If a public hearing is held, it will be held at our Office of Administration auditorium in Research Triangle Park, North Carolina. You should contact Ms. Janet Eck, Coatings and Consumer Product Group, Emission Standards Division (C539-03), U.S. EPA, Research Triangle Park, North Carolina 27711, telephone number (919) 541-7946, to request to speak at a public hearing or to find out if a hearing will be held.

Docket.
Docket No. A-97-52 contains supporting information used in developing the proposed standards. The docket is located at the U.S. EPA, 401 M Street, SW, Washington, DC 20460 in Room M-1500, Waterside Mall (ground floor), and may be inspected from 8:30 a.m. to 5:30 p.m., Monday through Friday, excluding legal holidays.

FOR FURTHER INFORMATION CONTACT:

Mr. Vinson Hellwig, Coatings and Consumer Products Group, Emissions Standards Division (C539-03), U.S. EPA, Research Triangle Park, North Carolina 27711; telephone number (919) 541-2317; facsimile number (919) 541-5689; electronic mail (e-mail) address: hellwig.vinson@epa.gov.

SUPPLEMENTARY INFORMATION:

Comments.
Comments and data may be submitted by e-mail to: a-and-r-docket@epa.gov. Electronic comments must be submitted as an ASCII file to avoid the use of special characters and encryption problems and will also be accepted on disks in WordPerfect® file format. All comments and data submitted in electronic form must note the docket number: A-97-52. No confidential business information (CBI) should be submitted by e-mail. Electronic comments may be filed online at many Federal Depository Libraries.

Commenters wishing to submit proprietary information for consideration must clearly distinguish such information from other comments and clearly label it as CBI. Send submissions containing such proprietary information directly to the following address, and not to the public docket, to ensure that proprietary information is not inadvertently placed in the docket: Mr. Vinson Hellwig, c/o OAQPS Document Control Officer (C404-02), U.S. EPA, Research Triangle Park, NC 27711. The EPA will disclose information identified as CBI only to the extent allowed by the procedures set forth in 40 CFR part 2. If no claim of confidentiality accompanies a submission when it is received by EPA, the information may be made available to the public without further notice to the commenter.

Public Hearing.
Persons interested in presenting oral testimony or inquiring as to whether a hearing is to be held should contact Ms. Janet Eck, Coatings and Consumer Products Group, Emission Standards Division(C539-03), U.S. EPA, Research Triangle Park, NC 27711; telephone number (919) 541-7946 at least 2 days in advance of the public hearing. Persons interested in attending the public hearing should also contact Ms. Eck at least 2 days in advance of the public hearing to verify the time, date, and location of the hearing. The public hearing will provide interested parties the opportunity to present data, views, or arguments concerning the proposed emission standards.

Docket.
The docket is an organized and complete file of all the information considered by the EPA in the development of this rulemaking. The docket is a dynamic file because material is added throughout the rulemaking process. The docketing system is intended to allow members of the public and industries involved to readily identify and locate documents so that they can effectively participate in the rulemaking process. Along with the proposed and promulgated standards and their preambles, the contents of the docket will serve as the record in the case of judicial review. (See section 307(d)(7)(A) of the Clean Air Act (CAA).) The regulatory text and other materials related to this rulemaking are available for review in the docket or copies may be mailed on request from the Air and Radiation Docket and Information Center by calling (202) 260-7548. A reasonable fee may be charged for copying docket materials.

World Wide Web (WWW).
In addition to being available in the docket, an electronic copy of this proposed rule will also be available on the WWW through the Technology Transfer Network (TTN). Following signature by the Administrator, a copy of the proposed rule 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.

Regulated Entities.
The source category, which is divided into the five subcategories listed in Table 1, includes facilities that apply coatings to wood building products. In general, facilities that coat wood building products are covered under the Standard Industrial Classification (SIC) and North American Industrial Classification System (NAICS) codes listed in Table 1.

However, facilities classified under other SIC or NAICS codes may be subject to the proposed standards. Not all facilities classified under the SIC and NAICS codes in Table 1 will be subject to the proposed standards because some of the classifications cover products outside the scope of the NESHAP for wood building products.

Table 1.—Subcategories and Entities Potentially Regulated by the Proposed Standards

Subcategory
SIC
NAICS
Examples of regulated entities include those facilities that apply a surface coating to . . .

1. Doors and Windows

2431, 2499
a

321911, 321918, 321999
a

Doors and windows and any millwork and moulding associated with doors and windows.

2. Flooring

2426, 2421, 2499
a

321918, 321999
a

Solid wood flooring, engineered wood flooring, laminated flooring, and any millwork or moulding associated with flooring.

3. Interior Wall Paneling and Tileboard

2435, 2499
a

321211, 321999
a

Interior wall paneling or tileboard.

4. Other Interior Panels

2435, 2436, 2493, 2499
a

321211, 321212, 321219, 321999
a

Panels used for purposes other than interior wall paneling, such as sheathing, insulation board, pegboard, and ceiling tiles.

5. Exterior Siding, Doorskins, and Miscellaneous

2435, 2493, 2499
a

321211, 321219, 321999
a

Panel siding, trimboard, lap siding, trim associated with siding, doorskins, and other miscellaneous wood products.

a
The subcategory of the SIC code and NAICS code depends on the final end use of the product.

This table is not intended to be exhaustive, but rather provides a guide for readers regarding subcategories and entities likely to be regulated by this action. To determine whether your coating operation is regulated by this action, you should examine the applicability criteria in § 63.4681 of the proposed rule. If you have any questions regarding the applicability of this action to a particular entity, consult the person listed in the preceding
FOR FURTHER INFORMATION CONTACT
section.

Background Information Document and Economic Impact Analysis.
The Background Information Document (BID) and the Economic Impact Analysis (EIA) for the proposed rule may be obtained from the TTNWeb; the wood building products (surface coating) docket (A-97-52); the EPA Library (MD-35), Research Triangle Park, North Carolina 27711, telephone (919) 541-2777; or the National Technical Information Service (NTIS), 5285 Port Royal Road, Springfield, Virginia 22161, telephone (703) 487-4650. Please refer to “Background Information Document—National Emission Standards for Hazardous Air Pollutants (NESHAP) for the Wood Building Products (Surface Coating) Industry” (EPA-453/R-00-003) and the “Industry Profile: Wood Building Products Industry” (EPA-453/R-01-002).

Outline.
The information presented in this preamble is organized as follows:

I. Background

A. What is the source of authority for development of NESHAP?

B. What criteria are used in the development of NESHAP?

C. What are the health effects associated with HAP emissions from surface coating of wood building products?

II. Summary of the Proposed Rule

A. What source categories and subcategories are affected by the proposed rule?

B. What is the relationship to other rules?

C. What are the primary sources of emissions and what are the emissions?

D. What is the affected source?

E. What are the emission limits, operating limits, and work practice standards?

F. When must I comply with the proposed rule?

G. What are the testing and initial compliance requirements?

H. What are the continuous compliance provisions?

I. What are the notification, recordkeeping, and reporting requirements?

III. Rationale for Selecting the Proposed Standards

A. How did we select the source category and subcategories?

B. How did we select the regulated pollutants?

C. How did we select the affected source?

D. How did we determine the basis and level of the proposed standards for new or reconstructed and existing sources?

E. How did we select the format of the proposed standards?

F. How did we select the testing and initial compliance requirements?

G. How did we select the proposed continuous compliance requirements?

H. How did we select notification, recordkeeping, and reporting requirements?

IV. Summary of Environmental, Energy, and Economic Impacts

A. What are the air impacts?

B. What are the cost impacts?

C. What are the economic impacts?

D. What are the non-air health, environmental, and energy impacts?

V. Administrative Requirements

A. Executive Order 12866, Regulatory Planning and Review

B. Executive Order 13132, Federalism

C. Executive Order 13175, Consultation and Coordination with Indian Tribal Governments

D. Executive Order 13045, Protection of Children from Environmental Health Risks and Safety Risks

E. Executive Order 13211, Actions Concerning Regulations that significantly Affect Energy Supply, Distribution, or Use

F. Unfunded Mandates Reform Act of 1995

G. Regulatory Flexibility Act (RFA), as Amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C., 601,
et seq.

H. Paperwork Reduction Act

I. National Technology Transfer and Advancement Act

I. Background

A. What Is the Source of Authority for Development of NESHAP?

Section 112 of the CAA requires us to list categories and subcategories of major sources and area sources of HAP and to establish NESHAP for the listed source categories and subcategories. The Flatwood Paneling (Surface Coating) category of major sources was listed on July, 16, 1992 (57 FR 31576) under the Surface Coating Processes industry group. The name of the source category was subsequently changed to Wood Building Products (Surface Coating) on November 18, 1999 (64 FR 63025) to reflect more accurately the types of surface coating operations currently used in the industry. Major sources of HAP are those that emit or have the

potential to emit equal to or greater than 9.1 Mg/yr (10 tpy) of any one HAP or 22.7 Mg/yr (25 tpy) of any combination of HAP.

B. What Criteria Are Used in the Development of NESHAP?

Section 112 of the CAA requires that we establish NESHAP for the control of HAP from both new or reconstructed and existing major sources. The CAA requires the NESHAP to reflect the maximum degree of reduction in emissions of HAP that is achievable. This level of control is commonly referred to as the MACT.

The MACT floor is the minimum control level allowed for NESHAP and is defined under section 112(d)(3) of the CAA. In essence, the MACT floor ensures that the standard is set at a level that assures that all major sources achieve the level of control at least as stringent as that already achieved by the better-controlled and lower-emitting sources in each source category or subcategory. For new or reconstructed sources, the MACT floor cannot be less stringent than the emission control that is achieved in practice by the best-controlled similar source. The MACT standards for existing sources can be less stringent than standards for new or reconstructed sources, but they cannot be less stringent than the average emission limit achieved by the best-performing 12 percent of existing sources in the category or subcategory (or the best-performing five sources for categories or subcategories with fewer than 30 sources).

In developing MACT, we also consider control options that are more stringent than the floor. We may establish standards more stringent than the floor based on the consideration of the cost of achieving the emission reductions, any non-air quality health and environmental impacts, and energy requirements.

