[Federal Register Volume 59, Number 233 (Tuesday, December 6, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-29824]


[[Page Unknown]]

[Federal Register: December 6, 1994]


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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Part 63

[AD-FRL-5116-1]
RIN 2060-AD98

 

National Emission Standards for Hazardous Air Pollutants; 
Proposed Standards for Shipbuilding and Ship Repair

AGENCY: Environmental Protection Agency (EPA).

ACTION: Proposed rule and notice of public hearing.

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SUMMARY: The proposed standards would limit emissions of hazardous air 
pollutants (HAP) from surface coating operations from any new or 
existing shipbuilding and ship repair facilities at a major source 
(defined in part V, A). The proposed standards implement section 112(d) 
of the Clean Air Act (Act), which requires the Administrator to 
regulate emissions of those chemicals designated as HAP in section 
112(b). The intent of the proposed standards is to protect the public 
health by requiring new and existing major sources to limit HAP 
emissions to levels attainable by use of maximum achievable control 
technology (MACT).
    In addition, this document contains draft recommended best 
available control measures (BACM) for volatile organic compound (VOC) 
and particulate emissions from this category. The draft BACM implements 
section 183(b)(4) of the Act.

DATES: Comments. Comments must be received on or before February 6, 
1995.
    Public Hearing. If anyone contacts the EPA requesting to speak at a 
public hearing by December 27, 1994, a public hearing will be held on 
January 18, 1995, beginning at 10 a.m.

ADDRESSES: Comments. Interested parties may submit written comments (in 
duplicate if possible) to Public Docket No. A-92-11 at the following 
address: U.S. Environmental Protection Agency, Air and Radiation Docket 
and Information Center (6102), 401 M Street, SW., Washington, DC 20460. 
The Agency requests that a separate copy also be sent to the contact 
person listed below.
    Public Hearing. If anyone contacts the EPA requesting a public 
hearing, the hearing will be held at the EPA Office of Administration 
Auditorium in Research Triangle Park, North Carolina. Persons 
interested in attending the hearing or wishing to present oral 
testimony should notify Ms. Kim Teal, Coatings and Consumer Products 
Group (MD-13), U.S. Environmental Protection Agency, Research Triangle 
Park, North Carolina 27711, telephone number (919) 541-5580.
    Background Information Document. The background information 
document (BID) and other documents supporting the proposed standards 
may be obtained from the docket or from the U.S. EPA Library (MD-35), 
Research Triangle Park, North Carolina 27711, telephone number (919) 
541-2777. Please refer to ``Surface Coating Operations at Shipbuilding 
and Ship Repair Facilities--Background Information for Proposed 
Standards,'' EPA-450/-D-94-011a.
    Docket. Docket No. A-92-11, containing supporting information used 
in developing the proposed standards, is located at the EPA's Air and 
Radiation Docket and Information Center at the above address in Room M-
1500, Waterside Mall (ground floor), and may be inspected from 8 a.m. 
to 4 p.m., Monday through Friday. The proposed regulatory text and 
other materials related to this rulemaking are available for review in 
the docket. A reasonable fee may be charged for copying docket 
materials.

FOR FURTHER INFORMATION CONTACT: For information concerning regulatory 
decisions and the proposed standards, contact Dr. Mohamed Serageldin, 
Coatings and Consumer Products Group, Emission Standards Division (MD-
13), U. S. Environmental Protection Agency, Research Triangle Park, 
North Carolina 27711, telephone number (919) 541-2379.

