# Hazardous Air Pollutants: Proposed Regulations Governing Constructed, Reconstructed or Modified Major Sources; Proposed Rule ENVIRONMENTAL PROTECTION AGENCY

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## Record

- **Collection:** Federal Register
- **Document type:** Uncategorized Document
- **Published:** April 1, 1994

## Text

SUMMARY: The proposed rule would implement the provisions in section
112(g) of the Clean Air Act (Act). The section 112(g) requirements are
new provisions of the 1990 amendments to the Act. Section 112(g)
applies to the owner or operator of a constructed, reconstructed, or
modified major source of hazardous air pollutants (HAP). After the
effective date of a title V permit program in a State, all owners or
operators of major sources that are constructed, reconstructed, or
modified in that State would be required to install maximum achievable
control technology (MACT). The proposed rule establishes requirements
and procedures for the owners or operators to follow in order to comply
with section 112(g). The proposed rule also contains guidance
permitting authorities in implementing section 112(g). When no
applicable Federal emission limitation has been promulgated, the Act
requires the permitting authority (generally a State or local agency
responsible for the program) to determine a MACT emission limitation on
a case-by-case basis. Procedures are proposed for making these
determinations. The proposed rule includes proposed de minimis emission
rates for all of the listed HAP. These de minimis values are critical
in defining the scope of the section 112(g) requirements. Pursuant to
section 112(g), an owner or operator may provide emission offsets to
avoid requirements for modifications. The proposed rule provides
procedures for providing and reviewing offset demonstrations, including
procedures for evaluating whether emission offsets are ``more
hazardous'' than emission increases being offset. Finally, the proposal
includes a number of clarifying amendments to previously proposed or
promulgated regulations. These proposed amendments would clarify the
relationship between those requirements and section 112(g) of the Act.

DATES: Comments. Comments must be received on or before June 30, 1994.
The EPA does not intend to extend this date.
Public Hearing. If anyone contacts the EPA requesting a public
hearing by May 2, 1994, a public hearing may be held June 1, 1994
beginning at 10 a.m.
Request to Speak at Hearing. Persons wishing to present oral
testimony must contact the EPA by May 2, 1994.

ADDRESSES: Comments. Comments should be submitted (in duplicate if
possible) to: Air Docket (LE-131), Attention Docket Number A-91-64 (see
Docket section below), room M1500, U.S. Environmental Protection
Agency, 401 M Street, Southwest, Washington, DC 20460. The EPA requests
that a separate copy also be sent to the contact person listed below.
The docket is located at the above address in room M-1500, Waterside
Mall (ground floor), and may be inspected from 8:30 a.m. to 12 p.m. and
1 p.m. to 3 p.m., Monday through Friday. The proposed regulatory text
and other materials related to this rule making are available for
review in the docket. A reasonable fee may be charged for copying
docket materials.
Public Hearing. If anyone contacts the EPA requesting a public
hearing, it will be held at the EPA's Office of Administration
Auditorium, Research Triangle Park, North Carolina. Persons interested
in attending the hearing or wishing to present oral testimony should
notify Ms. Theresa Adkins, U.S. Environmental Protection Agency,
Research Triangle Park, North Carolina 27711, telephone number (919)
541-5502.
Docket. Docket No. A-91-64, containing supporting information used
in developing the proposed rule is available for public inspection and
copying between 8:30 a.m. and 3:30 p.m., Monday through Friday, at the
EPA's Air Docket, room M1500, U.S. Environmental Protection Agency, 401
M Street, SW., Washington, DC 20460. A reasonable fee may be charged
for copying.

FOR FURTHER INFORMATION CONTACT: Mr. Timothy Smith (regulatory issues),
telephone (919) 541-4718, Dr. Jane Caldwell-Kenkel (hazard ranking
issues), telephone (919) 541-0328, or Ms. Lynn Hutchinson (MACT
determination procedures), telephone (919) 541-5624, Emission Standards
Division (MD-13), U.S. Environmental Protection Agency, Research
Triangle Park, North Carolina 27711.

SUPPLEMENTARY INFORMATION: The information presented in this preamble
is organized as follows:

I. Summary of Proposed Rule
A. Requirements for Constructed and Reconstructed Major Sources
B. Requirements for Modified Major Sources
C. Software Illustrating the Proposed Requirements
II. Background Discussion
A. Clean Air Act Amendments: Section 112
B. Clean Air Act Amendments: Provisions for Constructed,
Reconstructed and Modified Major Sources of Hazardous Air Pollutants
C. Process To Develop the Proposed Rule
III. Summary and Rationale for Sec. 63.40 Through 63.47, and
Sec. 63.49, of the Proposed Rule
A. Section 63.40--Applicability
B. Section 63.41--Definitions
C. Section 63.42--Requirements for Constructed and Reconstructed
Major Sources
D. Section 63.43--Requirements for Modified Major Sources
E. Section 63.44--de minimis Levels
F. Section 63.45-- MACT determinations
G. Sections 63.46 and 63.47. Offset Demonstration
H. Section 63.49. Requirements for Emission Units Subject to a
Subsequently Promulgated MACT Standard or MACT Requirement
IV. Proposed Approach for Demonstrating that Offsets are ``More
Hazardous'': Summary and Rationale (Sec. 63.48)
A. Statutory Requirements for a ``More Hazardous'' Finding
B. Overview of the Alternatives Considered for a ``More Hazardous''
Finding
C. The Establishment of Relative Hazard Between Categories of
Pollutants
D. The Determination of Relative Hazard Within Categories of
Pollutants
E. The Determination of a ``More Hazardous'' Decrease in Emissions
F. Miscellaneous Hazard Ranking Issues
V. Discussion of the Relationship of the Proposed Requirements to
Other Requirements of the Act
A. Relationship of section 112(g) Implementation to Title V Program
B. Relationship to section 112(l) Delegation Process
C. Section 112(i)(5) Early Reductions Program
D. Section 112(j) ``Hammer'' Provision
E. Subpart A ``General Provisions''
F. Section 112(g) Implementation During the Transition Period
VI. Administrative Requirements
A. Executive Order 12866
B. Regulatory Flexibility Act
C. Paperwork Reduction Act
VII. Suggest Format for Comments

The proposed regulatory text is not included in the Federal
Register notice, but is available in Docket No. A-91-64 or by request
from the EPA contact persons designated earlier in this note. The
proposed regulatory language is also available on the technology
Transfer Network (TTN), of EPA's electronic bulletin boards. The TTN
provides information and technology exchange in various areas of air
pollution control. The service is free, except for the cost of a
telephone call. Dial (919) 541-5742 for up to a 14,400 bps modem. If
more information on the TTN is needed call the HELP line at (919) 541-
5384.
The purpose of this document is to provide the public with an
opportunity to comment on the proposed rule implementing the
requirements of section 112(g) of the Act. This preamble is organized
to serve readers needing: (1) an overview of the proposed requirements
of the section 112(g) program, and (2) a detailed discussion of the
alternatives considered in the developing the proposed requirements.
Section I of the preamble provides an overview of the requirements
of the regulations being proposed today.
Section II provides background on section 112(g) in the context of
the 1990 amendments to the Act.
Section III provides a detailed discussion of the requirements of
the proposed rule and the rationale for these requirements including
other regulatory options that were considered.
One of the most important and challenging provisions of section
112(g) is the requirement that the EPA provide a ranking of HAP for
purposes of offset demonstrations. Section IV of the preamble provides
a detailed discussion of EPA's approach to this pollutant ranking.
Section V of the preamble discusses the relationship between the
requirements of the proposed rule and other important Act
implementation activities. Section VI demonstrates that the proposed
rulemaking is consistent with a number of Federal administrative
requirements.
This preamble makes use of the term ``State,'' usually meaning the
State air pollution control agency which would be the permitting
authority implementing title V or part 70 and the section 112(g)
program. The reader should assume that use of ``State'' also applies,
as defined in section 302(d) of the Act, to the District of Columbia
and territories of the United States, and may also include reference to
a local air pollution control agency. In some cases, the term
``permitting authority'' is used and can refer to both State agencies
and to local agencies (when the local agency directly makes the
determinations or assists the State in making the determinations). The
term ``permitting authority'' may also apply to the EPA, where the EPA
is responsible for the program.

I. Summary of Proposed Rule

The proposed rule would implement the requirements of section
112(g) of the Act by adding new regulatory sections to 40 CFR part 63,
subpart B. The new sections would appear as Secs. 63.40 through 63.49
of subpart B. The requirements of section 112(g) are displayed in
Figure 1. The program applies to major sources of hazardous air
pollutants for which changes are proposed that would lead to increases
in emissions. The program imposes control technology requirements on
``constructed, reconstructed, or modified'' major sources of hazardous
air pollutants.
BILLING CODE 6560-50-P

TP01AP94.000

BILLING CODE 6560-50-C

A. Requirements for Constructed and Reconstructed Major Sources

Figure 2 displays the requirements of the proposed rule for
constructed or reconstructed major sources.

BILLING CODE 6560-50-P

TP01AP94.001

BILLING CODE 6560-50-C
The definition of ``major source'' can be found in a subpart A to
40 CFR part 63. (This subpart is expected to be promulgated at roughly
the same time as today's proposal implementing section 112(g). In this
proposed rule, two alternative definitions of ``construct'' and
``reconstruct'' are given. The EPA is taking public comment on the
alternatives and intends to select one in the final rule. (Under both
alternatives, construction of major-emitting equipment on a new site is
considered ``construction;'' the alternatives differ in the treatment
of new equipment adding ``major'' amounts of emissions to an existing
site.) If equipment additions or overhauls meet the definition of
``construct a major source'' or ``reconstruct a major source,'' then,
pursuant to Sec. 63.42 of the proposed rule, the owner or operator must
demonstrate that emissions will be controlled to a level consistent
with the ``new source MACT'' definition in section 112(d)(3) of the
Act. When no applicable MACT standard (i.e., promulgated under section
112(d) of the Act) has been promulgated for the category, a case-by-
case determination must be made. The procedures for MACT determinations
are set forth in Sec. 63.45 of the proposed rule and are further
described in a draft guidelines document that is being released in
tandem with the proposed rule. Guidelines for MACT Determinations under
Section 112(g), EPA-450/3-92-007b). The EPA is also requesting comment
on these guidelines, which can be obtained from the EPA library,
telephone (919) 541-2777.

B. Requirements for Modified Major Sources

The statutory requirements in section 112(g) of the Act for
``modifications'' to a major source are more complex. Figure 3 displays
the requirements in the proposed rule for modifications. If a plant
meets the definition of ``major source'' in subpart A, then any
``physical change or change in the method of operation'' increasing
``actual emissions'' above a ``de minimis level'' at the plant is a
``modification.'' This proposed rule contains definitions and
procedures for addressing each of these terms. Section 63.44 provides a
table of de minimis values for each of the HAP listed in section 112(b)
of the Act.
BILLING CODE 6560-50-P

TP01AP94.002

BILLING CODE 6560-50-C
Past Federal air quality regulations have excluded a number of
activities from the definition of ``physical change or change in the
method of operation.'' In paragraph 63.43(c) of the proposed rule, the
EPA proposes to provide a similar list of exclusions for purposes of
section 112(g) of the Act. There are a number of possible approaches to
the determination of an ``actual emission increase.'' In paragraph
64.33(d), the EPA proposes a calculation procedure for ``actual
emissions.''
The Act requires the owner or operator of a major source
``modification'' to demonstrate that an ``existing source MACT'' level
will be met. The language in section 112(g) is ambiguous regarding the
extent of coverage at a plant site when a modification has occurred.
Paragraph 63.43(b) in the proposed rule is intended to clarify the
ambiguity by describing the equipment that would require MACT when a
``modification'' occurs.
Section 63.45 of the proposed rule outlines the principles and
procedures for the ``existing source MACT'' demonstration. If no
applicable standard has been promulgated by the Administrator, then a
case-by-case determination of MACT must be made. More detail on the
procedures described in Sec. 63.45 is given in a draft MACT Guidelines
Document, Guidelines for MACT Determinations under section 112(g) (EPA-
450/3-92-007b). This document includes a process for demonstrating that
the control technology recommended by the owner or operator is
consistent with minimum requirements described in section 112(d) of the
Act.
One important provision of section 112(g) of the Act is that an
owner or operator wishing to avoid the MACT demonstration requirement
may provide emission ``offsets.'' The Act provides little specific
guidance on these offsets, and therefore the proposed regulation must
address a number of complex issues related to the offsets. In
Secs. 63.46 and 63.47 of the proposed rule, the EPA provides two
optional approaches for defining the types of emission decreases that
would be credited as offsets. The owner or operator wishing to provide
an offset demonstration could use either approach. The approach in
Sec. 63.46 is the more complex approach and resembles the ``netting''
process used for the criteria pollutant ``prevention of significant
deterioration'' program (40 CFR 52.21) and nonattainment new source
review provisions (40 CFR 51.165 and 166). The approach in Sec. 63.47
is a more simplified approach which imposes greater restrictions on the
types of decreases that would be creditable.
Section 112(g)(1) allows for offsetting between pollutants. This is
a major departure from other ``offset'' or ``netting'' programs which
allow for decreases to be credited only towards increases of the same
pollutant or pollutants within broad classes. Section 112(g)(1)(B)
requires that the EPA provide guidance for determining that offsetting
decreases are ``more hazardous'' than the increase being offset. In
Sec. 63.48 of the proposed rule, the EPA requests comment on a possible
method for making a ``more hazardous'' demonstration.

