[Federal Register Volume 88, Number 186 (Wednesday, September 27, 2023)]
[Proposed Rules]
[Pages 66336-66351]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-21041]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2023-0330; FRL-4908.1-01-OAR]
RIN 2060-AV20


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

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule.

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SUMMARY: The EPA is proposing to add requirements for sources to 
reclassify from major source status to area source status under the 
National Emission Standards for Hazardous Air Pollutants (NESHAP) 
program. The requirements of this proposal would apply to all sources 
that choose to reclassify, including any sources which have 
reclassified since January 25, 2018. The EPA is proposing that sources 
reclassifying from major source status to area source status under the 
NESHAP program must satisfy the following criteria: any permit 
limitations taken to reclassify from a major source of hazardous air 
pollutants (HAP) under the Clean Air Act to an area source of HAP must 
be federally enforceable, any such permit limitations must contain 
safeguards to prevent emission increases after reclassification beyond 
the applicable major source NESHAP requirements at time of 
reclassification, and reclassification will only become effective once 
a permit has been issued containing enforceable conditions reflecting 
the requirements proposed in this action and electronic notification 
has been submitted to the EPA. Additionally, we are proposing 
clarifications to reporting requirements and updating language 
regarding submittal of confidential business information.

DATES: 
    Comments. Comments must be received on or before November 13, 2023. 
Under the Paperwork Reduction Act (PRA), comments on the information 
collection provisions are best assured of consideration if the Office 
of Management and Budget (OMB) receives a copy of your comments on or 
before October 27, 2023.
    Public hearing: If anyone contacts us requesting a public hearing 
on or before October 2, 2023, we will hold a virtual public hearing. 
See SUPPLEMENTARY INFORMATION for information on requesting and 
registering for a public hearing.

ADDRESSES: You may send comments, identified by Docket ID No. EPA-HQ-
OAR-2023-0330, by any of the following methods:
     Federal eRulemaking Portal: https://www.regulations.gov/ 
(our preferred method). Follow the online instructions for submitting 
comments.
     Email: [email protected]. Include Docket ID No. EPA-
HQ-OAR-2023-0330 in the subject line of the message.
     Fax: (202) 566-9744. Attention Docket ID No. EPA-HQ-OAR-
2023-0330.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, Docket ID No. EPA-HQ-OAR-2023-0330, Mail Code 28221T, 1200 
Pennsylvania Avenue NW, Washington, DC 20460.
     Hand/Courier Delivery: EPA Docket Center, WJC West 
Building, Room 3334, 1301 Constitution Avenue NW, Washington, DC 20004. 
The Docket Center's hours of operation are 8:30 a.m.-4:30 p.m., Monday-
Friday (except federal holidays).
    Instructions: All submissions received must include the Docket ID 
No. for this rulemaking. Comments received may be posted without change 
to https://www.regulations.gov/, including any personal information 
provided. For detailed instructions on sending comments and additional 
information

[[Page 66337]]

on the rulemaking process, see the SUPPLEMENTARY INFORMATION section of 
this document.

FOR FURTHER INFORMATION CONTACT: For questions about this proposed 
action, contact U.S. EPA, Attn: Nathan Topham, Mail Drop: D243-02, 109 
T.W. Alexander Drive, P.O. Box 12055, RTP, North Carolina 27711; 
telephone number: (919) 541-0483; email address: [email protected].

SUPPLEMENTARY INFORMATION: 
    Participation in virtual public hearing. To request a virtual 
public hearing, contact the public hearing team at (888) 372-8699 or by 
email at [email protected]. If requested, the hearing will be 
held via virtual platform on October 12, 2023. The hearing will convene 
at 10:00 a.m. Eastern Time (ET) and will conclude at 4:00 p.m. ET. The 
EPA may close a session 15 minutes after the last pre-registered 
speaker has testified if there are no additional speakers. The EPA will 
announce further details at https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112.
    If a public hearing is requested, the EPA will begin pre-
registering speakers for the hearing no later than 1 business day after 
a request has been received. To register to speak at the virtual 
hearing, please use the online registration form available at https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112 or contact the public hearing 
team at (888) 372-8699 or by email at [email protected]. The 
last day to pre-register to speak at the hearing will be October 10, 
2023. Prior to the hearing, the EPA will post a general agenda that 
will list pre-registered speakers at: https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112.
    The EPA will make every effort to follow the schedule as closely as 
possible on the day of the hearing; however, please plan for the 
hearings to run either ahead of schedule or behind schedule.
    Each commenter will have 4 minutes to provide oral testimony. The 
EPA encourages commenters to provide the EPA with a copy of their oral 
testimony electronically (via email) by emailing it to 
[email protected]. The EPA also recommends submitting the text of 
your oral testimony as written comments to the rulemaking docket.
    The EPA may ask clarifying questions during the oral presentations 
but will not respond to the presentations at that time. Written 
statements and supporting information submitted during the comment 
period will be considered with the same weight as oral testimony and 
supporting information presented at the public hearing.
    Please note that any updates made to any aspect of the hearing will 
be posted online at https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112. While the EPA expects the hearing to go forward as set forth 
above, please monitor our website or contact the public hearing team at 
(888) 372-8699 or by email at [email protected] to determine if 
there are any updates. The EPA does not intend to publish a document in 
the Federal Register announcing updates.
    If you require the services of a translator or special 
accommodation such as audio description, please pre-register for the 
hearing with the public hearing team and describe your needs by October 
4, 2023. The EPA may not be able to arrange accommodations without 
advanced notice.
    Docket. The EPA has established a docket for this rulemaking under 
Docket ID No. EPA-HQ-OAR-2023-0330. All documents in the docket are 
listed in https://www.regulations.gov/. Although listed, some 
information is not publicly available, e.g., Confidential Business 
Information (CBI) or other information whose disclosure is restricted 
by statute. Certain other material, such as copyrighted material, is 
not placed on the internet and will be publicly available only in hard 
copy. With the exception of such material, publicly available docket 
materials are available electronically in Regulations.gov.
    Instructions. Direct your comments to Docket ID No. EPA-HQ-OAR-
2023-0330. The EPA's policy is that all comments received will be 
included in the public docket without change and may be made available 
online at https://www.regulations.gov/, including any personal 
information provided, unless the comment includes information claimed 
to be CBI or other information whose disclosure is restricted by 
statute. Do not submit electronically to https://www.regulations.gov/ 
any information that you consider to be CBI or other information whose 
disclosure is restricted by statute. This type of information should be 
submitted as discussed below.
    The EPA may publish any comment received to its public docket. 
Multimedia submissions (audio, video, etc.) must be accompanied by a 
written comment. The written comment is considered the official comment 
and should include discussion of all points you wish to make. The EPA 
will generally not consider comments or comment contents located 
outside of the primary submission (i.e., on the Web, cloud, or other 
file sharing system). For additional submission methods, the full EPA 
public comment policy, information about CBI or multimedia submissions, 
and general guidance on making effective comments, please visit https://www.epa.gov/dockets/commenting-epa-dockets.
    The https://www.regulations.gov/ website allows you to submit your 
comment anonymously, which means the EPA will not know your identity or 
contact information unless you provide it in the body of your comment. 
If you send an email comment directly to the EPA without going through 
https://www.regulations.gov/, your email address will be automatically 
captured and included as part of the comment that is placed in the 
public docket and made available on the internet. If you submit an 
electronic comment, the EPA recommends that you include your name and 
other contact information in the body of your comment and with any 
digital storage media you submit. If the EPA cannot read your comment 
due to technical difficulties and cannot contact you for clarification, 
the EPA may not be able to consider your comment. Electronic files 
should not include special characters or any form of encryption and be 
free of any defects or viruses. For additional information about the 
EPA's public docket, visit the EPA Docket Center homepage at https://www.epa.gov/dockets.
    Submitting CBI. Do not submit information containing CBI to the EPA 
through https://www.regulations.gov/. Clearly mark the part or all of 
the information that you claim to be CBI. For CBI information on any 
digital storage media that you mail to the EPA, note the docket ID, 
mark the outside of the digital storage media as CBI, and identify 
electronically within the digital storage media the specific 
information that is claimed as CBI. In addition to one complete version 
of the comments that includes information claimed as CBI, you must 
submit a copy of the comments that does not contain the information 
claimed as CBI directly to the public docket through the procedures 
outlined in Instructions above. If you submit any digital storage media 
that does not contain CBI, mark the outside of the digital storage 
media clearly that it does not contain CBI and note the docket ID. 
Information not marked as CBI will be included in the public docket and 
the EPA's electronic public docket without prior notice. Information 
marked as CBI will not be

[[Page 66338]]

disclosed except in accordance with procedures set forth in 40 Code of 
Federal Regulations (CFR) part 2.
    Our preferred method to receive CBI is for it to be transmitted 
electronically using email attachments, File Transfer Protocol (FTP), 
or other online file sharing services (e.g., Dropbox, OneDrive, Google 
Drive). Electronic submissions must be transmitted directly to the 
OAQPS CBI Office at the email address [email protected], and as 
described above, should include clear CBI markings and note the docket 
ID. If assistance is needed with submitting large electronic files that 
exceed the file size limit for email attachments, and if you do not 
have your own file sharing service, please email [email protected] to 
request a file transfer link. If sending CBI information through the 
postal service, please send it to the following address: OAQPS Document 
Control Officer (C404-02), OAQPS, U.S. Environmental Protection Agency, 
Research Triangle Park, North Carolina 27711, Attention Docket ID No. 
EPA-HQ-OAR-2023-0330. The mailed CBI material should be double wrapped 
and clearly marked. Any CBI markings should not show through the outer 
envelope.
    Preamble acronyms and abbreviations. Throughout this preamble the 
use of ``we,'' ``us,'' or ``our'' is intended to refer to the EPA. We 
use multiple acronyms and terms in this preamble. While this list may 
not be exhaustive, to ease the reading of this preamble and for 
reference purposes, the EPA defines the following terms and acronyms 
here:

CAA Clean Air Act
CEDRI Compliance and Emissions Data Reporting Interface
CFR Code of Federal Regulations
D.C. Cir. the United States Court of Appeals for the District of 
Columbia Circuit
EPA Environmental Protection Agency
FIP Federal Implementation Plan
HAP hazardous air pollutant(s)
MACT maximum achievable control technology
MM2A Major MACT to Area
MRR monitoring, recordkeeping, and reporting
NESHAP national emission standards for hazardous air pollutants
NMA National Mining Association
NSR New Source Review
NTTAA National Technology Transfer and Advancement Act
OIAI Once In, Always In
OMB Office of Management and Budget
PRA Paperwork Reduction Act
PSD prevention of significant deterioration
PTE potential to emit
RFA Regulatory Flexibility Act
RIA Regulatory Impact Analysis
SIP State Implementation Plan
TIP Tribal Implementation Plan
tpy tons per year
UMRA Unfunded Mandates Reform Act

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

I. General Information
    A. Does this rule apply to me?
    B. Where can I get a copy of this document and other related 
information?
II. Background
    A. What is the statutory authority for this action?
    B. History of PTE and Enforceability of Limits in the NESHAP 
Program
    C. History of Reclassifications in the NESHAP Program
III. Proposed Criteria for MM2A Reclassifications
    A. Electronic Notification and Reclassification Effective Date
    B. Sufficiency of Limits Taken To Reclassify
    C. Ministerial Revisions From the 2020 MM2A Final Rule
    D. What sources will have to ensure all new requirements are met 
and when will those sources need to comply with the new 
requirements?
IV. Statutory and Executive Order Reviews
    A. Executive Order 12866: Regulatory Planning and Review and 
Executive Order 14094: Modernizing Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    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 (NTTAA)
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations and Executive Order 14096: Revitalizing Our Nation's 
Commitment to Environmental Justice for All