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

I. Description of the Source Category
II. Background
III. Summary of the Proposed Rule
    A. Applicability
    B. Standards
    C. Compliance Dates
    D. Compliance Procedures
    E. Test Methods and Procedures
    F. Monitoring Requirements
    G. Notification Requirements
    H. Recordkeeping and Reporting Requirements
IV. Summary of Estimated Environmental, Energy, and Economic Impacts 
of the Proposed Standards
    A. Number and Type of Affected Facilities
    B. Air Emission Reductions
    C. Secondary Environmental Impacts
    D. Energy Impacts
    E. Cost Impacts
    F. Economic Impacts
V. National Emission Standards for Hazardous Air Pollutants (NESHAP) 
Decision Process
    A. Source of Authority for NESHAP Development
    B. Criteria for Development of NESHAP
    C. Categorization/Subcategorization: Determining MACT ``Floors''
    D. Regulatory Approach and Regulatory Alternatives
VI. Process Description and Control Technologies
    A. Painting Process
    B. Control Technologies for Painting Operations
    C. Handling, Transfer, and Storage of Volatile Organic HAP 
Containing Materials
VII. Selection Rationale
    A. Selection of Emission Points to be Covered
    B. Selection of the Basis for the Proposed Standards
    C. Selection of the Format of the Proposed Standards
    D. Selection of Compliance Dates
    E. Selection of Compliance Procedures
    F. Selection of Test Methods and Procedures
    G. Selection of Notification, Recordkeeping, and Reporting 
Requirements
    H. Operating Permit Program
    I. Solicitation of Comments
VIII. Administrative Requirements
    A. Public Hearing
    B. Docket
    C. Executive Order 12866
    D. Paperwork Reduction Act
    E. Regulatory Flexibility Act
    F. Clean Air Act Section 117
    G. Regulatory Review
IX. Statutory Authority
    The proposed regulatory text is not included in this Federal 
Register notice, but is available in Docket No. A-92-11 or by request 
from the EPA contact persons designated earlier in this notice, free of 
charge. The proposed regulatory language is also available on the 
Technology Transfer Network (TTN), one of the EPA's electronic bulletin 
boards. The TTN provides information and technology exchange in various 
areas of air pollution control. The service is free, except for the 
cost of a phone call. Dial (919) 541-5742 for up to a 14,400-bps modem. 
If more information on TTN is needed, call the HELP line at (919) 541-
5384.

I. Description of the Source Category

    Section 112 of the Act requires the EPA to evaluate and control 
emissions of HAP. The control of HAP is to be achieved through 
promulgation of emission standards under sections 112(d) and (f) for 
major source categories and such minor sources as deemed appropriate 
that emit HAP. Pursuant to section 112(c) of the Act, the EPA published 
in the Federal Register the initial list of source categories that emit 
HAP on July 16, 1992 (57 FR 31576). This list includes both ``major'' 
and ``area'' sources (as defined by the Act) that the EPA intends to 
regulate before November of the year 2000. The initial list of source 
categories includes ``Shipbuilding and Ship Repair (Surface Coating),'' 
the major sources only, as a source category.
    For the purpose of the proposed rule, shipbuilding and ship repair 
refers to all facilities that build, repair, paint, repaint, convert, 
or alter ships. (Hereafter, this industry will be referred to as 
``shipbuilding.'') A ship is defined as any marine or fresh-water 
vessel used for military or commercial operations, including self-
propelled vessels, those towed by other craft (barges), and 
navigational aids (buoys). This definition includes, but is not limited 
to, all military vessels, commercial cargo and passenger (cruise) 
ships, ferries, barges, tankers, container ships, patrol and pilot 
boats, and dredges. It does not include offshore oil and gas drilling 
platforms, although it is believed that identical coating systems would 
be appropriate for them also.

II. Background

    The proposed rule represents the EPA's first extensive regulation 
of air pollutants from the shipbuilding and ship repair industry. 
Essentially all volatile organic hazardous air pollutants (VOHAP) are a 
subset of a category of pollutants referred to as volatile organic 
compounds (VOC). The VOC is a class of pollutants that are 
photochemically reactive precursors of ozone. Emissions of VOC (and 
consequently VOHAP as well) from ``marine coating operations'' have 
been regulated by some State and local district rules. California and 
Louisiana have defined VOC limits for a wide range of marine coating 
categories. The California limits being generally more stringent than 
those of Louisiana. Other States have limited VOC emissions from the 
industry's spray booths as one of many ``miscellaneous metal coating 
operations,'' using guidance presented in the EPA's control techniques 
guidelines (CTG) document ``Control of Volatile Organic Emissions from 
Existing Stationary Sources, Volume VI: Surface Coating of 
Miscellaneous Metal Parts and Products'' (June 1978) EPA 450/2-78-015. 
Outdoor painting of ships' hulls was specifically exempt from this 
guidance, but some States have rules that limit shipyard painting done 
inside buildings and on the interior of ships based on the guidance.

