National Emission Standards for Hazardous Air Pollutants: General Provisions, 69-92 [E6-22283]

Agencies

• ENVIRONMENTAL PROTECTION AGENCY

[Federal Register Volume 72, Number 1 (Wednesday, January 3, 2007)]
[Proposed Rules]
[Pages 69-92]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E6-22283]


=======================================================================
-----------------------------------------------------------------------

ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2004-0094; FRL-8263-3]
RIN 2060-AM75


National Emission Standards for Hazardous Air Pollutants: General 
Provisions

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The EPA is proposing amendments to the General Provisions to 
the national emission standards for hazardous air pollutants (NESHAP). 
The proposed amendments would replace the policy described in the May 
16, 1995 EPA memorandum entitled, ``Potential to Emit for MACT 
Standards--Guidance on Timing Issues,'' from John Seitz, Director, 
Office of Air Quality Planning and Standards (OAQPS), to EPA Regional 
Air Division Directors. The proposed amendments provide that a major 
source may become an area source at any time by limiting its potential 
to emit hazardous air pollutants (HAP) to below the major source 
thresholds of 10 tons per year (tpy) of any single HAP or 25 tpy of any 
combination of HAP. Thus, under the proposed amendments, a major source 
can become an area source at any time, including after the first 
substantive compliance date of an applicable MACT standard so long as 
it limits its potential to emit to below the major source thresholds. 
We are also proposing to revise tables in numerous MACT standards that 
specify the applicability of General Provisions requirements to account 
for the regulatory provisions we are proposing to add through this 
notice.

DATES: Comments. Written comments must be received on or before March 
5, 2007.
    Public Hearing. If anyone contacts EPA requesting to speak at a 
public hearing by January 23, 2007, a public hearing will be held on 
February 2, 2007. Persons interested in attending the public hearing 
should contact Ms. Lala Alston at (919) 541-5545 to verify that a 
hearing will be held.

ADDRESSES: Submit your comments, identified by Docket ID No. EPA-HQ-
OAR-2004-0094, by one of the following methods:
     www.regulations.gov. Follow the on-line instructions for 
submitting comments.
     Email: a-and-r-docket@epa.gov, Attention Docket ID No. 
EPA-HQ-OAR-2004-0094.
     Facsimile: (202) 566-1741, Attention Docket ID No. EPA-HQ-
OAR-2004-0094.
     Mail: U.S. Environmental Protection Agency, EPA West (Air 
Docket), 1200 Pennsylvania Ave., NW., Room: 3334, Mail Code: 6102T, 
Washington, DC 20460, Attention E-Docket ID No. EPA-HQ-OAR-2004-0094.
     Hand Delivery: Air and Radiation Docket and Information 
Center, U.S. Environmental Protection Agency, 1301 Constitution Ave., 
NW., Room: 3334, Mail Code: 6102T, Washington, DC, 20460, Attention 
Docket ID No. EPA-HQ-OAR-2004-0094. Such deliveries are only accepted 
during the Docket's normal hours of operation, and special arrangements 
should be made for deliveries of boxed information.
    Instructions: Direct your comments to Docket ID No. EPA-HQ-OAR-
2004-0094. The EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at www.regulations.gov, including any personal information 
provided, unless the comment includes information claimed to be 
Confidential Business Information (CBI) or other information whose 
disclosure is restricted by statute. Do not submit information that you 
consider to be CBI or otherwise protected through www.regulations.gov, 
or e-mail. Send or deliver information identified as CBI only to the 
following address: Mr. Roberto Morales, OAQPS Document Control Officer, 
U.S. EPA (C404-02), Attention Docket ID No. EPA-HQ-OAR-2004-0094, 
Research Triangle Park, NC 27711. Clearly mark the part or all of the 
information that you claim to be CBI. The www.regulations.gov Web site 
is an ``anonymous access'' system, which means EPA will not know your 
identity or contact information unless you provide it in the body of 
your comment. If you send an e-mail comment directly to EPA without 
going through www.regulations.gov, your e-mail address will be 
automatically captured and included as part of the comment that is 
placed in the public docket and made available on the Internet. If you 
submit an electronic comment, EPA recommends that you include your name 
and other contact information in the body of your comment and with any 
disk or CD-ROM you submit. If EPA cannot read your comment due to 
technical difficulties and cannot contact you for clarification, EPA 
may not be able to consider your comment. Electronic files should avoid 
the use of special characters, any form of encryption, and be free of 
any defects or viruses.
    Docket: All documents in the docket are listed in the index. 
Although listed in the www.regulations.gov index, some information is 
not publicly available, (i.e., CBI or other information whose 
disclosure is restricted by statute. Certain other material, such as 
copyrighted material will be publicly available only in hard copy. 
Publicly available docket materials are available either electronically 
at www.regulations.gov or in hard copy at the Air and Radiation Docket, 
EPA/DC, EPA West, Room 3334, 1301 Constitution Ave., NW., Washington, 
DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday 
through Friday, excluding legal holidays. The telephone number for the 
Public Reading Room is (202) 566-1744, and the telephone number for the 
Air and Radiation Docket is (202) 566-1742.


    Note: The EPA Docket Center suffered damage due to flooding 
during the last week of June 2006. The Docket Center is continuing 
to operate. However, during the cleanup, there will be temporary 
changes to Docket Center telephone numbers, addresses, and hours of 
operation for people who wish to make hand deliveries or visit the 
Public Reading Room to view documents. Consult EPA's Federal 
Register notice at 71 FR 38147 (July 5, 2006) or the EPA Web site at 
https://www.epa.gov/epahome/dockets.htm for current information on 
docket operations, locations and telephone numbers. The Docket 
Center's mailing address for U.S. mail and the procedure for 
submitting comments to www.regulations.gov are not affected by the 
flooding and will remain the same.

    Public Hearing. If a public hearing is held, it will be held at the 
EPA facility complex in Research Triangle Park, NC or an alternate site 
nearby.

FOR FURTHER INFORMATION CONTACT: Rick Colyer, Program Design Group 
(D205-02), Sector Policies and Programs Division, Office of Air Quality 
Planning and Standards, U.S. EPA, Research Triangle Park, NC 27711, 
telephone number (919) 541-5262, electronic mail (e-mail) address, 
colyer.rick@epa.gov.

SUPPLEMENTARY INFORMATION:

[[Page 70]]

    Regulated Entities. Categories and entities potentially regulated 
by this action include all major sources regulated under section 112 of 
the CAA.
    Worldwide Web (WWW). In addition to being available in the docket, 
an electronic copy of today's proposal will also be available on the 
WWW through the Technology Transfer Network (TTN). Following signature, 
a copy of this action will be posted on the TTN's policy and guidance 
page for newly proposed rules at https://www.epa.gov/ttn/oarpg. The TTN 
provides information and technology exchange in various areas of air 
pollution control.