C. Software Illustrating the Proposed Requirements

The EPA recognizes the complexity of this proposed rule and the
need for assistance in clarifying the provisions for potentially
affected plant operators and permitting authorities. In order to help
communicate the requirements, the EPA is developing software that
should provide this assistance. This software is designed to provide
users with the opportunity to explore for example cases how to
determine whether ``construction,'' ``reconstruction,'' or
``modifications'' requirements apply and whether an example pollutant
is considered ``more hazardous'' than another. The EPA hopes that this
software can facilitate an improved review of the proposed rule.

II. Background

A. Act Amendments. Section 112

The Act amendments of 1990 [Public Law 101-549] contain major
changes to section 112 of the Act pertaining to the control of HAP
emissions. Section 112(b) includes a HAP list that is composed of 189
chemicals, including 172 specific chemicals and 17 compound classes.
Section 112(c) requires publication of a list of source categories of
major sources emitting these HAP, and of area sources that warrant
regulation. Section 112(d) requires promulgation of emission standards
for each listed source category according to a schedule set forth in
section 112(e).

B. Act Amendments. Provisions for Constructed, Reconstructed, and
Modified Major Sources of HAP

The amendments to section 112 include a new section 112(g). This
section is entitled ``Modifications,'' but it contains control
technology requirements for constructed and reconstructed major sources
as well as major source modifications.
1. Statutory Requirements for Constructed and Reconstructed Major
Sources. Section 112(g)(2)(B) contains requirements for constructed and
reconstructed major sources, as follows:

After the effective date of a permit program under title V in
any State, no person may construct or reconstruct any major source
of hazardous air pollutants, unless the Administrator (or the State)
determines that the maximum achievable control technology emission
limitation under this section for new sources will be met. Such
determination shall be made on a case-by-case basis where no
applicable emission limitations have been established by the
Administrator.

This section mandates a more stringent minimum level of control for
``constructed'' and ``reconstructed'' major sources than for
``modified'' sources. In addition, this section mandates the setting of
a case-by-case emission limitation based on a technology determination
for major sources that are constructed or reconstructed after the
effective date of a title V permit program, but before the
establishment of Federal emission limitations.
2. Statutory Requirements for Modifications. The requirements for
major source modifications differ from those for constructed and
reconstructed major sources. Section 112(g)(2)(A) states that:

After the effective date of a permit program under title V in
any State, no person may modify a major source of hazardous air
pollutants in such State, unless the Administrator (or the State)
determines that the maximum achievable control technology emission
limitation under this section for existing sources will be met. Such
determination shall be made on a case-by-case basis where no
applicable emission limitations have been established by the
Administrator. (emphasis added)

The underlined phrases signal important differences between section
112(g) and the way modifications have been treated previously under
sections 111 and 112 of the Act. Previously, a ``modification'' has
been treated as a change to an existing air pollution source which
caused it to be subject to an emission standard or level of control
that would be required for new equipment. Under section 112(g),
``modified'' equipment need only meet an existing source level of
control which was envisioned to be potentially less demanding. Congress
was apparently concerned that treating modifications as ``new sources''
would be overly stringent. Senator Lautenberg summarized the
Congressional discussion as follows:

* * * one of the differences between the House and Senate air
toxics provisions was their treatment of modifications to existing
sources. The House bill included modified existing sources in its
definition of new source, while the Senate bill had limited the new
source definition to new and reconstructed sources.
As the Author of the Senate provision, I was concerned that the
House definition would have unduly hampered routine operations of
many manufacturing facilities that may make frequent operational or
physical changes which may result in increased and different mixes
of air pollutants. For example, many pharmaceutical and electronic
manufacturing facilities in my State make frequent changes in their
operations which result in variation in their air emissions. Simply
substituting one hazardous air pollutant for another more hazardous
air pollutant in a process could have caused the source to be
considered a new source. Or, simply initiating the manufacturing of
new or different products causing certain alterations and increases
in the emissions, could have triggered the new source definition.
The implications of the new source definition in the House bill
would have been substantial for an existing major source. This could
have caused time-consuming delays as well as imposing the
unreasonable burden of retrofitting the modification to bring it
into compliance with new source MACT.\1\
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\1\It has been held that although ``such statements by
individual legislators should not be given controlling effect, * * *
when they are consistent with the statutory language and other
legislative history, they provide evidence of Congress' intent.''
Brock v. Pierce County, 476 U.S. 253, 263 (1986). While Senator
Lautenberg's statement alone would not be sufficient to impose
requirements not grounded in the statute itself or limit the
Agency's discretion, it is a helpful explanation of Congressional
intent.

---------------------------------------------------------------------------
136 Cong. Rec. S 17124-5 (October 26, 1990).

A second important difference between section 112(g) and the pre-
amendment treatment of modifications is that case-by-case control
technology judgments must be made where no applicable emission
limitations have been established by the Administrator. Modifications
that occur after the ``effective date'' of the operating permits
program (see discussion below in section II.A of this preamble), but
before the promulgation by the EPA of a section 112(d) standard for a
given source category, must comply with emission limitations that
reflect a case-by-case judgment on the part of the reviewing authority.
The Act establishes a number of complex considerations in
determining what constitutes a ``modification.'' The definition of a
major source ``modification'' is given in section 112(a)(5) and
additional considerations are given in section 112(g)(1)(A). Section
112(a)(5) states that:

The term `modification' means any physical change in, or change
in the method of operation of, a major source which increases the
actual emissions of any hazardous air pollutant emitted by such
source by more than a de minimis amount or which results in the
emissions of any hazardous air pollutant not previously emitted by
more than a de minimis amount. (emphasis added)

This definition of modification is very similar to the definition
contained in section 111 of the Act. One important difference in this
definition is that it allows for an exception for modifications that
result in an increase which is less than a de minimis amount, while
section 111 regulates ``any emission increase'' caused by the physical
change or change in the method of operation.
Section 112(g)(1)(A) provides for consideration of emission offsets
in the definition of ``modification.'' Section 112(g)(1)(A) states
that:

A physical change in, or change in the method of operation of, a
major source which results in a greater than de minimis increase in
actual emissions of a hazardous air pollutant shall not be
considered a modification, if such increase in the quantity of
actual emissions of any hazardous air pollutant from such source
will be offset by an equal or greater decrease in the quantity of
emissions of another hazardous air pollutant (or pollutants) from
such source which is deemed more hazardous.

Congress recognized the difficulty in interpreting the phrase
``which is deemed more hazardous.'' In section 112(g)(1)(B), the EPA is
required to provide a hazard ranking of the chemicals, as follows:

The Administrator shall, after notice and opportunity for
comment and not later than 18 months after the date of enactment of
the Clean Air Act Amendments of 1990, publish guidance with respect
to implementation of this subsection * * * [i.e, section 112(g)] * *
* Such guidance shall include an identification, to the extent
practicable, of the relative hazard to human health resulting from
emissions to the ambient air of each of the pollutants listed under
* * * [section 112(b)] * * * sufficient to facilitate the offset
showing authorized by * * * [section 112(g)(1)(A)] * * * Such
guidance shall not authorize offsets between pollutants where the
increased pollutant (or more than one pollutant in a stream of
pollutants) causes adverse effects to human health for which no
safety threshold for exposure can be determined unless there are
corresponding decreases in such types of pollutants.

Finally, Congress directed the EPA to prevent unnecessary delays in
the review of modifications, particularly where no case-by-case control
decision is needed. Section 112(g)(3) says that:

The Administrator (or the State) shall establish reasonable
procedures for assuring that the requirements applying to
modifications under this section are reflected in the permit.

Again citing Senator Lautenberg,

As long as the permit provides that the existing source MACT
standard will be complied with in the event of a modification, the
objectives of the modification provision in the law will have been
satisfied. If there is no existing source MACT standard, then the
Congress expects an expeditious determination of what emission
limitations the modification must meet.

3. Requirement for Guidance. Need for Rulemaking. Section
112(g)(1)(B) of the Act directs the EPA to ``publish guidance with
respect to the implementation of this subsection.'' The EPA believes
that ``subsection'' refers to all of the requirements of ``subsection
112(g)'' of the Act, and that guidance is required to provide
consistency in implementing all of the section 112(g) requirements.
The EPA requests comment on an alternative reading that would
require guidance only for the ranking of pollutants. The EPA believes
that although section 112(g)(1)(B) states that the pollutant ranking is
to be included in the guidance, the EPA does not believe that this
language means that the guidance should be limited to the pollutant
ranking.
In any case, there is no requirement in section 112(g) that the EPA
publish a rule to implement the requirements. At a minimum, the EPA
must issue ``guidance'' after ``notice and opportunity for comment.''
The EPA believes that there are sound policy reasons for promulgating a
rule rather than issuing informal guidance. First, the requirement for
``opportunity for comment'' on the guidance suggests that any guidance
that is issued would require a review process similar to a rulemaking.
Second, the EPA believes that a rulemaking would serve to provide a
consistent basis for interpreting a number of ambiguous phrases in the
statute. In the absence of such a rule, a consistent interpretation of
the Federal requirements would not exist and the potential for
litigation and delays could increase.

C. Process To Develop the Proposed Rule

The EPA has undertaken a substantial effort to obtain feedback from
interested parties in the development of the proposed rule.
During July 1991, a 2-day meeting was held with an ad hoc group
consisting of representatives of environmental organizations,
industrial trade groups, and State and local air quality agencies. This
meeting served to introduce the principal issues involved with section
112(g) implementation. Written comments were received from a number of
participants. These comments are included in the Docket for the
proposed rule.
During October 1991, the EPA consulted an independent panel of
scientific experts for input into the hazard ranking process. This
panel of the EPA's Science Advisory Board (SAB) was apprised of the
EPA's theoretical outline for hazard ranking in a public meeting held
on October 28 and 29, 1991. The consultation meeting provided members
of the SAB an opportunity to provide verbal feedback on several
approaches.
On November 19, 1991, ideas for developing section 112(g) guidance
were discussed at the meeting of the National Air Pollution Control
Techniques Advisory Committee (NAPCTAC). At the NAPCTAC, staff of the
EPA presented a number of preliminary positions on a number of section
112(g) issues. A copy of the EPA presentation and a summary of the
NAPCTAC meeting are also included in the Docket.
Finally, the EPA has consulted with a subcommittee of the Clean Air
Act Advisory Committee for input on approaches to implementing section
112(g). Meetings were held on May 26 and June 29, 1992 to present a
summary of section 112(g) issues and to provide the subcommittee with
the EPA's staff thinking with respect to those issues. A third meeting
was held on September 24, 1992 to obtain feedback on a draft of the
proposed rule. A copy of the draft rule submitted to the subcommittee,
and several comment letters on that draft, are included in the Docket.
Additional meetings were held with the subcommittee on January 15,
1993. In February 1993, a revised draft of the rule and a first draft
of this preamble were circulated to subcommittee members. On March 19,
a meeting was held to discuss procedures for case-by-case MACT
determinations. A copy of the February draft of the rule and preamble,
and associated feedback from subcommittee members, is included in the
Docket.