Control Techniques Guidelines

    Section 183(b)(4) of the Act, as amended in 1990 (1990 Amendments), 
requires the Administrator to issue CTG's for VOC and particulate 
emissions from coatings (paints) and solvents used in shipbuilding and 
ship repair facilities, to such level as the Administrator determines 
may be achieved through the adoption of BACM. Volatile organic 
compounds react in the atmosphere to form ozone, a criteria air 
pollutant for which primary and secondary ambient air quality standards 
have been established. The EPA is required to take into account the 
applicable requirements of section 112 in developing the guidelines.
    The organic HAP emissions described in the remainder of this 
document are, with only one exception, a subset of the VOC emissions 
from coatings and solvents used in shipbuilding and ship repair 
facilities. Thus the control techniques evaluated for the MACT standard 
are also applicable to VOC emissions.
    The EPA has traditionally issued draft CTG's containing recommended 
control levels for public comment. Rather than issue a separate draft 
CTG in this case, the EPA is using this document to request public 
comment on a draft recommended by BACM. The recommended BACM is 
identical to the proposed MACT for coatings and solvents, stated in 
terms of VOC units rather than VOHAP units (where a VOHAP means any 
compound of carbon, excluding metallic carbides and carbonates, that is 
listed in or pursuant to section 112(b) of the Act; this includes both 
VOC and exempt compounds that are listed as HAP). For those options 
using VOC as a surrogate for VOHAP for the MACT standard, compliance 
would be based on the Agency's reference Method 24. For any compliance 
option involving measurement of actual VOHAP content, the test method 
used by the source must be documented and approved by the 
Administrator. Comments received on the proposed MACT rule will also be 
considered in formulating a final recommended BACM and vice-versa.
    Meanwhile, States are in the process of developing VOC rules for 
these sources to meet other Act requirements. The EPA published an 
alternative control techniques (ACT) document in February 1994 to 
provide guidance to the States for these efforts. The recommended BACM 
described here is consistent with information in the ACT. Also, as 
explained in the ACT, although control technologies for particulate 
emissions at shipyards are in development, none are sufficiently 
demonstrated at this time to recommend as BACM. Therefore, the Agency 
has no recommendation for BACM for particulate emissions at this time.

III. Summary of the Proposed Rule

A. Applicability

1. Description of the Source Category
    The proposed rule would apply to each shipbuilding facility whose 
total activities emit or have the potential to emit, considering 
controls, 9.1 megagrams per year (Mg/yr) (10 tons per year [tons/yr]) 
or more of any HAP or 22.7 Mg/yr (25 tons/yr) or more of any 
combination of HAP.
    In general, the shipbuilding industry covered by the proposed rule 
is represented by SIC Code 3731, ``Shipbuilding and Repairing.'' This 
industry consists of establishments that build, repair, repaint, 
convert, and alter ships. However, SIC Code 3731 includes the 
manufacture of both offshore oil and gas well drilling and production 
platforms; marine coatings used on such platforms will not be subject 
to this rule, but rather to limitations imposed by the EPA's Federal 
rule on Architectural and Industrial Maintenance Coatings.
    Based on information obtained through the U. S. Maritime Directory 
Listings (June 1992), there are an estimated 437 facilities of varying 
capabilities involved in the construction and repair of ships in the 
United States. Of the 437 facilities, an estimated 25 qualify as major 
sources of HAP emissions and would be subject to the proposed rule. The 
total VOHAP emissions from surface coating operations at the 25 
facilities that would be subject to the proposed rule are estimated at 
1,155 Mg/yr (1,272 tons/yr).
    The EPA requests comment on the appropriate timing of the 
shipbuilding and ship repair facility's applicability determination, 
and on whether all facilities, regardless of their past emissions or 
HAP usage, should be eligible to qualify as area sources under the HAP 
usage limits. The Agency also seeks comment on whether a facility that 
is initially determined to be subject to the rule should be able 
subsequently to escape applicability, and if so, under what 
circumstances.
2. Affected Sources
    For purposes of this rulemaking, the affected source would be 
considered the aggregate of all operations at a shipbuilding facility. 
A new operation at a shipbuilding facility would not be considered a 
new source. Instead, it may qualify as a modification of the existing 
source.
    The proposed standards would limit VOHAP emissions from indoor and 
outdoor coating operations. The VOHAP emissions result largely from 
solvent evaporation from the coatings. These emissions occur during 
application and drying/curing. Due to the size of ships and their 
components, most coatings are applied outdoors.
    The proposed standards would also reduce VOHAP emissions from 
handling, transfer, use, and storage of VOHAP-containing materials 
through work practice measures. These emissions also occur as a result 
of solvent evaporation.