Outline

    The information presented in this preamble is organized as follows:

I. Summary of Proposed Action
II. Background
III. Rationale for the Proposed Amendments
    A. Why is EPA proposing these amendments?
    B. What is the authority for this action?
    C. What are the implications of this proposed action?
    D. What regulatory changes are we proposing?
IV. Impacts of the Proposed Amendments
V. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review
    B. Paperwork Reduction Act
    C. Regulatory Flexibility Act
    D. Unfunded Mandates Reform Act
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use
    I. National Technology Transfer and Advancement Act

I. Summary of Proposed Action

    Today's proposed amendments would replace an existing EPA policy 
established in a May 16, 1995, EPA memorandum entitled ``Potential to 
Emit for MACT Standards-Guidance on Timing Issues.'' See ``Potential to 
Emit for MACT Standards-Guidance on Timing Issues,'' from John Seitz, 
Director, Office of Air Quality Planning and Standards, to EPA Regional 
Air Division Directors. The 1995 policy provides that a major source 
may become an area source by limiting its potential to emit (PTE) HAP 
emissions to below major source levels (10 tpy or more of any 
individual HAP or 25 tpy or more of any combination of HAP), no later 
than the source's first substantive compliance date under an applicable 
NESHAP (also known as a MACT standard). Thus, under the 1995 policy, a 
source that limits its PTE and thereby attains area source designation 
by the first compliance date of the MACT is not subject to major source 
requirements. By contrast, a source that does not have a PTE limit in 
place by the first substantive compliance date would be subject to 
major source MACT, regardless of its subsequent HAP emissions. The 1995 
policy is generally referred to as EPA's ``once in, always in'' (OIAI) 
policy for MACT standards.
    The regulatory amendments proposed today, if finalized, would 
replace the 1995 OIAI policy and allow a major source of HAP emissions 
to become an area source at any time by limiting its PTE for HAP to 
below the major source thresholds.

II. Background

    Section 112 of the CAA distinguishes between ``major'' and ``area'' 
sources of HAP. A major source of HAP is defined as ``* * * 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 tpy or 
more of any hazardous air pollutant or 25 tpy or more of any 
combination of hazardous air pollutants.'' (section 112(a)(1)). An area 
source is defined as any stationary source of HAP that is not a major 
source. (section 112(a)(2)). ``Hazardous air pollutant'' is defined as 
``* * * any air pollutant listed pursuant to subsection (b)'' of 
section 112. (section 112(a)(6)).
    ``Potential to emit'' is currently defined in the NESHAP General 
Provisions as ``* * * the maximum capacity of a stationary source to 
emit a pollutant under its physical and operational design. Any 
physical or operational limitation on the capacity of the stationary 
source to emit a pollutant, including air pollution control equipment 
and restrictions on hours of operation or on the type or amount of 
material combusted, stored, or processed, shall be treated as part of 
its design if the limitation or the effect it would have on emissions 
is federally enforceable.'' (40 CFR 63.2).\1\
---------------------------------------------------------------------------

    \1\ As explained further below, in National Mining Association 
v. EPA, 59 F. 3d 1351(D.C. Cir. 1995) (NMA), the D.C Circuit 
remanded the definition of ``potential to emit'' found in 40 CFR 
63.2 to the extent it required that physical or operational limits 
be ``federally enforceable.'' The court did not vacate the rule 
during the remand. Two additional cases were decided after National 
Mining. In Chemical Manufacturers Ass'n v. EPA, (CMA) No. 89-1514, 
1995 WL 650098 (D.C. Cir. Sept. 15, 1995), the court, in light of 
National Mining, vacated and remanded to EPA the federal 
enforceability component in the potential to emit definition in the 
PSD and NSR (40 CFR parts 51 and 52) regulations. In Clean Air 
Implementation Project v. EPA, No. 96-1224 1996 WL 393118 (D.C. Cir. 
June 28, 1996) (CAIP), the court vacated and remanded the federal 
enforceability requirement in the title V (40 CFR part 70) 
regulations. The CMA and the CAIP orders were similar in that they 
contained no independent legal analysis, but rather relied on the 
National Mining decision.
    Before any of the above cases were decided, EPA implemented a 
``transitional'' policy to allow sources to rely on state-only 
enforceable PTE limits. ``Options for Limiting the Potential to Emit 
(PTE) of a Stationary Source Under Section 112 and Title V of the 
Clean Air Act (Act)'' (Jan. 25, 1995), available at https://
www.epa.gov/Region7/programs/artd/air/title5/t5memos/ptememo.pdf. 
After the court decisions, EPA extended the transition policy 
several times. See ``Third Extension of January 25, 1995 Potential 
to Emit Transition Policy'' (December 20, 1999), available at http:/
/www.epa.gov/Region7/programs/artd/air/title5/t5memos/4thext.pdf. 
Under the Third Extension, sources can rely on state-only 
enforceable PTE limits until we finalize our response to the 
remands. EPA intends to issue a proposed PTE rule in the near 
future.
---------------------------------------------------------------------------

    The CAA treats the regulation of major sources and area sources 
differently. Generally, major source categories are listed under 
section 112(c)(1), while area source categories are listed under 
section 112(c)(3) following a finding that either the source category 
presents a threat of adverse human health or environmental effects that 
warrants regulation under section 112, or the category falls within the 
purview of CAA section 112(k)(3)(B). See CAA section 112(c)(1) and (3). 
Standards for major sources are based on the performance of the maximum 
achievable control technology (MACT) currently employed by the best 
controlled sources in the industry. Standards for area sources may be 
based on MACT, but alternatively may be based on generally available 
control technology (GACT) or generally available management practices 
that reduce HAP emissions. See CAA section 112(d)(2) and (5).
    Major sources can achieve significant HAP emission reductions and 
emit at levels below the major source thresholds through a variety of 
mechanisms. In order to be recognized as an area source and thereby 
avoid the application of major source MACT requirements, however, a 
major source must limit its potential to emit HAP to ensure that its 
emissions remain below major source thresholds. See CAA section 
112(a)(1) (defining major source HAP thresholds); 40 CFR 63.2 (same).
    A significant question that arose early in the development of the 
MACT program was when major sources may limit their PTE to below the 
major source thresholds in order to avoid having to comply with major 
source MACT standards. The EPA issued