C. What Are the Health Effects Associated With HAP Emissions From Surface Coating of Wood Building Products?

The primary HAP emitted from the surface coating of wood building products include xylene, toluene, ethyl benzene, EGBE, and glycol ethers (not including EGBE). These compounds account for more than 84 percent of the nationwide HAP emissions from this source category. Other HAP identified in emissions include MEK, MIBK, methanol, styrene, and formaldehyde. The HAP that would be controlled with the proposed rule are associated with a variety of adverse health effects. These adverse health effects include chronic health disorders (e.g., irritation of the lungs, eyes, and mucus membranes and effects on the central nervous system) and acute health disorders (e.g., lung irritation and congestion, alimentary effects such as nausea and vomiting, and effects on the central nervous system).

We do not have the type of current detailed data on each of the facilities covered by the proposed emission standards for this subcategory and the people living around the facilities that would be necessary to conduct an analysis to determine the actual population exposures to the HAP emitted from these facilities and potential for resultant health effects. Therefore, we do not know the extent to which the adverse health effects described above occur in the populations surrounding these facilities. However, to the extent the adverse effects do occur, the proposed rule would reduce emissions and subsequent exposures.

II. Summary of the Proposed Rule

A. What Source Categories and Subcategories Are Affected by the Proposed Rule?

The proposed rule would apply to you if you own or operate a wood building products surface coating facility that uses at least 4,170 liters (1,100 gallons (gal)) of coatings per year and is a major source, is located at a major source, or is part of a major source of HAP emissions, whether or not you manufacture the wood building product substrate. The surface coating operations are not required to be major sources of HAP emissions in order for the surface coating operations at a major source facility to be covered by the proposed rule. As long as some part of the total facility causes it to be a major source (e.g., the wood substrate manufacturing process), the surface coating operations would be subject to the proposed standards.

We have defined a wood building products surface coating facility as any facility engaged in the finishing or laminating of a wood building product. A wood building product is any product that contains more than 50 percent by weight wood or wood fiber and is used in the construction, either interior or exterior, of a residential, commercial, or institutional building. As explained later, we have established five subcategories in the wood building products surface coating source category, including: (1) Doors and windows; (2) flooring; (3) interior wall paneling and tileboard; (4) other interior panels; and (5) exterior siding, doorskins, and miscellaneous (see Table 1 of this preamble).

Facilities that manufacture or apply surface coatings to prefabricated/premanufactured or mobile/modular homes are not subject to the proposed NESHAP requirements. These facilities were found to have very low -or no-HAP emissions because coatings applied to these homes are typically waterborne (latex) formulations. Based on the data submitted by 70 of these facilities, no major sources of HAP emissions were identified in the database (docket A-97-52).

You would not be subject to the proposed rule if your wood building products surface coating facility is located at an area source. An area source of HAP is any facility that has the potential to emit HAP but is not a major source. You may establish area source status by limiting the source's potential to emit HAP through appropriate mechanisms available through the permitting authority.

The source category does not include research or laboratory facilities; janitorial, building, and facility construction or maintenance operations; or hobby shops that are operated for personal rather than for commercial purposes. The source category also does not include coating applications using handheld nonrefillable aerosol containers.

B. What Is the Relationship to Other Rules?

Affected sources subject to the proposed rule may also be subject to other rules. We specifically request comments on how monitoring, recordkeeping, and reporting requirements can be consolidated for sources that are subject to more than one rule.

Some wood building products surface coating facilities also manufacture the substrate that is subsequently coated. Any process associated with wood building products substrate manufacturing would be subject to the future NESHAP for plywood and composite wood products (future 40 CFR part 63, subpart DDDD).

Some wood building products surface coating facilities manufacture products that are used in the production of wood furniture or wood furniture components. These wood building products are subject to the NESHAP for wood furniture manufacturing operations (40 CFR part 63, subpart JJ). The surface coating of millwork and trim associated with cabinet manufacturing is also covered under the wood furniture NESHAP.

Wood treatment and preservation operations, which were delisted from the source category list, would not be subject to the wood building products (surface coating) NESHAP. Wood treatment and preservation operations include wood treatment or fire retardant operations located at wood building product facilities that involve impregnating the wood product with the wood treatment chemicals or fire retardant by using a retort or other pressure vessel. This includes operations that are normally not considered coating operations. We request specific comments on the wood treatment and fire retardant operations.

C. What Are the Primary Sources of Emissions and What Are the Emissions?

Emissions from coating application and drying/curing account for most of the HAP emissions from wood building products surface coating operations. The remaining emissions are primarily from mixing and/or thinning and cleaning operations. In most cases, HAP emissions from surface preparation, storage, handling, and waste/wastewater operations are relatively small.

Available emission data collected during the development of the proposed NESHAP show that the primary organic HAP emitted from the surface coating of wood building products includes xylene, toluene, ethyl benzene, EGBE, and other glycol ethers. These compounds account for 84 percent of this source category's nationwide organic HAP emissions. Other significant organic HAP identified include MEK, MIBK, methanol, styrene, and formaldehyde.

Based on information reported in survey responses during the development of the proposed NESHAP, inorganic HAP, including chromium, manganese, and antimony compounds, are components of some coatings used by this source category. No inorganic HAP were reported in thinners or cleaning materials. Most of the coating operations do not cause the coating material to become airborne. Where spraying is performed, most of the inorganic HAP components remain as solids in the dry coating film on the parts being coated or are deposited on the walls, floor, and grates of the spray booths in which they are applied. Some of the inorganic HAP particles are entrained in the spray booth exhaust air. Spray booths in the wood building products industry typically have either water curtains or dry filters to remove overspray particles. Therefore, inorganic HAP emission levels are expected to be very low and have not been quantified.

D. What Is the Affected Source?

We define an affected source as a stationary source, a group of stationary sources, or part of a stationary source to which a specific emission standard applies. The proposed rule defines the affected source as the collection of all operations associated with the surface coating of wood building products. These operations include preparation of a coating for application (e.g., mixing with thinners); surface preparation of the wood building products; coating application, curing, and drying equipment; equipment cleaning; and storage, transfer, and handling of coatings, thinners, cleaning materials, and waste materials.

E. What Are the Emission Limits, Operating Limits, and Work Practice Standards?

Emission Limits.
We are proposing to limit organic HAP emissions from each new or reconstructed affected source using the emission limits in Table 2. The proposed emission limits for each existing affected source are given in Table 3. These limits are based on five subcategories that group similar operations and types of coatings. We request specific comments on the proposed emission limits for both existing and new or reconstructed sources for these subcategories. You can choose from several compliance options in the proposed rule to achieve the emission limits. You could comply by applying materials (coatings, thinners, and cleaning materials) that meet the emission limits, either individually or collectively. You could also use a capture system and add-on control device to meet the emission limits or comply by using a combination of both approaches.

Some wood building products facilities surface coat more than one product, and occasionally the products are in different subcategories. For purposes of the proposed standards, those affected sources coating multiple products covered by two or more subcategories must maintain product-or subcategory-specific records in order to demonstrate compliance with each applicable emission limit for all products coated at the affected source.

Table 2.—Emission Limits for New or Reconstructed Affected Sources

For any affected source applying coating to. . .
The organic HAP emission limit you must meet, in kilograms (kg) HAP/liter solids applying (pounds (lb) HAP/gal solids), is:

1. Doors and windows
0.06 (0.48)

2. Flooring
0.00 (0.00)

3. Interior wall paneling or tileboard
0.00 (0.04)

4. Other interior panels
0.00 (0.00)

5. Exterior siding, doorskins, and miscellaneous
0.00 (0.00)

Table 3.—Emission Limits for Existing Affected Sources

For any affected source applying coating to. . .
The organic HAP emission limit you must meet, in kg HAP/liter solids (lb HAP/gal solids), is:

1. Doors and windows
0.17 (1.45)

2. Flooring
0.09 (0.78)

3. Interior wall paneling or tileboard
0.18 (1.53)

4. Other interior panels
0.00 (0.01)

5. Exterior siding, doorskins, and miscellaneous
0.01 (0.06)

Operating Limits.
If you reduce emissions by using a capture system and add-on control device (other than a solvent recovery system for which you conduct a liquid-liquid material balance), the proposed operating limits would apply to you. These limits are site-specific parameter limits you determine during the initial performance test of the system. For capture systems that are not permanent total enclosures (PTE), you would establish average volumetric flow rates or duct static pressure limits for each capture device (or enclosure) in each capture system. For capture systems that are PTE, you would establish limits on average facial velocity or pressure drop across openings in the enclosure.

For thermal oxidizers, you would monitor the combustion temperature. For catalytic oxidizers, you would monitor the temperature immediately before and after the catalyst bed, or you would monitor the temperature before the catalyst bed and implement a site-specific inspection and maintenance plan for the catalytic oxidizer. For carbon adsorbers for which you do not conduct a liquid-liquid material

balance, you would monitor the carbon bed temperature and the amount of steam or nitrogen used to desorb the bed. For condensers, you would monitor the outlet gas temperature from the condenser. For concentrators, you would monitor the temperature of the desorption concentrate stream and the pressure drop of the dilute stream across the concentrator.

All site-specific parameter limits that you establish must reflect operation of the capture system and control devices during a performance test that demonstrates achievement of the emission limits during representative operating conditions. We request specific comments on the proposed operating limits for this source category.

Work Practice Standards.
If you use an emission capture system and control device for compliance, you would be required to develop and implement a work practice plan to minimize organic HAP emissions from mixing operations, storage tanks and other containers, and handling operations for coatings, thinners, cleaning materials, and waste materials. The work practice plan must include steps to ensure that, at a minimum: All organic HAP coatings, thinners, cleaning materials, and waste materials must be stored in closed containers; spills of organic HAP coatings, thinners, cleaning materials, and waste materials must be minimized; organic HAP coatings, thinners, cleaning materials, and waste materials must be conveyed from one location to another in closed containers or pipes; mixing vessels which contain organic HAP coatings and other materials must be closed except when adding to, removing, or mixing the contents; and emissions of organic HAP must be minimized during cleaning of storage, mixing, and conveying equipment.

If your affected source has an existing documented plan that incorporates steps taken to minimize emissions from the aforementioned sources, then your existing plan could be used to satisfy the requirement for a work practice plan.

If you use a capture system and control device for compliance, you would be required to develop and operate according to a startup, shutdown, and malfunction plan (SSMP) during periods of startup, shutdown, or malfunction of the capture system and control device.