B. Standards

    The proposed standards would be the same for new and existing 
facilities. (See section VII.B. for discussion on the basis for the 
standards.) The proposed standards would impose limits on the VOHAP 
content of 23 types of coatings used at shipbuilding facilities. (See 
section VII.C. for a list of the proposed limits.) The limits would be 
stated in terms of mass of VOHAP per volume of coating less water and 
less negligibly photochemically reactive (exempt) compounds. Compliance 
with the VOHAP limits must be demonstrated on a monthly basis.
    The proposed standards would allow for an alternative means of 
compliance other than using compliant coatings, if approved by the 
Administrator.
    The proposed standards would also require that all handling and 
transfer of VOHAP containing materials to and from containers, tanks, 
vats, vessels, and piping systems be conducted in a manner that 
minimizes spills and other factors leading to emissions. In addition, 
containers of thinning solvent or waste that hold any VOHAP must be 
normally closed (to minimize evaporation) unless materials are being 
added to or removed from them.

C. Compliance Dates

    The proposed rule would require compliance for existing affected 
sources within 1 year after the effective date of the rule. An existing 
unaffected area source that increases its HAP emissions (or potential 
to emit) such that it becomes a major source would be required to 
comply within 1 year after becoming a major source.
    Any new or reconstructed sources would be required to adhere to the 
compliance schedule in the General Provisions Sec. 63.6(b) of subpart A 
without any modification. For new or reconstructed affected sources 
whose startup date is before the effective date of the rule, the 
compliance date is the effective date of the rule. For new or 
reconstructed affected sources whose startup date is after the 
effective date of the rule, the compliance date is the startup date. A 
new unaffected area source that increases its emissions (or potential 
to emit) such that it becomes a major source would be required to 
comply immediately upon becoming a major source.

D. Compliance Procedures

    The proposed rule would allow affected sources to choose among five 
options for demonstrating compliance with the VOHAP standards. Their 
choice will be influenced by the perceived need to add ``thinning'' 
solvent (thinner) to alter the viscosity of the coating in order to 
spray effectively. (For the purposes of this proposed regulation, 
thinner is defined as any liquid material added to a coating.) 
Regardless of the option(s) chosen, affected sources would first be 
required to determine the coating category (e.g., general use, air 
flask, antenna, etc.), the applicable VOHAP limit, and the VOC content 
for each batch of coating received from the manufacturer.
    A source may demonstrate compliance either by showing that the VOC 
content is less than the VOHAP limit (options 1-4) or by the use of 
option 5 (discussed below) which would measure the actual VOHAP 
content. If the shipyard is subject to regulatory limits on the VOC 
content of its coatings, the primary compliance method for this rule 
would be to certify the VOC content of each container of coating, as 
applied. (That information would then be used to determine compliance 
with the applicable VOHAP limit using any of the options 1-4.) 
Certification of VOC content is done by: (1) using Method 24 of 40 CFR 
part 60, appendix A; (2) using forms similar to those included in the 
certification procedure published in EPA-450/3-84-019 (revised 6/86), 
``Procedures for Certifying Quantity of Volatile Organic Compounds 
Emitted by Paint, Ink, and Other Coatings''; or (3) an alternative 
method approved by the Administrator. Option 5 may be used for 
demonstrating compliance when a shipyard is not subject to VOC limits.
    Affected sources would be allowed to use the following methods to 
demonstrate compliance to avoid testing every container of coating; 
however, any analysis of an individual container of coating using the 
Agency's Method 24 would take precedence to determine or to verify a 
violation. Paragraphs (i) through (iii) are summaries of options 1, 2, 
and 3.
    (i) Shipyards can demonstrate compliance of the as-supplied VOC 
content as certified by the manufacturer. If the as-supplied coating is 
used without adding thinning solvent, shipyards can certify that the 
as-applied VOC content of the batch of coating is identical to the as-
supplied VOC content, if it were certified by the manufacturer. If the 
certified VOC content is less than the VOHAP limit, compliance is 
demonstrated. (``As applied'' means after any thinning by the user or 
just prior to application to the substrate. ``As supplied'' means as 
supplied by the coating manufacturer.)
    (ii) Shipyards can demonstrate compliance if the actual volume of 
thinner used is less than the maximum allowable volume of thinner on a 
coating-by-coating basis.
    (iii) Shipyards can demonstrate compliance by comparing the actual 
volume of thinner used to the maximum allowable volume on a ``group'' 
basis. A group of coatings would be defined as those which use the same 
thinner. (See section VII.E. for more explanation.)
    Compliance with options 1 through 4 is based on the VOC content of 
each container of coating, as applied. If the as-applied VOC content is 
less than or equal to the VOHAP limit, then compliance would be 
demonstrated (See part III.E. for how ``exempt'' compounds which are 
HAP are considered in compliance determinations and other details).
    Shipyards can also demonstrate compliance by measuring the actual 
VOHAP content of a coating. If the as-applied VOHAP content is less 
than or equal to the alternate VOHAP limit, then compliance would be 
demonstrated. (See II.E., Option 5, for how alternate VOHAP limits are 
determined). (Concurrently with this rule, the Agency is preparing 
requirements for sample preparation and the performance specifications 
required of an acceptable analytical procedure.)
    An affected source may choose to use only one of the options for 
all coatings at the facility or a combination of options. Each option 
is discussed in more detail below.