[[Page 71]]

guidance on this and related issues on May 16, 1995, in a memorandum 
from John Seitz, Director of the Office of Air Quality Planning and 
Standards, to the EPA regional air division directors. The May 1995 
memorandum addressed three issues:
     ``By what date must a facility limit its potential to emit 
if it wishes to avoid major source requirements of a MACT standard?''
     ``Is a facility that is required to comply with a MACT 
standard permanently subject to that standard?''
     ``In the case of facilities with two or more sources in 
different source categories: If such a facility is a major source for 
purposes of one MACT standard, is the facility necessarily a major 
source for purposes of subsequently promulgated MACT standards?''
    In the May 1995 memorandum, EPA took the policy position that the 
latest date by which a source could obtain area source status by 
limiting its HAP PTE would be the first substantive compliance date of 
an applicable MACT standard. For existing sources, this would be no 
later than 3 years after the effective date of the regulation (which 
for MACT standards is the date of publication in the Federal Register), 
but could be sooner; for example, some standards for leaking equipment 
require compliance no later than 6 months after the effective date of 
the regulation.
    Furthermore, in the May 16, 1995, memorandum, EPA stated that once 
a source was required to comply with a MACT standard, i.e., once the 
first substantive compliance date had passed without the source 
limiting its PTE, it must always comply, even though compliance with 
the standard may reduce HAP emissions from the source to below major 
source thresholds.
    Finally, the May 16, 1995 memorandum provided that a source that is 
major for one MACT standard would not be considered major for a 
subsequent MACT standard if the potential to emit HAP emissions were 
reduced to below major source levels by complying with the first MACT 
standard.
    The 1995 memorandum, on which we did not seek notice and comment, 
set forth transitional policy guidance and was intended to remain in 
effect only until such time as the Agency proposed and promulgated 
amendments to the Part 63 General Provisions. We are today proposing to 
amend the General Provisions and replace the 1995 policy memorandum.

III. Rationale for the Proposed Amendments

A. Why Is EPA Proposing These Amendments?

    EPA issued the May 1995 memorandum in an effort to provide answers 
to pressing questions raised shortly after the inception of the air 
toxics program. Since issuance of the memorandum, EPA has received 
questions concerning the OIAI policy and recommendations to revise the 
policy.
    In August 2000, EPA met with representatives of the State and 
Territorial Air Pollution Program Administrators and the Association of 
Local Air Pollution Control Officials (STAPPA/ALAPCO) to explore ways 
to revise the OIAI policy to promote pollution prevention (P2). The 
STAPPA/ALAPCO stated its belief that the OIAI policy provides no 
incentive for sources, after the first substantive compliance date of a 
MACT standard, to implement P2 measures in order to reduce their 
emissions to below major source thresholds because there are no 
benefits to be gained, e.g., no reduced monitoring, recordkeeping, and 
reporting, and no opportunity to get out of major source requirements. 
In light of these concerns, the STAPPA/ALAPCO recommended that the 
Agency revise the OIAI policy to encourage P2. To accommodate some of 
these P2 concerns, in May 2003 we proposed to amend the part 63 General 
Provisions (68 FR 26249; May 15, 2003) in the following ways. First, 
the proposed amendments encourage P2 by allowing an affected source 
that completely eliminates all HAP emissions after the first compliance 
date of the MACT standard to submit a request to the Administrator that 
it no longer be subject to the MACT standard. If the request is 
approved, the affected source would no longer be subject to the MACT 
standard provided the source does not resume emitting HAP from the 
regulated source(s) of emissions. Second, the proposed amendments 
encourage P2 by allowing an affected source that uses P2 to reduce HAP 
emissions to the level required by the MACT standard, or below, to 
request ``P2 alternative compliance requirements,'' which could include 
alternative monitoring, recordkeeping and reporting. If the request is 
approved, the alternative compliance requirements would replace the 
compliance requirements in the MACT standard.
    It is important to understand the differences in applicability 
between the P2 amendments, and OIAI and today's proposal revising that 
policy. The proposed P2 amendments are targeted at the ``affected 
source'' as that term is defined in 40 CFR 63.2. ``Affected source'' 
describes the collection of regulated emission points defined as the 
entity subject to a specific MACT standard. See 40 CFR 63.2. For 
example, an affected source could be a single production unit or the 
combination of all production units within a single contiguous area and 
under common control, or a single emission point or a collection of 
many related emission points within a single contiguous area and under 
common control. Each MACT standard defines the ``affected source'' for 
regulation.
    By contrast, the 1995 OIAI policy and today's proposed amendments 
that seek to replace that policy focus on ``major sources,'' as defined 
in 40 CFR 63.2. As explained above, major sources are defined by the 
total amount of HAP emitted from a stationary source or group of 
stationary sources located within a contiguous area and under common 
control. See 40 CFR 63.2. A major source can include several different 
affected sources subject to multiple MACT standards.
    The relationship between the proposed P2 amendments and today's 
proposal is best illustrated by the following example. Consider a major 
source that emits 50 tpy total HAP which is comprised of 5 affected 
sources subject to various MACT. If the Agency finalizes the P2 
amendments and one of the affected sources that emitted 15 tpy of HAP 
eliminated all its HAP emissions, the affected source, if its request 
is approved by the permitting authority, would no longer be subject to 
MACT. However, the other four affected sources within the major source 
would still be subject to their respective MACT because the sources' 
combined emissions would be 35 tpy, which exceeds the major source 
threshold. We are considering the comments received on the proposed P2 
amendments and have not yet taken any final action with regard to that 
proposal.
    In addition to the feedback from STAPPA concerning the OIAI policy, 
EPA has heard from others who have taken the position that the OIAI 
policy serves as a disincentive for sources to reduce emissions of HAP 
beyond the levels actually required by an applicable standard. For 
example, one source whose emissions after applying MACT were still 
above major source thresholds has significant emissions of one HAP for 
which the MACT standard does not require reductions. The source has 
indicated it is willing to substantially reduce that HAP to achieve 
area source status, but would not do so as long as