The General Provisions (40 CFR part 63, subpart A) also would apply to you as indicated in the proposed rule. The General Provisions codify certain procedures and criteria for all 40 CFR part 63 NESHAP. The General Provisions contain administrative procedures, preconstruction review procedures for new sources, and procedures for conducting compliance-related activities such as notifications, reporting and recordkeeping, performance testing, and monitoring. The proposed rule refers to individual sections of the General Provisions to emphasize key sections that are relevant. However, unless specifically overridden in the proposed rule, all of the applicable General Provisions requirements would apply to you.

F. When Must I Comply With the Proposed Rule?

Existing wood building products facilities must comply within 3 years of the date the promulgated rule is published in the
Federal Register
. New sources that commence construction after today's date must comply immediately upon initial startup or the effective date of the rule, whichever is later.

G. What Are the Testing and Initial Compliance Requirements?

New or reconstructed affected sources would have to be in compliance upon initial startup of the affected source or by the effective date of the final rule, whichever is later. Existing affected sources would have to be in compliance with the final standards no later than 3 years after the effective date of the final rule. The effective date is the date on which the final rule is published in the
Federal Register
.

Compliance with the emission limits is based on a rolling 12-month organic HAP emission rate determined each month. Each 12-month period is a compliance period. The initial compliance period, therefore, is the 12-month period beginning on the compliance date. If the compliance date occurs on any day other than the first day of a month, then the initial compliance period begins on the compliance date and extends through the end of that month plus the following 12 months. We have defined “month” as a calendar month or a pre-specified period of 28 to 35 days to allow for flexibility at sources where data are based on a business accounting period.

Being “in compliance” means that the owner or operator of the affected source meets the requirements to achieve the proposed emission limitations during the initial compliance period. At the end of the initial compliance period, the owner or operator would use the data and records generated to determine whether or not the affected source is in compliance with the organic HAP emission limit and other applicable requirements for that period. If the affected source does not meet the applicable limits and other requirements, it is out of compliance for the entire initial compliance period. We welcome specific comments on the compliance dates and the data collection activities required for the initial compliance period.

Emission Limits.
There are several proposed options for complying with the proposed emission limits, and the testing and initial compliance requirements vary accordingly. You would be able to use different compliance options for different coating operations in the affected source and also for the same coating operation at different times.

Option 1: Compliance based on the compliant material option.
If you demonstrate compliance based on the compliant material option, you would determine the mass of organic HAP in all coatings, thinners, and cleaning materials used and the volume fraction of coating solids in all coatings used each month during the initial compliance period. You would be required to demonstrate that the organic HAP content of each coating meets the applicable emission limit and that you use no organic HAP thinners or cleaning materials.

To determine the mass fraction of organic HAP in coatings, thinners, and cleaning materials and the volume fraction of coating solids, you could either rely on manufacturer's data or on test results using the test methods listed below. You may use alternative test methods provided you get EPA approval in accordance with the NESHAP General Provisions in 40 CFR 63.7(f). However, if there is any inconsistency between the test method results (either EPA's or an approved alternative) and manufacturer's data, the test method results would prevail for compliance and enforcement purposes:

• For mass fraction of organic HAP, use Method 311 of 40 CFR part 63, appendix A;

• The proposed rule would allow you to use nonaqueous volatile matter as a surrogate for organic HAP, which would include all organic HAP plus all other organic compounds, and excluding water. If you choose this option, then you would use Method 24 of 40 CFR part 60, appendix A; and

• For volume fraction of coating solids, use either information from the supplier or manufacturer of the material, ASTM Method D2697-86 (1998), or ASTM Method D6093-97.

To demonstrate initial compliance based on the material used, you would be required to demonstrate that the organic HAP content of each coating

meets the applicable emission limit and that you use no organic HAP thinners or cleaning materials.

Option 2: Compliance based on the emission rate without add-on controls option.
If you demonstrate compliance based on the emission rate without add-on controls option, you would determine the mass fraction of organic HAP in all coatings, thinners, and cleaning materials and the volume fraction of coating solids used each month during the initial compliance period. You would use the same methods as described above for Option 1. You would also:

• Determine the quantity of each coating, thinner, and cleaning material used.

• Calculate the total mass of organic HAP in all materials and total volume of coating solids used each month. You may subtract the total mass of organic HAP contained in waste materials you send to a hazardous waste treatment, storage, and disposal facility regulated under 40 CFR part 262, 264, 265, or 266.

• Calculate the total mass of organic HAP emissions and total volume of coating solids for the initial compliance period by adding together all the monthly values for mass of organic HAP and for volume of coating solids for the 12 months in the initial compliance period.

• Calculate the ratio of the total mass of organic HAP for the materials used to the total volume of coating solids used for the initial compliance period.

• Record the calculations and results and include them in your Notification of Compliance Status.

Option 3: Compliance based on the emission rate with add-on controls option.
If you use a capture system and add-on control device, other than a solvent recovery system for which you conduct a liquid-liquid material balance, your testing and initial compliance requirements are as follows:

• Conduct an initial performance test to determine the capture and control efficiencies of the equipment and to establish operating limits to be achieved on a continuous basis. The performance test would have to be completed by the compliance date for existing sources and no later than 180 days after the compliance date for new or reconstructed affected sources.

• Determine the mass fraction of organic HAP in each material and the volume fraction of coating solids for each coating used each month of the initial compliance period.

• Calculate the total mass of organic HAP in all materials and total volume of coating solids used each month in the coating operation or group of coating operations. You may subtract from the total mass of organic HAP the amount contained in waste materials you send to a hazardous waste treatment, storage, and disposal facility regulated under 40 CFR part 262, 264, 265, or 266.

• Calculate the organic HAP emission reductions for the controlled coating operations using the capture and control efficiencies determined during the performance test and the total mass of organic HAP in materials used in controlled coating operations.

• Calculate the total mass of organic HAP emissions and total volume of coating solids for the initial compliance period by adding together all monthly values for mass of organic HAP and for volume of coating solids for the 12 months in the initial compliance period.

• Calculate the ratio of the total mass of organic HAP emissions to the total volume of coating solids used during the initial compliance period.

• Record the calculations and results and include them in the Notification of Compliance Status.

If you use a capture system and add-on control device, other than a solvent recovery system for which you conduct liquid-liquid material balances, you would determine both the efficiency of the capture system and the emission reduction efficiency of the control device. To determine the capture efficiency, you would either verify the presence of a PTE using EPA Method 204 of 40 CFR part 51, appendix M (and all materials must be applied and dried within the enclosure); or use one of the protocols in § 63.4765 of the proposed rule to measure capture efficiency. If you have a PTE and all the materials are applied and dried within the enclosure and you route all exhaust gases from the enclosure to a control device, then you would assume 100 percent capture.

To determine the emission reduction efficiency of the control device, you would conduct measurements of the inlet and outlet gas streams. The test would consist of three runs, each run lasting at least 1 hour, using the following EPA Methods in 40 CFR part 60, appendix A:

• Method 1 or 1A for selection of the sampling sites.

• Method 2, 2A, 2C, 2D, 2F, or 2G to determine the gas volumetric flow rate.

• Method 3, 3A, or 3B for gas analysis to determine dry molecular weight.

• Method 4 to determine stack moisture.

• Method 25 or 25A to determine organic volatile matter concentration. Alternatively, any other test method or data that have been validated according to the applicable procedures in Method 301 of 40 CFR part 63, appendix A, and approved by the Administrator, could be used.

If you use a solvent recovery system, you could determine the overall control efficiency using a liquid-liquid material balance instead of conducting an initial performance test. If you use the material balance alternative, you would be required to measure the amount of all materials used in the coating operations served by the solvent recovery system during each month of the initial compliance period and determine the volatile matter contained in these materials. You would also measure the amount of volatile matter recovered by the solvent recovery system each month of the initial compliance period. Then you would compare the amount recovered for the 12-month initial compliance period to the amount used to determine the overall control efficiency, and apply this efficiency to the ratio of organic HAP to coating solids for the materials used. You would record the calculations and results and include them in your Notification of Compliance Status.

Operating Limits.
As mentioned above, you would establish operating limits as part of the initial performance test of a capture system and control device, other than a solvent recovery system for which you conduct liquid-liquid material balances. The operating limits are the minimum or maximum (as applicable) values achieved for capture systems and control devices during the most recent performance test that demonstrated compliance with the emission limits.

The proposed rule specifies the parameters to monitor for the types of emission control systems commonly used in the industry. You would be required to install, calibrate, maintain, and continuously operate all monitoring equipment according to the manufacturer's specifications and ensure that the continuous parameter monitoring systems (CPMS) meet the requirements in § 63.4768 of the proposed rule. If you use control devices other than those identified in the proposed rule, you would submit the operating parameters to be monitored to the Administrator for approval. The authority to approve the parameters to be monitored is retained by EPA and is not delegated to States.

If you use a thermal oxidizer, you would continuously monitor the appropriate temperature and record it at least every 15 minutes. The temperature monitor is placed in the firebox or in the duct immediately downstream of the firebox before any substantial heat exchange occurs. The operating limit would be the average temperature

measured during the performance test, and for each consecutive 3-hour period, the average temperature would have to be at or above this limit. If you use a catalytic oxidizer, you may choose from two methods to determine operating limits. In the first method, you would continuously monitor the temperature immediately before and after the catalyst bed and record it at least every 15 minutes. The operating limits would be the average temperature before the catalyst bed and the average temperature difference across the catalyst bed during the performance test, and for each 3-hour period, the average temperature and the average temperature difference would have to be at or above these limits. In the alternative method, you would continuously monitor the temperature immediately before the catalyst bed and record it at least every 15 minutes. The operating limit would be the average temperature just before the catalyst bed during the performance test, and for each 3-hour period, the average temperature would have to be at or above these limits. As part of the alternative method, you must also develop and implement an inspection and maintenance plan for your catalytic oxidizer.

If you use a carbon adsorber and do not conduct liquid-liquid material balances to demonstrate compliance, you would monitor the carbon bed temperature after each regeneration and the total amount of steam or nitrogen used to desorb the bed for each regeneration. The operating limits would be the carbon bed temperature (not to be exceeded) and the amount of steam or nitrogen used for desorption (to be met as a minimum).

If you use a condenser, you would monitor the outlet gas temperature to ensure that the air stream is being cooled to a low enough temperature. The operating limit would be the average condenser outlet gas temperature measured during the performance test, and for each consecutive 3-hour period, the average temperature would have to be at or below this limit.