E. Test Methods and Procedures

    The proposed rule would require Method 24 be used as the reference 
method to determine compliance if the VOC content is used as a 
surrogate for VOHAP. Manufacturers whose coatings do not release 
reaction by-products may request an alternative or equivalent method to 
be approved by the Administrator. If it is demonstrated to the 
satisfaction of the Administrator that a specific coating does not 
release VOC by-products from the cure reaction (all VOC emissions are 
evaporated solvent), then she may approve use of batch solvent 
formulation data to certify the as-supplied VOC content of that paint. 
In the event of any inconsistency between the VOC content as measured 
by Method 24 and formulation data, however, the Method 24 test shall 
govern.
    A few coatings may contain HAP which are (or through subsequent 
formal action may become) excluded from EPA's definition of VOC because 
these HAP have negligible photochemical reactivity and do not 
contribute to tropospheric ozone formation. These non-VOC HAP are 
nonetheless of regulatory concern as toxic chemicals. Therefore, for 
the purposes of this rule the mass of VOHAP determined by Method 24 
would be the mass of VOC plus exempt compounds; hence, unlike for a VOC 
determination, the total mass loss of these organic volatiles must be 
used in subsequent calculations. However, the volume of exempt 
compounds should be subtracted (from the total coating volume) just as 
water, as indicated by the units for VOHAP presented in Method 24. 
Manufacturers and affected sources would be required to certify the 
VOHAP of paints using a form similar to that published in the EPA's 
``Procedures for Certifying Quantity of Volatile Organic Compounds 
Emitted by Paint, Ink, and Other Coatings'' (Revised June 1986) EPA-
450/3-84-019 [Docket A-92-11, II-B-27]. If the shipyard chooses to 
demonstrate compliance using the VOHAP content of the coating(s), the 
manufacturer or affected source would need to provide details on how 
the VOHAP values were determined.

F. Monitoring Requirements

    Section 114(a)(3) of the amended CAA requires enhanced monitoring 
and compliance certifications of all major stationary sources. The 
annual compliance certifications certify whether compliance has been 
continuous or intermittent. Enhanced monitoring shall be capable of 
detecting deviations from each applicable emission limitation or 
standard with sufficient representativeness, accuracy, precision, 
reliability, frequency and timeliness to determine if compliance is 
continuous during a reporting period. The monitoring in this regulation 
satisfies the requirements of enhanced monitoring.
    The test methods and procedures described in the previous section 
will be used to determine compliance. Failure to meet the emission 
limits as measured by these procedures would be an enforceable 
violation of the emission limits of the standard. When add-on controls 
are used, monitoring shall be capable of detecting deviations from each 
applicable emission limitation or other standard with sufficient 
reliability and timeliness to determine continuous compliance over the 
applicable reporting period.
    Although the term ``continuous'' generally means at all times, the 
Agency has determined that less frequent measurements or determinations 
of compliance can ensure continuous compliance. The potential 
variability of the emissions or parameters is a primary factor in 
establishing the frequency of measurements.

G. Notification Requirements

    The proposed rule would require affected sources to follow the 
notification requirements in Secs. 63.9(a)-(d) and (h)-(j) of subpart A 
of the general provisions. In addition to the initial notification 
requirements in Secs. 63.9(b)(2) and (3) of subpart A, sources would be 
required to include in the initial notification: (1) the compliance 
procedure(s) that they intend to use; (2) procedures for ensuring 
compliance with the handling, transfer, and storage standard; and (3) 
procedures for maintaining records. These are subject to the approval 
of the Administrator. In addition, they would be required to submit a 
notification of compliance status on a quarterly basis, with any 
exceedances reported on a quarterly basis. Following the first year, 
the owner or operator of a source that has had no exceedances for a 
full year (can be any year after the first year), may request 
Administrator approval to reduce the frequency of notification to 
semiannual.