[[Page 72]]

the OIAI policy applied and the source could not be redesignated as an 
area source. Another source, which has maintained actual HAP emissions 
well below major source levels, discovered its PTE limit (designating 
it as an area source) was based on an erroneous emission factor. Even 
though actual emissions have always been below major source levels, its 
PTE, when recalculated using the correct emission factors, exceeded the 
major source threshold. In this example, the source did not realize its 
problem until after the first substantive compliance date, which meant 
that, under the OIAI policy, the source was subject to the MACT 
standard.
    Moreover, the OIAI policy, as written, does not encourage sources 
to explore the use of different control techniques, P2, or new and 
emerging technologies that would result in lower emissions. Thus, under 
OIAI, the same source could be subject to substantially different 
requirements based solely on the date by which the source reduced its 
potential to emit HAP to below the major source thresholds. For 
example, under OIAI, a major source that is subject to a MACT standard 
may become an area source prior to the first substantive compliance 
date of that standard, without reaching MACT levels of emissions 
reductions. As a result, prior to the first substantive compliance date 
of a MACT standard, a source emitting 30 tpy of a combination of HAP 
could reduce emissions by 10 tpy, take a HAP PTE limitation at 20 tpy, 
emit less than 10 tpy of any one HAP, and become an area source. Such a 
source would no longer meet the applicability criteria of a potentially 
applicable major source MACT standard and would, therefore, not be 
required to comply with that standard. By contrast, if the same source 
reduced its emissions of HAP to 20 tpy (and didn't emit 10 tpy or more 
of any single HAP) by complying with an applicable major source MACT 
standard after the first substantive compliance date of the standard, 
it would have to continue to comply with the requirements of the major 
source MACT standard because the first substantive compliance date had 
passed. The only difference in these two situations is the date on 
which the source reduced its emissions. As explained below, there is 
nothing in the CAA that compels the conclusion that a source cannot 
attain area source status after the first substantive compliance date 
of a MACT standard.

B. What Is the Authority for This Action?

    As noted above, Congress expressly defined the terms ``major 
source'' and ``area source'' in section 112(a). A ``major source'' is a 
source that ``emits or has the potential to emit considering controls, 
in the aggregate,'' 10 tons per year or more of any HAP or 25 tons per 
year or more of any combination of HAP, and an ``area source'' is any 
stationary source that is not a ``major source.'' CAA section 112(a)(1) 
and (a)(2).\2\ Notably absent from these definitions is any reference 
to the compliance date of a MACT standard. Rather, Congress defined 
major source by reference to the amount of HAP the source ``emits or 
has the potential to emit considering controls,'' and required EPA to 
determine whether that amount exceeds certain specified levels. 42 
U.S.C. 112(a)(1) (emphasis added). Congress placed no temporal 
limitations on the determination of whether a source emits or has the 
potential to emit HAP in sufficient quantity to qualify as a major 
source.
---------------------------------------------------------------------------

    \2\ In addition to ``major sources'' and ``area sources,'' 
Congress identified a third type of source under section 112: 
electric utility steam generating units (``Utility Units''). See 
section 112(a)(8). Congress created a special statutory provision 
for Utility Units in section 112(n)(1)(A). Discussion of that 
provision is not relevant to this proposal. Today's proposal focuses 
solely on ``major sources'' and ``area sources.'' See CAA 112(a)(1), 
112(a)(2).
---------------------------------------------------------------------------

    In March 1994, EPA issued final regulations interpreting the term 
``major source.'' See 59 FR 12408 (March 16, 1994) (the General 
Provisions governing the section 112 program).\3\ The regulatory 
definition of ``major source'' is virtually identical to the statutory 
definition. Specifically, EPA defined ``major source'' as ``any 
stationary source or group of stationary sources * * * that emits or 
has the potential to emit considering controls'' at or above major 
source thresholds. 40 CFR 63.2. EPA, in turn, defined the phrase 
``potential to emit'' that appears in the definition of ``major 
source,'' as the ``maximum capacity of a stationary source to emit a 
pollutant under its physical and operational design.'' Id. To give 
effect to the phrase ``considering controls'' in the statutory 
definition of ``major source,'' (CAA section 112(a)(1)), EPA further 
defined the term ``potential to emit'' in its regulations as follows:

    \3\ The General Provisions in 40 CFR Part 63 eliminate the 
repetition of general information and requirements in individual 
NESHAP subparts by consolidating all generally applicable 
information in one location. The General Provisions include sections 
on applicability, definitions, compliance dates, and monitoring, 
recordkeeping and reporting requirements, among others. In addition, 
the General Provisions include administrative sections concerning 
actions that the EPA Administrator must take, such as making 
determinations of applicability, reviewing applications for approval 
of new construction, responding to requests for extensions or 
waivers of applicable requirements, and generally enforcing NESHAP. 
The General Provisions apply to every facility that is subject to a 
NESHAP subpart, except where specifically overridden by that 
subpart.
---------------------------------------------------------------------------

    Any physical or operational limitation on the capacity of the 
stationary source to emit a pollutant, including air pollution 
control equipment and restrictions on hours of operation or on the 
type or amount of material combusted, stored, or processed, shall be 
treated as part of its design if the limitation or the effect it 
would have on emissions is federally enforceable.

40 CFR 63.2.

    The Court of Appeals for the District of Columbia Circuit reviewed 
EPA's definition of ``potential to emit'' and, in July 1995, remanded 
the definition to EPA to the extent the definition required that 
physical or operational limitations be ``federally enforceable.'' 
National Mining Ass'n v. EPA, 59 F.3d 1351 (D.C. Cir. 1995).\4\ In 
remanding the rule, the D.C. Circuit held that ``EPA has not explained 
* * * how its refusal to consider limitations other than those that are 
`federally enforceable' serves the statute's directive to `consider[] 
controls' when it results in a refusal to credit controls imposed by a 
state or locality even if they are unquestionably effective.'' Id. at 
1363. The court also noted that ``[i]t is not apparent why a state's or 
locality's controls, when demonstrably effective, should not be 
credited in determining whether a source subject to those controls 
should be classified as a major or area source.'' Id.; see also id. at 
1365 (``By no means does that suggest that Congress necessarily 
intended for state emissions controls to be disregarded in determining 
whether a source is classified as a `major' or `area' source.'').
---------------------------------------------------------------------------

    \4\ In that same opinion, the Court otherwise upheld EPA's 
definition of ``major source.''
---------------------------------------------------------------------------

    As noted above, EPA is in the process of developing a proposed PTE 
rule that responds to the Court's remand in NMA and, among other 
things, proposes amendments to the definition of PTE in 40 CFR part 63. 
EPA anticipates issuing the proposed rule in the near future. See n.1.
    Today's proposed rule is wholly consistent with the plain language 
of section 112(a)(1). Specifically, under today's proposed regulations, 
any source with a PTE limit that limits HAP emissions to less than the 
major source thresholds is, by definition, not a ``major source'' 
because its ``potential to emit considering controls'' is less than the 
identified major source thresholds. 42 U.S.C. 7412(a)(1) (emphasis 
added). By