III. Summary and Rationale for Section 63.40 Through 63.47, and Section
63.49, of the Proposed Rule

This section of the preamble is a detailed discussion of the
provisions of the proposed rule. This discussion outlines the rationale
for the decisions that were made, and describes other options that were
considered. The overall structure of the proposed requirements for
constructed and reconstructed sources is displayed in Figure 2. The
overall structure of the proposed requirements for modifications is
displayed in Figure 3.

A. Section 63.40--Applicability

Section 63.40 describes the timing of the requirements of the
proposed rule and the situations it is generally intended to address.
1. 63.40(a)--Subpart B applicability. Paragraph 63.40(a) of the
proposed rule indicates that the intent of the rule is to implement
section 112(g) of the Act.
2. 63.40(b)--Overall requirements. Paragraph 63.40(b) of the
proposed rule indicates the overall applicability of section 112(g) to
the owner or operator of a major source of HAP who constructs,
reconstructs or modifies a major source after the ``effective date of a
title V program'' in each State.
(a) Effective date. The meaning of ``effective date of a title V
permit program'' is indicated in the final regulations for
implementation of title V of the Act, which are contained in 40 CFR
part 70, and which were published on July 21, 1992 (57 FR 32250). Under
these regulations, States are required to submit a permit program for
review by the EPA on or before November 1993. The EPA is required to
approve or disapprove the permit program within 1 year after receiving
the submittal. The EPA's program approval date is termed the
``effective date.''
Congressional intent for using this effective date as the trigger
date for section 112(g) requirements is clear. According to Senator
Lautenberg (Congressional record, S. 17125, October 26, 1990):

Requirements for modifications do not apply to a source until
there is an approved permit program in that State. This should
ensure that there is a permit program in place that is designed to
expeditiously deal with modifications.

The effective date of title V permit programs is defined in section
502(h) of the Act, which says ``The effective date of a permit program,
or partial or interim program, approved under * * * [title V] * * *
shall be the effective date of approval by the Administrator. The
effective date of a permit program, promulgated by the Administrator
shall be the date of promulgation.'' This definition is incorporated
into the operating permit regulations as 40 CFR 70.4(g).
This language refers to two types of title V programs: one type
where the EPA ``approves'' the title V program under 40 CFR part 70 and
another type where the EPA ``promulgates'' a program under 40 CFR part
71. Programs ``approved'' by the EPA under Part 70 will be developed by
the State or local area and submitted to the EPA for approval. The
language in section 502(h) of the Act makes these programs immediately
effective upon EPA approval. Programs ``promulgated'' by the EPA under
part 71 are anticipated to be rare, and they occur only where a State
failed to submit a program or submitted a program that EPA could not
approve. The EPA is required by section 502(d)(3) of the Act to
promulgate and administer a title V program if, by November 1995, the
EPA has not approved the State program. The language in section 112(g),
because it refers to the effective date of a title V program in any
State (and not by any State), means that the program will apply to both
the EPA ``approved'' and ``promulgated'' programs.
The title V regulations provide for approval of ``interim'' and
``partial'' programs in certain limited circumstances. The EPA believes
that, because partial programs must ensure compliance with ``all
requirements established under section 112 applicable to `major
sources' and `new sources','' and interim programs must ``substantially
meet the requirements of [title V],'' an interim or partial program
would trigger the requirements of section 112(g).
A significant issue in the beginning of a section 112(g) program is
to define the activities that would ``grandfather'' a project that is
already underway. As described in the proposed rule, ``construction,
reconstruction, or modification'' are triggered from the ``onsite
fabrication, erection, or installation'' of a project. If such
activities occur after the effective date, then the proposed rule would
be applicable. The EPA requests comment on other alternatives such as:
(1) Grandfathering projects for which a complete application has been
submitted to the permitting authority, (2) grandfathering projects
which have submitted an application, or (3) grandfathering projects
which have not yet received a permit.
(b) Major Source. Section 112(g) applies only to major sources as
defined in section 112(a)(1) of the Act. This definition, already
included in 40 CFR part 63, subpart A, (the general provisions of part
63), is as follows:

The term `major source' means any stationary source or group of
stationary sources located within a contiguous area and under common
control that emits or has the potential to emit considering
controls, in the aggregate, 10 tons per year or more of any
hazardous air pollutant or 25 tons per year or more of any
combination of hazardous air pollutants * * *

The definition also allows the EPA to establish a lesser quantity
than 10 or 25 tons to define ``major source'' with respect to
particular HAP where warranted on the basis of potency, persistence,
and other factors. To date, no such lesser quantities have been
established.
As a result of this definition, the section 112(g) requirements do
not apply if the total emissions from an entire ``contiguous area under
common control'' (in general, the entire plant site) are less than the
listed amounts. Once plant-wide emissions exceed this total, then
certain activities at the plant site are subject to the section 112(g)
requirements that are outlined in the proposed rule.
It is necessary to note that neither the proposed Subpart A
requirements nor this proposed rule contain consideration of Standard
Industrial Classification Codes (SIC codes) in the definition of
``major source.'' The EPA considered using the 2-digit SIC code for
this proposed rule, in a manner similar to that for the proposed 40 CFR
part 70 operating permits rule. The EPA believes, however, that this
would be inconsistent with the definition of ``major source'' in
section 112(a) of the Act, which does not restrict a ``contiguous
boundary'' to equipment within a 2-digit SIC code. For purposes of
implementing section 112(g), such a restriction could, in some cases,
restrict the portion of the plant from which emission offsets could be
obtained. In other cases, a portion of the plant within a given 2-digit
SIC code may not be subject to regulation, because that portion would
not emit enough to be considered a ``major source'' in and of itself.
The EPA recognizes that the treatment of 2-digit SIC codes under
section 112 of the Act is not consistent with the 40 CFR part 70
operating permits regulation. The EPA requests comment on whether the
operating permits rule should be amended to eliminate this
inconsistency.
An important element of the major source definition is the term
``potential to emit.'' ``Potential to emit'' is based on the source's
capability to emit hazardous air pollutants with consideration to
Federally enforceable limitations. Such limitations include
restrictions on capacity, restrictions on the types of materials used,
emission limitations, and other types of restrictions. A definition of
``potential to emit'' is contained in the proposed 40 CFR part 63
subpart A General Provisions.
3. 63.40(c)--Exclusion for Steam Generating Units. Paragraph
63.40(c) of the proposed rule clarifies that electric utility steam
generating units are not yet subject to the requirements of section
112(g).
Section 112(n)(1) requires the EPA to perform a study of the
hazards to public health associated with HAP emissions from electric
utility steam generating units. This paragraph states that:

The Administrator shall regulate electric utility steam
generating units under this section, if the Administrator finds such
regulation is appropriate and necessary after considering the
results of the study required by this paragraph. (emphasis added)

The EPA reads the phrase ``under this section'' as a broad
exemption from regulation under section 112, including section 112(g),
pending the results of the utility health hazards study. The EPA
requests public comment on this reading.
4. 63.40(d)--Relationship to State and Local Requirements. Most
State and local regulatory agencies maintain regulatory programs that
involve toxic air pollutant reviews for constructed and modified
sources. Paragraph 63.40(d) clarifies that the requirements of section
112(g) do not supersede any requirements of these programs that are
more stringent than the proposed rule.
5. 63.40(e)--Relationship to Other Standards. The proposed rule
contains an exemption for sources emitting less than that which is
regulated by promulgated standards in other subparts of 40 CFR part 63.
Without this exemption, permitting authorities would be required to
conduct a case-by-case MACT determination in cases where: (1) The
emission rate exceeds a de minimis level as defined in the proposed
rule for purposes of section 112(g) of the Act, but (2) the emitting
equipment is below an applicability cutoff in a promulgated MACT
standard. Such standards may describe an equipment size or capacity, or
a stack concentration below which the requirements may be inapplicable.
The EPA believes that emissions below such a cutoff are consistent with
``MACT'' because a MACT evaluation was made in establishing the cutoff.
An example should serve to clarify this exemption. First, for
equipment leaks for synthetic organic chemical manufacturing, the EPA
has proposed regulation of streams in ``VHAP service,'' i.e., where HAP
contribute more than 5 percent of the stream. (See description of
proposed 40 CFR part 63, subpart H requirements, 57 FR 62617-62719,
December 31, 1992.) There may be instances where less than 5 percent of
such a stream represents an increase that is greater than a de minimis
emission rate listed in this proposed rule. If the final chemical plant
standard, when promulgated, contains the 5 percent cutoff, the EPA
believes that a case-by-case review for pollutants emitted at less than
5 percent was not intended by Congress in writing section 112(g).
The last sentence of paragraph 63.40(e) is intended to make clear
that this paragraph is only intended to address situations involving a
regulatory cutoff for specifically evaluated emission points. For
example, the proposed synthetic organic chemical plant standard does
not address boilers or other combustion equipment. If a physical change
resulted in a greater than de minimis increase from such equipment,
then paragraph 63.40(e) should not be interpreted to mean that they are
exempted from the proposed rule.

B. Section 63.41--Definitions

1. Terms Defined in the General Provisions. A number of terms used
in the defined rule have already been proposed for all of 40 CFR part
63 by the General Provisions contained in subpart A. Readers interested
in the definitions and rationale for those terms should refer to
recently promulgated subpart A. Relevant terms defined in the General
Provisions include:

--Act
--Approved permit program
--Capital expenditure
--Effective date
--Federally enforceable
--Hazardous air pollutant
--Major source
--Permit program
--Potential to emit
--Relevant standard
--Title V Permit

2. Terms Related to Construction and Reconstruction. As noted above
in section II of this preamble, the Act imposes more stringent
requirements for major source ``construction'' and major source
``reconstruction'' than for major source ``modification.'' There is a
degree of ambiguity in the statute regarding what must occur in order
to ``construct'' or ``reconstruct'' a major source. The following terms
reflect two alternative readings of the statute and are included in
section 63.41:

--Construct A Major Source
--Reconstruct A Major Source
--Green-field Site
--Emission Unit

A detailed discussion of these definitions and the two approaches is
included in section II.C of this preamble.
3. Terms Related to MACT. Definitions for the following terms
related to levels of control technology are included in section 63.41
of the proposed rule:

--Available information
--MACT
--Control Technology
--MACT Floor
--MACT Emission Limitation for Existing Sources
--MACT Emission Limitation for New Sources

The basis for the MACT definitions is statutory language contained
in section 112(d) of the Act. The term MACT appears only in section
112(g) of the Act, and does not appear elsewhere in section 112. There
is, however, considerable legislative history indicating that this term
refers to the level of control required by section 112(d) emission
standards. This term was used in this context in the House Bill, H. R.
3030. For purposes of the definitions in the proposed rule, the EPA
assumes that is a reference to the ``maximum degree of reduction in
emissions'' language contained in section 112(d)(3). The minimum
control technology requirements of section 112(d), often referred to as
the ``MACT floor'' are cited a number of times in the proposed rule. To
avoid repeating these requirements each time, the regulation includes a
definition of ``MACT floor.'' The term ``available information'' is
used to define the extent of review for permitting authorities and
applicants for case-by-case MACT determinations.
4. Terms Affecting Extent of Coverage by MACT. The following terms
are used to describe equipment subject to a MACT determination:

--Emission point
--MACT-affected emission unit
--List of source categories

An ``emission point,'' as defined in the regulation, is defined
narrowly to refer to any individual point of release to the atmosphere.
As described below, an individual MACT determination will often be made
at once for a number of emission points. The term ``MACT-affected
emission unit'' is used to refer to the collection of all emission
points considered when such a MACT determination is made.
One purpose of the term ``MACT-affected emission unit'' is to
clarify that a major source ``construction'' ``reconstruction'' or
``modification'' project which involves more than one emission point or
emission unit may require more than one MACT determination. As outlined
in paragraph (3) of the definition, the EPA believes that MACT
determinations consistent with section 112(d) of the Act may not
include combinations of emission points involving more than one
category on a published list of source categories (57 FR 31576). For
example, most types of combustion sources appear as individually listed
categories. As a result, a ``construction'' ``reconstruction'' or
``modification'' involving boilers and other process equipment must
make a separate MACT determination for the boilers.
Another purpose of the term ``MACT-affected emission unit'' is to
provide owners and operators of modified major source with additional
flexibility. There are situations, such as that displayed in Figure 4,
for which there may be overall technologies that would reduce emissions
more effectively than applying MACT to each emission point being
changed. Accordingly, paragraph (2)(ii) of the definition gives the
owner and operator the discretion to include emission points in the
``MACT-affected emission unit'' in addition to those that are
``affected by the modification.'' A detailed discussion of ``affected
by the modification appears below in section III.D of this preamble.
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The EPA considered requiring that the ``MACT-affected emission
unit'' include additional emission points in cases where it is contrary
to common practice to consider them in isolation from the emission
point for which the ``modification'' has occurred. For example, the
addition of a single pump or valve to a production unit may yield a
determination to require a leak detection and repair program as the
control measure. The EPA believes that it would not be good engineering
practice to suggest a leak detection program for that unique pump or
valve, or a different leak detection program from that for other
equipment within the same production unit. By including all equipment
in the production unit as part of the ``MACT-affected emission unit,''
a more reasonable assessment of control alternatives may result. The
EPA believes, however, that inclusion of Figure 4. Example Illustrating
Paragraph (2)(ii) in the Definition of ``MACT-affected emission unit''
this provision is probably not needed, because permitting authorities
will generally treat such equipment as a single grouping. In addition,
this provision may lead to confusion as to which situations would
require broader MACT coverage. The EPA requests comment on whether this
provision should be included in the final rule.
5. De minimis. The definition of de minimis is discussed below in
section III.E. of this preamble.
6. Electric Utility Steam Generating Unit. The definition of
electric utility steam generating unit in the proposed rule is taken
directly from section 112(a) of the Act.
7. Source Reduction Project. As discussed below (see discussion
related to Sec. 63.47 of the proposed rule), the proposed rule provides
for source reduction projects to be considered in identifying emission
offsets. The definition of ``source reduction project'' is intended to
be consistent with the Pollution Prevention Act, Public Law 101-503.
C. Section 63.42--Requirements for Constructed and Reconstructed
Major Sources. Section 63.42 (in combination with a number of
definitions contained in Sec. 63.41) contains the requirements for
constructed and reconstructed major sources described in section
112(g)(2)(B) of the Act. Equipment affected by this section must comply
with a ``new source MACT'' level of control. The EPA requests comment
on its interpretation of the statutory language pertaining to
constructed and reconstructed major sources.
1. ``Green-field'' Facilities. The most straightforward case for
section 112(g) is for a new plant site emitting (or having the
potential to emit) more than major amounts of HAP (that is, 10 tons/yr
individually, 25 tons/yr collectively, or amounts that exceed any
lesser quantity cutoffs that may be established under subpart C of part
63). The EPA believes that the statute clearly requires such a new
plant site to be treated as a ``constructed major source'' subject to a
``new source MACT'' level of control.
2. Addition of Equipment at an Existing Plant Site. Another
important situation to address is the addition of equipment emitting
major amounts, i.e., greater than 10 tons per year of one HAP, or
greater than 25 tons per year from all HAP, to an existing major source
plant site. An example of such an addition is shown in Figure 5.
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The EPA believes that there are two possible readings of the Act
with respect to this situation, and that both readings are consistent
with the definition of ``major source'' in section 112(a) of the Act.
Under the first reading, the addition of equipment at an existing plant
site would constitute ``construction of a major source'' because the
addition would entail the construction of ``a stationary source or
group of stationary sources'' emitting major amounts (that is, 10 tons/
yr individually, 25 tons/yr collectively, or amounts that exceed any
lesser quantity cutoffs that may be established under subpart C of part
63). This equipment addition would be subject to a ``new source MACT''
level of control which is likely to be more stringent than the
``existing source MACT'' level of control for ``modifications.'' Also,
there would be no opportunity to provide for emission offsets in lieu
of a control technology demonstration.
Under the second reading, the entire plant site would be treated as
a ``stationary source or group of stationary sources'' and any such
addition would be treated as a major source ``modification.'' If
treated as a possible ``modification,'' then the Act provides the
opportunity to seek such offsets and, if such offsets are provided,
then the new equipment could be operated without controls, or with
controls that are less stringent than MACT, until an applicable
standard is promulgated under section 112(d). If offsets were not
provided, the equipment would be controlled with existing source MACT.
The EPA believes that there are advantages and disadvantages of
both readings.
The ``construction'' reading ensures that major-emitting equipment
additions (that is, those emitting more than 10 tons/year of a HAP, or
25 tons per year from all HAP, or amounts exceeding a lesser quantity
cutoff), which generally would represent sizeable investments, would be
built with state-of-the art control technology. It is generally
recognized that it is more straightforward to build such a level of
control technology into the original design, and that it is difficult
or impossible to retrofit such controls at a later date. A fundamental
goal of programs such as the new source performance standards (NSPS)
program under section 111 of the Act and the effluent guidelines
program under the Clean Water Act is to achieve long-term reductions in
emissions by requiring ``best'' controls as old production operations
are replaced with new operations. However, the ``construction''
definition precludes offsetting--which in some cases might result in a
greater reduction in overall hazard by focusing controls on pollutants
of greater regulatory concern and by reducing the total quantities of
pollutants.
For equipment additions occurring after EPA has proposed a section
112(d) standard, the ``construction'' reading would provide greater
consistency if the equipment addition meets the definition of ``new
source'' in that section 112(d) standard. If the equipment is a ``new
source'' in the proposed standard, any such ``new source'' constructed
after the proposal date of the standard is required to install ``new
source MACT'' upon promulgation of the standard. Inconsistencies would
result if the same equipment, if major-emitting, was treated as a
``modification'' in today's proposed rule.
The ``modification'' reading provides sources the flexibility to
completely offset increased emissions--thereby achieving a greater
emission reduction than the ``construction'' definition, presumably at
less cost. However, where sources opt to install existing source MACT
rather than offset, emission reductions could be less than if the
source installed new source MACT. In addition, it is difficult to judge
whether emission reductions being used as offsets would have occurred
whether or not the plant is being modified. The EPA is not able to
determine which approach would result in lower net emissions over time.
Also, the ``modification'' reading may lead to inequities in the
implementation of the program. As shown in Figure 6, a ``green-field''
plant site emitting 10 tons per year would be subject to a new source
MACT, while addition of identical equipment at an existing plant would
be subject to existing source MACT (or emissions would have to be
offset).
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The ``modification'' reading would appear to be the most consistent
with the approach taken by the EPA in the prevention of significant
deterioration (PSD) and non-attainment new source review (NSR) programs
for criteria air pollutants. The PSD program includes a ``netting''
provision which takes into account plant-wide emission increases and
decreases in evaluating whether a ``modification'' has occurred. The
NSR program also takes plant-wide emission reductions into account in
determining applicability of the program to equipment additions. The
ability to consider plant-wide emission reductions was upheld in a 1985
Supreme Court decision [Chevron USA, Inc. v. Natural Resources Defense
Counsel, 467 U.S. 837 (1984)]. One difference between the PSD and NSR
programs and the section 112(g) program in the proposed rule is that
most equipment additions which avoid ``best'' or ``lowest achievable''
controls under these programs must still meet a ``best demonstrated''
level of control if NSPS standards have been established. For section
112(g), however, an equipment addition could avoid controlling HAP
emissions entirely until a MACT standard is established. Additionally,
the PSD and NSR programs are focused on preserving or attaining
national ambient air quality standards. The EPA requests comment on
whether the lack of such ambient criteria for HAP would suggest a
greater technology focus under section 112(g).
The EPA requests public comment on these two interpretations. For
the proposed rule, both interpretations are presented as separate
``alternatives.''
Under Alternative A, addition of a major-emitting ``emission unit''
is included within the definition of ``construct a major source.'' The
definition of emission unit is the same as that used for regulations
proposed pursuant to section 112(j) of the Act. The definition is
intended to provide permitting authorities with considerable
flexibility in determining the ``entity'' which would be treated as
``construction.'' The EPA requests comment on whether more prescriptive
language for this term would be desirable.
Under Alternative B, the only activity that is included within the
definition of ``construct a major source'' is the addition of major-
emitting equipment at a green-field site. By implication, any such
activity at a site which is not a green-field site is regulated under
the modifications provisions of Sec. 63.43 of the proposed rule. The
term ``green-field site'' generally refers to equipment constructed in
a previously undeveloped area. There are, however, situations where a
virtually undeveloped area or small commercial or industrial equipment
could exist at a site for which a major source is to be constructed.
Accordingly, the proposed definition of ``green-field site'' includes
as ``green-field'' a site for which the total emissions of any given
HAP are less than de minimis. The EPA requests comment on other
possible definitions of this term.
The EPA also requests comments on other possible approaches to the
definition of ``construct a major source.'' One approach suggested to
the EPA would include any equipment addition at a major source emitting
more than de minimis quantities within the definition of ``construct a
major source.'' The EPA believes that this reading is inconsistent with
the statute. In addition, in structuring standards under section
112(d), it is unlikely that the EPA will promulgate standards that
would treat all equipment additions as ``new.'' The EPA requests public
comment on whether such an interpretation is appropriate.
3. Reconstruction. Section 112(g) continues the concept of
``reconstruction'' contained in past regulatory programs. The concept
of reconstruction is intended to prevent the circumvention of ``new
source'' requirements by completely overhauling existing equipment.
Current air pollutant emission standards under previous requirements of
the Act treat replacement of components as a reconstruction if the
replacement represents more than 50 percent of an entirely new
facility.
For section 112(g), the requirements apply to the reconstruction of
a ``major source,'' and the proposed rule defines ``reconstruct a major
source'' as the replacement of components at a major source such that
the replacement exceeds 50 percent of the capital cost of an entirely
new major source. Two alternative definitions of ``reconstruct a major
source'' are included in Sec. 63.41 of the proposed rule; these two
definitions are intended to coincide with the two alternative
definitions of ``construct a major source'' discussed previously.
Under Alternative A, ``reconstruct a major source'' is based upon
an emission unit. If an emission unit emits major amounts, then the
replacement of components at that unit would be considered a
``reconstruction'' if the cost of the replacement exceeds 50 percent of
the cost of an entirely new unit. In this case, new source MACT would
be required for the emission unit.
Under Alternative B, ``reconstruct a major source'' is based upon
all equipment within the entire contiguous plant site. The definition
includes only those situations where the replacement of components
would exceed 50 percent of the cost of the entire plant site. Under
Alternative B, the probability that a reconstruction would occur is
substantially decreased. If, however, a reconstruction did occur under
this definition, it would require the entire plant to install new
source MACT.
The EPA requests public comment on the definition of ``reconstruct
a major source'' in the proposed rule.
4. Control Technology Review Requirements For Constructed and
Reconstructed Major Sources. Section 63.42 reflects the statutory
requirement that an owner or operator who proposes to ``construct or
reconstruct'' a major source must obtain a determination from ``the
permitting authority'' that a new source MACT emissions limitation will
be met. The ``permitting authority'' is defined as the agency
responsible for the title V permit program. Further discussion on this
issue, and on other issues related to implementation of section 112(g),
is contained in section V of this preamble.
The requirements and procedures for obtaining the MACT
determinations are contained in Sec. 63.45 of the proposed rule (see
discussion below).

D. Section 63.43--Requirements for Modified Major Sources

Section 63.43 of the proposed rule is intended to clarify the
requirements in sections 112(a) and 112(g) of the Act related to major
source modifications.
Section 112(a) of the Act defines the term ``modification'' as:

any physical change in, or change in the method of operation of, a
major source which increases the actual emissions of any hazardous
air pollutant emitted by such source by more than a de minimis
amount or which results in the emissions of any hazardous air
pollutant not previously emitted by more than a de minimis amount.