If you use a concentrator, you would monitor the desorption concentrate stream gas temperature and the pressure drop of the dilute stream across the concentrator. The operating limits would be the desorption concentrate gas stream temperature (to be met as a minimum) and the dilute stream pressure drop (not to be exceeded).

For each capture system that is not a PTE, you would establish operating limits for gas volumetric flow rate or duct static pressure for each enclosure or capture device. The operating limit would be the average volumetric flow rate or duct static pressure during the performance test, to be met as a minimum. For each capture system that is a PTE, the operating limit would require the average facial velocity of air through all natural draft openings to be at least 200 feet per minute or the pressure drop across the enclosure to be at least 0.007 inches water.

Work Practices.
If you use the emission rate with add-on controls option, you would be required to develop and implement on an ongoing basis a work practice plan for minimizing organic HAP emissions from storage, mixing, material handling, and waste handling operations. You would have to make the plan available for inspection if the Administrator requests to see it. We believe work practice standards are appropriate to further reduce emissions. We request specific comments on the work practice standards required for this source category.

If your affected source has an existing documented plan that incorporates steps taken to minimize emissions from the aforementioned sources, then your existing plan may be used to satisfy the requirement for a work practice plan.

If you use a capture system and control device for compliance, you would be required to develop and operate according to a SSMP during periods of startup, shutdown, or malfunction of the capture system and control device.

H. What Are the Continuous Compliance Provisions? Emission Limits.

Option 1: Compliance based on the compliant material option.
If you demonstrate compliance with the proposed emission limits based on the compliant material option, you would demonstrate continuous compliance if, for each 12-month compliance period, the organic HAP content of each coating used does not exceed the applicable emission limit and you use no thinner or coating material that contains organic HAP. You would follow the same procedures for determining compliance that you used for the initial compliance period.

Option 2: Compliance based on the emission rate without add-on controls option.
If you demonstrate compliance with the proposed emission limits based on the emission rate without add-on controls option, you would demonstrate continuous compliance if, for each 12-month compliance period, the ratio of total mass of organic HAP to total volume of coating solids used is less than or equal to the applicable emission limit. You would follow the same procedures for calculating the organic HAP to coating solids ratio that you used for the initial compliance period.

Option 3: Compliance based on the emission rate with add-on controls option.
For each coating operation on which you use a capture system and control device other than a solvent recovery system for which you conduct a liquid-liquid material balance, the continuous parameter monitoring results for each month would affect your compliance determination. If the monitoring results indicate no deviations from the operating limits and there were no bypasses of the control device, you would assume the capture system and control device are achieving the same percent emission reduction efficiency as they did during the most recent performance test in which compliance was demonstrated. You would then apply this percent reduction to the total mass of organic HAP in materials used in controlled coating operations to determine the monthly mass of organic HAP emissions from those operations. If there were any deviations from the operating limits during the month or any bypasses of the control device, you would account for them in the calculation of the monthly emissions by assuming the capture system and control device were achieving zero emission reduction during the periods of deviation. Then, you would determine the organic HAP emission rate by dividing the total mass of organic HAP emissions by the total volume of coating solids used during the 12-month compliance period. Every month, you would calculate the emission rate for the previous 12-month period.

For each coating operation on which you use a solvent recovery system and conduct a liquid-liquid material balance each month, you would use the liquid-liquid material balance to determine control efficiency. To determine the overall control efficiency, you must measure the amount of all materials used during each month and determine the volatile matter content of these materials. You must also measure the amount of volatile matter recovered by the solvent recovery system during the month, calculate the overall control efficiency, and apply it to the total mass of organic HAP in the materials used to determine total organic HAP emissions. Then, you would determine the 12-month organic HAP emission rate in the same manner as described above.

Operating Limits.
If you use an emission capture system and control device, the proposed rule would require

you to achieve, on a continuous basis, the operating limits you establish during the performance test. If the continuous monitoring shows that the capture system and control device is operating outside the range of values established during the performance test, you have deviated from the established operating limits.

If you operate a capture system and control device that allow emissions to bypass the control device, you would have to demonstrate that organic HAP emissions collected by the capture system are being routed to the control device by monitoring for potential bypass of the control device. You may choose from the following four monitoring procedures:

• Flow control position indicator to provide a record of whether the exhaust stream is directed to the control device;

• Car-seal or lock-and-key valve closures to secure the bypass line valve in the closed position when the control device is operating;

• Valve closure monitoring to ensure any bypass line valve or damper is closed when the control device is operating; or

• Automatic shutdown system to stop the coating operation when flow is diverted from the control device.

If the bypass monitoring procedures indicate that emissions are not routed to the control device, you have deviated from the emission limits.

Work practices.
If you use the emission rate with add-on controls option, you would be required to implement, on an ongoing basis, the work practice plan you developed during the initial compliance period. If you did not develop a plan for reducing organic HAP emissions or you do not implement the plan, this would be a deviation from the work practice standard.

If your affected source has an existing documented plan that incorporates steps taken to minimize emissions from the aforementioned sources, then your existing plan may be used to satisfy the requirement for a work practice plan.

If you use a capture system and control device for compliance, you would be required to operate according to your SSMP during periods of startup, shutdown, or malfunction of the capture system and control device.

I. What Are the Notification, Recordkeeping, and Reporting Requirements?

You are required to comply with the applicable requirements in the NESHAP General Provisions, subpart A of 40 CFR part 63, as described in the proposed rule. The General Provisions notification requirements include: initial notifications, notification of performance test if you are complying using a capture system and control device, notification of compliance status, and additional notifications required for affected sources with continuous monitoring systems. The General Provisions also require certain records and periodic reports.

Initial Notifications.
If the proposed standards apply to you, you must send a notification to the EPA Regional Office in the region where your facility is located, and to your State agency, within 120 days after the date of initial startup for new or reconstructed sources, or 120 days after publication of the final rule, whichever is later. Existing affected sources must send the initial notification within 120 days after publication of the final rule. The report notifies us and your State agency that you have constructed a new facility, reconstructed an existing facility, or you have an existing facility that is subject to the proposed rule. Thus, it allows you and the permitting authority to plan for compliance activities. You will also need to send a notification of planned construction or reconstruction of a source that would be subject to the proposed rule and apply for approval to construct or reconstruct.

Notification of Performance Test.
If you demonstrate compliance by using a capture system and control device for which you do not conduct a liquid-liquid material balance, you would conduct a performance test. The performance test would be required no later than 180 days after initial startup or 180 days after publication of the final rule, whichever is later for a new or reconstructed affected source and no later than the compliance date for an existing affected source (3 years after publication of the final rule). You must notify us (or the delegated State or local agency) at least 60 calendar days before the performance test is scheduled to begin, as indicated in the General Provisions for the NESHAP.

Notification of Compliance Status.
You would send us a Notification of Compliance Status within 30 days after the end of the initial compliance period. Your compliance procedures would depend on which compliance option you choose. In the notification, you would certify whether the affected source has complied with the proposed standards, identify the option(s) you used to demonstrate initial compliance, and provide calculations supporting the compliance demonstration.

If you elect to comply by using a capture system and control device for which you conduct performance tests, you must provide the results of the tests. Your notification would also include the measured range of each monitored parameter and the operating limits established during the performance test, and information showing whether the source has complied with its operating limits during the initial compliance period.

Recordkeeping Requirements.
You would be required to keep records of reported information and all other information necessary to document compliance with the proposed rule for 5 years. As required under the General Provisions, records for the 2 most recent years must be kept on-site; the other 3 years may be kept off-site. Records pertaining to the design and operation of the control and monitoring equipment must be kept for the life of the equipment.

Depending on the compliance option that you choose, you may need to keep records of the organic HAP content, volatile matter content, coating solids content, and quantity of the coatings, thinners, and cleaning materials used during each compliance period.

If you demonstrate compliance by using a capture system and control device, you would also need to keep records of the following:

• All required measurements, calculations, and supporting documentation needed to demonstrate compliance with the standards;

• All results of performance tests and parameter monitoring;

• All information necessary to demonstrate conformance with the requirements for minimizing emissions from mixing, storage, and handling operations for coatings, thinners, and cleaning materials;

• All information necessary to demonstrate conformance with the affected source's SSMP when the plan procedures are followed;

• The occurrence and duration of each startup, shutdown, or malfunction of the emission capture system and control device;

• Actions taken during startup, shutdown, or malfunction that are different from the procedures specified in the affected source's SSMP; and

• Each period during which a CPMS is malfunctioning or inoperative (including out-of-control periods).

The proposed rule would require you to collect and keep records according to certain minimum data requirements for the CPMS. Failure to collect and keep the specified minimum data would be a deviation that is separate from any emission limits, operating limits, or work practice standards.

Deviations, as determined from these records, will need to be recorded and also reported. A deviation is any instance when any requirement or obligation established by the proposed rule, including but not limited to, the emission limits, operating limits, and work practice standards, is not met.

If you use a capture system and control device to reduce organic HAP emissions, you would have to make your SSMP available for inspection if the Administrator requests to see it. The plan will stay in your records for the life of the affected source or until the affected source is no longer subject to the proposed standards. If you revise the plan, you would need to keep the previous superceded versions on record for 5 years following the revision.

Periodic Reports.
Each reporting year is divided into two semiannual reporting periods. If no deviations occur during a semiannual reporting period, you would submit a semiannual report stating that the affected source has been in continuous compliance. If deviations occur, you would need to include them in the report as follows:

• Report each deviation from the emission limits.

• Report each deviation from the work practice standards if you use a emission capture system and control device.

• If you use a emission capture system and control device other than a solvent recovery system for which you conduct liquid-liquid material balances, report each deviation from an operating limit and each time a bypass line diverts emissions from the control device to the atmosphere.

• Report other specific information on the periods of time and details of deviations that occurred.

You would also have to include in each semiannual report an identification of the compliance option(s) you used and of time periods when you changed to another option.

Other Reports.
You would be required to submit reports for periods of startup, shutdown, or malfunction of the capture system and control device. If the procedures you follow during any startup, shutdown, or malfunction are inconsistent with your plan, you would report those procedures with your semiannual reports in addition to immediate reports required by § 63.10(d)(5)(ii) of the NESHAP General Provisions.

III. Rationale for Selecting the Proposed Standards

A. How Did We Select the Source Category and Subcategories?

The surface coating of wood building products is a source category that is on the list of source categories to be regulated because it contains major sources that emit or have the potential to emit at least 9.07 Mg (10 tons) of any one HAP or at least 22.7 Mg (25 tons) of any combination of HAP annually. The proposed rule would control HAP emissions from both new or reconstructed sources and existing major sources. Area sources are not being regulated under the proposed rule.