[[Page 73]]

contrast, under the 1995 policy memorandum, a source is treated as a 
major source in perpetuity even if sometime after the first compliance 
date of a MACT standard the source no longer meets the statutory 
definition of ``major source'' (i.e., the source has a ``potential to 
emit considering controls'' less than the major source thresholds). EPA 
believes that the approach proposed today gives full effect to the 
statutory definitions and to the distinctions that Congress created 
between ``major'' and ``area'' sources. Id. at 1353-54 (discussing 
differences in requirements affecting major and area sources and 
recognizing that Congress did not contemplate that all area sources be 
subject to regulation); see also 42 U.S.C. 7412(c)(3), 7412(k)(3)(B).
    Moreover, nothing in the structure of the Act counsels against 
today's proposed approach. Congress defined major and area sources 
differently and established different requirements for such sources. 
See NMA, 59 F3d 1353-54. The 1995 policy memorandum creates a dividing 
line between major and area sources that does not exist on the face of 
the statute by including a temporal limitation on when a source can 
become an area source by limiting its PTE.
    Furthermore, as noted in the May 1995 OIAI memorandum itself, EPA 
intended that the memorandum be a transitional policy which would 
remain in effect only until EPA undertook notice and comment 
rulemaking, which it is now doing. Nothing precludes the Agency from 
revising a prior agency position where, as here, we have a principled 
basis for doing so. As the Supreme Court recently observed:

    ``An initial agency interpretation is not instantly carved in 
stone. On the contrary, the agency * * * must consider varying 
interpretations and the wisdom of its policy on a continuing basis, 
Chevron, supra at 863-64, for example, in response to changed 
factual circumstances, or a change in administrations.''

National Cable & Telecomms. Ass'n v. Brand X Internet Servs., 545 U.S. 
967 (2005) (citations omitted); see also American Trucking Ass'n v. 
Atchison, Topeka & Santa Fe Ry., 387 U.S. 397, 416 (1967); Mobil Oil 
Corp. v. EPA, 871 F.2d 149, 152 (D.C. Cir. 1989) (``an agency's 
reinterpretation of statutory language is nevertheless entitled to 
deference, so long as the agency acknowledges and explains the 
departure from its prior views''). We solicit comment on all aspects of 
today's proposal, including EPA's position that today's proposed 
approach gives proper effect to the statutory definitions in section 
112(a) and is consistent with the language and structure of the Act.

C. What Are the Implications of This Proposed Action?

    In the 1995 memorandum, EPA stated, as a matter of policy, that 
without the OIAI policy, facilities could backslide from MACT levels of 
control and increase their emissions to a level slightly below the 
major source thresholds. The 1995 memorandum further asserts that if 
this occurred, the ``maximum achievable emissions reductions that 
Congress mandated for major sources would not be achieved.'' We agree 
that Congress mandated that sources that meet the definition of ``major 
source'' in section 112(a) be required to comply with MACT, but a 
source that takes a PTE limit that limits its PTE to below the major 
source HAP thresholds does not, as explained above, meet the statutory 
definition of ``major source,'' and therefore should not be subject to 
the requirements applicable to a major source.
    EPA recognizes that some sources in complying with an applicable 
MACT standard will reduce HAP emissions below the major source 
thresholds because that is the level of emissions necessary to maintain 
compliance with the MACT standard. If this rule is finalized, we 
believe it is unlikely that such sources would, in becoming area 
sources, increase their current emissions to a level just below the 
major source thresholds. While this may occur in some instances, it is 
more likely that sources will adopt PTE limitations at or near their 
current levels of emissions, which is the level needed to meet the MACT 
standard(s).\5\ This conclusion is based on a number of factors.
---------------------------------------------------------------------------

    \5\ We recognize that there may be instances where a source will 
emit at a level that is below the level required by the MACT. EPA 
cannot mandate that sources emit at such a level. Accordingly, in 
discussing potential emission increases as the result of today's 
proposal, we properly limit our discussion to those sources that 
emit below the major source thresholds because they must do so to 
meet the MACT standard, not those sources that, for other reasons, 
emit at a level below the level required by the MACT standard.
---------------------------------------------------------------------------

    First, many sources attaining area source status do so because of 
the control devices that they installed to meet the MACT standards. 
Such control systems are designed to operate a certain way and cannot 
be operated at a level which achieves only a partial emission 
reduction, i.e., the devices either operate effectively or they do not. 
Thus, we expect that sources that have attained area source status by 
virtue of a particular control technology will maintain their current 
level of emissions.
    Second, several additional programs have been implemented under the 
CAA since the issuance of the 1995 OIAI memorandum. Specifically, in 
many cases, sources will maintain the level of emission reduction 
associated with the MACT standard because that level is needed to 
comply with other requirements of the Act, such as RACT controls on 
emissions of volatile organic compounds, which are also HAP. Sources 
may also need to maintain their current level of control for other 
reasons, including, for example, for emissions netting and emissions 
trading purposes.
    Third, if this rule is finalized, those sources that seek to 
maintain area source status will likely take PTE limits at or near 
their current MACT emission levels to ensure that their emissions 
remain below the major source thresholds. Sources have no incentive to 
establish their PTE limit too close to the major source thresholds 
because repeated or frequent exceedances above the PTE could provide 
the permitting authority reason to revoke the PTE and bring an 
enforcement action. 42 U.S.C. 7413(g); see NMA, 59 F.3d at 1363 n.20 
(noting that a source that claims to have lowered its emissions to 
below major source thresholds, but has actual emissions that exceed 
such thresholds, can be subject to sanctions under CAA section 113).
    Fourth, permitting authorities will likely encourage emission 
reduction maintenance and impose more stringent PTE terms and 
conditions on the source the closer the source's PTE is to the major 
source thresholds. Such terms and conditions may include shorter 
compliance periods and perhaps more robust monitoring, recordkeeping, 
and reporting to ensure that the source does not exceed its PTE.
    Finally, many sources that take a PTE limitation to become an area 
source will ultimately be subject to area source standards issued 
pursuant to section 112. To date, EPA has issued emission standards for 
approximately 20 area source categories. Over the next three years, EPA 
is required to develop area source standards for approximately 50 
additional categories. While the level at which those standards will be 
set is not known at this time, the standards will reflect at least 
generally available control technology and some may be set at MACT-
based levels, which would mean that many sources could be required to 
maintain their current emission levels. See, e.g., 42 U.S.C. 
7412(d)(2), (d)(5), 7412(k)(3)(B).
    For all of these reasons, we believe it is unlikely that a source 
that currently emits at a level below the major source

[[Page 74]]

thresholds as the result of compliance with a MACT standard would 
increase its emissions in response to this rule. However, even if such 
increases occur, the increases will likely be offset by emission 
reductions at other sources that should occur as the result of this 
proposal. Specifically, this proposal provides an incentive for those 
sources that are currently emitting above major source thresholds and 
complying with MACT, to reduce their HAP emissions to below the major 
source thresholds.
    We solicit comment on the issues discussed above. Please include 
with your comments any relevant factual information and describe the 
scenarios under which sources, in response to this proposal, would 
likely increase emissions from the level required by MACT to just below 
the major source thresholds.