Section 112(g)(2)(A) of the Act states that:

After the effective date of a permit program under title V in
any State, no person may modify a major source of hazardous air
pollutants in such State, unless the Administrator (or the State)
determines that the maximum achievable control technology emission
limitation under this section for existing sources will be met. Such
determination shall be made on a case-by-case basis where no
applicable emission limitations have been established by the
Administrator.

There are a number of questions raised by this statutory language
for which interpretations are needed. In particular, three questions
are addressed by Sec. 63.43 of the proposed rule:
(a) How much of a major source must be controlled to a MACT level
when a modification occurs?
(b) What is a physical change or change in the method of operation?
(c) How should actual emission increases be calculated?
The EPA requests public comment on the various statutory
interpretations contained in this section. One important overall
interpretation is that the process for a modification under section
112(g) of the Act should follow a similar two-step process as contained
in previous modifications requirements under the NSPS and PSD programs.
1. General Requirements for Modifications (Paragraph 63.43(a).
Paragraph 63.43(a) outlines the overall statutory requirements for
major source modifications. An owner or operator who wishes to modify a
major source is required by this paragraph to obtain a determination
from the permitting authority that ``the MACT emission limitation for
existing sources'' will be met. The ``permitting authority'' is defined
in the proposed rule as the agency implementing title V of the Act (see
further discussion in section V.A of this preamble).
Paragraph 63.43(a) requires that the MACT determinations be made
consistent with Sec. 63.45 of the proposed rule (see discussion below).
A determination is required for ``all emission points affected by the
modification'' according to paragraph 63.43(b). The phrase all emission
points is used intentionally rather than each emission point in order
to provide the flexibility to evaluate control technologies over the
entire modification. In some cases, a MACT determination made for a
combination of emission points may yield a more cost-effective strategy
than controlling each emission point individually.
Paragraph 63.43(a) also refers to two important exceptions. First,
certain activities, listed in paragraph 63.43(c), are excluded from
consideration as ``physical changes'' or ``changes in the method of
operation.'' Second, paragraph 63.43(e) gives the owner and operator
the option to provide an offset demonstration.
2. Paragraph 63.43(b). ``Modification'' and ``Emission Points
Affected by the Modification.'' Section 112(g)(2)(A) of the Act
requires that ``the MACT emission limitation for existing sources will
be met,'' but it does not specify which emitting equipment at the major
sources is subject to the MACT determination when a modification
occurs. For the proposed rule the term ``emission points affected by
the modification'' is used as an approach to clarifying this ambiguous
phrase.
Paragraph 63.43(b) in the proposed rule clarifies how the terms
``modification'' and ``emission points affected by the modification''
are used in the proposed rule.
Paragraph 63.43(b)(1) identifies three different situations which
could be a ``modification:''

--An emission increase from a single emission point that is greater
than de minimis,
--Construction of any emission point at a major source that emits
greater than de minimis amounts, but not enough to be considered
``construction'' in accordance with Sec. 63.42 of the proposed rule,
and
--Emission increases from multiple emission points where the sum of the
emission increases exceeds de minimis amounts for a given modification
project. (The intent of this latter provision is to ensure that
modification projects are considered as a whole in evaluating whether
the increase is greater than de minimis. This provision is not intended
to require owner or operators to keep a running tally of all emission
increases and decreases.)

Paragraph 63.43(b)(2) further clarifies how an ``emission
increase'' is to be determined for purposes of identifying a
``modification.'' An ``emission increase'' occurs if a ``physical
change in or change in the method of operation of'' the major source
leads to an actual emission increase as calculated in accordance with
paragraph (e) (see discussion below).
Paragraph 63.43(b)(3) identifies as ``emission points affected by
the modification'' those emission points that increase in emissions, as
determined by paragraph 63.43(b)(2), and that ``contribute'' to a
greater than de minimis increase in emissions. The word ``contribute''
means that emission points are included in cases where that emission
point in any of itself does not increase emissions by more than a de
minimis amount, but the modification as a whole does. The EPA
considered an option which would identify as affected only those
emission points that ``significantly'' contribute to a greater than de
minimis increase. In some cases, the total emissions resulting from a
project may exceed de minimis amounts for a given HAP, but some
emission points may have very small emission increases of that HAP. For
such cases, the inclusion of the term ``significant'' could serve to
exempt such equipment from review. The EPA is concerned, however, that
it is difficult to define ``significant'' in a way that would be
reasonable and consistently applied. The EPA believes that the
inclusion of such sources in other programs, such as BACT reviews in
the PSD program, has not led to the imposition of unreasonable
controls. The EPA requests comment on whether the term ``significant''
should be included in this paragraph, and, if so, how it should be
defined.
The EPA considered alternative approaches to MACT coverage that may
also be consistent with the Act. One approach would apply MACT plant-
wide when a change to the plant constitutes a modification. This
approach would interpret the language to mean that a modification of a
major source requires MACT for the entire major source. While this
approach would maximize emission reductions, the EPA believes that it
would greatly complicate the review process. Many plants have hundreds
of emission points that release HAP to the atmosphere. The EPA does not
believe that Congress intended for a case-by-case review of all
emission points any time one emission point was modified, or any time
an emission point was added to the plant. This would greatly increase
the review time, would increase the burden on State and local agencies
to analyze the available control technologies for existing equipment.
Also, there would be an increase in the costs associated with an
equipment modification. The EPA does not believe that these results
were intended.
Another approach considered would be to subdivide a given major
source plant site into distinct major-emitting emission units. Such an
approach would treat each subdivision as a separate ``major source'' in
and of itself and would apply MACT to all emission points within the
``major source'' being modified. Under this approach, MACT would not
apply to the entire plant, but could incorporate additional emission
points. The EPA believes that such an approach would be very complex to
administer in that it would be difficult to define the appropriate
``major source'' subdivisions. The EPA requests comments on whether
such an approach is consistent with the intent of the statute.
3. Paragraph 63.43(c) Activities Excluded from the Definition of
Physical Change or Change in the Method of Operation. (Step 1 of the 2-
Step Process to Identify Modifications). In paragraph 63.43(b), the
term ``physical change or change in the method of operation'' is used
frequently. For both the PSD program (40 CFR 52.21), the NSPS program
(40 CFR part 60), the program for National Emission Standards for
Hazardous Air Pollutants (NESHAP) prior the 1990 amendments to the Act
(40 CFR part 61), and the criteria pollutant nonattainment area new
source review (NSR) program, there are a number of activities that are
not considered to be a physical change or change in the method of
operation. For the PSD program (see 40 CFR part 52.21), the following
activities are excluded:

(a) Routine maintenance, repair and replacement;
(b) Use of an alternative fuel or raw material by reason of an
order under section 2 (a) and (b) of the Energy Supply and
Environmental Coordination Act of 1974 (or any superseding
legislation) or by reason of a natural gas curtailment plant
pursuant to the Federal Power Act;
(c) Use of an alternative fuel by reason of an order or rule
under section 125 of the Act;
(d) Use of an alternative fuel at a steam generating unit to the
extent that the fuel is generated from municipal solid waste;
(e) Use of an alternative fuel or raw material by a stationary
source which:
(1) The source was capable of accommodating before January 6,
1975, unless such change would be prohibited under any Federally
enforceable permit condition which was established after January 6,
1975 pursuant to 40 CFR 52.21 or under regulations approved pursuant
to 40 CFR subpart I or 40 CFR 51.166; or
(2) The source is approved to use under any permit issued under
40 CFR 52.21 or under regulations approved pursuant to 40 CFR
51.166;
(f) An increase in the hours of operation or in the production
rate, unless such change would be prohibited under any Federally
enforceable permit condition which was established after January 6,
1975, pursuant to 40 CFR 52.21 or under regulations approved
pursuant to 40 CFR subpart I or 40 CFR 51.166.

Under the NSPS/NESHAP program (see 40 CFR part 60.15 and 61.15),
the following activities are specifically excluded from the definition
of a modification:

(a) Maintenance, repair, and replacement which the Administrator
determines to be routine for a source category;
(b) An increase in production rate of an existing facility if
that increase can be accomplished without a capital expenditure on
that facility;
(c) An increase in the hours of operation;
(d) Use of an alternative fuel or raw material if prior to the
date of * * * [a particular NSPS or NESHAP], the existing facility
was designed to accommodate that alternative use. A facility shall
be considered to be designed to accommodate an alternative fuel or
raw material if that use could be accomplished under the facility's
construction specifications as amended prior to the change.
Conversion to coal required for energy considerations, as specified
in section 111(a)(8) of the Act, shall not be considered a
modification.
(e) The addition or use of any system or device whose primary
function is the reduction of air pollutants, except when an emission
control system is removed or is replaced by a system which the
Administrator determines to be less environmentally beneficial.

The EPA believes that Congress intended the EPA to base the
exclusions for HAP modifications under section 112(g) on these existing
criteria. According to Senator Lautenberg (136 Cong. Rec. S 17124-5
(October 26, 1990).):

With the exception of the allowance for a de minimis increase in
emissions, the definition is identical to the definition of
modifications in section 111 of existing law. Under this provision,
the EPA has issued regulations specifying certain kinds of
activities which would not constitute a modification. Clearly it is
intended that such kinds of activities would also be excluded from
triggering the modification definition under the new section 112.
(emphasis added)