I. General Information

A. Does this rule apply to me?

    Categories and entities potentially impacted by this rule include 
major sources of HAP that choose to take limitations to restrict their 
potential to emit in order to reclassify from a major source of HAP to 
an area source of HAP pursuant to the requirements in 40 CFR part 63, 
subpart A, implementing section 112 of the CAA. This rule also would 
impact those sources that have reclassified since January 25, 2018.
    Federal, state, local, and tribal governments may be affected by 
the proposed amendments, once promulgated, if their current programs do 
not meet the requirements, and those jurisdictions choose to create 
potential to emit (PTE) limiting mechanisms that allow sources located 
within their jurisdiction to reclassify from major to area source 
status under the NESHAP program. Section 112(l) of the CAA allows for 
delegation of the implementation and enforcement of NESHAPs to state 
and local air pollution control agencies and 40 CFR part 63, subpart E 
contains the regulatory framework for such delegations. Per 40 CFR 
63.90(e), programs approved under 40 CFR part 63, subpart E are 
federally enforceable by the Administrator and citizens under the 
CAA.\1\ Subpart E describes the types of delegations, including 
straight delegations of NESHAPs (delegation of individual NESHAPs 
without change), rule adjustment (delegation of individual NESHAPs with 
changes), rule substitution (delegation of individual NESHAPs through 
use of a state/local/tribal rule in place of the NESHAP), equivalence 
by permit (alternative requirements and authorities that take the form 
of permit terms and conditions for individual facilities instead of 
source category regulations), and approval of programs that substitute 
for CAA section 112 requirements (intended for mature air toxics 
programs with many regulations affecting source categories regulated by 
Federal section 112 standards). Subpart E describes the necessary 
components for programs, timing of review and approval by the EPA, and 
approval or disapproval process for such programs. If federally 
enforceable HAP PTE limiting mechanisms do not exist in a state, that 
state can choose to submit mechanisms according to one of the processes 
provided in 40 CFR part 63, subpart E. In short, this process involves 
a state submitting authorities to the EPA for review and approval to 
use in lieu of CAA section 112 requirements. While the specific steps 
involved in this process depend on the type of HAP PTE limiting 
mechanism under consideration (e.g., the process for a straight 
delegation is simpler than the state program approval process), the end 
result is a federally enforceable mechanism that has been reviewed and 
approved by the EPA. We are seeking comment on the potential burdens on

[[Page 66339]]

states and regulated facilities related to the use of 40 CFR part 63, 
subpart E by states for mechanisms to allow sources to reclassify from 
major sources to area sources. We are also seeking comment on the time 
needed should a state choose to submit programs for EPA review and 
approval under subpart E in order to allow for sources to reclassify 
from major sources to area sources where no such federally enforceable 
programs currently exist. This proposal does not require any changes or 
seek to alter in any way existing state-only enforceable PTE limiting 
mechanisms that are not used for sources reclassifying from major 
sources of HAP to area sources of HAP.
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    \1\ This refers to the legal authority granted under the CAA 
(i.e., under section 113 and section 304(a) of the statute) to the 
EPA Administrator and citizens to enforce in Federal court all 
limitations and conditions that implement requirements under the CAA 
(e.g., issued under an approved program under section 112(l) of the 
CAA or a SIP or another statute administered by the EPA.).
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    The EPA is the permitting authority for issuing, rescinding, and 
amending permits for sources in Indian country, with four 
exceptions.\2\ Once promulgated, state, local, or tribal regulatory 
authorities \3\ may receive requests to issue new permits or make 
changes to existing permits for sources in their jurisdiction to 
address the amended requirements.
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    \2\ Two tribes have approved title V programs or delegation of 
40 CFR part 71. The tribes may have sources that request to no 
longer be covered by title V. Neither of these two tribes have 
approved minor source permitting programs but may in the future. In 
the meantime, the tribes will need to coordinate with the EPA, who 
is the permitting authority in Indian country for these requests. In 
addition, two other tribes has a major source that would be eligible 
to request reclassification. If that source requests a new permit, 
the tribe may issue the minor source permit, but the EPA would need 
to be made aware of the request, as the EPA is the permitting 
authority for title V.
    \3\ The term regulatory authority is intended to be inclusive of 
the federal, state, tribal, or local air pollution control agency 
with authority to process reclassification requests and issuance of 
enforceable PTE limits.
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B. Where can I get a copy of this document and other related 
information?

    In addition to being available in the docket, an electronic copy of 
this action is available on the internet. Following signature by the 
EPA Administrator, the EPA will post a copy of this proposed action at 
https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112. Following publication in 
the Federal Register, the EPA will post the Federal Register version of 
the proposal and key technical documents at this same website.
    A memorandum showing the rule edits that would be necessary to 
incorporate the changes to 40 CFR part 63, subpart A proposed in this 
action is available in the docket (Docket ID No. EPA-HQ-OAR-2023-0330). 
The EPA also will post a copy of this document to https://www.epa.gov/stationary-sources-air-pollution/reclassification-major-sources-area-sources-under-section-112.

II. Background

A. What is the statutory authority for this action?

    The statutory authority for this action is provided by section 112 
of the CAA, as amended (42 U.S.C. 7401 et seq.). Section 112 of the CAA 
requires the EPA to establish emissions standards for ``major sources'' 
and ``area sources'' of HAP to control and reduce their emissions. 
Section 112(a)(1) defines major source, in relevant part, 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 tons per 
year or more of any hazardous air pollutant or 25 tons per year or more 
of any combination of hazardous air pollutants''; and 112(a)(2) defines 
area source, in relevant part, as ``any stationary source of hazardous 
air pollutants that is not a major source.'' 42 U.S.C. 7412(a)(1) and 
(2).
    For major sources, section 112 establishes a two-stage regulatory 
process to develop standards to control HAP emissions. The first stage 
requires the EPA to establish technology-based standards based on the 
maximum achievable control technology (MACT). In this stage the EPA 
must establish minimum standards based on best performing units in a 
source category, referred to as the MACT floor, and evaluate whether 
additional emission reductions are achievable based on the EPA's 
consideration the cost of achieving such emission reduction, and any 
non-air quality health and environmental impacts and energy 
requirements, referred to as the beyond-the-floor analysis. The second 
stage requires the EPA to evaluate residual risk from HAP after 
implementation of the initial standards to determine whether 
promulgation of additional standards is needed to provide an ample 
margin of safety to protect public health or to prevent an adverse 
environmental effect, referred to as the residual risk review; and 
requires the EPA to evaluate developments in practices, processes, and 
control technologies to determine if more stringent standards are 
necessary, referred to as the technology review. Pursuant to CAA 
section 112(f)(2), the EPA is required to perform residual risk reviews 
within 8 years of promulgating initial standards; and pursuant to 
section 112(d)(6), the EPA is required to perform the technology review 
no less often than every 8 years.
    For area sources, the EPA may elect to promulgate alternative 
standards than those established for major sources that provide for the 
use of generally available control technologies (GACT) or management 
practices to reduce HAP emissions. Unlike MACT standards required for 
major sources, GACT standards are not required to be updated pursuant 
to residual risk reviews and unlike the MACT ``floor'' process, GACT 
standards may consider costs when establishing the level of the 
standard.

B. History of PTE and Enforceability of Limits in the NESHAP Program

    The potential to emit (PTE) is key to the distinction between major 
and area sources. PTE refers to the maximum capacity of a stationary 
source to emit a pollutant under its physical and operational design 
and is used to determine whether a source qualifies as a major or area 
source. In 1994, the EPA promulgated the definition of PTE in the 
General Provisions of the NESHAP at 40 CFR 63.2, which defined PTE in 
terms based on the major source definition in section 112(a)(1) of the 
CAA.\4\ As promulgated in 1994, the PTE definition states that PTE 
``means 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.'' Under this definition, and consistent with section 
112(a)(1), sources that would otherwise qualify as major sources are 
able to obtain enforceable permit limitations from the EPA or delegated 
authority containing physical or operational limits to bring their 
emission below the major source threshold, referred to as synthetic 
minor sources.
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    \4\ CAA section 112(a)(1) defines major source, in relevant 
part, 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 tons per year or more of any hazardous air pollutant or 25 tons 
per year or more of any combination of hazardous air pollutants.'' 
(emphasis added).
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    In National Mining Association (NMA) v. EPA, 59 F.3d 1351 (D.C. 
Cir. 1995), the D.C. Cir. remanded without vacatur the 40 CFR 63.2 
definition to the EPA to justify the requirement that

[[Page 66340]]

physical or operational limits on the capacity to emit a pollutant be 
``federally enforceable,'' i.e., whether limits needed to be 
enforceable by the EPA and citizen groups under the CAA or other 
federal statutes. The NMA decision confirmed that the EPA has an 
obligation to ensure that limits considered in determining a source's 
PTE are effective, but it stated that the Agency had not adequately 
explained how ``federal enforceability'' furthered effectiveness. 59 
F.3d at 1363-1365.\5\
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    \5\ Two additional cases addressing PTE in different CAA 
programs were decided after National Mining. In Chemical 
Manufacturers Ass'n v. EPA, 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 regulations (40 CFR 
parts 51 and 52). In Clean Air Implementation Project v. EPA, No. 
96-1224, 1996 WL 393118 (D.C. Cir. June 28, 1996), the court vacated 
and remanded the federal enforceability requirement in the title V 
regulations (40 CFR part 70). The CMA and the CAIP orders were 
similar in that they contained no independent legal analysis, but 
rather relied on the National Mining decision.
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    After the NMA decision, the EPA extended a pre-existing 
transitional policy allowing the use of non-federally enforceable 
limits (e.g., state-only enforceable limits) for limiting PTE provided 
those limits are legally enforceable and practicably enforceable.\6\ 
Legal enforceability means that the reviewing authority has the right 
to enforce a limit or restriction. As the EPA explained in the 
transitional policy, practicably enforceable means that limitations and 
restrictions must be of sufficient quality and quantity to ensure 
accountability, and specifically, for a permit provision to be 
practicable enforceable it must specify ``(1) a technically-accurate 
limitation and the portions of the source subject to the limitation; 
(2) the time period for the limitation (hourly, daily, monthly, 
annually); and (3) the method to determine compliance including 
appropriate monitoring, recordkeeping and reporting.'' \7\
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    \6\ See ``Third Extension of January 25, 1995 Potential to Emit 
Transition Policy,'' from John S. Seitz and Eric V. Schaeffer to 
Regional Offices (December 20, 1999). See also ``Options for 
Limiting the Potential to Emit (PTE) of a Stationary Source Under 
Section 112 and Title V of the Clean Air Act,'' from John S. Seitz 
and Robert I. Van Heuvelen to Regional Offices (January 25, 1995); 
``Extension of January 25, 1995, Potential to Emit Transition 
Policy,'' from John S. Seitz and Robert I. Van Heuvelen to Regional 
offices (August 27, 1997). Copies of these memoranda are available 
in the docket for this action.
    \7\ ``Options for Limiting the Potential to Emit (PTE) of a 
Stationary Source Under Section 112 and Title V of the Clean Air 
Act,'' from John S. Seitz and Robert I. Van Heuvelen to Regional 
Offices (January 25, 1995)
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    On March 23, 2001, the EPA added recordkeeping requirements for 
applicability determinations for sources with a maximum capacity to 
emit HAP in amounts greater than major source thresholds but with PTE 
limits to avoid applicability of a standard.\8\ At that time, the EPA 
also confirmed that until the rules are clarified to address various 
PTE issues, consistent with the NMA Court decision, any determination 
of HAP PTE under 40 CFR 63.2 should consider the regulations and also 
take into consideration the EPA transition policy guidance memoranda. 
66 FR 16342 (March 23, 2001).
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    \8\ See 40 CFR 63.10(b)(3). These requirements became final 
April 5, 2002. See 67 FR 16582 (April 5, 2002); see also, 66 FR 
16342 (March 23, 2001).
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    On November 19, 2020, the EPA issue a final rule titled 
``Reclassification of Major Sources as Area Sources Under Section 112 
of the Clean Air Act,'' 85 FR 73854 (referred to here as the 2020 MM2A 
final rule), in which the EPA made an interim ministerial revision to 
the definition of ``potential to emit'' in 40 CFR 63.2, which is 
discussed further in section II.C.1. of this preamble. See 85 FR 73875 
(November 19, 2020). Specifically, the Agency removed the word 
``federally'' from the phrase ``federally enforceable'' that was in the 
40 CFR 63.2 definition of ``potential to emit.''