H. Recordkeeping and Reporting Requirements

    The proposed rule would require affected sources to follow the 
general recordkeeping and reporting requirements in Secs. 63.10(a)-(b) 
and (f) of subpart A of the general provisions. Sections 63.10(c)-(e) 
of subpart A do not apply unless a source uses a control device to 
comply with the standards except for the excess emission report 
required by Sec. 63.10(e)(3) which applies regardless of how emissions 
are controlled.
    In addition, each owner or operator of an affected source would be 
required to certify annually that all personnel involved with coatings, 
thinning of coatings, keeping coating records, or handling/transferring 
VOHAP-containing materials have received the training required by the 
regulation. A record of the certification is required, but no report is 
required. The purpose of the certification is to ensure that the 
training does occur at least once per year, and that documentation does 
exit for an enforcement official to review.
    Affected sources would be required to keep all records needed to 
demonstrate compliance with the standards, including calculations and 
records of any Method 24 or alternate VOHAP tests. All records would be 
compiled each calendar month and compliance status determined every 
month. In addition, a source is required to report on a quarterly basis 
any exceedances to the EPA and to provide in the excess emissions 
report the data needed to confirm and quantify the reported exceedance. 
All records must be maintained for a minimum of 5 years.
    The quarterly report should include:
    1. A summary of the number and duration of deviations during the 
reporting period classified by reason, including known causes for which 
a Federally-approved or promulgated exemption from an emission 
limitation or standard may apply;
    2. Identification of the data availability achieved during the 
reporting period, including a summary of the number and total duration 
of incidents during which the monitoring protocol failed to operate in 
accordance with design or produced data that did not meet minimum data 
accuracy and precision requirements (classified by reason);
    3. Identification of the compliance status as of the last day of 
the reporting period and whether compliance was continuous or 
intermittent during the reporting period;
    4. If, pursuant to (2) of this section, the owner or operator 
identifies any deviation as resulting from a known cause for which no 
Federally-approved or promulgated exemption from an emission limitation 
or standard applies, the monitoring report shall also include all 
records that the source is required to maintain that pertain to the 
periods during which such deviation occurred and:
    a. The magnitude of each deviation;
    b. The reason for each deviation;
    c. A description of the corrective action taken for each deviation, 
including action taken to both minimize it and prevent recurrence; and
    d. All quality assurance activities performed on any element of the 
monitoring protocol.

IV. Summary of Estimated Environmental, Energy, and Economic Impacts of 
the Proposed Standards

    The nationwide impacts presented below are the impacts the proposed 
standards would have on existing facilities. Because of downsizing of 
military forces, no new major sources are expected to be built in the 
next five years. Therefore, impacts on new sources are expected to be 
zero.

A. Number and Type of Affected Facilities

    Approximately 437 facilities (shipyards) are involved in the 
construction and repair of ships nationwide. Based on industry 
information and data reported in the U.S. Department of Commerce's 
``U.S. Industrial Outlook '92--Shipbuilding and Repair'' (January 1992) 
and the U.S. Maritime Directory Listings (June 1992). It is estimated 
that only 25 qualify as major sources of HAP emissions and would be 
affected by the proposed rule.

B. Air Emission Reductions

    The nationwide baseline VOHAP emissions for the approximately 25 
major shipbuilding facilities from surface coating operations are 
estimated to be 1,155 Mg/yr (1,272 tons/yr). Implementation of the 
proposed standards would reduce these emissions by approximately 24 
percent to 883 Mg/yr (972 tons/yr).

C. Secondary Environmental Impacts

    No environmental impacts to water, solid waste, noise, or secondary 
air impacts are associated with implementation of the proposed 
standards, as explained below.
1. Water
    There are no negative water pollution impacts resulting from 
transition to compliant coatings.
2. Solid Waste
    There are no negative solid waste impacts associated with the 
proposed standards. No additional or new types of solid or hazardous 
waste will be generated. Because the compliant (higher solid) coatings 
are more concentrated, fewer containers will require disposal when the 
same volume of solids is applied.
3. Noise
    There is no additional noise associated with the proposed 
standards. Pumps and compressors, the source of the majority of the 
noise in paint operations, is not expected to change.
4. Secondary Air Impacts
    There are no significant secondary air pollution impacts. Use of 
compliant coatings avoids use of any type of control device or 
equipment that would consume large amounts of energy. Furthermore, any 
reduction in VOC emissions that result from compliance with the HAP 
rule will reduce both ozone formation and CO2, a greenhouse gas 
(VOC that remain airborne react to form ozone and are ultimately 
oxidized to CO2).