D. What Regulatory Changes Are We Proposing?

    For the reasons discussed above, we believe that the 1995 OIAI 
policy should be replaced and today are proposing to allow a major 
source to become an area source at any time by taking a PTE limit on 
its HAP emissions. Specifically, we are proposing to amend section 63.1 
by adding a new paragraph (c)(6). That paragraph would specify that a 
major source may become an ``area source'' at any time by restricting 
its ``potential to emit'' (PTE) hazardous air pollutants, as that term 
is defined in 40 CFR Part 63, Subpart A, to below major source 
thresholds. 6 7 If a source takes a PTE limit, it will no 
longer be subject to major source requirements that apply to HAP 
emissions, subject to certain restrictions described below. The major 
source requirements to which the source would no longer be subject, 
include, but are not limited to, compliance assurance monitoring and 
title V requirements (assuming the source is not otherwise subject to 
title V permitting). As an area source complying with its PTE limit, 
the source would nonetheless be subject to any applicable area source 
requirements issued pursuant to section 112, and title V if EPA has not 
exempted the area source category from such requirements.
---------------------------------------------------------------------------

    \6\ We recognize that there may be sources that were major 
sources as of the first substantive compliance date of a MACT 
standard that, by complying with non-section 112 CAA requirements, 
became area sources for HAP emissions. In this instance, EPA 
proposes that the source obtain a PTE limit for its HAP emissions to 
ensure that those emissions remain below major source thresholds.
    \7\ Some individual MACT standards in Part 63 provide sources 
the opportunity to become area sources not by limiting total mass 
emissions directly, but by limiting material use or by taking other 
measures, which in turn, correlate to emissions below major source 
levels (e.g., see subpart KK, Printing and Publishing and subpart 
JJ, Wood Furniture Manufacturing Operations (limiting HAP usage to 
below major source thresholds). We recommend that sources refer to 
the applicable NESHAP for guidance in determining whether the source 
meets the major source thresholds. See 40 CFR 63.2 (defining 
``potential to emit''by reference to physical or operational 
limitations, including, for example, ``restrictions on hours of 
operation, or on the type or amount or material combusted, stored, 
or processed'').
---------------------------------------------------------------------------

    There are two provisions of the current regulations that are 
relevant for background purposes: Sections 63.6(b)(7) and 63.6(c)(5). 
Section 63.6(b)(7) provides that when an area source becomes a major 
source ``by the addition of equipment or operations that meet the 
definition of new affected source in the relevant standard, the portion 
of the existing facility that is a new affected source must comply with 
all requirements of that standard applicable to new sources,'' and the 
source must comply with the relevant standard upon startup. 40 CFR 
63.6(b)(7) (Emphasis added). Section 63.6(c)(5), in turn, states: 
``Except as provided in section 63.6(b)(7),'' an area source that 
becomes a major source is treated as an existing major source and must 
comply with applicable MACT standards by the date specified in the 
standard for area sources that become major sources.\8\ For those major 
source MACT standards that do not specify such a date, the affected 
source has a period of time to comply that is equivalent to the 
compliance period specified in the standard for existing affected 
sources (which is up to three years). 40 CFR 63.6(c)(5). Section 
63.6(c)(5) was designed to address existing area sources that have not 
previously been subject to a MACT standard, but that later increase 
their emissions and become a major source. Section 63.6(c)(5) only 
applies, however, where the change that resulted in the increased 
emissions does not meet the definition of a new affected source under 
the relevant major source MACT standard.
---------------------------------------------------------------------------

    \8\ EPA explained the purpose of section 63.6(b)(7) in the 
preamble to the General Provisions as follows:
    Section 63.6(b)(7) states that an unaffected new area source 
that increases its emissions of (or its potential to emit) HAP such 
that it becomes a major source, must comply with the relevant 
emission standard immediately upon becoming a major source. [Under 
section 63.6(b)(7), a]n unaffected existing area source that 
increases its emissions (or its potential to emit) such that it 
becomes a major source, must comply by the date specified for such a 
source in the standard. If such a date is not specified, the source 
would have an equivalent period of time to comply as the period 
specified in the standard for other existing sources. However, if 
the existing area source becomes a major source by the addition of a 
new affected source, or by reconstructing, the portion of the source 
that is new or reconstructed is required to comply with the 
standard's requirements for new sources.
    59 FR 12408, 12413 (Mar. 16, 1994).
---------------------------------------------------------------------------

    As noted above, EPA today proposes to amend section 63.1 to add a 
new paragraph (c)(6) that would authorize a major source to become an 
area source at any time by obtaining a PTE limit limiting its HAP 
emissions to below major source thresholds. EPA proposes, however, the 
following restrictions.
    The first restriction relates to a regulatory provision that we are 
adding to address the situation where sources switch between major and 
area source status more than once. Specifically, there may be 
situations where sources that are major sources as of the first 
substantive compliance date of the MACT standard later take PTE 
limitations to attain area source status, and then subsequently seek to 
switch back to major source status. In these situations, EPA proposes 
that 40 CFR 63.6(c)(5) not apply, and that, except as noted below, the 
source must meet the major source MACT standard immediately upon that 
standard again becoming applicable to the source. See proposed 
regulations at 40 CFR 63.1(c)(6)(i).\9\ In this scenario, existing 
affected sources at the major source were previously subject to the 
MACT standard. The affected sources therefore should be able to comply 
with the standard immediately upon the standard again becoming 
applicable to them. Id.
---------------------------------------------------------------------------

    \9\ The new proposed 40 CFR 63.1(c)(6)(i), like section 
63.6(c)(5), is subject to the provisions of 40 CFR 63.6(b)(7).
---------------------------------------------------------------------------

    To date, we have identified one set of circumstances where 
additional time would be necessary for the source to comply with the 
major source MACT. Specifically, there are situations where major 
source MACT rules may be amended and either become more stringent or 
apply to additional emission points or additional HAP. For example, 
under section 112(d)(6) MACT standards must be reviewed every 8 years 
and revised if necessary. If revisions issued pursuant to section 
112(d)(6) increase the stringency of the standards or revise the 
standards such that they apply to additional emission points or HAP, it 
would be necessary to allow existing sources sufficient time to come 
into compliance with the new requirements. The revision of a MACT 
standard pursuant to section 112(d)(6) is only one example of a 
situation where a MACT rule may be revised. MACT rules are also amended 
for other reasons, including as the result of settlements resolving 
pending litigation over a standard. Any type of rule amendment 
situation where the