C. History of Reclassifications in the NESHAP Program

1. What has happened to date in Section 112 of the CAA related to major 
source reclassifications?
    Shortly after the EPA began promulgating individual NESHAP 
standards following the 1990 CAA Amendments, the Agency received 
multiple requests to clarify when a major source of HAP could avoid CAA 
section 112 requirements applicable to major sources by taking 
enforceable limits on its PTE below the major source thresholds. In 
response, the EPA issued a 1995 a memorandum \9\ that provided guidance 
on three timing issues related to avoidance of CAA section 112 
requirements for major sources:
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    \9\ ``Potential to Emit for MACT Standards--Guidance on Timing 
Issues,'' from John Seitz to the EPA Regional Air Division Directors 
(May 16, 1995) (``1995 Seitz Memorandum'') (available in the docket 
for this action).
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     ``By what date must a facility limit its PTE if it wishes 
to avoid major source requirements of a MACT standard?''
     ``Is a facility that is required to comply with a MACT 
standard permanently subject to that standard?''
     ``In the case of facilities with two or more sources in 
different source categories: If such a facility is a major source for 
purposes of one MACT standard, is the facility necessarily a major 
source for purposes of subsequently promulgated MACT standards?''
    In the 1995 Seitz Memorandum, the EPA stated our interpretation of 
the relevant statutory language that facilities that are major sources 
of HAP may switch to area source status at any time until the ``first 
compliance date'' of the standard.\10\ Under this interpretation, 
facilities that are major sources on the first substantive compliance 
date of an applicable major source NESHAP were required to comply 
permanently with that major source standard even if the source was 
subsequently to become an area source by limiting its PTE. This 
position was commonly referred to as the ``Once In, Always In'' (OIAI) 
policy. The 1995 Seitz Memorandum provided that a source that is major 
for one MACT standard would not be considered major for a subsequent 
MACT standard if the source's potential to emit HAP emissions was 
reduced to below major source levels by complying with the first major 
source MACT standard. In the 1995 Seitz Memorandum, the EPA set forth 
transitional policy guidance that was intended to remain in effect only 
until the Agency proposed and promulgated amendments to the 40 CFR part 
63 General Provisions.
---------------------------------------------------------------------------

    \10\ The ``first substantive compliance date'' is defined as the 
first date a source must comply with an emission limitation or other 
substantive regulatory requirement (i.e., leak detection and repair 
programs, work practice measures, etc., but not a notice 
requirement) in the applicable standard.
---------------------------------------------------------------------------

    The expressed basis for the OIAI policy was that it would help 
ensure that required reductions in HAP emissions were maintained over 
time in a way that was consistent with the language and structure of 
the statute, and would avoid compromising the emissions reductions that 
Congress mandated major source to achieve.\11\ The EPA explained at the 
time that because the CAA did not directly address a deadline for a 
source to avoid requirements applicable to major sources through a 
reduction of potential to emit, the EPA viewed the OIAI policy as 
consistent with ``the language and structure of the Act . . . that 
sources should not be allowed to avoid compliance with a standard after 
the compliance date, even through a reduction in potential to emit.'' 
\12\
---------------------------------------------------------------------------

    \11\ See 1995 Seitz Memorandum at 9 (``A once in, always in 
policy ensures that MACT emissions reductions are permanent, and 
that the health and environmental protection provided by MACT 
standards is not undermined.'').
    \12\ Id. at 6.
---------------------------------------------------------------------------

    Since issuing the OIAI policy, the EPA has twice proposed 
regulatory

[[Page 66341]]

amendments that would have altered the OIAI policy. In 2003, the EPA 
proposed amendments that focused on HAP emissions reductions resulting 
from pollution prevention activities but did not finalize the proposed 
changes relevant to the OIAI policy. See 68 FR 26249 (May 15, 2003); 69 
FR 21737 (April 22, 2004).
    In 2007, the EPA proposed to replace the OIAI policy set forth in 
the 1995 Seitz Memorandum. 72 FR 69 (January 3, 2007). In that 
proposal, the EPA proposed that a major source that is subject to a 
major source MACT standard would no longer be subject to that standard 
if the source were to become an area source through an enforceable 
limitation on its PTE for HAP. Under the 2007 proposal, major sources 
could take such limits on their PTE and obtain ``area source'' status 
at any time and would not be required to have done so before the 
``first compliance date,'' as the OIAI policy provided. Id. at 70 
(``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 below 
the major source thresholds.'').
    Many commenters supporting the 2007 proposal expressed the view 
that, by imposing an artificial time limit on major sources obtaining 
area source status, the OIAI policy created a disincentive for sources 
to implement voluntary pollution abatement and prevention efforts, or 
to pursue technological innovations that would reduce HAP emissions 
further. Stakeholders commented to the EPA that the definitions in CAA 
section 112(a) contain a single factor for distinguishing between major 
source and area source--the amount of HAP the source ``emits'' or ``has 
the potential to emit.'' Commenters further stated that the temporal 
limitation imposed by the OIAI policy was inconsistent with the CAA and 
created an arbitrary date by which sources must determine whether their 
HAP PTE will exceed either of the major source thresholds. Other 
commenters opposed the 2007 proposal, arguing that it would contravene 
Congress's intent in developing section 112 of the CAA, lead to 
backsliding in performance of pollution controls and resulting health 
protections from sources no longer subject to MACT standards, and 
lacked sufficient rationale to justify overturning long-standing EPA 
policy regarding major and area sources. The EPA never took final 
action on the 2007 proposal, and it was later superseded and replaced. 
Comments on the lack of a temporal distinction in defining major 
sources and area sources were re-emphasized in comments received per 
Executive Order 13777, Enforcing the Regulatory Reform Agenda (February 
24, 2017), and the Presidential Memorandum on Streamlining Permitting 
and Reducing Regulatory Burdens for Domestic Manufacturing (January 24, 
2017).
    On January 25, 2018, the EPA issued a memorandum from William L. 
Wehrum, Assistant Administrator of the Office of Air and Radiation, to 
the EPA Regional Air Division Directors titled ``Reclassification of 
Major Sources as Area Sources Under Section 112 of the Clean Air Act'' 
(MM2A Memorandum) withdrawing the OIAI policy.\13\ The MM2A Memorandum 
discussed the statutory provisions that govern when a major source 
subject to major source NESHAP requirements under section 112 of the 
CAA may be reclassified as an area source, and thereby avoid being 
subject thereafter to major source NESHAP requirements and other 
requirements applicable to major sources under CAA section 112. In the 
MM2A Memorandum, the EPA discussed the language of CAA section 112(a) 
regarding Congress's definitions of ``major source'' and ``area 
source,'' and determined that the OIAI policy articulated in the 1995 
Seitz Memorandum was contrary to the plain language of the CAA and, 
therefore, must be withdrawn.
---------------------------------------------------------------------------

    \13\ See notice of issuance of this guidance memorandum at 83 FR 
5543 (February 8, 2018).
---------------------------------------------------------------------------

    In the MM2A Memorandum, the EPA announced the future publication of 
a proposed rule to receive input from the public on adding regulatory 
text consistent with the reading of the statute as described in the 
MM2A Memorandum. On July 26, 2019, the EPA proposed regulatory text to 
implement the reading of the statute as discussed in the MM2A 
Memorandum.\14\ The 2019 proposal superseded and replaced the 2007 
proposal.\15\
---------------------------------------------------------------------------

    \14\ See 84 FR 36304 (July 26, 2019).
    \15\ See 72 FR 69 (January 3, 2007).
---------------------------------------------------------------------------

    The 2019 MM2A proposal also addressed questions received after the 
issuance of the 2018 MM2A Memorandum. In the comments on the 2007 and 
2019 proposals, many stakeholders asserted that the implementation of 
this reading and withdrawal of the OIAI policy would create incentives 
for stationary sources that have reduced HAP emissions to below major 
source thresholds to reclassify to area source status by taking 
enforceable PTE limits and reduce their compliance burden. These 
stakeholders also stated that sources with emissions above major source 
thresholds after complying with CAA section 112 major source 
requirements could be encouraged to evaluate their operations and 
consider additional changes that can further reduce their HAP emissions 
to below the major source thresholds. Other stakeholders raised the 
concern that allowing sources to reclassify could potentially result in 
emission increases from sources that have reduced their actual 
emissions to below the major source thresholds because they have had to 
comply with major source NESHAP requirements. Some stakeholders 
contended that federal safeguards (i.e., conditions on reclassification 
requiring that sources limit emissions to at least the level of control 
achieved under the major source NESHAP) were required to ensure that 
the emissions did not increase from sources that reclassified. They 
noted that some states cannot implement air pollution control 
requirements that are not derived from Federal regulations, while other 
stakeholders asserted that only those major sources that had reduced 
emissions through pollution prevention or removal of equipment should 
be allowed to reclassify.
    Other stakeholders, generally opposed to requiring safeguards, 
questioned the legal basis for establishing safeguards that would 
restrict emissions from area sources. These stakeholders stated that 
the EPA holds no regulatory authority to prohibit or regulate emissions 
increases from area sources unless EPA lists these area sources under 
CAA section 112 and then develops standards, or if area sources exceed 
the major source threshold. They stated that CAA section 112 contains 
no restrictions on the gross quantity of emissions emitted from any 
major or area sources, nor does it outright prohibit stationary sources 
from undertaking activities that increase emissions.
    In the 2019 proposal, the EPA proposed specific criteria that PTE 
limits must meet for these limits to be effective. The EPA also 
proposed to amend the definition of ``potential to emit'' in 40 CFR 
63.2 by removing the requirement for federally enforceable limits and 
requiring instead that limits meet the effectiveness criteria of being 
both legally enforceable and practicably enforceable. The EPA also 
proposed to amend 40 CFR 63.2 to include the definitions of ``legally 
enforceable'' and ``practicably enforceable'' described in the MM2A 
proposal. The EPA then took comment on the effectiveness criteria and 
the proposed amendments to 40 CFR 63.2.

[[Page 66342]]

    The EPA received significant comments from many stakeholders on the 
proposed effectiveness criteria and proposed amendments to 40 CFR 63.2. 
One of the main concerns raised by stakeholders in their comments was 
the interactions and effects of the proposed amendments with other CAA 
programs, including Prevention of Significant Deterioration (PSD), New 
Source Review (NSR), State Implementation Plan (SIP), and title V 
operating permits, and the impacts of the proposed amendments to 
existing state, local, and tribal agency rules.
    The EPA published the 2020 MM2A final rule (85 FR 73854) on 
November 19, 2020, which formalized the withdraw of the OIAI policy 
first introduced in the 2018 MM2A Memorandum. The EPA did not take 
final action on the proposed amendments to 40 CFR 63.2 as it was still 
considering the comments received on the proposed effectiveness 
criteria and proposed amendments to 40 CFR 63.2. In the final MM2A 
rule, the EPA expressed its intention to take action on this aspect of 
the MM2A proposal in a separate action at a later date. However, as 
part of the final MM2A rule, the EPA made an interim ministerial 
revision to the definition of ``potential to emit'' in 40 CFR 63.2. 
Specifically, the Agency removed the word ``federally'' from the phrase 
``federally enforceable'' that was in the 40 CFR 63.2 definition of 
``potential to emit.''
    The EPA explained that this interim ministerial revision was not 
the EPA's final decision and should not be read to suggest that the EPA 
was leaning towards or away from any particular final action on this 
aspect of the MM2A proposal. The revision was an interim revision to 
cover the period of time while the EPA continued to consider the 
comments on this aspect of the MM2A proposal and until the Agency takes 
final action with respect to the proposed effectiveness criteria and 
proposed amendments to 40 CFR 63.2. The EPA asserted that this revision 
was ministerial because it merely reflected the NMA decision, which 
held that the EPA had not explained why a PTE limit had to be 
``federally enforceable'' to be considered as the basis for 
reclassifying a major source to area source status. See NMA v. EPA, 59 
F.3d at 1363-1365.\16\ So, for the reasons explained in the final MM2A 
rule preamble, the revision to the PTE definition did not represent a 
final decision by the EPA.
---------------------------------------------------------------------------