The proposed rule incorporates a very similar list of exclusions in
paragraph 63.43(c). Regarding increases in production rate, the
proposed rule uses the ``capital expenditure'' language in part 60. The
definition of a ``capital expenditure'' is given in the proposed
Subpart A ``General Provisions'' to 40 CFR part 63. A standard
procedure for the determination of ``capital expenditure,'' using
methods in an Internal Revenue Service (IRS) publication, is provided
in this definition. Similar to the PSD program, increases in the hours
of operation are not considered a physical change under the proposed
rule unless they are prohibited by an existing Federally enforceable
requirement. The proposed rule uses the effective date of the title V
permit program as the date by which an alternative fuel or raw material
must have been accommodated.
The EPA requests comment on use of these exclusions in the proposed
rule. In particular, the EPA requests comment on whether a raw material
substitution involving a substitution of one raw material with another
raw material of greater hazard should be automatically excluded from
consideration as a modification. The proposed rule considers
substitution with a ``more hazardous'' raw material to constitute a
possible ``modification'' unless the use of the substitute raw material
was already allowed by a permit. The proposed rule includes a
definition of ``operations that the major source is designed to
accommodate'' which allows for materials accommodated by an existing
permit to be used without triggering section 112(g) requirements. In
addition, this definition allows for operational changes to be made in
cases where they are clearly within the permit. For example, some batch
chemical reaction trains are allowed by permits to produce a number of
different chemicals. In switching from production of one chemical to
another, it may be necessary to make a number of pre-approved equipment
changes. The EPA requests comment on whether such equipment changes, if
approved in a permit, issued prior to the effective date of the section
112(g) rule, should constitute ``operations that the major source is
designed to accommodate'' and should not trigger a ``modifications''
review pursuant to section 112(g).
The EPA also seeks comment on whether such operational changes,
contained in permits issued prior to the effective date of the section
112(g) rule, should be incorporated into a title V permit without
triggering section 112(g) review.
The EPA also seeks comment on whether such operational changes,
contained in permits issued prior to the effective date of the section
112(g) rule, should be incorporated into a title V permit without
triggering section 112(g) review.
In addition, Sec. 63.45(c)(3) of the proposed rule provides that a
source may seek approval of case-by-case MACT determination for new
alternate operating scenarios (that were not incorporated in a State
permit) when obtaining it's title V permit. As a result, the source
would then be free to activate any such alternative operating scenario
without having to undergo further section 112(g) review. The EPA
requests comment on whether the approach contained in proposed
Sec. 63.45(c)(3) is an appropriate approach to application of section
112(g) requirements to alternate operating scenarios.
4. Calculation of Actual Emissions Increase. (Step 2 of the Process
to Identify a Modification). Once a physical or operational change has
been identified for a given emission point or set of emission points,
the next step is to determine whether there has been an increase in
``actual emissions,'' and to calculate the amount of the increase. If
such an ``actual emission increase'' is more than a de minimis level
(per Sec. 63.44 of the proposed rule, see discussion below), then the
change constitutes a ``modification.''
Any method for calculating an increase must provide for a
``before'' case, often referred to as the ``baseline,'' and an
``after'' case representing the emission after the change.
When the physical change involves addition of a new emission point,
the baseline is zero emissions and it is only necessary to define
anticipated future emissions. For the proposed rule, the ``after'' case
is considered to be the potential to emit. ``Potential to emit'' is
defined in subpart A. Physical and operational limitations can be
considered if the limitations are Federally enforceable.
When the physical or operational change involves an emission
increase from already existing equipment, emissions before and after
the change must be compared.
In developing an approach to this case for the proposed rule, the
EPA reviewed two approaches to emission increase calculations which
have been used in past air pollution programs for criteria air
pollutants. The first approach is the approach used in the new source
performance standard (NSPS) program to determine whether ``any emission
increase'' has occurred due to a physical change or change in the
method of operation. The second approach is the ``actual emission
increase'' approach used in the PSD program.
The approach used for the NSPS program (and the NESHAP program in
40 CFR part 61, before the 1990 Act amendments) is more straightforward
than that used for the PSD program. For these regulations, a
``modification'' occurs if the physical change leads to ``any
increase'' in emissions. In making this determination, they must follow
the approach outlined in 40 CFR 60.14(b). This approach considers ``any
increase'' to occur if the source, operating at its production
capacity, will release more emissions (on a pound per hour basis) to
the atmosphere. If the emission factor (that is, the amount of
emissions per unit of production) increases, or the equipment is
otherwise inherently more emitting (for example, due to a capital
expenditure increasing the size or capacity of equipment), an increase
is considered to have occurred and the equipment is subject to the
NSPS. In some cases, source tests before and after the change are used
to demonstrate whether an emission increase has occurred.
This approach is fairly straightforward to implement and relies on
immediately available data rather than past records. In addition,
Senator Lautenberg's belief that the definition of actual emissions is
``identical to that in section 111'' may suggest that Congressional
intent was for the NSPS approach to identifying modifications.
The EPA believes that calculations based upon the NSPS method could
serve as a reasonable surrogate for an ``actual emissions''
calculation. In an ideal sense, a true ``actual emissions'' calculation
would require perfect knowledge of the level of emissions that actually
occurred in the past, and perfect knowledge of the emissions that would
actually occur in the future if the change were to take place. In
practice, past emissions are difficult to document (and for HAP,
perhaps impossible if appropriate data have not been collected), and
future emissions cannot be predicted with certainty. In this context,
the EPA believes that a policy decision can be made to consider the
NSPS test as a possible method for actual emissions calculations.
Although this approach does not attempt to gather ``actual'' data on
past emission rates, the EPA believes that it can be a reasonable
surrogate for describing the ``actual'' difference between future and
past emissions.
The term ``actual emissions increase'' has been used in the PSD
program. For PSD, the term ``baseline'' is used to describe emissions
before a physical or operational change. The ``baseline'' for actual
emissions for an emission unit as of a particular date is defined as
the average rate, in tons per year, at which the unit actually emitted
the pollutant during a 2-year period which precedes the particular date
and is representative of normal source operation. A different time
period is allowed if the permitting authority deems that it is more
representative of normal source operation. Under this approach,
emissions after the operational change are the potential to emit, in
tons per year. This approach requires that records be supplied of the
actual rates of operation during the baseline period.
The EPA is concerned that the PSD approach may be administratively
complex. For the PSD program, this approach to applicability has proven
very complex for criteria pollutants such as volatile organic compounds
(VOC). Protracted discussions are often required to establish the
appropriate time period for the actual ``before'' case emissions and to
approve documentation for the actual rates of production and operation.
This approach would be more complex for HAP for which VOC totals would
need to be speciated into individual HAP subtotals. It may be very
difficult or impossible in many cases to provide for adequate
documentation of these HAP subtotals.
The EPA also notes that there is an ongoing project aimed at
reforming the PSD program. A number of options are being considered. If
the PSD program is revised to accommodate one of these approaches, that
approach may be applicable to section 112(g) implementation. The PSD
reform project is proceeding in parallel with the effort to develop
this proposed rule. The EPA requests comment on whether any suggested
applicability approach in the proposed rulemaking for a restructured
PSD program should be selected as the approach to implementation of
section 112(g) of the Act. The EPA requests comment on whether any of
these approaches should be included in the final rule.
The proposed rule contains, as paragraph 63.43(d), an approach to
``actual emissions'' that closely resembles the NSPS approach. The EPA
believes that this approach will yield a more consistently implemented
program that ensures a technology review when a physical change causes
increased emissions during the operation of the equipment being
changed. The approach differs slightly from the NSPS approach for
pollutants for which the de minimis value listed in Sec. 63.45 of the
proposed rule is expressed as a tons per year value. For such
pollutants, paragraph 63.43(d) includes a two-step process. The first
step is to determine the pounds per hour increase, as would be done for
the NSPS test. The second step is to convert the pounds per hour value
to a tons per year value based upon the future hours of operation of
the equipment. For this conversion, it is assumed that the equipment
will operate 8760 hours per year unless constrained by a Federally
enforceable limitation.
5. Paragraph 63.43(e)--Offsets. If a physical change leads to
actual emission increases by more than a de minimis amount, that
increase is not a ``modification'', if, according to section
112(g)(1)(A) of the Act:

such increase in the quantity of actual emissions of any hazardous
air pollutant from such source will be offset by an equal or greater
decrease in the quantity of emissions of another hazardous air
pollutant (or pollutants) from such source which is deemed more
hazardous

Paragraph 63.43(e) of the proposed rule incorporates this offset
provision. This paragraph allows the owner or operator to submit a
showing (consistent with Sec. 63.46 and Sec. 63.47, see discussion
below) to demonstrate the acceptability of the offset. The process for
determining whether offsets are ``deemed more hazardous'' is contained
in Sec. 63.48 of the proposed rule (see discussion in section IV of
this preamble).
Paragraph 63.43(e) identifies some general restrictions on the
offsets that are used. (Additional restrictions are contained in
Secs. 63.46 and 63.47 of the proposed rule.) First, a decrease in
actual emissions cannot credit any amount of actual emissions that
exceeds allowable emissions under a Federally enforceable requirement.
Second, the decrease must be Federally enforceable before operation of
the physical change being offset. There are a number of mechanisms for
Federal enforceability including: (1) A Notice of Offset approval under
Sec. 63.46 or Sec. 63.47, a requirement of a State program approved
under section 112(l) of the Act, (2) a permit condition contained in a
permit issued pursuant to 40 CFR part 70 or 40 CFR part 71, (3) a
Federally enforceable requirement of a PSD or NSR permit, (4) a
requirement of a Federally approved State Implementation Plan, or (5) a
Federally enforceable court order. Third, the owner or operator may not
credit any emission decreases used under the ``early reductions''
program to obtain the compliance extensions granted by section
112(i)(5) of the Act. Any amount exceeding the 90 (or 95) percent
reduction required by the early reduction program is, however,
creditable. The EPA considered adding a further restriction on: (1)
Emission reductions of volatile organic compounds (VOC) that were
necessary to achieve progress towards attainment of the ozone standard,
and (2) reductions of VOC and other pollutants previously credited
under the PSD or NSR programs. The proposed rule would in some cases
allow such emission reductions to be creditable as offsets. The EPA
requests comment on this issue.
6. Paragraph 63.43(f). Increases and Decreases of the Same
Pollutant. There is some ambiguity in the Act regarding cases where a
modification leading to an increase in a given pollutant will be
accompanied by a decrease in the same pollutant elsewhere in the plant.
Paragraph 63.43(f) is intended to clarify EPA's position on this issue.
For such cases, the proposed rule requires that the emission decreases
be documented using the procedures of Sec. 63.46 or 63.47 of the
proposed rule. If the net emission increase is less than de minimis,
then a modification has not occurred.
The EPA considered an alternative that would require that emission
decreases in such cases to completely offset the increase such that an
overall decrease would occur. The EPA believes that the requirements of
proposed Sec. 63.43(f) reflect the most natural reading of the statute.
The EPA requests comment on this issue.

E. Section 63.44. De Minimis Levels

As mentioned previously, an emission increase must exceed de
minimis levels in order to constitute a ``modification'' under section
112(g) of the Act. The proposed rule includes, as Sec. 63.44, a table
displaying de minimis emission rates for each of the HAP.
1. De Minimis. General Principles. The statute gives little
specific direction on how to establish de minimis quantities. In
establishing de minimis values, the EPA believes there are general
principles that have been established. A good discussion of these
principles is included in the April 20, 1979 Alabama Power decision.
(Alabama Power v. Costle, 656 F. 2nd 323 (1979). Generally, de minimis
authority gives regulatory agencies such as the EPA the ability to
provide exemptions when ``the burdens of regulation yield a gain of
trivial or no value.'' Further, ``the de minimis exemption must be
designed with the specific administrative burdens and specific
regulatory context in mind.'' The overall intent of such exemptions is
to prevent relatively trivial items from needlessly draining
administrative resources.
In keeping with these general principles, the EPA believes the main
test in establishing de minimis values is to define the emission level
for HAP for which regulation under section 112(g) would ``yield a gain
of trivial or no value.''
It appears that some limited consideration can be given to
administrative resource implications resulting from a selected de
minimis emission level. For example, if a selected de minimis cutoff
yielded very small benefits, but would increase the number of
applications, reviews, and enforcement resources by an unreasonable
degree, and a slightly higher cutoff would not create as unreasonable a
burden, the EPA believes that this could be taken into consideration.
The EPA recognizes, however, that its authority to provide de
minimis exemptions is strictly limited. Again citing Alabama Power,

That implied authority * * * [for de minimis] * * * is not
available for a situation where the regulatory function does provide
benefits, in the sense of furthering the regulatory objectives, but
the agency concludes that the acknowledged benefits are exceeded by
the costs.

The EPA believes that the interpretation of de minimis detailed herein
correctly balances the requirement to meet regulatory objectives, while
alleviating the burdens of regulation which would yield a trivial value
in this specific regulatory context.
2. De Minimis Concepts in Section 112 of the Act. The EPA believes
that Congress has provided guidance in what is considered to be a
``trivial'' level of a hazardous air pollutant. In section 112(c)(9) of
the Act, the EPA may delete a source category from possible regulation
under section 112 if no source in the source category would result in:
(1) Emission of a carcinogen that could cause a lifetime risk of cancer
of one in one million to the individual in the populations who is most
exposed, and (2) emission of a non-carcinogen that would exceed air
quality levels that would exceed a level adequate to protect public
health with an ``ample margin of safety'' and would not result in
adverse environmental impacts. The concepts behind section 112(f) of
the Act appear similar for ``residual risk'' emission standards to
address risks remaining after application of technology-based
standards. The EPA believes that it is reasonable to use the one-per-
million cancer risk and ample margin of safety criteria for
establishing de minimis levels under section 112(g). The EPA has
traditionally believed that exposures that cause a risk above one in
one million are considered important.
3. Basis for de minimis Values Listed in Sec. 63.44 of the Proposed
Rule. The table in Sec. 63.44 of the proposed rule lists the de minimis
values for the 189 HAP listed in section 112(b) of the Act. Readers
interested in documentation for each de minimis value can refer to a
technical support document, Background Document. Documentation of De
Minimis Emission Rates for Proposed 40 CFR part 63, subpart B. (EPA-
453/R-93-035) The following discussion is intended to provide an
overview of the methods used to develop these values.
The section 112(b) list includes 172 pollutants that are listed as
individual chemicals, and 17 pollutants that are listed as chemical
groups. Where appropriate, the 17 chemical groups were subdivided into
sub-groupings or individual compounds within the group. The table
indicates, for each chemical or chemical group, a de minimis emission
rate and the basis for each de minimis rate.
The EPA considered expressing the de minimis values as ambient
concentrations, rather than emission rates. This would require either
the applicant or the permitting authority to perform a dispersion
calculation for each proposed release to determine whether a de minimis
concentration would be exceeded. The EPA believes that this would
greatly increase the complexity and thus the resources need to
implement the program. Although the EPA believes that States wishing to
include this dispersion review as part of an overall section 112(g)
program should be given the flexibility to do so (see discussion
below), the EPA believes that most States would prefer de minimis
values to be expressed as emission rates, rather than concentrations.
It is important to note that the de minimis values listed in
Sec. 63.44 were developed specifically for the section 112(g) program,
and that the values were developed in part based upon the interim
nature of the time period for which case-by-case MACT determinations
are required. Such case-by-case MACT determinations are required under
section 112(g) prior to emission standards promulgated pursuant to
section 112(d). The EPA does not consider these values to be
necessarily indicative of the emission rate which may be considered de
minimis for other programs or decisions, for which the decisions would
be more long-term in nature. In particular, these values should not be
considered as precedent-setting for other section 112 issues such as
the residual risk standard-setting process under section 112(f) or the
risk criterion established for delisting categories pursuant to section
112(c) of the Act.
(a) Values for ``nonthreshold'' HAP which have evidence of
carcinogenicity. For ``nonthreshold'' HAP which have evidence of
carcinogenicity (see discussion in section IV.C.3 of this preamble for
the rationale for identifying such pollutants), the following
descriptors are used in the ``Basis'' column in the table:

--UR
--UR-CAP
--DEF=1

The ``UR'' descriptor indicates that the de minimis value was
calculated based upon a risk-specific dose for the pollutant. The risk-
specific dose is the exposure level associated with a given lifetime
cancer risk, in this case, a risk management decision of 10-6
lifetime risk. The risk-specific dose is derived from the unit risk, an
upper-bound estimate of the excess cancer risk over background
associated with a continuous lifetime exposure to the pollutant.
Readers should be aware that there are many uncertainties in the
derivation of unit risk.
De minimis emission rates were calculated in four steps. First,
based upon the unit risk value, the EPA calculated the concentration in
the ambient air that would yield a lifetime cancer risk of one-per-
million. Using benzene as the example, lifetime continuous exposure to
1 microgram per cubic meter of benzene is associated with a risk as
high as 8.3 in one million, and a lifetime risk of one-per million is
equivalent to 0.12 micrograms per cubic meter (one divided by 8.3).
The second step in the calculation was to adjust the risk-specific
dose to account for the expected maximum exposure duration for a major
source subject to a case-by-case MACT determination under section
112(g) of the Act. The EPA selected a 7-year exposure period as the
duration of exposure, rather than the more frequently used 70-year
lifetime exposure. The 7-year period was selected because emission
increases avoiding modification requirements under a section 112(g) de
minimis exemption would be still subject to maximum achievable control
technology requirements within roughly 7 years under sections 112(j) or
112(d). The EPA is required to promulgate MACT standards in accordance
with a schedule in section 112(e) of the Act by November 15, 2000. Such
standards would require compliance for existing sources by no later
than the year 2003. Even if the EPA does not meet every deadline in its
schedule for promulgation of section 112(d) emission standards, States
are required to develop equivalent emission standards within 18 months
after the EPA fails to meet a deadline. As a result, the longest time
for which standards would not be developed is 18 months after November
15, 2000, i.e., May 2002. Because the section 112(g) program will start
up in most States in early 1995, (as soon as operating permit programs
commence) about 7 years (2002 minus 1995), is a reasonable,
conservative estimate of the time that would elapse before imposition
of technology requirements for emission increases avoiding
``modification'' requirements.
Adjusting for this 7-year exposure period, using benzene as the
example, a lifetime risk of one-per-million (0.12 micrograms per cubic
meter over 70 years) is equivalent to the risk associated with exposure
to 1.2 micrograms per cubic meter over 7 years. The EPA requests
comment on this adjustment. Other exposure adjustments were considered,
including: (1) No exposure adjustment, and (2) adjustment by a factor
less than 70/7. The EPA requests comment on whether these or other
alternatives better identify emission increases which can be considered
de minimis for this program.
As a third step, in order to express the de minimis values as
emission rates, rather than ambient concentration, the EPA developed a
``model plant.'' This model plant represents a standard set of
conditions for the nature of the release and the exposure. The
following model plant was used:

--stack height: 10 meters
--stack diameter: 1 meter
--distance to nearest exposed individual: 200 meters
--stack temperature: ambient
--exit velocity: 0.1 m/sec
--worst-case down-wash is assumed

The EPA proposes these conditions as a reasonable set of conditions
for purposes of setting de minimis values under section 112(g) of the
Act.
For this model plant, the EPA performed calculations using 314 sets
of meteorological data. (A complete description of these calculations
is contained in the docket for the proposed rule.) The results of these
calculations indicated, on average, that for each microgram per cubic
meter of a pollutant added to the atmosphere at the assumed fence-line
of 200 meters, there would be 2 tons of emissions. This ratio, 2 tons/
yr per 1.0 g/m\3\, annual average, was used as the
relationship between emission rate and ambient concentration.
As a fourth step, the EPA used the risk-specific dose at a one-per-
million risk, identified in Step 2 above, in tandem with the
relationship between emission rate and concentration developed in Step
3, to calculate a de minimis emission rate. For example, for benzene,
Step 2 indicated an exposure associated with one-per-million risk of
1.2 g/m\3\ over the 7-year exposure period. In order to reach
this exposure level, the model plant would need to emit 1.2 x 2, or
2.4 tons/year of benzene. For purposes of the proposed rule (i.e., the
table in Sec. 63.44), each of the values is rounded to one significant
figure; for benzene, 2.4 tons/year is rounded to 2 tons/year. The EPA
believes that one significant figure is appropriate, given the
uncertainties in the unit risk values and exposure assumptions on which
the values are based.
The EPA requests comment on the methodology for de minimis values,
including the appropriateness of the assumptions used to develop the
model plant. It is recognized that there are other model plant
assumptions that would result in less dispersion, and that the selected
model plant does not represent an absolute worst-case. For example,
less dispersion could be experienced for: (1) Releases for which
weather conditions represent the worst-case of the 314 stations, rather
than the median of the 314 stations, (2) releases at ground level,
rather than the assumed height of 10 meters, (3) releases immediately
adjacent to residences, which could occur at distances less than the
assumed 200 meters. The results of the dispersion calculations (which
are listed in Appendix A of the technical background document)
indicated that the highest concentration experienced at the 314
stations was 15.6 g/m3, while the lowest concentration
was 2.2 g/m3. The median value, 5.0 /m3,
therefore, could underpredict by a factor of approximately 3, or could
overpredict by a factor of approximately 2. The EPA also explored the
sensitivity of the results to stack height and distance to nearest
receptor. The following table illustrates this sensitivity analysis.
(Stack release parameters not shown in the table are identical to those
listed above.) The results indicate that, for a given 10 tons/year
release, the resulting concentration could be significantly higher
than, or significantly lower, than that resulting from the selected
model plant.

------------------------------------------------------------------------
Distance to Median
nearest concentration
Stack height (meters) residence (g/
(meters) m3)
------------------------------------------------------------------------
1........................................... 200 16
3........................................... 100 34
3........................................... 500 3.4
10.......................................... 100 6.7
10.......................................... 200 *5.0
10.......................................... 500 2.8
15.......................................... 200 2.5
50.......................................... 200 0.15
100......................................... 200 0.026
------------------------------------------------------------------------
*These conditions are the model plant used for the proposed rule.

The EPA is considering an approach for which two tables would be
required to set de minimis values: (1) The table in Sec. 63.44, and (2)
a second table which would include an adjustment factor for site-
specific conditions. For example, the adjustment factor would lead to
lower de minimis values for sources with a 1 meter stack height and 50
meter distance to the receptor, but higher de minimis values for a
source with a 25 meter stack and 1000 meter distance to the receptor.
This approach would not require the applicant or the permitting
authority to perform site-specific dispersion calculations. Rather, the
table would specify adjustment factors that would apply to given ranges
of conditions. (For example, there could be an adjustment factor
applicable to stack heights from 1 to 3 meters, in combination with
distances 100 meters or less to the receptor). This approach would have
the advantages of taking site-specific variables into account (the EPA
also requests comment on whether other variables, such as flow rate and
temperature could be included). The EPA has two concerns with this
approach. First, the approach would add administrative complexity to
the process, in that documentation and enforcement of stack height,
distance, etc., would be required. Second, the EPA requests comment on
the policy advantages and disadvantages of an approach that would yield
different levels of control for similar equipment.
The ``UR-CAP'' description in the table indicates that the unit
risk approach yielded an emissions rate greater than 10 tons per year.
Emissions of 10 tons per year or more of such pollutants from the model
facility would yield risk levels below the de minimis bench mark. The
proposed rule ``caps'' de minimis emission rates at 10 tons per year
because the EPA believes that it would be difficult to assume that
Congress intended, simultaneously, for an emission rate to be
considered both ``major'' for identifying major sources and smaller
than ``trivial'' for emission increases. However, the EPA is concerned
that capping de minimis rates at 10 tons per year could bring sources
into the program with modifications that pose a trivial threat to human
health. The EPA seeks comments on this approach, on the feasibility of
promulgating de minimis emission rates above 10 tons per year, and on
the desirability of capping de minimis rates at a level less than 10
tons per year.
The ``DEF=1'' descriptor indicates that the pollutant was assigned
a default value of 1 ton/yr. This default value was assigned for
pollutants identified as possible, probable or known human carcinogens,
but for which no unit risk value was available. The choice of 1 ton/yr
is a policy decision based upon a review of the pollutants with potency
values. The EPA does not believe that these pollutants should be
assigned the 10 tons/year cap; if potency values were available, and
were consistent with the other such pollutants, the value would likely
be less than 10 tons per year. The EPA requests comment on this default
value.
(b) Values for noncancer effects. For the remaining pollutants on
the section 112(b) list that have not been evaluated for
carcinogenicity or which have been assigned a weight of evidence
classification of D or E, the EPA believes that de minimis values
should be established that would be consistent with concentration
benchmark that represent an ``ample margin of safety.''
The descriptor ``RfC'' in the table indicates that the de minimis
emission rate was calculated based upon the EPA's inhalation reference
concentrations (RfC's). The RfC is defined as an estimate (with an
uncertainty spanning perhaps an order of magnitude) of a daily exposure
to the human population (including sensitive subgroups) that is likely
to be without appreciable risk of deleterious effects during a long-
term period of exposure. For the proposed rule, the EPA assumes that
the RfCs themselves represent an ample margin of safety level for
noncancer effects from long-term exposures. The methodology for
developing RfCs is discussed in Interim Methods for Development of
Inhalation Reference Concentrations, EPA/600/8-90-066A. For the
relatively few chemicals for which RfCs have been established, the EPA
used a similar method to that described above for carcinogens, with the
exception that there was no adjustment for the exposure period. No
adjustment is made here because the RfC is designed to protect against
chronic exposures, which is interpreted as less than lifetime (i.e., 7
years in this case).
There are a number of pollutants that have not been associated with
cancer, and for which RfCs have not been developed. For these
pollutants, default de minimis emission rates are derived from
composite score values. The descriptor ``CS'' indicates when this
approach was used. The composite score is a chronic toxicity ranking
system developed for establishing reportable quantities (RQs) under
section 102 of the Comprehensive Environmental Response, Compensation,
and Liability Act (CERCLA). The basis for these composite scores is
described in greater detail in section III of this preamble. For the
CERCLA section 102 program, RQs are established for chronic noncancer
effects as follows:

------------------------------------------------------------------------
CS value RQ (pounds)
------------------------------------------------------------------------
1-5........................................................ 5000
6-20....................................................... 1000
21-40...................................................... 100
41-80...................................................... 10
81-100..................................................... 1
------------------------------------------------------------------------