[[Page 75]]

amendments substantively modify the MACT could necessitate additional 
time for compliance. We are thus proposing that sources that switch 
status from major source to area source and then revert back to major 
source status, be allowed additional time for compliance if the major 
source standard has changed such that the source must undergo a 
physical change, install additional controls and/or implement new 
control measures. We propose that such sources have the same period of 
time to comply with the revised MACT standard as is allowed for 
existing sources subject to the revised standard. We solicit comment on 
this proposed compliance time-frame and whether the proposed regulatory 
text adequately captures the intended exception.
    We are proposing the immediate compliance rule, with the above-
noted exception, because we believe that in most cases, sources achieve 
and maintain area source status by operating the controls they used to 
meet the MACT standard. Therefore, a source that reverts to major 
source status should be in a position to comply immediately with the 
MACT standard. Sources may, in addition to, or in lieu of, operating 
controls, reduce their production level or hours of operation, but 
regardless of the means employed to attain area source status, we 
believe that the sources will likely not be removing the controls used 
to meet the MACT standard. We recognize that some MACT standards allow 
alternative compliance options, such as the use of low HAP materials, 
but these options should continue to be available for the affected 
source. Moreover, the addition of equipment or process units to an 
existing affected source should not change the source's ability to meet 
the MACT standard upon startup of the new equipment or unit because the 
equipment or process units should be accompanied by either a tie-in to 
existing controls or installation of new controls. See also 40 CFR 
63.6(b)(7) (applying to new affected sources). We solicit comment on 
whether our assumptions, as stated in this paragraph, are correct.
    More specifically, we solicit comment on the appropriateness of the 
proposed immediate compliance rule and whether such rule should be 
finalized. If it should be maintained, we solicit comment on whether 
there are other situations, in addition to the one noted above, that 
would necessitate an extension of the time period for compliance with 
the MACT standards. We further solicit comment on whether we should 
instead allow all sources that revert back to major source status a 
specific period of time in which to comply with the MACT standard, 
which would be consistent with the approach provided for in 40 CFR 
63.6(c)(5). If we pursue this approach in the final rule, we request 
comment on whether we should provide the same time periods as are 
already provided for in 40 CFR 63.6(c)(5), or whether a different time 
period is appropriate and why. To the extent a commenter proposes a 
compliance time-frame, we request that the commenter explain the basis 
for providing that time-frame. Thus, depending on the comments received 
and the factual circumstances identified, we will consider (1) not 
finalizing the immediate compliance, with exceptions, approach, and 
instead providing all sources that revert back to major source status a 
defined period of time to comply consistent with the provisions of 40 
CFR 63.6(c)(5); and (2) retaining the proposed immediate compliance 
rule, and adopting additional exceptions to that rule, if we receive 
persuasive and concrete scenarios that we believe would warrant 
allowing additional time to comply with a previously applicable MACT 
standard.\10\ If we pursue the former approach, we would likely amend 
40 CFR 63.6(c)(5). If we pursue the latter approach and retain the 
immediate compliance rule, but create exceptions in addition to the one 
noted above, there are two ways to implement the exceptions: Through a 
case-by-case compliance extension request process or by identifying in 
the final rule specific exceptions to the immediate compliance rule and 
providing a time period for compliance for each identified exception. 
Under the case-by-case approach, the permitting authority could grant 
limited additional time for compliance upon a specific showing of need. 
A case-by-case compliance extension request process would call for the 
owners or operators of sources to submit to the relevant permitting 
authority a request that (i) identifies the specific additional time 
needed for compliance, and (ii) explains, in detail, why the source 
needs additional time to come into compliance with the MACT standard. 
The permitting authority would review the request and could either 
approve it in whole, or in part (i.e., by specifying a different 
compliance timeframe or allowing different timeframes for different 
parts of the affected sources), or deny the request.
---------------------------------------------------------------------------

    \10\ The new proposed regulatory provision at 40 CFR 
63.1(c)(6)(i) is subject to the provisions of 40 CFR 63.6(b)(7). 
Thus, if a source adds a piece of equipment which results in 
emissions at levels in excess of the major source thresholds, and 
that equipment meets the definition of a new affected source under 
the relevant MACT standard, the source is subject to the provisions 
of 40 CFR 63.6(b)(7) and must meet the requirements for new sources 
in the relevant major source MACT standard including compliance at 
startup.
---------------------------------------------------------------------------

    We envision that a request for a compliance extension, if such an 
option is provided in the final rule, would ordinarily be made in the 
context of the title V permit application or an application to modify 
an existing title V permit. Any compliance extension, if granted, would 
be memorialized in the title V permit. Another option sources may 
consider is seeking approval to include in their title V permit 
alternative operating scenarios that address the source's different 
projected operating scenarios. By incorporating alternative operating 
scenarios into the permit, the source could avoid having to reopen and 
revise the permit if it chooses to switch source status and again 
become a major source.
    If we retain the proposed immediate compliance rule with 
exceptions, we will also consider the option of including in the final 
rule defined compliance extension time-frames for defined factual 
scenarios, as we have done for the exception described above. Under 
this approach, if a source satisfies the criteria identified in the 
final rule, it would automatically be afforded the defined extension of 
time to comply with the MACT standard upon the source again becoming 
subject to MACT. This extension approach would be useful if there are 
specific factual scenarios that affect a broad number of sources, 
because defining the compliance extension time-frame in the final rule 
eliminates the burden on permitting authorities associated with the 
case-by-case approach.
    In submitting your comments on the above-noted issues and proposed 
section 63.6(c)(6), please identify, with specificity, the factual 
circumstances that would warrant a compliance extension, explain why 
the source would need the extension under the circumstances identified, 
and why the source could not comply with the standard immediately upon 
returning to major source status given the identified circumstances. We 
specifically solicit comment on our discussion above as to the 
mechanics of obtaining a compliance extension if a case-by-case 
approach is finalized, including, for example, the type of information 
requested from the source seeking the proposed compliance extension, 
the permit vehicle used to obtain the extension, and any limitations on

[[Page 76]]

providing extensions.\11\ We further solicit comment on the approach of 
providing a compliance extension in the final rule for certain defined 
factual scenarios. With regard to this approach, we solicit comment on 
the nature of the scenario that would warrant such an extension and the 
amount of additional time that would be needed to comply with the MACT 
standard and why such a period of time is needed to comply.
---------------------------------------------------------------------------