D. Energy Impacts

    Paint heaters are now used in some shipyards. Some sources may use 
paint heaters in lieu of solvent to reduce paint viscosity. Although 
some secondary air impacts would result from the power requirements of 
the electrical heaters, the amount of electricity that they draw is 
insignificant.

E. Cost Impacts

    The incremental nationwide annual costs associated with the 
proposed standards (MACT cost minus baseline cost) is approximately 
$1.7 million per year. The use of compliant coatings will not require 
different equipment. Because lower-VOC (and presumably lower-VOHAP) 
coatings are more concentrated, less coating volume is required to 
cover the same surface area to the same dry film thickness. Some of 
these compliant coatings, however, may be more expensive both on a 
dollar-per-gallon basis, but also in cost-per- volume solids 
(nonvolatiles). Therefore, the annual costs associated with the 
proposed standards reflect the difference between the costs of higher-
priced coatings and the savings associated with the decreased volume of 
coatings (because of the higher solids content) and labor to apply 
them.
    Minor costs would be incurred by any source that purchases paint 
heaters or other minor equipment necessary to comply with the handling, 
transfer, and storage standard. These costs are expected to be 
insignificant.

F. Economic Impacts

    Economic impacts were calculated on a facility-specific basis as 
well as on a market segment basis (i.e., military construction, 
commercial repair, etc.). Economic impact indicators examined included 
price, output, and employment impacts. The economic impact analysis 
calculated economic impacts for six market segments within the 
shipbuilding and repair industry. Two methods were used to calculate 
the potential price impacts; therefore, these impacts will be provided 
in terms of ranges.
    Twenty major-source yards were identified as first-tier shipyards 
(facilities that have the capability to construct, drydock, and/or 
topside repair vessels with a minimum overall length of 400 feet). Two 
market segments in the first tier, facilities engaging in construction 
of military ships and privately owned facilities engaging in repair of 
military ships, are each estimated to increase their prices 0.1 percent 
or less to recover increased costs of the rule. The cost for the third 
market segment, government-owned shipyards engaging in repairing 
military ships, will be negligible.
    The remaining five major-source shipyards are categorized into the 
``second tier'' (facilities building and repairing ships less than 400 
feet in length). Within this tier, the market segment consisting of 
facilities constructing ships for the military is estimated to require 
a price increase between 0.1 and 0.2 percent. The market segment 
consisting of facilities engaging in construction of ships for the 
commercial sector is estimated to require a price increase of 0.3 
percent or less. Lastly, the market segment consisting of facilities 
performing repair on ships in the commercial sector is expected to 
require little or no price increase.
    The facility-specific impact calculations estimate the maximum 
price increase necessary for a regulated facility to fully recoup its 
annualized control costs. For the purposes of the analysis, a 
facility's price increase was considered significant if greater than 1 
percent and deviated considerably from its corresponding market segment 
price increase.
    The facility-specific price increase calculations indicated that 23 
of the 25 major-source shipyards are expected to experience price 
increases of 0.1 percent or less. Of the two remaining, one is expected 
to experience a 0.2 percent price increase and the other, 0.3 percent.
    The above data indicate that none of the regulated facilities are 
expected to experience price increases greater than 1 percent. In 
addition, a comparison of each facility's price increase to its 
corresponding market segment price increase reveals that the results of 
each analysis are not significantly different. Therefore, 
implementation of the NESHAP is not expected to have a significant 
impact on the 25 major-source facilities in the shipbuilding and repair 
industry.
    The economic analysis also examined the impact of the NESHAP on 
industry output and employment. The industry is expected to experience 
a negligible reduction in output as a result of implementing the 
regulation. Assuming a one-to-one relationship between output and 
employment, the same conclusion can be applied to the NESHAP impact on 
the industry's employment level.