The surface coating of wood building products as described in the listing includes any facility engaged in the surface coating of wood building products, whether they manufacture the wood building product or not. We use wood building products lists contained in the SIC and NAICS code descriptions to describe the vast array of wood building products.

We intend the source category to include facilities for which the surface coating of wood building products is either their principal activity or is an integral part of a production process that is the principal activity. Most coating operations are located at plant sites such as these. However, some may be located at plant sites for which some other activity is principal. Collocated surface coating operations comparable to the types and sizes of the dedicated facilities, in terms of the coating operations and applicable emission control techniques, are included in the source category. The definition of the source category is intended to reflect this inclusion.

Due to the broad scope of the wood building products surface coating industry, the category definition likewise needs to be broad in order to include the varieties of operations and activities that might occur at these facilities. However, a broad description has the potential to unintentionally include coating operations that we would not consider part of the category. Therefore, we reviewed the available data and information to identify a descriptor common to all the sources in the database that would further help to describe the category. Based on our review, we believe that the quantity of coating usage is the most equitable description for purposes of defining the scope of the category. Other descriptions that could have been used but that we have chosen not to propose because they would be too difficult to implement or they are not as equitable as coating usage include production rate, quantity of emissions, and solvent usage.

Facilities in the affected source category for which the data were available to us reported annual usage of coatings to be higher than 4,170 liters per year (1,100 gal per year). Therefore, the types of coatings and coating application methods that were evaluated in developing these proposed standards represent only those known to be used at facilities applying more than 4,170 liters (1,100 gal) of coatings per year.

To be consistent with the available data, we propose to define the source category to include any wood building products surface coating operation that is a major source of HAP emissions or that is located at or is part of a major source and uses at least 4,170 liters per year (1,100 gal per year) of coatings annually. This definition is intended to include all facilities dedicated to wood building product surface coating operations, and similar types and sizes of surface coating operations that are collocated at major sources for which the principal activity is something other than surface coating. The source category does not include research or laboratory facilities; janitorial, building, and facility construction or maintenance operations; or hobby shops that are operated for personal rather than for commercial purposes. The source category also does not include coating applications using handheld nonrefillable aerosol containers. We request specific comments on the source category definition.

Subcategory Selection.
The statute gives us discretion to determine if and how to subcategorize. Once the floor has been determined for new or reconstructed and existing affected sources for a source category or subcategory, we must set MACT standards that are no less stringent than the MACT floor. Such standards must then be met by all sources within the source category or subcategory. A subcategory is a group of similar sources within a given source category. As part of the regulatory development process, we evaluate the similarities and differences between industry segments or groups of facilities comprising a source category. In establishing subcategories, we consider factors such as process operations (type of process, raw materials, chemistry/formulation data, associated equipment, and final products); emission characteristics (amount and type of HAP); control device applicability; and opportunities for pollution prevention. We may also

consider existing regulations or guidance from States and other regulatory agencies in determining subcategories.

After reviewing survey responses from the industry, facility site visit reports, and information received from stakeholder meetings, we found that the wood building products surface coating industry may be grouped into five subcategories with differing coating and performance requirements. The five subcategories are: (1) Doors and windows; (2) flooring; (3) interior wall paneling and tileboard; (4) other interior panels; and (5) exterior siding, doorskins, and miscellaneous.

We specifically invite comments on the selection of subcategories in the proposed rule. For example, we are interested in whether there may be significant differences in product quality or manufacture that could appropriately be addressed by additional subcategories. The EPA notes that cost-effectiveness estimates for some of the subcategories covered by the proposed rule suggest that achieving the MACT floor will be expensive in comparison to the volume of organic HAP controlled. The data suggest that there is a great deal of variation in emission rates even within many of the subcategories. The EPA is interested in data or information that can be used to better address subcategorization and on the costs of the proposed rule and any alternative approaches that commenters may suggest.

Doors and Windows.
The doors and windows subcategory typically includes the priming and sometimes prefinishing of doors and/or windows, including associated door and window components such as moulding or trim. Moulding and trim are decorative or ornamental wood products that are assembled with doors and windows to create a fixture. Facilities typically produce both doors and windows and door and window components at the same site. This is primarily to achieve consistency in the appearance of the coatings applied and to aid in the assembly of the end product or complete fixture (e.g., door or window assembly).

Door and window manufacturing and assembly operations are not typically performed at the same site as doorskin manufacturing due to the different manufacturing operations and types of coatings used. Doors are manufactured by applying adhesive to a core and frame and then pressing a doorskin on either side of the core and frame. Doorskins are thin pieces of wood, such as veneer or fiberboard, which are typically only primed at the doorskin manufacturing location prior to being sent to a location that manufactures a door.

The doors and windows segment of the industry is faced with two separate coating problems due to the exposure to both inside and outside environments, which require substantially different performance requirements. First, the primers and prefinishes that will be subject to exterior conditions must have weather resistant properties similar to those of exterior siding. Second, the coatings subject to interior conditions must have stain and scrub resistant properties similar to interior coatings that may or may not be pigmented, but must still resist ultraviolet (UV) (sunlight) damage.

Related to those performance requirements, doors and windows are the only products in the industry that require solvent-borne wood treatment/preservative coatings prior to finishing. More than half of the coatings (57 percent) reported by the facilities in the database are high-HAP content wood treatment/preservative coatings. These are low-solids solvent-borne coatings that must penetrate the wood to protect from moisture and decay. There are no known low- or no-HAP alternatives for these coatings, and the average organic HAP content was 2.34 kg HAP/liter solids (19.5 lb HAP/gal solids), based on a sample of door and window facilities.

The sharp angles, small areas, and openings associated with moulding and trim of doors and windows are more difficult to coat than the other relatively flat surfaces coated in the other subcategories of this industry. Door and window surface coating operations utilize either hang or flat lines and coat using spray systems due to non-flat surfaces that prevent the use of roll coating. Line speeds for doors and windows are also much slower than most “flat” products (e.g., 100 doors per day versus 70,000 doorskins per day). Dip tanks are sometimes used for the wood treatment/preservative coatings, which allows the product to soak in the coating.

Although some doors are marketed with only a factory-applied primer, most are coated with a prefinish system that must meet industry performance standards. The prefinish system used is either solvent-based aminoplast technology or conventional solvent-based coating technology. Conventional solvent-based coating systems are typically used for interior doors while solvent-based aminoplast technology is used primarily for exterior doors to impart weather resistance characteristics without compromising aesthetic requirements. The commercial resin systems available for mixing with aminoplast coats are diluted with xylene and/or toluene. We believe that the performance requirements and various coating operations of this industry segment warrant creation of a subcategory.

Flooring.
The flooring subcategory includes facilities involved in the finishing or lamination of a wood building product to be used as hardwood or wood laminate flooring. Hardwood flooring is cut and grooved and typically finished in 8-foot or 12-foot strips. Laminate flooring is becoming increasingly popular in the United States and is manufactured using adhesives (typically urea formaldehyde or melamine formaldehyde) that are applied to a paper backing to one side of a thin piece of particleboard and a decorative laminate.

Flooring is limited by the coating types used, including the predominant use of solvent-borne stains and UV sealers and topcoats. Based on a sample of flooring operations, UV sealers and topcoats accounted for approximately 65 percent of all coatings and zero organic HAP emissions. Stains made up the other 35 percent of coatings and averaged 2.82 kg HAP/liter solids (23.5 lb HAP/gal solids). No other industry segment has this unique finishing scenario. Solvent-based stains are prevalent in the industry, and some industry representatives state they are needed in order to obtain the clarity of the wood grain. Recent technology advancements over the past few years have moved to water-borne stains, which in the past have tended to cause “fuzziness” in the appearance of the wood grain. In addition to the hardwood flooring products, the use of adhesives in laminated flooring distinguishes this operation from the remainder of the industry. For these reasons, we believe that a separate subcategory is appropriate for flooring.

Interior Wall Paneling and Tileboard.
The interior wall paneling and tileboard subcategory includes the application of a coating to a panel used only as a wall covering. Interior wall paneling is usually grooved, frequently embossed, and sometimes grain printed to resemble various wood species. The substrate can be hardboard, plywood, medium density fiberboard (MDF), or particleboard. Tileboard is a premium interior wall paneling product used in areas of the home such as kitchens and bathrooms. If tileboard is manufactured at a facility, then interior wall paneling is typically manufactured at the same facility. Tileboard, however, is not always manufactured at facilities that manufacture interior wall paneling.

Interior wall paneling and tileboard are the primary components of the interior panel product subgroup of wood building products. Product specifications are established by consensus standards for both interior wall paneling and tileboard. Interior wall paneling has more decorative coating requirements than other products and is typically manufactured at the same facilities as tileboard, although in much smaller quantities. Tileboard has even more stringent product performance requirements (i.e., adhesion and hardness standards, household stain, scrub and moisture resistance, while maintaining a relative smooth surface) compared to standard interior wall paneling.

Decorative appearance (embossed, grooved, or grain-printed) and performance of the intermediate and end products require multiple coating layers and coating steps far exceeding other subcategories. Production speeds of 30 to 35 boards per minute require that coalescent solvents be used that come out of the wet film without leaving cure blisters and without leaving residual solvent in the coating film or substrate. Residual solvents can cause product “blocking” (products sticking together) during storage. Tileboard coatings average 0.71 kg HAP/liter solids (5.9 lb HAP/gal solids), and interior wall paneling coatings average around 0.19 kg HAP/liter solids (1.6 lb HAP/gal solids). Both products utilize high-temperature aminoplast crosslinkable coatings that are used on substrates that can tolerate higher processing temperatures. These coatings have traditionally been tied to solvent-borne technology where the main resins are supplied in toluene, xylene, and butyl alcohols. The aforementioned coating elements of this industry segment support the creation of a separate subcategory.

Other Interior Panels.
The other interior panels subcategory typically includes the application of a coating to interior panels that are sold for uses other than wall paneling, such as sheathing, insulation board, pegboard, and ceiling tiles. Panels in this category are normally not embossed, grooved, or grain-printed. Other interior panels are frequently cut to size after coating either by the coater or the purchaser. In addition to hardwood plywood and hardboard substrates, softboard, fiberboard, particleboard, and MDF are other substrates that are shipped to, or produced at, wood building products facilities and used to produce coated interior panels.