    \11\ Some major sources that switch to area source status may, 
as an area source, no longer be subject to title V requirements and 
therefore apply to their permitting authority to terminate their 
title V permits and obtain a PTE limit through another permit 
vehicle. Presumably, such sources would have their title V permit 
terminated at the same time the non-title V permit limiting their 
PTE becomes effective. If, however, the area source reverts back to 
major source status, the source will once again have to obtain a 
title V permit. The source would also have to terminate the non-
title V permit containing its PTE limit to allow it to emit at major 
source levels. Once the HAP PTE limitation no longer applies to the 
source, the source must comply with applicable major source MACT 
standards or have taken appropriate steps to apply for a compliance 
extension.
---------------------------------------------------------------------------

    The second restriction to the new proposed regulatory provision at 
40 CFR 63.1(c)(6) concerns those major sources that take PTE limits to 
become area sources and thereby become subject to area source standards 
in 40 CFR part 63. We propose that a major source with affected sources 
subject to a major source MACT standard that switches to area source 
status where the EPA has established area source standards for the same 
affected source would have to comply immediately with those area source 
standards if the first substantive compliance date has passed or would 
have to comply by the first substantive compliance date if it has not 
passed. Because the area source standard is not likely to be more 
stringent than the major source MACT standard that the source was 
already meeting, the source likely will not need additional compliance 
time after the source status change. However, if different emission 
points are controlled or different controls are necessary to comply 
with the area source standard or other physical changes are needed to 
comply with the standard, additional time, not to exceed 3 years, may 
be granted by the permitting authority if adequate support for the 
additional time is provided by the source.\12\
---------------------------------------------------------------------------

    \12\ The existing regulations do not address the issue of 
compliance time-frames for sources that switch from major source 
status to area source status. See CAA section 112(i)(3), 40 CFR 
63.6(c)(5).
---------------------------------------------------------------------------

    Accordingly, EPA is proposing to add 40 CFR 63.1(c)(6)(ii), which 
provides that a major source that subsequently becomes an area source 
by limiting its PTE must meet all applicable area source requirements 
in Part 63 immediately upon the effective date of the permit containing 
the PTE limits, provided the first compliance date for the area source 
standard has passed. We further propose that if a source (or a portion 
thereof) must undergo a physical change or install additional control 
equipment to meet the applicable area source standard, the source may 
submit to the relevant permitting authority a request that (i) 
identifies the specific additional time needed for compliance (i.e., 
such request cannot exceed three years) with the area source standard, 
and (ii) explains, in detail, why the additional time is necessary to 
comply with the standard. The proposed new regulatory provision--40 CFR 
63.1(c)(6)(ii)--is delegable. See generally 42 U.S.C. 7412(l); 40 CFR 
Subpart E. A permitting authority may approve, in whole or in part, or 
deny the request.
    The proposed new regulatory provision, 40 CFR 63.1(c)(6)(ii), is 
analogous to 40 CFR 63.6(c)(5), which is briefly described above. We 
promulgated 40 CFR 63.6(c)(5) as part of the General Provisions, 
because we recognized a gap in the statute. Specifically, the statute 
is silent as to how to address sources that are existing area sources 
at the time the MACT standard is promulgated and that, at some later 
date, become major sources subject to the MACT standard. Section 
63.6(c)(5) fills this particular gap. Similarly, the statute does not 
address the scenario where a major source becomes an area source and 
the compliance date for the area source standard has already passed and 
modifications to the source are needed to achieve compliance with the 
standard. EPA today proposes 40 CFR 63.1(c)(6)(ii) to address this 
situation. Section 112(i)(3) does not directly address either of these 
identified scenarios. Rather, it directly addresses those sources that 
are existing affected sources as of the date the emission standard is 
promulgated. See CAA section 112(i)(3) (``After the effective date of 
any emission standard * * * promulgated under this section and 
applicable to a source, no person may operate such source in violation 
of such standard * * * except in the case of an existing source,'' EPA 
shall provide a compliance date that provides for compliance as 
expeditiously as practicable, but no later than 3 years ``after the 
effective date of the standard.'') (emphasis added). Moreover, the new 
proposed regulatory provision, 40 CFR 63.1(c)(6)(ii), is consistent 
with CAA section 112(i)(3), because it requires sources to comply 
immediately with the area source standard upon the effective date of 
the permit containing the PTE limit (which is the permit that provides 
area source status), and authorizes additional time only if the 
Permitting Authority determines that such time is appropriate based on 
the facts and circumstances. In any event, any extension of time 
provided pursuant to proposed 40 CFR 63.1(c)(6)(ii) cannot exceed three 
years.
    Under today's proposed regulations, sources that reduce their 
emission levels and obtain a PTE HAP limit below major source 
thresholds must meet that limit and all associated conditions, as 
specified in the relevant permit, on the effective date of the permit. 
Prior to the effective date of the permit, the source must continue to 
comply with the relevant major source MACT standard(s) and other 
conditions in its title V permit. Of course, permitting authorities may 
deny a request to adopt area source status where the source has changed 
its status more than once, if, in the opinion of the permitting 
authority, these actions are an indication that the restrictions on PTE 
are, in practice, ineffective.
    To the extent an area source standard applies, the compliance date 
for that standard has passed, and the source needs a compliance 
extension, the source must apply for and obtain that compliance 
extension before becoming subject to the area source standard; 
otherwise, the source will be in violation of the area source standard. 
We solicit comment on the proposed case-by-case compliance extension 
date approach, including, for example, the type of information that 
should be requested from the source seeking the proposed compliance 
extension, the permit vehicle used to obtain the extension, and whether 
the limitations proposed above (i.e., the affected source must undergo 
a physical change or install additional control equipment in order to 
meet the area source standard) are appropriate. See proposed 
regulations at 40 CFR 63.1(c)(6)(ii). We also solicit comment generally 
on the mechanics of obtaining the compliance extension and the 
appropriate vehicle for requesting the compliance extension. If the 
area source category is not exempted from the requirements of title V, 
the request for a compliance extension can be made in the context of 
the title V permit process. If, however, the area source category at 
issue is exempt from title V, the source could submit its compliance 
date extension request to the permitting authority issuing its PTE HAP 
limitation, provided that the permitting authority is the same State 
authority that has been

[[Page 77]]

delegated authority to implement the Section 112 program. We further 
solicit comment on whether the proposed compliance date extension 
provision in 40 CFR 63.1(c)(6)(ii) should be extended to major sources 
that become area sources only a few months pr