    \16\ See note 6, supra.
---------------------------------------------------------------------------

    Further, the interim ministerial revision did not alter any rights 
or legal consequences and simply preserved the status quo that has been 
in effect since the late 1990s. The EPA expressly said that the interim 
ministerial revision did not change how the EPA applies the 
transitional policy that the Agency has been following since 1995. This 
transitional policy allows for any physical or operational limitation 
on the capacity of the stationary source to emit a pollutant (such as 
air pollution control equipment and restrictions on hours of operation 
or on the type or amount of material combusted, stored, or processed) 
to be treated as part of its design if the limitation or the effect it 
would have on emissions is federally enforceable or legally enforceable 
by a state or local permitting authority and practicably enforceable. 
The final MM2A rule became effective on January 19, 2021.
    A significant concern raised during the 2020 MM2A rulemaking is 
that under the current MM2A framework, sources with adjustable controls 
can obtain PTE limits just below the major source thresholds to 
reclassify from major source status to area source status and reduce 
their control efficiency to reduce operational costs, and subsequently 
increase emissions, in a manner that would not have been allowed under 
the major source NESHAP. This possibility stems from the differences in 
stringency in major source rules compared to area source rules for the 
same source category. In short, major source NESHAPs require MACT 
standards that reduce emissions from all major sources in a category to 
the levels achieved by the best performers. In contrast, NESHAP 
standards for area sources allow for the use of GACT standards that 
often require less control of HAP than the corresponding MACT standards 
for major sources. In addition, GACT standards typically apply to a 
select group of HAP, known as urban HAP, rather than all listed HAP. 
Finally, unlike the residual risk requirements for sources subject to 
MACT standards, there is no requirement for the EPA to evaluate the 
public health risk that remains after implementation of GACT standards. 
These differences are most concerning for major source categories for 
which the area source NESHAP applies to fewer emission points and 
regulates fewer HAP than the major source rule or for which there is no 
NESHAP applicable to area sources at all. The current MM2A framework 
does not provide clear requirements for sources reclassifying in a 
source category with less stringent or no requirements for area 
sources, creating inconsistencies between sources in a given category 
based on their decision to reclassify or not, between sources across 
source categories based on the existence and stringency of area source 
NESHAPs, and between sources based on the robustness of the state or 
local regulations in the area where they are located.
2. What is Executive Order 13990 and how does it impact this proposal?
    On January 20, 2021, President Biden issued Executive Order 13990 
Protecting Public Health and the Environment and Restoring Science to 
Tackle the Climate Crisis. This E.O. called for the EPA to review 
actions taken during the prior four years and, as appropriate, consider 
suspending, revising, or rescinding actions that did not align with the 
Administration's policy to listen to the science; to improve public 
health and protect our environment; to ensure access to clean air and 
water; to limit exposure to dangerous chemicals and pesticides; to hold 
polluters accountable, including those who disproportionately harm 
communities of color and low-income communities; to reduce greenhouse 
gas emissions; to bolster resilience to the impacts of climate change; 
to restore and expand our national treasures and monuments; and to 
prioritize both environmental justice and the creation of the well-
paying union jobs necessary to deliver on these goals.

III. Proposed Criteria for MM2A Reclassifications

    In this action the EPA is proposing to update electronic reporting 
requirements for sources that reclassify from major to area sources, 
and to add requirements for sources to reclassify from major source to 
area source status to improve the effectiveness of PTE limits for these 
sources. Specifically, the EPA proposes to require safeguards to ensure 
that reclassified sources cannot increase their emissions as a result 
of reclassification, and to require PTE limits for reclassified sources 
be federally enforceable (i.e., enforceable by the EPA and citizens 
under the CAA or other federal statute). The EPA is proposing these 
additional criteria for reclassified sources, because of the EPA's 
particular concern with this subset of sources which may be able to 
increase emissions as a result of reclassification.

A. Electronic Notification and Reclassification Effective Date

    To provide information to the EPA and the public, 40 CFR 63.9(b) 
requires sources to notify the EPA when a source becomes subject to a 
relevant standard

[[Page 66343]]

and 40 CFR 63.9(j) requires sources to notify the Administrator when 
there is a change in the information previously submitted to the EPA. 
The notification requirements of 40 CFR 63.9(j) apply to those sources 
that reclassify from major source to area source status under CAA 
section 112 (e.g., by taking production or operation limits to reduce a 
source's HAP emissions below the applicability threshold). Sources that 
reclassify are currently required to notify the EPA within 15 days 
after reclassification. The required notification must include 
information on the standard the source was reclassifying from and to 
(if applicable), along with the effective date of the reclassification. 
To ensure the availability of this information, the EPA requires 
electronic submission of such notifications. Sources that reclassify to 
area source status by taking limits to reduce HAP emissions are also 
currently required under 40 CFR 63.10 to keep records of applicability 
determinations on-site. We are clarifying that reclassifications that 
occur after the effective date of this action will be effective upon 
the date of electronic submittal of the notification to the EPA. This 
clarification will ensure that sources submit the required notification 
to the EPA when reclassification occurs. We have become aware of some 
sources that have reclassified and the required reclassification has 
not been submitted through CEDRI. In order to prevent this from 
continuing, we have determined that reclassifications will not be 
considered effective until notification has been submitted to the EPA. 
Sources that have already reclassified or reclassify prior to the 
effective date of this action and have not submitted the required 
electronic notification must submit electronic notification of 
reclassification to the EPA within six months of the effective date of 
this action. Reclassified sources that have already submitted 
electronic notification to the EPA do not need to resubmit the 
notification. The EPA expects these notification and recordkeeping 
requirements under 40 CFR part 63 will assist the EPA in its oversight 
role under the CAA and be of minimal burden to the regulated community.
    Additionally, we are proposing to clarify the original intent of 
the language in 40 CFR 63.9(j) allowing the use of the application for 
reclassification to fulfill the requirements of notification to more 
clearly indicate that it must be submitted to the Compliance and 
Emissions Data Reporting Interface (CEDRI) and contain the information 
required in 40 CFR 63.9(j)(1) through (4). We are also proposing to 
update the procedures for submittal of confidential business 
information to include electronic submittal procedures.

B. Sufficiency of Limits Taken To Reclassify

    In this proposal, the EPA is revisiting the sufficiency of 
restrictions on PTE relied upon for reclassification, i.e., what a 
source must do to be able to reclassify. The EPA proposes to require 
(1) additional criteria that a PTE limit must meet before it can serve 
as the basis for reclassification from major to area for CAA section 
112 purposes and (2) federal enforceability of permit limits that are 
taken by sources to reclassify from major to area source status. The 
proposed additional criteria for PTE (referred to here as 
``safeguards'') would require a determination that a source 
reclassifying from major to area source status will not emit beyond 
what would have been allowed had the source maintained major source 
status. Federal enforceability would ensure that the EPA and citizens 
are able to enforce those permit limits taken to reclassify in federal 
court under the Clean Air Act or other statutes administered by the 
EPA. In proposing these changes, the EPA seeks to ensure that the 
opportunity for sources to reclassify from major to area for purposes 
of CAA section 112 does not undermine the emissions reductions intended 
by that program.
    Hazardous air pollutants pose public health risks at levels well 
below the major source thresholds (10/25 TPY), at times in very small 
quantities. Congress understood this fact in enacting CAA section 112 
by directing the EPA to further reduce or eliminate HAP emissions where 
possible.\17\ Further, the EPA shares the concerns raised by commenters 
on the MM2A rulemaking that sources with adjustable controls that can 
reclassify by reducing emissions just below the major source threshold 
could subsequently increase emissions under less stringent, or 
nonexistent, area source regulations for a given source category. For 
example, if a major source standard had the effect of reducing 
emissions of a certain pollutant to 1 ton per year but there is no 
corresponding area source standard for the same source category, then a 
source could take a PTE limit of 9.9 tons per year of a single HAP or 
24.9 tons per year of combined HAP emissions, thus increasing its 
emissions, and reclassify under the 2020 MM2A final rule. Indeed, every 
source in this hypothetical source category could do the same. In order 
to protect the public from the health risks of HAPs, and based on 
Congress' intent to reduce harmful HAP emissions and regulate to the 
maximum extent achievable, the EPA proposes enhanced oversight, 
compliance assurance, and that national consistency be required for the 
reclassified sources via safeguards and federal enforceability of 
restrictions or limitations taken to otherwise avoid applicable 
requirements as a major source of HAPs under Part 63 to ensure such 
concerning scenarios do not occur.
---------------------------------------------------------------------------

    \17\ CAA section 112(a)(1) in defining ``major source'' provides 
that the EPA may establish a ``lesser quantity'' threshold for major 
sources ``on the basis of the potency of the air pollutant, 
persistence, potential for bioaccumulation, other characteristics of 
the air pollutant, or other relevant factors.'' In addition, CAA 
section 112(d)(2) directs the EPA in promulgating emission standards 
to ``require the maximum degree of reduction in emissions of the 
hazardous air pollutants subject to this section (including a 
prohibition on such emissions, where achievable)[.]''
---------------------------------------------------------------------------

    In prior rulemakings and guidance, the EPA has discussed the timing 
of when a source can reclassify from major to area source. Most 
recently in the 2020 MM2A rule, the EPA adopted the position that the 
lack of a temporal limitation on whether a source qualifies as a major 
source under CAA section 112(a)(1) refuted the EPA's earlier OIAI 
policy. The EPA does not propose to reopen that conclusion here. 
However, as the EPA discussed in the 2019 proposal to the MM2A rule, in 
addition to the timing of reclassification there is a separate question 
as to the sufficiency of the PTE limit taken to reclassify.
    The sufficiency of limitations on PTE taken to reclassify from 
major to area source status is governed by the definitions of ``major 
source'' and ``area source'' in CAA section 112(a)(1) and (2). Major 
sources are defined, in relevant part, as sources that can emit or have 
the potential to emit ``considering controls,'' 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. Area sources are in turn 
defined as any stationary source of hazardous air pollutants that is 
not a major source. Therefore, in determining what qualifies as an area 
source the EPA must consider the major source definition and how to 
``consider controls'' the facility would rely upon to justify its 
status as an area source. The EPA proposes the most appropriate 
interpretation of ``considering controls'' is one that, on the one 
hand, does not undermine the purposes of CAA section 112 by allowing 
sources to potentially increase HAP emissions while on the other hand 
also recognizes that the statute does not place an absolute time limit 
on the opportunity to reclassify.