The EPA believes that for section 112(g) purposes, pollutants with a
relatively low CS value, (less than or equal to 20) can be assigned a
de minimis emission rate at the 10 tons per year maximum. For
pollutants with greater CS values, the EPA believes that de minimis
emission rates less than the 10 tons per year ``cap'' should be
established. For the proposed rule, the EPA has assigned de minimis
emission rates that mirror the magnitude of the difference in the RQ
values. That is, pollutants with CS scores between 21 and 40 are
assigned de minimis emission rates which are a factor of 10 less than
those for which the CS score is between 6 and 20. Pollutants with CS
scores greater than 40 are assigned de minimis emission rates that are
a factor of 10 less than those for which the CS score is between 21 and
40. (Note that none of the threshold HAP for section 112(g) have a CS
value greater than 80.) The EPA believes that the assignment of the de
minimis emission rates in this manner for these ranges of CS values
represents a reasonable default approach in absence of a more rigorous
method. The EPA requests comment on this issue and on other approaches
that could be used. The default assumptions are as follows:

------------------------------------------------------------------------
Range of composite score De minimis emission rate
------------------------------------------------------------------------
CS = 1 to 20....................... 10 tons/yr.
CS = 21 to 40...................... 1 ton/yr.
CS = 41 and greater................ 0.1 ton/yr.
------------------------------------------------------------------------

The descriptor ``DEF=5'' indicates the method used for pollutants
with neither composite score, reference concentration, weight of
evidence indicating carcinogenicity, or identified as acutely toxic
(see section C below). For such pollutants, a default value of 5 tons/
year was used. This value is greater than the 1 ton/year value for the
pollutants which may be carcinogens. The EPA believes that this is
reasonable considering the values for the other pollutants. The EPA
requests comment on the selection of this 5 tons/year default value.
(c) de minimis values for short-term exposures. As discussed below
in section IV.C. of this preamble, several pollutants on the HAP list
produce health effects from short-term exposures. Examples of these
pollutants include arsine, phosgene, and methyl isocyanate. These
pollutants are addressed as follows.
First, a policy decision was made to assign a default annual de
minimis emission rate of 0.1 tons per year. In this way, these
pollutants are assigned a de minimis emission rate that is equal to the
default value assigned for the pollutants of highest concern for
chronic noncancer health effects.
Second, for a number of these pollutants, the EPA considered
establishing and listing in the table short-term de minimis emission
rates, expressed in pounds/hour. The EPA believes that such short-term
values would be a better indicator of de minimis for pollutants which
the primary concern is health effects resulting from short-term
exposures. At this time, however, the EPA is not proposing these
pounds/hour de minimis levels for three reasons. First, the EPA has not
established consistent procedures for establishing RfCs for short-term
exposures. Ideally, de minimis values for acutely toxic pollutants
should be based on such short-term RfCs. However, there is currently
only one short-term RfC which has been developed by the EPA (a value of
0.3 ppm for developmental toxicity by exposures of 30 minutes or less
to ethylene oxide). Second, the EPA feels that additional information
is needed on whether the inclusion of such short-term values would add
significantly to the overall scope of the section 112(g) program.
Finally, the EPA has some concern with the potential difficulty of
collecting or reporting data on short-term emission rates from affected
facilities.
The EPA is considering an interim method to establish short-term de
minimis values based upon Levels of Concern (LOC). The LOC have been
established for chemicals on the Superfund Amendments and
Reauthorization Act (SARA) title III section 302 list of ``extremely
hazardous substances.'' The LOC indicate levels of airborne
concentrations of chemicals for which no serious irreversible health
effects occur following a short-term exposure (30 minutes). The LOC are
by definition one-tenth of ``Immediately Dangerous to Life and Health''
levels (IDLH) produced by National Institute for Occupational Safety
and Health (NIOSH).
The EPA believes that LOC have some possible merit for use in
setting short-term de minimis values. The LOC are the only values, of
which the EPA is aware, which have an extensive data-base and are
designed to protect from serious effects of short-term or acute
exposures. The LOCs are intended to protect the general population,
including sensitive individuals.
There are, however, several disadvantages for using LOC to set de
minimis levels; that is, in establishing a level below which public
health is protected with an ample margin of safety for non-carcinogenic
effects. Most of the LOC values are based upon animal lethality data.
Benchmarks derived from such data may not protect against all health
effects in humans. In addition, the safety factor of 10 which is
applied to IDLH to protect sensitive individuals of the population and
for protection against serious health effects may not be adequate.
There are questions concerning the scientific peer review of the
rationale for each LOC and supporting data. Finally, it is not known
what the maximum duration of exposure at the LOC would be for
protection against adverse effects.
Despite these serious disadvantages, LOC may be appropriate on an
interim basis for setting short-term de minimis levels for acutely
toxic pollutants in the absence of a better methodology and data. The
EPA requests comment on the methodology and short-term de minimis
emission rates described below and seeks suggestions concerning other
methods and supporting data to use in determining such concentrations.
In addition, the EPA requests comment on the number of major sources of
HAP whose modifications would cause such de minimis emission rates to
be exceeded.
The methodology the EPA is considering is as follows. First, for
each pollutant of concern for acute exposures, a short-term de minimis
concentration for each pollutant would be derived by dividing its LOC
by a safety factor of 1000. This factor of 1000 is a crude estimate of
the factor needed to convert the LOC, which is based upon mortality or
very severe effects, into a level that would ensure that no adverse
human health effects would be observed. Second, a ``reasonable worst
case'' model plant is developed to describe the relationship between
the de minimis concentration and a de minimis emission rate. For the
examples described below, the same model plant was used as that
described above for setting de minimis levels for long-term exposures:
Stack height is 10 meters;
Exit gas velocity is negligible;
Stack diameter is 1 meter;
Exit gas temperature is equal to the ambient temperature;
Worst-case down-wash is assumed;
The nearest exposed individual is at a distance of 200 meters.
For this model plant, the ``Tier 1 screening approach'' described
in A Tiered Modeling Approach for Assessing the Risks Due to Hazardous
Air Pollutants, EPA-450/4-92-01, is used to describe the relationship
between the de minimis concentration and a pound/hour de minimis
emission rate. Use of this approach results in a ratio of maximum off-
site short-term concentration to emission rate of 314 (micrograms/
m\3\)/(lb/hr) or 0.314 (milligrams/m\3\)/(lb/hr). This factor indicates
that the prototypical facility which emits 1 pound of pollutant in an
hour will have a maximum short-term concentration off-site which will
equal to 0.314 milligrams/m\3\.
The short-term concentration predictions made using the Tier 1
method are interpreted as 1-hour average concentrations, i.e., they
account for the dilution due to the general meander of a dispersed
plume over the course of a 1-hour period. Since the de minimis
concentration values relate to ``peak'' or very short-term exposure
levels (maybe on the order of a few seconds), the EPA believes it would
be desirable to derive peak concentration values from the 1-hour
predictions. Data taken by the EPA indicate that the concentration
levels during any few second time interval within the 1-hour period
will not vary more than a factor of two. Therefore, for purposes of the
examples described below, a ``peak-to-mean'' ratio of two was used,
that is, the peak concentration is assumed to be twice that of the 1-
hour average.
Using the value, [(0.314 milligrams/m\3\)/(lb/hr)], coupled with
the peak-to-mean ratio of two, the de minimis emission rate, Edm,
from the de minimis concentration level, Cdm, for each acutely
toxic pollutant would be calculated as follows:

Edm=[Cdm/(2)]/0.314

The following lists a number of examples illustrating the LOCs and
the short-term de minimis emission rates that would result based upon
this method. (Note: the value for ethylene oxide is derived from a
short-term RfC of 0.3 parts per million, rather than an adjusted LOC).
The EPA requests comment on whether the final rule should incorporate
these values, and on other possible alternative methods that could be
used to derive short-term de minimis emission rates.
(d) de minimis values for pollutants having multiple health
concerns. Some HAP may produce a spectrum of health effects including
both cancer and effects other than cancer, including acute health
effects. The de minimis value for these pollutants was the lowest value
calculated for the cancer and chronic noncancer health effects using
the procedures described in paragraphs (a) and (b). A short-term
pounds/hour de minimis emission rate, if developed, would, for some
pollutants, appear in addition to the annual emission rate.
4. Proposed de minimis considerations for pollutants of concern
under EPA's section 112(m) Great Waters program. The descriptor ``GWP''
in the table of de minimis values indicates that a value of 0.01 tons
per year was a ``Great Waters Pollutant'' for which a special de
minimis value was assigned as a policy decision. The EPA requests
comment on this selected value and on several alternatives that were
considered.

------------------------------------------------------------------------
Short-term
de minimis
CAS # Pollutant LOC (mg/m\3\) value (lbs/
hr)
------------------------------------------------------------------------
107028........... Acrolein............. 1.15............ 0.00183
7783702.......... Antimony 2.70............ 0.00430
pentafluoride.
1303282.......... Arsenic pentoxide.... 8.00............ 0.0127
1377533.......... Arsenic oxide........ 1.40............ 0.00223
7784421.......... Arsine............... 1.90............ 0.00302
94077............ Benzotrichloride..... 0.700........... 0.00111
100447........... Benzyl chloride...... 5.18............ 0.00824
57578............ beta-Propiolactone... 1.50............ 0.00239
1366190.......... Cadmium oxide........ 4.00............ 0.00637
7782505.......... Chlorine............. 7.25............ 0.0115
79118............ Chloroacetic acid.... 1.80............ 0.00286
107302........... Chloromethyl methyl 1.82............ 0.00290
ether.
10025737......... Chromic Chloride..... 0.0500.......... 0.0000795
10210681......... Cobalt carbonyl...... 0.270........... 0.000430
77781............ Dimethyl sulfate..... 5.00............ 0.00800
534521........... 4,6-Dinitro-0-cresol 0.500........... 0.000800
and salts.
151564........... Ethyleneimine........ 4.00............ 0.00636
75218............ Ethylene oxide\1\.... 0.3ppm.......... ............
62207765......... Fluomine............. 3.00............ 0.00477
77474............ Hexachlorocyclopentad 0.0195.......... 0.0000310
iene.
7664393.......... Hydrogen fluoride.... 1.64............ 0.00261
7783075.......... Hydrogen selenide.... 0.660........... 0.00105
12108133......... Methylcyclopentadieny 0.600........... 0.000955
lmanganese.
60344............ Methyl hydrazine..... 0.940........... 0.00150
624839........... Methyl isocyanate.... 4.70............ 0.00748
13463393......... Nickel carbonyl...... 0.350........... 0.000557
56382............ Parathion............ 2.00............ 0.00318
75445............ Phosgene............. 0.800........... 0.00127
7723140.......... Phosphorous.......... 3.00............ 0.00477
151508........... Potassium cyanide.... 5.00............ 0.00796
143339........... Sodium cyanide....... 5.00............ 0.00796
13410010......... Sodium selenate...... 1.60............ 0.00255
10102188......... Sodium selenite...... 2.30............ 0.00366
78002............ Tetraethyllead....... 4.00............ 0.00637
75741............ Tetramethyllead...... 4.00............ 0.00637
7550450.......... Titanium 1.00............ 0.00159
tetrachloride.
584849........... Toluene diisocyanate. 7.00............ 0.0111
------------------------------------------------------------------------
\1\This is not a LOC but a short-term RFC for a 30-minute exposure and
is in ppm rather than mg/m\3\. The value in mg/m\3\ is 0.54.

The EPA believes that de minimis values under section 112(g) can
take into account a hazardous air pollutant's potential for causing
non-air quality health and environmental impacts. For example,
deposited pollutants which are persistent and bioaccumulate are of
special concern to the living resources in the ecosystem into which
they are deposited. The EPA is required by section 112(m) of the Act to
investigate the potential for adverse impacts of atmospheric deposition
to the Great Lakes, Chesapeake Bay, Lake Champlain and Coastal Waters
(collectively referred to as the ``Great Waters.'' Interim results of
these investigations indicate the following 13 HAP appear to be of the
greatest concern: lead and lead compounds, polycyclic organic matter
(POM), hexachlorobenzene, mercury, polychlorinated Biphenyls (PCBs),
chlorinated dioxins, chlorinated furans, toxaphene, chlordane, DDE,
D(lchloro)D(lphebyl)T(Richloroethane) (DDT), lindane, a-hexachlorcyclo-

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A94-7241. Public record. Not legal advice.