Some facilities produce interior panels that are used in final products such as shelving, drawersides, cabinetry, store fixtures, display cases, and many other wood furniture components. These types of facilities that are major sources of organic HAP emissions will not be covered under the wood building products (surface coating) NESHAP because they are already covered under the wood furniture NESHAP (40 CFR part 63, subpart JJ).

Other interior panels make up the rest of the interior panels subcategory of wood building products. In this segment of the industry, product specifications are established between the buyer and seller and not by consensus standards. These products are used for interior applications other than wall paneling or tileboard and use fewer coating layers. Other interior panels typically are produced with a single color and have fewer coating steps, less stringent product performance requirements, and some UV applications that provide low organic HAP emission rates. Primers and basecoats comprise 32 percent of all the coatings used on these products and average 0.21 kg HAP/liter solids (1.8 lb HAP/gal solids); prefinishes (clearcoats, paints/inks, sealers, stains, and topcoats) make up 47 percent of the coating usage and average 0.20 kg HAP/liter solids (1.7 lb HAP/gal solids). These product differences support a separate subcategory.

Exterior Siding, Doorskin, and Miscellaneous.
Exterior siding may be made of solid wood, hardboard, or waferboard. Siding made of solid wood and hardboard is typically primed at the manufacturing facility and finished in the field, although some finishing may be performed during manufacturing on a limited basis. Exterior trim (material made out of siding panels and used for edges and corners around the siding) is typically manufactured at the same facility and coated with the same coatings as siding.

Facilities that produce waferboard or oriented strandboard siding typically use a coated paper overlay with a water-borne primer. Since the coating paper overlay is often added prior to the press, which is considered to be part of the substrate manufacturing process, these facilities will not be covered under the wood building products (surface coating) NESHAP, but will be covered under the plywood and composite wood products NESHAP (40 CFR part 63, subpart DDDD).

Doorskins are thin pieces of wood, such as veneer or fiberboard, used on the outside surfaces or facings of a door. Doorskin manufacturing is almost always performed at a separate location from door manufacturing. Also, many facilities manufacture and finish both exterior siding and doorskins at the same site.

There are several miscellaneous wood building products that are surface coated and for which there is little or no emissions or product performance information available. However, several of the miscellaneous wood building products are used on the exterior of buildings or structures, which would require similar protection as exterior siding. These miscellaneous wood building products include, but are not limited to, shutters, shingles, awnings, laminated veneer lumber, and millwork that is not associated with doors and windows or flooring.

This industry segment involves exterior products that must have coatings able to withstand extreme and long-term weather conditions. The predominant use of primers (82 percent of all coatings) relates to a compatibility issue for all subsequent coating layers and warranty provisions. These primers are low-HAP content coatings that average 0.01 kg HAP/liter solids (0.1 lb HAP/gal solids). The prefinishes, including basecoats, sealers, stains, and topcoats, have a higher average HAP content, 0.07 kg HAP/liter solids (0.6 lb HAP/gal solids), and comprise the remaining 18 percent of the coatings used by these facilities. The typical siding facility produces mainly primed siding, but has a small percentage of prefinished material as well. Also, many exterior siding facilities coat doorskins at the same location.

In summary, an important aspect in the determination of subcategories for wood building products surface coating operations relates to the differences in the performance requirements of the coatings used, which relates to the type and the amount of coatings required to meet the end-product specifications. The effectiveness of an applied coating system depends on the extent to which the adhesion of the coating to the substrate or other coating layers can take place, the chemical nature and physical properties of the coating material, and the severity of service environment. The durability and quality of coatings depend on cohesion and adhesion properties. The EPA believes that coatings and surface multiplicity differences, as outlined above, warrant establishing subcategories for the wood building products source category.

B. How Did We Select the Regulated Pollutants?

Available emission data collected during the development of the proposed NESHAP show that the primary organic HAP emitted from the surface coating of

wood building products include xylene, toluene, ethyl benzene, EGBE, and glycol ethers (not including EGBE). These compounds account for 84 percent of this source category's nationwide organic HAP emissions. However, many other organic HAP are used in wood building products coatings, thinners, and cleaning materials. Therefore, the proposed rule would regulate emissions of all organic HAP.

Although most of the coatings used in this source category do not contain inorganic HAP, some special purpose coatings used by this source category do contain inorganic HAP such as chromium, manganese, and antimony. Emissions of these materials to the atmosphere are minimal because the facilities in this source category employ either water curtains or dry filters that remove overspray particles from the spray booth exhaust. Therefore, at this time, it does not appear that emissions of inorganic HAP from this source category warrant Federal regulation.

C. How Did We Select the Affected Source?

In selecting the affected source(s) for emission standards, our primary goal is to ensure that MACT is applied to HAP-emitting operations or activities within the source category or subcategory being regulated. The affected source also serves to determine where new source MACT applies under a particular standard. Specifically, the General Provisions in subpart A of 40 CFR part 63 define the terms “construction” and “reconstruction” with reference to the term “affected source” (40 CFR 60.2) and provide that new source MACT applies when construction or reconstruction of an affected source occurs (40 CFR 60.5). The collection of equipment and activities evaluated in determining MACT (including the MACT floor) is used in defining the affected source.

When emission standards are based on a collection of emission sources, or total facility emissions relative to products with similar coating operations, we select an affected source based on that same collection of emission sources, or the total facility emissions relative to products with similar coating operations, as well. This approach for defining the affected source broadly is particularly appropriate for industries where affected source-wide emission standards provide the opportunity and incentive for owners and operators to utilize control strategies that are more cost effective than if separate standards were established for each emission point within a facility.

The affected source for these proposed standards is broadly defined to include all operations associated with the surface coating of wood building products and the cleaning of coating operation equipment. In selecting the affected source, we considered, for each operation, the extent to which HAP materials are used and the amount of HAP that are emitted. The organic HAP emissions from surface coating operations at wood building products facilities originate from the surface coating application, drying/curing, thinning and/or mixing, and cleaning operations; storage, handling, and transfer of coatings, thinners, and cleaning materials; and waste materials related to the various coatings applied to the wood building products. Consequently, the magnitude of emissions depends heavily on the amount and HAP content of the coatings used, the application method used, the amount and HAP content of solvents used, the drying/curing operations used, and the efficiency of any capture systems and add-on control devices. These factors are determined by the purpose or function of the coating, the wood building products surface coating method, and specific requirements related to the end use of the wood building product.

A broad definition of the affected source was selected to provide maximum flexibility in complying with the proposed emission limits for organic HAP. In planning its total usage of organic HAP materials, each affected source can select among available coatings, thinners, and cleaning materials to comply with the proposed limits. Additional information on the wood building products surface coating operations selected for regulation, and other operations, are included in the docket for the proposed standards.

D. How Did We Determine the Basis and Level of the Proposed Standards for New or Reconstructed and Existing Sources?

After we identify the specific source categories or subcategories of sources to regulate under section 112 of the CAA, we must develop emission standards for each category and subcategory. Section 112(d)(3) establishes a minimum baseline or “floor” for standards. For new or reconstructed sources in a category or subcategory, the standards cannot be less stringent than the emission control achieved in practice by the best-controlled similar source for which we have emission information. The standards for existing sources can be less stringent than standards for new or reconstructed sources, but they cannot be less stringent than the average emission limitation achieved by the best-performing 12 percent of existing sources (or the best-performing five existing sources for categories or subcategories with fewer than 30 sources) for which we have emission information.

Within the wood building products industry, organic HAP emission control for cleaning and surface coating operations is accomplished primarily through the use of low- or no-HAP coatings, thinners, and cleaning materials. Add-on capture and control systems for organic HAP are rarely used by the industry. While low- or no-HAP materials have achieved broad use throughout the industry, each particular coating technology is not used at every facility. Rather, facilities use various combinations of low- or no-HAP coatings, thinners, and cleaning materials. Thus, we judged the most reasonable approach to establishing a MACT floor to be the evaluation of a facility's organic HAP emissions from all coating-related operations. To account for differences in production levels from one facility to another, we normalized the organic HAP emission rate by the volume of coating solids used. We believe coating solids usage is an appropriate indicator of overall production levels.

We used information obtained from industry survey responses to estimate the sourcewide organic HAP emission rate from each survey respondent. We calculated total organic HAP emissions by assuming that 100 percent of the volatile components in all coatings (including adhesives), thinners, and cleaning materials are emitted. Sources used for determining the MACT floor emission limits were identified as those facilities that listed “major source” or “synthetic minor source” as their title V status on their questionnaire response, and other facilities whose data indicated that they have the capacity to increase their organic HAP emissions to at least 9.1 Mg/yr (10 tpy), even though they did not identify themselves as major or synthetic minor sources.

The survey response information was used to determine the total volume of coating solids used by each source. We included decorative, protective, and functional coatings in this total.

Using the sourcewide organic HAP emissions and the total volume of coating solids used for each survey respondent, we calculated the normalized organic HAP emissions (emission rate) in units of kg organic HAP per liter of coating solids (lb

organic HAP per gal of coating solids) used. The facilities were then ranked from the lowest to the highest emission rate in each of the five subcategories.

For two of the five subcategories, the existing source MACT floor was based on the top 12 percent of the facilities because the subcategories were projected to have more than 30 sources. The existing source MACT floor for the other three subcategories was based on the top five facilities because the subcategories were projected to have fewer than 30 sources. The “average” emission rate for each subcategory was interpreted as the median emission rate. The median emission rate was selected rather than the mean or mode because it is associated with an actual emission rate being achieved by a real facility.

The best performing facilities in each subcategory in the database achieved the emission limits for new or reconstructed sources in Table 2 of this preamble. The MACT floor process for existing sources resulted in the emission limits identified in Table 3 of this preamble by subcategory. The survey data showed no appreciable differences between the floor facilities and the remaining facilities in each subcategory in terms of the substrates coated, the coating technologies used, or the applicability of control measures across the various operations. Therefore, we believe the floor levels of control are achievable by the sources in each subcategory.

After the floors have been determined for new or reconstructed and existing sources in a source category or subcategory, we must set emission standards that are technically achievable and no less stringent than the floors. Such standards must then be met by all sources within the source category or subcategory. We identify and consider any reasonable regulatory alternatives that are “beyond-the-floor,” taking into account emission reductions, cost, non-air quality health and environmental impacts, and energy requirements. These alternatives may be different for new or reconstructed and existing sources because of different MACT floors, and separate standards may be established for new or reconstructed and existing sources.