[[Page 66344]]

The former concern was first articulated in the 1995 OIAI policy, the 
latter in the 2018 MM2A policy and subsequent rulemaking.
    Today's proposal seeks to reconcile these objectives by recognizing 
that a facility subject to a MACT standard may reclassify at any time, 
while requiring a determination by the state or local permitting 
authority that doing so will not undermine the emissions reductions 
entailed by the MACT standard, and further ensuring limits taken to 
reclassify are effective by allowing for federal and citizen 
enforcement. The EPA proposes the best interpretation of the term 
``considering controls'' in the definition of ``major source'' in CAA 
section 112 allows for this reconciliation. Specifically, the EPA is 
proposing that for a facility seeking to reclassify from major to area 
source status for purposes of a particular MACT standard, the 
``controls'' that are determinative are those that are proven to be at 
least as effective at reducing emissions as the MACT standard to which 
the facility has been subject, and which are subject to federal 
enforcement as defined in 40 CFR 63.2.
    This interpretation of CAA section 112(a)(1) is consistent with the 
D.C. Circuit decision NMA v. EPA, which recognized the word 
``controls'' commonly refers to governmental restrictions but is 
ambiguous as used in the major source definition. 59 F.3d 1351, 1362 
(D.C. Cir. 1995) (``It is common ground that Congress meant the word 
`controls' to refer to governmental regulations and not, for instance, 
operational restrictions that an owner might voluntarily adopt. (We 
note, however, that the word could be read that broadly, which 
certainly supports the government's position that the term is not clear 
on its face.)''). Accordingly, in assessing a reclassified source, the 
EPA would determine whether safeguards and the enforceability of limits 
taken to reclassify, or governmental restrictions, are sufficient for 
the source to no longer qualify as a major source.
    In considering the term ``controls,'' the NMA court settled on the 
touchstone of ``effectiveness,'' faulting the EPA for not adequately 
explaining the relationship of federal enforceability to that core 
criterion. The Court explained that the EPA was ``not obliged to take 
into account controls that are only chimeras and do not really restrain 
an operator from emitting pollution[,]'' 59 F.3d at 1362, but that the 
EPA's determination of what constitutes appropriate ``controls'' should 
be tied to how well a limit actually restrains a facility's operations 
in accordance with CAA section 112. Today's proposal is based on this 
concept of ``effectiveness,'' and specifically on the reasoning that a 
limit taken to avoid a MACT standard to which a facility is already 
subject to cannot be considered an ``effective'' control if it results 
in the facility emitting more than it would have under the MACT 
standard. The EPA is also proposing that the enhanced effectiveness 
brought about by federal enforceability justifies the requirement that 
limits taken to avoid a MACT standard be federally enforceable. That 
is, the EPA is bolstering the effectiveness of PTE limits for 
reclassified sources by requiring sources to maintain historical 
emission reductions, and increasing the scope of enforcement to ensure 
PTE limits are met. The proposal thus employs the concept of 
``effectiveness'' to avoid eroding the purposes of the Act, while 
recognizing the flexibility the EPA continues to believe exists for 
facilities to reclassify from major to area status for purposes of a 
MACT standard.
    Today's proposal is also consistent with the purpose of the CAA in 
general and CAA section 112, in particular. The CAA is intended ``to 
protect and enhance the quality of the Nation's air resources so as to 
promote the public health and welfare and the productive capacity of 
its population.'' CAA section 101(b)(1). CAA section 112 was revised 
with the 1990 Clean Air Act Amendments after Congress was frustrated 
with the EPA's slow pace of regulation for sources of hazardous air 
pollutants, which Congress recognized as a serious public health 
concern.\18\ In enacting CAA section 112, Congress set a broad 
statutory purpose to reduce the volume of HAP emissions with the goal 
of reducing the risk from HAP emissions to a level that is protective 
of even the most exposed and most sensitive subpopulations.\19\ 
Congress therefore established a program for major and area sources 
that would lead to continued reductions of HAP by requiring the EPA to 
set technology-based MACT standards pursuant to CAA section 112(d)(2) 
and (3), to perform risk reviews under CAA section 112(f)(2) and to 
update MACT standards where they fail to provide an ample margin of 
safety, and to perform technology reviews pursuant to CAA section 
112(d)(6) to review and update, as necessary, MACT and GACT standards 
based on new developments in pollution control technology. Relatedly, 
CAA section 112(c)(6) required the EPA to identify and ensure emissions 
standards were in place for source categories that emit specific, 
particularly harmful HAP, and which were not initially covered 
following promulgation of the 1990 Clean Air Act Amendments. The 
structure of CAA section 112 thus includes specific points at which 
progress towards public health goals are to be assessed. These 
assessments depend in no small part on the extent to which major 
sources of HAP are regulated by MACT standards. While Congress did not 
speak directly to reclassification from major to area sources, the EPA 
proposes to find it would be contrary to the emission reduction and 
health protection objectives of the CAA and CAA section 112 to allow 
sources to increase their emissions after reclassification. Doing so 
would serve to diminish as opposed to enhance air quality and could 
potentially lead to increased HAP emissions and thus increased public 
health risk from exposure. Moreover, CAA section 112(d)(2) directs the 
EPA in promulgating emission standards to ``require the maximum degree 
of reduction in emissions of the hazardous air pollutants subject to 
this section (including a prohibition on such emissions, where 
achievable)[.]'' If a facility subject to the controls of a major 
source NESHAP can remove those controls by reducing its PTE to below 
the 10/25 TPY threshold, this substantially reduces the likelihood that 
Congress' objective of prohibiting emissions can be achieved.
---------------------------------------------------------------------------

    \18\ See H.R. Rep. No. 101-490, at 315 (1990) (``In theory, 
[hazardous air pollutants] were to be stringently controlled under 
the existing Clean Air Act section 112. However, . . . only 7 of the 
hundreds of potentially hazardous air pollutants have been regulated 
by EPA since section 112 was enacted in 1970.''); id. at 151 (noting 
that in 20 years, the EPA's establishment of standards for only 
seven HAP covered ``a small fraction of the many substances 
associated . . . with cancer, birth defects, neurological damage, or 
other serious health impacts.'')
    \19\ For example, CAA section 112(f)(2) requires the EPA to 
promulgate standards under the risk review if necessary to ``reduce 
lifetime excess cancer risks to the individual most exposed to 
emissions from a source in the category or subcategory to less than 
one in one million.'' CAA section 112(f)(2). Similarly, the listing 
and delisting provisions in CAA section 112 focus on any adverse 
effects to human health, evidencing Congress' concerns with 
protecting even the most exposed individuals. See e.g., CAA section 
112(b) and (c). For further discussion of how the statutory design 
of CAA section 112 is meant to quickly secure large reductions in 
HAP emissions from stationary sources and Congress' direction to the 
EPA emphasize that the EPA should regulate with the most exposed and 
most sensitive members of the population in mind in order to achieve 
acceptable levels of HAP emissions see 88 FR 13956, 13963-13966 
(March 6, 2023).
---------------------------------------------------------------------------

    This proposed framework would not apply to a source that has taken 
restrictions to limit PTE (i.e., a synthetic minor source) before the 
source's first

[[Page 66345]]

compliance date of the applicable major MACT standard. The proposed 
sufficiency criteria for sources that reclassify from major sources to 
area sources (i.e., safeguards and federal enforceability) would be 
applicable to reclassified synthetic minor sources, that is sources 
that are or were subject to a major source NESHAP, have PTE over the 
major source threshold, and are taking a restriction so as to limit the 
PTE below the major source threshold. This proposed framework would not 
apply, however, to reclassified ``true'' minor sources--that is sources 
that modify operations such that they are no longer capable of emitting 
above the major source threshold; nor would it apply to sources that 
were never subject to a major source NESHAP. The EPA is specifically 
requesting comment on whether it is appropriate to differentiate 
between reclassified synthetic minor and true minor sources, 
particularly given the proposed justification in this proposal.
    This proposal for the EPA to introduce safeguards and federal 
enforceability for sources that reclassify from area to major source 
status also differs from the EPA's former OIAI policy because it would 
continue to allow sources to reclassify consistent with the 2020 MM2A 
final rule; however, this proposal would introduce conditions that 
apply to reclassified sources through their permitting authority. The 
intent is to create flexibility to meet emission reduction goals that 
did not exist under the OIAI policy while preventing the potential 
emissions increases allowed under the current MM2A framework.
    Further, the EPA seeks comment on its proposed interpretation of 
``considering controls'' to ensure limits taken by sources to 
reclassify are sufficiently protective.
1. Safeguards
    The EPA is proposing that for those sources that reclassify from 
major source to area source status under the NESHAP program, any limits 
relied upon as limiting PTE for operations subject to the NESHAP must 
ensure emissions do not increase beyond what would have been allowed if 
the reclassifying source had continued to be subject to the major 
source NESHAP. The proposed safeguards will apply to sources that 
reclassify after the effective date of this action, as well as those 
that have reclassified since the 2018 Wehrum memorandum.
    Specifically, we are proposing to codify in a new paragraph, 40 CFR 
63.1(c)(6)(iv), that any federally enforceable HAP PTE limitations 
taken by a major source to reclassify to area source status must 
include one of the following control methods or a combination: (1) 
continue to employ the emission control methods (e.g., control device 
and/or emission reduction practices) required under the major source 
NESHAP requirements, including previously approved alternatives under 
the applicable NESHAP and associated monitoring, recordkeeping, and 
reporting (MRR); (2) control methods prescribed for reclassification 
under a specific NESHAP subpart; or (3) emission controls that the 
permitting authority has reviewed and approved as ensuring the 
emissions of HAP from units or activities previously covered will not 
increase above the emission standard or level that was acceptable under 
the major source NESHAP requirements at the time of reclassification. 
The record of the permitting authority decision should identify the 
units and methods and include the data and analysis as well as the 
determination that MRR is adequate to assure compliance.
    The EPA proposes the introduction of safeguards, coupled with 
federal enforceability, will help to ensure the NESHAP program 
continues to reduce emissions over time, and that sources subject to 
the NESHAP program are not able to increase their emissions beyond what 
the major source NESHAP would have allowed as a result of 
reclassification and/or evade permit limits that would otherwise 
prevent them from doing so. The EPA proposes safeguards are needed due 
to differences in EPA and state requirements for certain types of major 
and area NESHAP sources, which creates instances where it is feasible 
that two identical sources within a source category could have 
significantly different emissions requirements for a given pollutant if 
one remains a major source and the other reclassifies as an area 
source. This is particularly true in instances where there are no area 
source requirements for certain industries.
    Under this proposed definition, state and local permitting 
authorities would be charged with ensuring permitting limits taken for 
sources to reclassify from major to area source satisfy one of the 
three criteria listed above. That is, the permitting authority will 
determine that emissions for a reclassified source will not be above 
what they would have been had the source remained subject to the major 
source NESHAP. The EPA continues to consider and seeks comment on the 
specifics of how state and local permitting authorities should 
implement this definition and make such determinations. We are 
soliciting comments on whether the determination that a source will not 
emit above what would have been allowed under the major source NESHAP 
must be based on the same units of measure as the NESHAP had been 
(e.g., tons per year vs. pounds per hour). This will largely be a case-
by-case decision that will rest partly on the type of measurements 
used, the method of control, and quantity of emissions in question. We 
are also soliciting comment on whether sources should be required to 
continue to comply with a specific emissions limit using a specific 
type of control, especially for sources subject to major source NESHAPs 
that allow for different control options. We are seeking comment on how 
to best structure safeguards to ensure that flexibility is provided to 
permitting authorities making these determinations to allow for 
improvements in control technology effectiveness or efficiency without 
compromising the emissions reductions achieved by the NESHAP.
    The EPA is seeking comment on additional benefits or drawbacks of 
safeguards for NESHAP reclassifications. The EPA is also seeking 
comment on other criteria that will improve the process by which 
sources apply for, and the permitting authority approves, enforceable 
permit conditions containing safeguard provisions.
    In light of the special attention Congress paid to specific 
pollutants \20\ in section 112(c)(6) of the CAA, we are specifically 
seeking comment on whether additional restrictions are warranted for 
source categories that are subject to MACT standards for the persistent 
and bioaccumulative HAP listed pursuant to CAA section 112(c)(6). We 
believe the proposed safeguards are sufficient to prevent emissions 
increases but we are seeking comment on whether any of the following 
additional restrictions are warranted to achieve Congress's directive 
that source categories emitting these HAP are subjected to MACT 
standards under CAA section 112(d)(2) or (d)(4). The first possible 
restriction we are seeking comment on is one that

[[Page 66346]]

would prevent any sources \21\ subject to a major source NESHAP used to 
reach the EPA's 90 percent threshold for any of the CAA section 
112(c)(6) HAP from reclassifying from major source status to area 
source status. Another restriction we are considering and seeking 
comment on is one that would require sources subject to a major source 
NESHAP to remain subject to the major source NESHAP for emissions of 
the section 112(c)(6) HAP while allowing those sources source to 
reclassify and no longer remain subject to the major source NESHAP for 
emissions of non-112(c)(6) HAP. Finally, we are considering a 
restriction that would allow such sources to reclassify but would only 
allow them to use the proposed option in 40 CFR 63.(1)(c)(6)(iv) that 
requires a source to ``continue to employ the emission control methods 
(e.g., control device and/or emission reduction practices) required 
under the major source NESHAP requirements, including previously 
approved alternatives under the applicable NESHAP and associated 
monitoring, recordkeeping, and reporting (MRR)''. We are seeking 
comment on all of these additional criteria and any other restrictions 
on sources or source categories emitting 112(c)(6) HAP that may be 
warranted.
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    \20\ CAA section 112(c)(6) states, in part: ``With respect to 
alkylated lead compounds, polycyclic organic matter, 
hexachlorobenzene, mercury, polychlorinated biphenyls, 2,3,7,8-
tetrachlorodibenzofurans and 2,3,7,8-tetrachlorodibenzo-p-dioxin, 
the Administrator shall, not later than 5 years after November 15, 
1990, list categories and subcategories of sources assuring that 
sources accounting for not less than 90 per centum of the aggregate 
emissions of each such pollutant are subject to standards under 
subsection (d)(2) or (d)(4).''
    \21\ See EPA-HQ-OAR-2004-0505-0010 for a list of source 
categories and corresponding NESHAP subparts used to reach the 90% 
threshold. See table 1.1 of EPA-HQ-OAR-2004-0505-0006 for the 
112(c)(6) emission inventory.
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2. Federal Enforceability
    In addition to safeguards, the EPA also proposes that limits taken 
by sources to reclassify from major to area sources must be federally 
enforceable as a condition of reclassification.\22\ Specifically, we 
are proposing to codify in a new paragraph, 40 CFR 63.1(c)(6)(iii), 
that, as a condition of reclassification, any PTE limitations taken by 
a major source to reclassify to area source status must be federally 
enforceable. The general definition of PTE under 40 CFR 63.2 would not 
be affected by this proposal to codify a new provision specific to 
reclassified sources, and as discussed in the following subsection, the 
EPA proposes to maintain interim revisions introduced to the general 
definition in the 2020 MM2A final rule. That is, under this proposal, 
sources that reclassify from major to area source status, would need to 
take federally enforceable limitations on PTE as a condition of 
reclassification. However, all other NESHAP sources would continue to 
be governed by the general PTE definition under 40 CFR 63.2, which does 
not require federal enforceability.
---------------------------------------------------------------------------

    \22\ 40 CFR 63.2 defines ``federally enforceable'' in relevant 
part as ``all limitations and conditions that are enforceable by the 
Administrator and citizens under the Act or that are enforceable 
under other statutes administered by the Administrator.''
---------------------------------------------------------------------------

    As discussed above, in NMA v. EPA, the D.C. Circuit faulted the EPA 
for not adequately explaining the relationship of federal 
enforceability to the core criteria of ``effectiveness.'' In that case, 
the EPA argued that federal enforceability allowed the EPA to verify 
that a source's claimed controls were working as they were supposed to, 
and that federal enforceability provided the EPA with the means to 
ensure that any operational restrictions intended to limit emissions 
were actually implemented. In response to these arguments, the NMA 
Court found ``EPA's core justification for its federal enforceability 
policy [was] the need to avoid the administrative burden that EPA would 
have to bear were it obliged to evaluate the effectiveness of state and 
local controls and the desirability of uniformity in environmental 
protection. . . If there [was] a closer fit between the notion of 
`federal enforceability' and Sec.  112's concerns with crediting 
effective controls,'' it was ``not evident'' from the record before the 
Court. 59 F.3d at 1364. Today's proposal is based on the EPA's 
assessment that federal enforceability of limits for reclassified 
sources significantly enhances the effectiveness of controls because 
limits taken by sources to reclassify that are enforceable by the 
federal government and citizens, in addition to state and local 
permitting authorities, are more likely to ensure compliance. Simply 
put, ensuring that more entities can bring an enforcement action if a 
source violates a PTE limit, i.e., EPA, States, Tribes, local 
government agencies, and citizen groups, will make the limit more 
effective in controlling HAP emissions.
    In the absence of federal enforceability for reclassified sources, 
the public is reliant on state and local permitting authorities, and 
citizen groups in certain jurisdictions, to ensure sources comply with 
PTE limits. While the EPA maintains that state and local enforcement 
can be an effective means for ensuring compliance with PTE limits for 
other NESHAP sources and CAA programs (e.g., NSR and title V), given 
the EPA's heightened concerns surrounding reclassified sources, the EPA 
proposes that additional oversight is appropriate to increase the 
effectiveness of controls for reclassified sources. PTE limits for 
reclassified sources are integral to ensure these sources are properly 
classified and are subject to the appropriate federal CAA section 112 
requirements. While the EPA intends to address PTE limits more 
generally in a separate rulemaking as discussed further below, this 
proposed rulemaking is specific to NESHAP sources that have 
reclassified from major to area sources, or will do so in the future.
    In addition to EPA enforcement, citizen enforcement is another 
important component of federal enforceability that EPA proposes will 
enhance enforcement for reclassified source limits. There is 
considerable variability for citizens to participate in the state and 
local enforcement of permit terms and other measures to limit emissions 
across state and local jurisdictions. Whereas Congress granted 
considerable enforcement authority to citizens under the CAA and other 
environmental statutes, the ability of citizens to participate in 
state- and local-only enforcement proceedings is, generally speaking, 
very limited. The EPA's current understanding is that around one third 
of states allow for general environmental citizen suits, which are in 
addition to various media-specific state citizen suit statutes, which 
provide varying degrees of effectiveness for enforcing permit limits 
for reclassified sources at issue in this proposal.\23\ Accordingly, in 
many instances, state and local permitting authorities are the only 
means of enforcement. To help ensure that reclassifying sources do not 
erode the goals of the CAA section 112 program, the EPA proposes the 
ability for citizens to enforce permits for such sources is needed. The 
EPA is seeking comment on the prevalence and effectiveness of citizen 
suit provisions in state and local enforceable HAP PTE limiting 
programs. Further, because of limitations on the EPA's and state and 
local enforcement authorities' budgets and resources and variability in 
priorities between state and local regulators and the EPA, the ability 
for citizen enforcement of limits for reclassified sources adds an 
important component of an effective enforcement regime.
---------------------------------------------------------------------------

    \23\ See P. Flynn & M. Barsa, State Citizen Suits, Standing, and 
the Underutilization of State Environmental Law, 52 Envtl. L. Rep. 
10473 (June 2022) (noting that 17 states have general, non-media 
specific citizen suit statutes, in addition to dozens of media 
specific state citizen suit laws).
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    The potential for federal enforcement for reclassified source 
limits provides an additional incentive for facilities to comply, 
ensures consistency in protection across jurisdictions, and thereby 
enhances the effectiveness of controls. This is evidenced in the broad

[[Page 66347]]

oversight authority to enforce the CAA that Congress granted to the 
EPA. Courts have recognized the EPA's ability to act to enforce the CAA 
even when a state has already acted.\24\ The greater number of agencies 
or persons that can enforce the requirements, the greater the 
likelihood is that some action will be brought.\25\ Indeed, federal 
enforceability enables the EPA to ensure that sources are abiding by 
the conditions they have adopted to opt out of federal major source 
standards; and grants citizens the ability to use the tools Congress 
provided in the CAA for the same goal. Federal enforcement for 
reclassified sources creates a clear regulatory structure for EPA and 
citizen enforcement through the CAA and produces a level playing field 
on which sources are subject to the same enforcement mechanisms 
regardless of the state in which they are located.
---------------------------------------------------------------------------

    \24\ See e.g., Murphy Oil v. EPA, 143 F.Supp.2d 1054 (W.D. Wis. 
2001) (holding in part, the EPA was entitled to pursue an 
enforcement action under the CAA against a facility despite a prior 
settlement with the state for a related violation); United States v. 
SCM Corp., 615 F. Supp. 411 (D. Md. 1985) (holding the EPA could 
pursue enforcement against a facility for CAA violations after the 
same facility reached a settlement with the state regulator for 
related violations, explaining ``[i]n a federal system, each person 
and entity is subject to simultaneous regulation by state and 
national authority''); see also Buckeye Power, Inc. v. EPA, 481 F.2d 
162, 167 (6th Cir. 1973) (``it is important to note [delegation to 
the state] does not detract from the Administrator's primary ability 
to enforce federally the provisions of every state plan against 
citizens of that state which drew the plan.''); cf. U.S. v. Power 
Engineering Co., 3030 F.3d 1232 (10th Cir. 2002) (deferring to the 
EPA's reasonable interpretation that the Resource Recovery and 
Conservation Act (RCRA) allows for the EPA to pursue an enforcement 
action despite the existence of a separate state enforcement 
proceeding).
    \25\ Increased enforcement leading to improvements in compliance 
is supported by the scientific literature. Gray and Shimshack (2011) 
survey the literature and find that rigorous monitoring and 
enforcement is a primary motivator for compliance with environmental 
regulatory requirements. The authors find that enforcement 
activities can lead to less violations and reductions in emissions. 
Gray, W.B., & Shimshack, J. P. (2011). The effectiveness of 
environmental monitoring and enforcement: A review of the empirical 
evidence. Review of Environmental Economics and Policy.
---------------------------------------------------------------------------

    In contrast, state-only enforceability for reclassified source 
limits creates significant burdens on the EPA if it were to attempt to 
enforce a violation of such a limit. In such instances, the EPA would 
either have to (1) litigate any enforcement issues of PTE limits taken 
to reclassify to an area source as a general citizen in the state forum 
(which is only available in states with citizen suit provisions that 
the EPA could utilize) or (2) only bring cases for violations of major 
source requirements (as opposed to permit limit exceedances that do not 
cross the major source threshold). State-only enforcement eliminates 
the EPA's use of the administrative enforcement powers granted by 
Congress that have been an effective and resource-saving means to bring 
sources into compliance without mounting a full effort enforcing a 
violation of the major source requirements. Enforcing the requirements 
of a major source MACT in the face of a facially valid state-only 
enforceable permit or permit limit that grants the same source area 
source status by saying a source cannot exceed 9.9 tpy of any HAP 
(which the EPA does not consider enforceable as a practical matter as a 
blanket emission limit alone) could create conflicts between what 
limits a state interprets as sufficient to avoid major source MACT 
requirements and what limits the EPA interprets as enforceable as a 
practical matter (e.g., a limit of 9.9 tpy on total HAP by itself is 
not enforceable as a practical matter). In such an instance a federal 
court may not be willing to entertain the conflict between the state 
and EPA in the permit challenge and e.g., dismiss the claim on the 
grounds of abstention, or remove the permit challenge to state court 
which may defeat the goal of national consistency of this federal 
program envisioned by Congress through federal court oversight. 
Furthermore, challenges to a facially-valid, state-only enforceable 
permit or permit term could create fairness issues (e.g., reliance on a 
state's permitting decision) that a source could use in its defense 
that may prevent the EPA or citizens from even pursuing the 
enforcement.\26\ Federal enforceability will help ensure that the 
safeguard provisions being proposed in this action are enforced for 
sources that reclassify.
---------------------------------------------------------------------------

    \26\ For example, courts may exercise the ``Burford doctrine'' 
under which a federal court may decline to interfere with state 
proceedings: ``(1) when there are difficult questions of state law 
bearing on policy problems of substantial public import whose 
importance transcends the result in the case then at bar; or (2) 
where the exercise of federal review of the question in a case and 
in similar cases would be disruptive of state efforts to establish a 
coherent policy with respect to a matter of substantial public 
concern.'' New Orleans Public Service, Inc. v. Council of City of 
New Orleans, 491 U.S. 350 (1989) (internal citations omitted).
---------------------------------------------------------------------------

    The public notice and comment requirements included in 40 CFR part 
63, subpart E provide an additional layer of transparency and 
accountability in creating HAP PTE limiting mechanisms used to measure 
compliance after reclassification to ensure they will contain 
sufficient information to assure compliance. The subpart E process does 
include requirements for public notice and comment when programs are 
submitted to the EPA for review and approval. The EPA is seeking 
comment on the need, associated burdens, and time required for public 
notice and comment beyond the process already present in 40 CFR part 
63, subpart E. Specifically, we are seeking comments on whether the EPA 
should require, as an additional condition of reclassification, that 
every permit containing the provisions required in this proposal used 
to reclassify from a major source of HAP to an area source of HAP 
should undergo an individual public notice and comment period. 
Additionally, we are seeking comment on the public's understanding of 
the public notice and comment process involved in 40 CFR part 63, 
subpart E.
    For these reasons, we are proposing that limits taken by sources to 
reclassify from major source to area source must be federally 
enforceable as defined in 40 CFR 63.2. We are seeking comment on 
additional benefits or drawbacks of federal enforceability for NESHAP 
reclassifications.