We identified and considered control levels more stringent than the MACT floor level of control for organic HAP. The more stringent option was the use of capture systems and add-on control devices at every facility. The add-on control device chosen for the beyond-the-floor analysis was a regenerative thermal oxidizer (RTO). An RTO was chosen to achieve the highest reduction level possible.

In evaluating the beyond-the-floor option, we calculated the additional costs and emission reductions associated with the use of a capture system and RTO. Since most affected sources do not have any form of add-on control to reduce organic HAP emissions from surface coating operations, we believe that almost all of the facilities, including the few facilities with existing add-on control, would need to install a new capture system and an RTO to achieve the more stringent level of control.

We calculated the cost to reduce each ton of organic HAP emissions using the more stringent level of control. Requiring sources to meet the beyond-the-floor level results in an estimated emission reduction of 4,800 Mg/yr (5,300 tpy) at an estimated cost of $133.5 million per year or $27,900 per Mg HAP ($25,300 per ton HAP) reduced.

Without having information on the benefits that would be achieved by reducing emissions beyond-the-floor, we determined that the additional emission reductions that could be achieved do not warrant the costs that each existing source could incur by using add-on controls. Therefore, we are not requiring beyond-the-floor levels of emission reductions at this time. After implementation of these standards, we will evaluate the health and environmental risks that may be posed as a result of exposure to emissions from the wood building products source category. At that time, we will determine whether the additional costs are warranted in light of the available risk information.

For new or reconstructed sources, the organic HAP emission limits are zero or near zero kg HAP/liter of solids (lb HAP/gal of solids). These limits will achieve 100 percent or nearly 100 percent organic HAP emission reductions. Therefore, there are no other control technologies that need to be considered as a beyond-the-floor option for controlling organic HAP from new or reconstructed sources.

For new or reconstructed sources, we based the proposed standards on the new source MACT floor. For existing sources, we based the proposed standards on the existing source MACT floor. As described earlier, we determined that the beyond-the-floor option was not technically or economically feasible for all existing sources.

The MACT levels of control for new or reconstructed and existing sources can be achieved in several different ways. Many sources would be able to use low- or no-HAP coatings, although they may not be available to meet the needs of every source. If a source is also using thinners or cleaning materials that contain organic HAP, then it may be able to switch to low- or no-HAP thinners and cleaning materials, which are widely available, to reduce the sourcewide organic HAP emissions rate to the MACT level. Other available options are the use of UV coatings or capture systems and add-on control devices to reduce emissions.

We note here that our assumption, used in the development of the MACT floors, that 100 percent of the organic HAP in the materials used are emitted by the affected source would not apply when the source sends organic HAP waste materials to a facility for treatment or disposal. We made that assumption because the industry survey responses provided little information as to the amount of organic HAP recovered and recycled or treated and disposed. We, therefore, concluded that the practice may not be common within the wood building products surface coating industry. We recognize, however, that some wood building products facilities may conduct such activities and should be allowed to account for such activities in determining their emissions. Thus, the proposed rule allows you to reduce the organic HAP emissions by the amount of any organic HAP contained in waste treated or disposed at a hazardous waste treatment, storage, and disposal facility that is regulated under 40 CFR part 262, 264, 265, or 266.

E. How Did We Select the Format of the Proposed Standards?

We selected the format of the standards to be mass of organic HAP per volume of coating solids. The proposed format would allow wood building products surface coating operation owners and operators flexibility in choosing any combination of means (including coating reformulation, use of low- or no-HAP materials, solvent elimination, work practices, and add-on control devices) to comply with the applicable emission limit that is workable for their particular situations.

We selected volume of coating solids as a component of the proposed standards to normalize the rate of organic HAP emissions across all sizes and types of facilities. We also selected the volume of coating solids used because it is directly related to the surface area coated and, therefore, provides an equitable basis for all coatings, regardless of differences in coating densities. A format based on the mass or weight of coating solids (instead of volume) could result in inequitable standards for higher-density pigmented

coatings, such as basecoats or enamels, compared to coatings with lower densities per unit volume.

Other choices for the format of the standards that we considered, but chose not to propose, included a usage limit (mass per unit of production) and a percent reduction limit based on a capture system and add-on control device. As it is not our intent to limit a facility's production under the proposed standards, we are not proposing a usage limit. We also evaluated, but are not proposing, a percent reduction limit, as most wood building products facilities are not expected to use capture systems and add-on control devices for compliance.

In lieu of emission standards, section 112(h) of the CAA allows work practice standards or other requirements to be established when a pollutant cannot be emitted through a conveyance or capture system, or when measurement is not practicable because of technological and economic limitations. Many wood building products facilities use some type of work practice measure to reduce HAP emissions from mixing, cleaning, storage, and waste handling areas as part of their standard operating procedures. They use these measures to decrease solvent usage and minimize exposure to workers. However, we do not have data to quantify accurately the emission reductions achievable by the work practice measures. The level of emissions depends on the type of equipment and the work practices used at the facility and would be very site-specific. For example, emissions from solvent-laden rags used to clean spray booths would depend on the method used to isolate and store such rags. In addition to lacking adequate data and information to quantify an emissions level for such operations, it is not practicable to measure emissions from these operations since they often occur in large open areas not amenable to testing. Therefore, work practice standards are appropriate for such operations under section 112(h) of the CAA.

We request specific comments on work practice standards and their applicability to this source category.

Under the option where emissions are reduced by using low- or no-HAP materials, we assume that all the organic HAP in the materials entering the affected source are volatilized (emitted). Therefore, emissions from operations occurring within the affected source (e.g., mixing operations) are accounted for in the determination of total materials usage at the affected source. However, when you comply by using capture systems and add-on control devices, emissions from mixing, storage, and waste handling operations are often not routed to the control devices and would not be practicable to measure for inclusion in a determination of compliance with emission limits. Therefore, the proposed rule would require development and implementation of an emission reduction work practice plan to assure that emissions are reduced from such operations.

F. How Did We Select the Testing and Initial Compliance Requirements?

The proposed standards would allow you to choose among several options to demonstrate compliance with the proposed standards for organic HAP.

Option 1: Compliant material option.
You would be required to document the organic HAP content of all coatings and show that each is less than the applicable emission limit. You would also have to show that each thinner and cleaning material used contains no organic HAP. Method 311 is the method developed by EPA for determining the mass fraction of organic HAP in coatings and has been used in previous surface coating NESHAP. We have not identified any other methods that provide advantages over Method 311 for use in the proposed standards.

Method 24 is the method developed by EPA for determining the mass fraction of volatile matter for coatings and can be used if you choose to determine the nonaqueous volatile matter content as a surrogate for organic HAP. In other NESHAP, volatile organic compound emission control measures have been implemented in coating industries, with Method 24 as the compliance method. We have not identified any other methods that provide advantages over Method 24 for use in the proposed standards.

The proposed methods for determining volume fraction of coating solids are either ASTM Method D2697-86 (1998) or ASTM Method D6093-97. These are voluntary consensus standards (VCS) determined to be appropriate for the proposed rule; they represent the consensus of the coating industry and other experts involved in their development.

Option 2: Emission rate without add-on controls option.
To demonstrate initial compliance using this option, you would calculate the organic HAP emission rate for one or more of your coating operation(s) in the affected source, based on the mass of organic HAP in all coatings, thinners, and cleaning materials and the volume of coating solids used during the initial compliance period. You would be required to demonstrate that the organic HAP emission rate does not exceed the applicable emission limit using the methods discussed previously.

Option 3: Emission rate with add-on controls option.
If you use a capture system and control device other than a solvent recovery device for which you conduct a liquid-liquid material balance, you would be required to conduct an initial performance test of the system to determine its overall control efficiency. For a solvent recovery system for which you conduct a liquid-liquid material balance, you would determine the quantity of volatile matter applied and the quantity recovered during the initial compliance period to determine its overall control efficiency. For both cases, the overall control efficiency would be combined with the monthly mass of organic HAP in the coatings, thinners, and cleaning materials used to calculate the monthly organic HAP emission rate in kg HAP/liter of coating solids (lb HAP/gal of coating solids). If you conduct a performance test, you would also determine parameter operating limits during the test. The test methods that the proposed standards would require for the performance test have been required in many standards of performance for industrial surface coating sources under 40 CFR part 60 and NESHAP under 40 CFR part 63. We have not identified any other methods that provide advantages over these methods.

G. How Did We Select the Proposed Continuous Compliance Requirements?

To demonstrate continuous compliance with the emission limits, you would need records of the quantity of coatings, thinners, and cleaning materials used and the data and calculations supporting your determination of their organic HAP content. If you conduct liquid-liquid material balances, you would need records of the quantity of volatile matter used and the quantity recovered by the solvent recovery system each month.

To ensure continuous compliance with the proposed organic HAP emission limits and operating limits, the proposed standards would require continuous parameter monitoring of capture systems and control devices and recordkeeping. We selected the following requirements based on reasonable cost, ease of execution, and usefulness of the resulting data to both the owners or operators and EPA for ensuring continuous compliance with the emission limits and operating limits.

We are proposing that certain parameters be continuously monitored

for the types of capture systems and control devices commonly used in the industry. These monitoring parameters have been used in other standards for similar industries. The values of these parameters that correspond to compliance with the proposed emission limits are established during the initial or most recent performance test that demonstrates compliance. These values are your operating limits for the capture system and control device.

You would be required to determine 3-hour average values for most monitored parameters for the affected source. We selected this averaging period to reflect operating conditions during the performance test to ensure the control system is continuously operating at the same or better control level as during a performance test demonstrating compliance with the emission limits.

H. How Did We Select Notification, Recordkeeping, and Reporting Requirements?

You would be required to comply with the applicable requirements in the NESHAP General Provisions, subpart A of 40 CFR part 63, as described in Table 4 of the proposed subpart QQQQ. We evaluated the General Provisions requirements and included those we determined to be the minimum notification, recordkeeping, and reporting necessary to ensure compliance with, and effective enforcement of, the proposed standards, modifying them as appropriate for the wood building products surface coating category.