C. Ministerial Revisions From the 2020 MM2A Final Rule

    In the 2020 MM2A final rule, the EPA introduced an interim 
ministerial revision to the definition of ``potential to emit'' in 40 
CFR 63.2 to remove the word ``federally'' from the phrase ``federally 
enforceable.'' As the EPA noted at the time, the revisions did not 
represent a final decision by the EPA or signal any direction that the 
EPA is intending to take in a future final action. The EPA is not 
revisiting this interim revision at this time. As noted in the previous 
section, the EPA's proposal to introduce federal enforceability for 
reclassified sources is being proposed as a separate provision from the 
40 CFR 63.2 ``potential to emit'' definition, such that it would only 
apply to reclassified sources.
    In this proposal, the EPA is solely focused on ensuring the 
sufficiency of permit limits for sources that reclassify from major to 
area sources. Accordingly, the EPA is not revisiting the interim 
ministerial revision to the definition of ``potential to emit'' in 40 
CFR part 63 and will address the definition of PTE under 40 CFR part 63 
in a separate rulemaking or guidance. Nor is the EPA addressing federal 
enforceability of PTE limits taken by other NESHAP sources (i.e., 
sources that are not reclassified sources), nor sources in other 
programs such as NSR or title V, for which the EPA previously 
introduced federally enforceable limits, but which may currently be 
subject to legally and practically enforceable state-law PTE limits. 
See NMA v. EPA, 59 F.3d 1351 (D.C. Cir. 1995) (remanding but not 
vacating federal enforceability of PTE

[[Page 66348]]

limits for NESHAP sources); CMA v. EPA, 70 F.3d 637 (D.C. Cir. 1995) 
(remanding and vacating federal enforceability of PTE limits for NSR 
sources); Clean Air Implementation Project v. EPA, 1996 WL 393118 (D.C. 
Cir. June 28, 1996) (remanding and vacating federal enforceability of 
PTE limits for title V sources). The EPA plans to address the 
definition of PTE in the NESHAP, NSR, title V, and related programs in 
separate rulemaking or guidance. In the interim, before the EPA 
completes the future rulemaking or guidance on the definition of PTE 
across affected programs, the EPA's longstanding interpretation of the 
court decisions cited previously, and associated policy, remains in 
effect. Specifically, pursuant to the EPA's guidance the terms 
``federally enforceable'' or ``enforceable'' as used in general 
definitions of ``potential to emit'' and related terms should be read 
to mean ``federally enforceable or legally and practicably enforceable 
by a state or local air pollution control agency.'' \27\ Note, this 
interpretation does not apply to the term ``federally enforceable'' as 
it is being introduced in this proposal as a condition for NESHAP 
sources to reclassify from major to area source status. Furthermore, to 
be eligible for consideration in determining PTE, any limitations, 
whether federally enforceable or not, must be enforceable as a 
practical matter, meaning both legally and practicably enforceable. To 
be practicably enforceable, limitations or standards used to constrain 
PTE must: (1) be technically accurate and specify the portions of the 
source subject to the limitation or standard; (2) specify the time 
period for the limitation or standard (e.g., hourly, daily, monthly 
and/or annual limits such as rolling annual limits); and (3) include a 
method for determining compliance, including appropriate monitoring, 
recordkeeping, and reporting.\28\
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    \27\ John Seitz and Robert Van Heuvelen, ``Release of Interim 
Policy on Federal Enforceability of Limitations on Potential to 
Emit'' (January 22, 1996).
    \28\ See, e.g., John Seitz and Robert Van Heuvelen, ``Release of 
Interim Policy on Federal Enforceability of Limitations on Potential 
to Emit'' (January 22, 1996); John S. Seitz, ``Options for Limiting 
the Potential to Emit (PTE) of a Stationary Source Under Section 112 
and Title V of the Clean Air Act'' (January 25, 1995); Kathie Stein, 
``Guidance on Enforceability Requirements for Limiting Potential to 
Emit through SIP and Sec.  112 Rules and General Permits'' (January 
25, 1995); and Terrell E. Hunt and John S. Seitz, ``Limiting 
Potential to Emit in New Source Permitting'' (June 13, 1989); ``In 
the Matter of Salt River Project Agricultural Improvement and Power 
District Aqua Fria Generating Station,'' Order on Petition No. IX-
2022-4 (July 28, 2022); ``In the matter of: Yuhuang Chemical Inc. 
Methanol Plant,'' Order on Petition No. VI-2015-03 (Aug. 31, 2016). 
See also 40 CFR 49.167, definition of ``Enforceable as a Practical 
Matter.''
---------------------------------------------------------------------------

    The EPA acknowledges that terminology referring to enforceability 
principles in EPA rules and guidance--such as the Agency's use of the 
terms ``federally enforceable,'' ``enforceable as a practical matter,'' 
and ``legally and practicably enforceable''--has varied somewhat 
historically. The EPA specifically solicits comment on terminology used 
both in this notice and historically and welcomes suggestions for 
maximizing clarity for regulated entities and the public.

D. What sources will have to ensure all new requirements are met and 
when will those sources need to comply with the new requirements?

    The proposed requirements, once finalized, will apply to any 
sources that reclassify from major source status to area source status 
under the NESHAP program, including those that have already 
reclassified since issuance of the January 25, 2018, Wehrum Memorandum. 
For sources that have reclassified from major source status to area 
source status since January 25, 2018, under the NESHAP program and 
prior to the effective date of the final rule, the changes to 40 CFR 
part 63 proposed in this action will be effective within 3 years of 
publication of the final rule. Specifically, sources who reclassified 
from major source status to area source status since January 25, 2018 
must have federally enforceable permit conditions including the 
safeguards proposed in this action within three years of publication of 
the final rule in order to maintain area source status. We are 
specifically seeking comment on whether to apply the proposed 
requirements to sources that have reclassified since the January 2018 
Wehrum memo or whether this action should only apply to sources that 
reclassify after the effective date of the final rule. We request 
comments on the impacts of coming into compliance with the proposed 
requirements for sources that have reclassified since the January 2018 
Wehrum memo. For those sources that reclassify after the effective date 
of the final rule, the proposed requirements will be effective upon 
reclassification. The process by which state air pollution control 
agencies can submit HAP PTE limiting mechanisms, such as rule 
adjustments, rule substitutions, equivalency by permit, or other 
mechanisms is described in 40 CFR part 63, subpart E for EPA review and 
approval. Programs that are approved pursuant to subpart E are 
federally enforceable and subpart E describes the necessary criteria 
for state programs that contain adjustments to CAA section 112 rules, 
state programs that substitute for CAA section 112 rules, and permit 
terms and conditions that substitute for CAA section 112 rules. We are 
seeking comment on the experience state agencies have had getting 
federally enforceable HAP PTE limiting mechanisms approved under 
subpart E and any potential hurdles that have prevented or would 
prevent state air pollution control agencies from submitting mechanisms 
for approval under 40 CFR part 63, subpart E. We are also seeking 
comment on the cost incurred by state air pollution control agencies to 
obtain subpart E approved programs. Given the timelines for EPA review 
and approval of state programs seeking approval for federally 
enforceable HAP PTE limiting mechanisms in subpart E, the EPA proposes 
that three years from publication of the final rule is sufficient time 
for sources who have chosen to reclassify to obtain federally 
enforceable HAP PTE limiting permit conditions. The EPA is seeking 
comment on the time needed for sources that have already reclassified 
to add such provisions as enforceable permit conditions, to the extent 
that they do not already exist.

IV. Statutory and Executive Order Reviews

    Additional information about these statutes and Executive Orders 
can be found at https://www.epa.gov/laws-regulations/laws-and-executive-orders.

A. Executive Order 12866: Regulatory Planning and Review and Executive 
Order 14094: Modernizing Regulatory Review

    This action is a ``significant regulatory action'' as defined in 
Executive Order 12866, as amended by Executive Order 14094. 
Accordingly, EPA submitted this action to the Office of Management and 
Budget (OMB) for Executive Order 12866 review. Documentation of any 
changes made in response to the Executive Order 12866 review is 
available in the docket.
    The EPA has not prepared a quantitative analysis of the potential 
costs and benefits associated with this action because it is highly 
uncertain which facilities may reclassify in the future as a result of 
the proposed rule, and any potential emissions changes that result from 
the added reclassification requirements will also

[[Page 66349]]

be highly uncertain.\29\ Furthermore, the EPA does not expect 
substantial costs for sources that have already reclassified and have 
not observed emission changes following a reclassification for this 
subset of facilities. Based on data available to the agency at this 
time, sources that have reclassified are unlikely to remove control 
devices to reduce HAP or take other actions that would increase HAP 
emissions. However, under the current framework, sources that 
reclassify in the future could operate in a manner that would increase 
emissions. This would be inconsistent with the aim of CAA section 112 
to achieve lasting emissions reductions across a wide range of 
industries to protect public health and the environment.
---------------------------------------------------------------------------

    \29\ In the Regulatory Impact Analysis for the 2020 MM2A Final 
Rule, the EPA assumed in the primary scenario that all facilities 
under 75% of the major source HAP emissions threshold that could 
potentially reclassify would over a 5-year time period from 
promulgation (2,700 facilities). While we are still within that time 
frame, the EPA has not seen nearly that many reclassifications 
occuring since the rule was promulgated. At the time of this 
proposal, around 200 facilities have reclassified. This represents 
over 90% fewer reclassifications than our estimate in the 2020 final 
rule. A list of facilities that have reclassified from major source 
to area source status at the time of proposal is available in the 
docket for this action. Therefore, we find the uncertainty in 
attempting to predict facility reclassification behavior to be too 
great to warrant an illustrative quantitative assessment of the 
proposed rule.
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    Prior to 2018, the OIAI policy prevented major sources of HAP from 
reclassifying to area sources of HAP after the first substantive 
compliance date of a major source NESHAP. The OIAI policy was initially 
replaced by a January 25, 2018, guidance document, then was formally 
codified by the 2020 MM2A final rule wherein EPA advocated for a 
reading of the CAA that suggests that there should be no temporal 
restrictions on reclassifications.
    The 2018 guidance memo and 2020 MM2A final rule allow facilities to 
reclassify from major sources of HAP to area sources of HAP at any 
time. Since 2018, about 200 facilities have reclassified, far short of 
the roughly 2,700 facilities we estimated might reclassify at the time 
of the 2020 final rule. Due to limited data available to the agency at 
the time of this proposal, the EPA does not have information regarding 
whether or how much emissions may have increased at any individual 
reclassified facilities--though we seek comment on that in this 
proposal. However, the current framework allows for emissions increases 
and decreased compliance assurance as all sources are required to do is 
obtain a PTE limit below the major source thresholds. We are requesting 
comment on specific examples of facilities that have had changes in 
actual emissions since reclassifying. The EPA has not heard about 
specific additional facilities' plans to reclassify that have not yet 
done so, but we seek comment on facilities that have considered 
reclassification but not yet done so and their reasons for waiting. 
However, it is reasonable to assume that additional reclassifications 
will occur over time. In the first half of 2023, there have been 
between zero and two reclassifications per month. We have added the 
list of reclassifications that have occurred to date at the time of 
this proposal to the docket for this action.
    Currently, sources that reclassify are only required to remain 
below the major source threshold unless they become subject to an area 
source NESHAP, which they would have to comply with if it requires more 
stringent controls than would be needed to keep emissions below the 
major source threshold. That could lead to increased HAP emissions from 
sources whose emissions were well below the major source threshold due 
a major source NESHAP prior to reclassification in the absence of this 
rule. The EPA seeks to ensure that a reclassified source does not 
increase emissions because we find that scenario runs counter to CAA 
section 112's goal of achieving lasting reductions of HAP emissions 
from major sources, as described earlier in this preamble.
    We do not expect significant costs and whether any costs or savings 
are incurred due to reclassification is very case-specific. We do not 
possess sufficient information to quantify costs or cost savings for 
individual facilities but seek comment on costs or cost savings. The 
costs incurred for a given facility are better attributed to the 
individual NESHAP rules the facility was subject to prior to 
reclassification rather than the General Provisions of part 63. Any 
potential costs for facilities in the future that may choose to 
reclassify are expected to be negligible for sources that have not yet 
reclassified and we do not expect sources to reclassify if it will 
increase their costs.
    The final MM2A rule already required electronic notification to the 
EPA and we are not requiring those sources who have already submitted 
notifications to resubmit their notification. We are seeking comments 
from sources who have already reclassified and information about 
changes in air pollution control devices at these facilities such that 
costs would be incurred to maintain emissions at a level that was 
achieved when the source was previously subject to a major source 
NESHAP.
    We expect that sources that reclassify will experience cost savings 
that will outweigh any additional cost of achieving area source status. 
The only potential costs that would be incurred by sources and 
regulatory authorities would be the costs of preparing and reviewing a 
source's application for area source status and issuing enforceable PTE 
limits, respectively, as appropriate.\30\ In addition, any potential 
costs associated with the reclassification of major sources as area 
sources (i.e., application reviews and PTE issuance) may be offset by 
reduced reporting and recordkeeping obligations for sources that no 
longer must meet major source NESHAP requirements, depending on case-
specific circumstances. Whether any cost or cost savings is incurred by 
any source choosing to reclassify is highly case specific and we are 
not providing quantitative estimates of costs in this proposal, 
however, we have included technical memoranda (e.g., MM2A Cost 
Memorandum) for the 2020 final MM2A rule and the regulatory impact 
analysis (RIA) from that rulemaking in the docket for this action to 
provide illustrative examples of the types of costs and costs savings 
that may occur due to reclassifications. We are seeking comments on the 
potential costs or cost savings associated with this proposal and our 
assumption that any changes to the costs associated with 
reclassification will be negligible.
---------------------------------------------------------------------------