IV. Summary of Environmental, Energy, and Economic Impacts

The proposed standards will affect an estimated 205 major source facilities that surface coat wood building products. The impacts are presented relative to a baseline reflecting the level of control prior to the standards. Due to consolidation throughout the industry, there is not expected to be any net growth within the wood building products surface coating industry during the next 5 years. Therefore, there are no projected impacts for new sources. For a facility that is already in compliance with the proposed standards, only monitoring, recordkeeping, and reporting cost impacts were estimated. For more information on how impacts were estimated, see the BID in the docket.

A. What Are the Air Impacts?

The proposed emission limits are expected to reduce nationwide organic HAP emissions from existing major sources by 3,200 Mg/yr (3,500 tpy). This represents a reduction of 61 percent from the baseline organic HAP emissions of 5,100 Mg/yr (5,600 tpy).

B. What Are the Cost Impacts?

We have estimated the costs related to complying with the emission limitations and meeting the monitoring, recordkeeping, and reporting requirements. The costs to comply with the emission limitations include the increased cost of low- or no-HAP coating materials and, for sources that choose to use existing emission capture and control systems, performance testing costs. We have assumed for this analysis that all affected sources will use low- or no-HAP coatings, thinners, and cleaning materials, and that these materials can be utilized without the need for capital expenditure. Annual costs to meet the monitoring, recordkeeping, and reporting requirements of the proposed rule have also been included.

To comply with the proposed standards, existing sources will likely use low- or no-HAP coatings, thinners, and cleaning materials. Compliance costs were estimated based on an incremental cost difference between the materials currently used and the complying materials. For purposes of the proposed rule, low- or no-HAP coatings used to comply with the standard are expected to be more expensive than the higher-HAP content coatings that are currently being used.

Performance testing costs for the facilities that choose to use existing control devices to comply with the standard include the labor hours required to conduct performance testing and monitoring on each emission capture system and control device used, and to develop the associated data elements for recordkeeping and reporting purposes.

Recordkeeping and reporting includes all labor hours related to the tracking of coating usage, the cost of purchasing computer equipment, the labor hours required to write and submit reports, and the labor hours required to train the coating personnel.

The total annual costs for the approximate 205 existing major sources are estimated at $27.3 million. According to estimates, recordkeeping and reporting costs will contribute $5.5 million to the overall cost of these proposed NESHAP; material costs will contribute $21.6 million; and performance testing and monitoring will contribute $246,000. We specifically invite comments on how the EPA might reduce the overall cost and cost by subcategory for the proposed rule and thereby increase the rule's cost-effectiveness.

C. What Are the Economic Impacts?

We performed an EIA to provide an estimate of the facility and market impacts of the proposed standards as well as the social costs. In general, we expect the economic impacts of the proposed standards to be minimal, with price increases for affected wood building products surface coating facilities of only 0.04 percent.

For affected sources, the median profit margin will remain unchanged, with small entities being slightly more affected by the proposed standards. The median profit margin for small entities is expected to decrease from 2.8 percent to 2.7 percent while the median profit margin for large entities is expected to decrease from 3.3 percent to 3.2 percent. Therefore, we do not expect an adverse economic impact on the industry as a whole.

The distribution of costs across wood building products surface coating facilities is slanted toward the lower impact levels with many facilities incurring costs related only to annually recurring monitoring, recordkeeping, and reporting, and for only a few sources that choose to use their existing add-on controls, initial performance testing, and parameter monitoring. The EIA indicates that these regulatory costs are expected to represent only 0.2 percent of the value of coating services, which should not cause producers to cease or alter their current operations. Hence, no firms or facilities are at risk of closure because of the proposed standards. For more information, refer to the “Industry Profile: Wood Building Products Industry” (docket A-97-52).

D. What Are the Non-Air Health, Environmental, and Energy Impacts?

Based on information from the industry survey responses, we found no indication that the use of low- or no-organic-HAP content coatings, thinners, and cleaning materials at existing sources would result in any increase or decrease in non-air health, environmental, and energy impacts. There would be no change in utility requirements associated with the use of these materials, so there would be no change in the amount of energy consumed as a result of the material conversion. Also, there would be no significant change in the amount of materials used or the amount of waste produced.

V. Administrative Requirements

A. Executive Order 12866, Regulatory Planning and Review

Under Executive Order 12866 (58 FR 51735, October 4, 1993), EPA must determine whether the regulatory action is “significant” and therefore subject to review by the Office of Management and Budget (OMB) and the requirements of the Executive Order. The Executive Order defines “significant regulatory action” as one that is likely to result in a rule that may:

(1) Have an annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities;

(2) Create a serious inconsistency or otherwise interfere with an action taken or planned by another agency;

(3) Materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligation of recipients thereof; or

(4) Raise novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in the Executive Order.

Pursuant to the terms of Executive Order 12866, OMB has notified EPA that it considers this a “significant regulatory action” within the meaning of the Executive Order. The EPA has submitted this action to OMB for review. Changes made in response to OMB suggestions or recommendations will be documented in the public record.

B. Executive Order 13132, Federalism

Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by State and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that have “substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government.”

Under Section 6 of Executive Order 13132, EPA may not issue a regulation that has federalism implications, that imposes substantial direct compliance costs, and that is not required by statute, unless the Federal government provides the funds necessary to pay the direct compliance costs incurred by State and local governments, or EPA consults with State and local officials early in the process of developing the proposed regulation. The EPA also may not issue a regulation that has federalism implications and that preempts State law, unless the Agency consults with State and local officials early in the process of developing the proposed regulation.

The proposed rule does not have federalism implications. It will not have substantial direct effects on the States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government, as specified in Executive Order 13132. Pursuant to the terms of Executive Order 13132, it has been determined that the proposed rule does not have “federalism implications” because it does not meet the necessary criteria. Thus, the requirements of Section 6 of the Executive Order do not apply to the proposed rule. Although Section 6 of Executive Order 13132 does not apply to the proposed rule, EPA did consult with State and local officials to enable them to provide timely input in the development of the proposed rule.

C. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments

Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 6, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” “Policies that have tribal implications” is defined in the Executive Order to include regulations that have “substantial direct effects on one or more Indian tribes, on the relationship between the Federal government and the Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes.”

The proposed rule does not have tribal implications. It will not have substantial direct effects on tribal governments, on the relationship between the Federal government and Indian tribes, or on the distribution of power and responsibilities between the Federal government and Indian tribes, as specified in Executive Order 13175. No tribal governments own or operate wood building products surface coating facilities. Thus, Executive Order 13175 does not apply to the proposed rule.

D. Executive Order 13045, Protection of Children From Environmental Health Risks and Safety Risks

Executive Order 13045, “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), applies to any rule that: (1) Is determined to be “economically significant” as defined under Executive Order 12866, and (2) concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the EPA must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency.

The EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under Section 5-501 of the Executive Order has the potential to influence the regulation. The proposed rule is not subject to Executive Order 13045 because it does not establish environmental standards based on an assessment of health or safety risks. No children's risk analysis was performed because no alternative technologies exist that would provide greater stringency at a reasonable cost. Furthermore, the proposed rule has been determined not to be “economically significant” as defined under Executive Order 12866.

E. Executive Order 13211, Actions Concerning Regulations that Significantly Affect Energy Supply, Distribution, or Use

The proposed rule is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (66 FR 28355, May 22, 2001) because it is not likely to have a significant adverse effect on the supply, distribution, or use of energy. Further, we have concluded that the proposed rule is not likely to have any adverse energy effects. Affected sources are expected to comply with the proposed rule through pollution prevention rather than end-of-pipe controls, and therefore, there would be no increase in energy usage.

F. Unfunded Mandates Reform Act of 1995

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for

Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, and tribal governments, in aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements.

The EPA has determined that the proposed rule does not contain a Federal mandate that may result in expenditures of $100 million or more for State, local, and tribal governments, in the aggregate, or the private sector in any 1 year. The maximum total annual cost of the proposed rule has been estimated to be less than $27.3 million. Thus, today's proposed rule is not subject to the requirements of sections 202 and 205 of the UMRA. In addition, EPA has determined that this proposed rule contains no regulatory requirements that might significantly or uniquely affect small governments because it contains no requirements that apply to such governments or impose obligations upon them. Therefore, today's proposed rule is not subject to the requirements of section 203 of the UMRA.

G. Regulatory Flexibility Act (RFA), as Amended by the Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA), 5 U.S.C. 601,
et seq.

The RFA generally requires us to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedure Act or any other statute unless the agency certifies that the rule will not have a significant economic impact on a substantial number of small entities. Small entities include small businesses, small organizations, and small governmental jurisdictions.

For the purposes of assessing the impacts of today's proposed rule on small entities, small entity is defined as: (1) A small business whose parent company has no more than 500 employees; (2) a small governmental jurisdiction that is a government of a city, county, town, school district, or special district with a population of less than 50,000; and (3) a small organization that is any not-for-profit enterprise that is independently owned and operated and is not dominant in its field.

In accordance with the RFA and SBREFA, EPA conducted an assessment of the proposed standards on small businesses within the wood building products surface coating industry. Based on Small Business Administration size definitions and reported sales and employment data, EPA's survey identified 4 out of 44 known facilities (4 out of 19 known companies) as being owned by small businesses that will be affected by the proposed standards. Small businesses own 9 percent of the facilities and represent 21 percent of the companies within the source category that will be affected by the proposed standards and are expected to incur less than 10 percent of the total industry compliance costs of $27 million. There are no small firms with compliance costs equal to or greater than 1 percent of their sales. The EPA believes the sample of firms included in this small entity analysis is representative of the small firms that may be affected by the proposed rule.

The EPA also notes that, while economies of scale will require individual small firms to pay a somewhat higher proportion of revenues than large firms for compliance, the burden on most small firms is quite low nevertheless. The median compliance cost is well below 1 percent of sales for both small and large firms affected by the proposed standards (0.18 and 0.02 percent of sales for small and large firms, respectively). After reviewing the range of costs to be borne by small businesses, EPA has determined the costs are typically small and, thus, certifies that this action will not have a significant economic impact on a substantial number of small entities. In addition, EPA has determined that the certification that this action will not have a significant economic impact on a substantial number of small entities does not change if this analysis is done using the NAICS-based small business size standards and NAICS industry data. For more information, please consult the memorandum “Small Entity Impact Analysis Results Comparison for Proposed Wood Building Products NESHAP” (docket A-97-52).

Although the proposed rule will not have a significant economic impact on a substantial number of small entities, EPA has nonetheless worked aggressively to minimize the impact of the proposed rule on smal

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A02-14034. Public record. Not legal advice.