    \30\ Illustrative example costs for a regulatory authority 
reviewing a source's application for area source status was 
estimated in the 2020 MM2A final rule, which is available in the 
docket for this action.
---------------------------------------------------------------------------

    While the EPA does not expect this action to directly impact the 
level of control of any particular NESHAP standards, this proposal is 
expected to enhance transparency, promote national consistency in EPA 
and citizen enforcement, and improve compliance assurance through 
clearer criteria for NESHAP reclassifications. The processes by which 
state programs and permits are approved under 40 CFR subpart E, 
includes requirements for public notice and comment as well as creating 
programs and permits that are federally enforceable by the EPA and 
citizens. These additional layers of oversight increase the likelihood 
that sources will continue to effectively operate HAP pollution control 
equipment and create a framework for the EPA and citizens to pursue 
enforcement actions if they do not. Additionally, the EPA finds that 
the safeguards proposed in this action will ensure that HAP emissions 
reductions

[[Page 66350]]

are achieved, and the corresponding public health and environmental 
benefits from decreased HAP emissions, are maintained at sources that 
reclassify from major sources of HAP to area sources of HAP.

B. Paperwork Reduction Act (PRA)

    This action does not impose any new information collection burden 
under the PRA. The proposed amendments to the General Provisions relate 
to voluntary actions taken by a source after consideration of the net 
impacts of the action. Therefore, this action would not impose any new 
information collection burden. The General Provisions do not themselves 
require any reporting and recordkeeping activities, and no ICR was 
submitted in connection with their original promulgation or their 
subsequent amendment. Any recordkeeping and reporting requirements are 
imposed only through the incorporation of specific elements of the 
General Provisions in the individual NESHAP, which are promulgated for 
particular source categories that have their own ICRs. The PRA costs 
for sources that reclassify will be properly accounted for in the ICRs 
for the NESHAPs they were subject to.

C. Regulatory Flexibility Act (RFA)

    I certify that this action will not have a significant economic 
impact on a substantial number of small entities under the RFA. In 
making this determination, the EPA concludes that the impact of concern 
for this rule is any significant adverse economic impact on small 
entities and that the agency is certifying that this rule will not have 
a significant economic impact on a substantial number of small entities 
because the rule relieves regulatory burden or has no net burden on the 
small entities subject to the rule.
    Small entities that are subject to major source NESHAP requirements 
would not be required to take any action under this proposed rule; any 
action a source takes to reclassify as an area source would be 
voluntary. We expect that sources that reclassify will experience cost 
savings that will outweigh any additional cost of achieving area source 
status. We do not expect substantial costs for sources that have 
already reclassified. Sources that reclassify are unlikely to remove 
control devices to reduce HAP or take other actions that would increase 
HAP emissions, however, the possibility does exist under the current 
framework. The final MM2A rule already required electronic notification 
to the EPA and we are not requiring those sources who have already 
submitted notifications to resubmit their notification. We are seeking 
comments on whether sources who have already reclassified have indeed 
removed control devices such that costs would be incurred to maintain 
emissions at a level that was achieved when the source was previously 
subject to a major source NESHAP. The only potential cost that would be 
incurred by regulatory authorities would be the cost of reviewing a 
sources' application for area source status and issuing enforceable PTE 
limits, as appropriate. No small government jurisdictions operate their 
own air pollution control permitting agencies, so none would be 
required to incur costs under the proposed rule. In addition, any costs 
associated with the reclassification of major sources as area sources 
(i.e., application reviews and PTE issuance) are expected to be offset 
by reduced reporting and recordkeeping obligations for sources that no 
longer must meet major source NESHAP requirements. Whether any cost or 
cost savings is incurred by any source, including those owned by a 
small parent company, choosing to reclassify is highly case specific 
and we are not providing quantitative estimates of costs in this 
proposal, however, we have included technical memoranda from the 2020 
final MM2A rule and the regulatory impact analysis (RIA) from that 
rulemaking in the docket for this action to provide illustrative 
examples of the types of costs and cost savings that can occur due to 
reclassifications. We are seeking comments on the potential costs or 
cost savings associated with this proposal and our assumption that the 
any changes to the costs associated with reclassification will be 
negligible.
    Based on the considerations above, we have, therefore, concluded 
that this action will relieve regulatory burden on net for any 
regulated small entities that choose to reclassify to area source 
status.

D. Unfunded Mandates Reform Act (UMRA)

    This action does not contain an unfunded mandate of $100 million or 
more as described in UMRA, 2 U.S.C. 1531-1538, and does not 
significantly or uniquely affect small governments. This action imposes 
no enforceable duty on any state, local, or tribal governments or the 
private sector.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the federal government and the states, or on the distribution of power 
and responsibilities among the various levels of government.

F. Executive Order 13175: Consultation and Coordination With Indian 
Tribal Governments

    This action has tribal implications. However, it will neither 
impose substantial direct compliance costs on federally recognized 
tribal governments, nor preempt tribal law. There are two tribes that 
currently implement title V permit programs and one that implements an 
approved TIP for minor source permitting, the latter of which also has 
a major source. As a result, these tribes may have additional permit 
actions if sources in their jurisdiction seek reclassification to area 
source status. Any tribal government that owns or operates a source 
subject to major source NESHAP requirements would not be required to 
take action under this final rule; the reclassification provisions in 
the final rule would be strictly voluntary. In addition, achieving area 
source status would result in reduced burden on any source that no 
longer must meet major source NESHAP requirements. Under the proposed 
rule, a tribal government with an air pollution control agency to which 
we have delegated CAA section 112 authority would be required to review 
permit applications and to modify permits as necessary. However, any 
burden associated with the review and modification of permits will be 
offset by reduced Agency oversight obligations for sources no longer 
required to meet major source requirements.
    For sources located within Indian country, where the EPA is the 
reviewing authority, unless the EPA has approved a non-federal minor 
source permitting program or a delegation of the Federal Indian Country 
Minor NSR Rule, the Federal Indian Country Minor NSR Rule at 40 CFR 
49.151 through 49.165 provides a mechanism for an otherwise major 
source to voluntarily accept restrictions on its PTE to become a 
synthetic source, among other provisions. The Federal Indian Country 
Minor NSR Rule applies to sources located within the exterior 
boundaries of an Indian reservation or other lands as specified in 40 
CFR part 49, collectively referred to as ``Indian country.'' See 40 CFR 
49.151(c) and 49.152(d). This mechanism may also be used by an 
otherwise major source of HAP to voluntarily accept restrictions on its 
PTE to become a synthetic area HAP source. The EPA's Federal 
Implementation Plan (FIP) program, which includes the Federal Indian 
Country Minor NSR Rule, provides additional options for particular

[[Page 66351]]

situations, such as general permits for specific source categories, to 
facilitate minor source emissions management in Indian country. 
Existing sources in Indian country may have PTE limits that preceded 
the EPA's FIP for minor sources and, for that reason, were issued in a 
40 CFR part 71 permit or FIP permitting provision applicable to Indian 
country.
    Consistent with EPA policy, the EPA will offer to consult with the 
potentially impacted tribes and other tribes upon their request.

G. Executive Order 13045: Protection of Children From Environmental 
Health Risks and Safety Risks

    The EPA interprets Executive Order 13045 as applying only to those 
regulatory actions that concern environmental health or safety risks 
that the EPA has reason to believe may disproportionately affect 
children, per the definition of ``covered regulatory action'' in 
section 2-202 of the Executive Order. This action is not subject to 
Executive Order 13045 because it does not directly regulate any 
emission source and will not have any direct impact on children's 
health. The emissions reductions achieved by individual NESHAP are 
properly accounted for in those individual NESHAP rather than the 
General Provisions. This action will not change the level of emissions 
reductions achieved by those NESHAP. While we do not expect this action 
to have any direct impact on children's health, preventing emissions 
increases will ensure protections achieved via any NESHAP that a source 
was subject to at the time of reclassification will provide continued 
protection achieved by any NESHAP that source was formerly subject to.

H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This action is not a ``significant energy action'' because it is 
not likely to have a significant adverse effect on the supply, 
distribution, or use of energy. We have concluded that this action is 
not likely to have any adverse energy effects.

I. National Technology Transfer and Advancement Act (NTTAA)

    This rulemaking does not involve technical standards.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations and 
Executive Order 14096: Revitalizing Our Nation's Commitment to 
Environmental Justice for All

    The EPA believes that this action does not have disproportionate 
and adverse human health or environmental effects on communities with 
environmental justice concerns because it does not establish an 
environmental health or safety standard. The proposed amendments to the 
General Provisions are procedural changes and do not impact the 
technology performance nor level of control of the NESHAP governed by 
the General Provisions.
    While the EPA does not expect this action to directly impact the 
level of control of any particular NESHAP standards, this proposal is 
expected to enhance transparency, promote national consistency in EPA 
and citizen enforcement, and improve compliance assurance through 
clearer criteria for NESHAP reclassifications. The processes by which 
state programs and permits are approved under 40 CFR subpart E, 
includes requirements for public notice and comment as well as creating 
programs and permits that are federally enforceable by the EPA and 
citizens. These additional layers of oversight increase the likelihood 
that sources will continue to effectively operate air pollution control 
equipment and create a framework for the EPA and citizens to pursue 
enforcement actions if they do not. Additionally, the EPA finds that 
the safeguards proposed in this action will ensure that HAP emissions 
reductions are achieved, and the corresponding public health and 
environmental benefits from decreased HAP emissions, are maintained at 
sources that reclassify from major sources of HAP to area sources of 
HAP.

List of Subjects in 40 CFR Part 63

    Environmental protection, Area sources, General provisions, 
Hazardous air pollutants, Major sources, Potential to emit.


Michael S. Regan,
Administrator.
[FR Doc. 2023-21041 Filed 9-26-23; 8:45 am]
BILLING CODE 6560-50-P