V. National Emission Standards for Hazardous Air Pollutants (NESHAP) 
Decision Process

A. Source of Authority for NESHAP Development

    Section 112 of the Act gives the EPA the authority to establish 
national standards to reduce HAP emissions from sources that emit one 
or more HAP. Section 112(b) contains a list of the specific HAP to be 
regulated by NESHAP. Section 112(c) directs the EPA to use this 
pollutant list to develop and publish a list of source categories for 
which NESHAP will be developed. The Act defines major sources as those 
that emit or have the potential to emit considering controls, in the 
aggregate, 9.1 Mg/yr (10 tons/yr) or greater of individual HAP or 22.7 
Mg/yr (25 tons/yr) or greater of any combination of HAP. The initial 
list of source categories was published on July 16, 1992 (57 FR 31576). 
Shipyards (major sources only) appear on this list.
    Area sources are those sources that are not major sources. Area 
source categories selected by the EPA for NESHAP development will be 
based on the Administrator's judgment that the sources in a category, 
individually or in the aggregate, pose a ``threat of adverse effects to 
health and the environment.'' The EPA will continue to evaluate whether 
area source shipyards should be added to the list of area source 
categories.

B. Criteria for Development of NESHAP

    The NESHAP are to be developed to control HAP emissions from both 
new and existing sources according section 112(d) of the Act. The 
standards are to reflect the maximum degree of reduction that is 
achievable for new or existing sources. The NESHAP must reflect 
consideration of the cost of achieving the emission reduction, nonair 
quality health and environmental impacts, and energy requirements for 
control levels more stringent than the MACT floor (described below). 
The Act specifies that emission reduction may be accomplished through 
application of measures, processes, methods, systems or techniques, 
including, but not limited to, measures which:
    1. Reduce the volume of, or eliminate emissions of, such pollutants 
through process changes, substitution of materials, or other 
modifications;
    2. Enclose systems or processes to eliminate emissions;
    3. Collect, capture, or treat such pollutants when released from a 
process, stack, storage, or fugitive emission point;
    4. Are design, equipment, work practice, or operational standards 
including requirements for operator training or certification as 
provided in section 112(h); or
    5. Any combination of the above [section 112(d)(2)].
    To develop NESHAP, the EPA collects information about the industry, 
including information on emission source characteristics, control 
technologies, data from HAP emission tests at well-controlled 
facilities, and information on the cost, energy, and other 
environmental impacts of emission control techniques. The EPA uses this 
information to analyze possible regulatory approaches.
    Although NESHAP are normally structured in terms of numerical 
emission limits, alternative approaches are sometimes necessary. In 
some cases, physically measuring emissions from a source may be 
impossible or at least impracticable due to technological and economic 
limitations. Section 112(h) authorizes the Administrator to promulgate 
a design, equipment, work practice, or operational standard or 
combination thereof, in those cases where it is not feasible to 
prescribe or enforce an emissions standard.
    If any sources in the source category are considered major (based 
on their emissions), then a MACT standard is required. To establish a 
MACT standard, the level of control corresponding to the MACT floor 
needs to be determined as a starting point for developing the 
regulatory alternatives.

C. Categorization/Subcategorization: Determining MACT ``Floors''

    Section 112 of the Act provides certain very specific directives to 
guide the EPA in the process for establishing MACT standards. It states 
that the EPA shall establish standards that require ``the maximum 
degree of reduction in emissions of the hazardous air pollutants *** 
that the Administrator, taking into consideration the cost of achieving 
such emission reduction, and any nonair quality health and 
environmental impacts and energy requirements, determines is achievable 
***'' [section 112(d)(2)]. In addition, a minimum baseline or ``floor'' 
for a standard is specified. For new sources, the standard for a source 
category or subcategory ``shall not be less stringent than the emission 
control that is achieved in practice by the best controlled similar 
source, as determined by the Administrator'' [section 112(d)(3)].
    Further, standards for existing sources shall be no less stringent 
than: (1) the average emission limitation achieved by the best 
performing 12 percent of the existing sources in the category or 
subcategory for categories and subcategories with 30 or more sources; 
or (2) the best performing five sources for categories or subcategories 
with fewer than 30 sources [section 112(d)(3)].
    Once the floor has been determined for new or existing sources for 
a category or subcategory, the Administrator must set MACT standards no 
less stringent. Such standards must then be met by all sources within 
the category or subcategory. However, in establishing standards, the 
Administrator may distinguish among classes, types, and sizes of 
sources within a category or subcategory and establish a different 
emission standard for each class, provided all standards are at least 
as stringent as the MACT floor.
    The EPA has determined that there are less than 30 major 
shipbuilding sources. Consequently, the MACT floor for existing 
categories or subcategories was calculated to be the arithmetic average 
(the mean) of the emission limitation achieved by the best performing 
five sources.

D. Regulatory Approach and Regulatory Alternatives

    The next step in establishing standards is the investigation of 
regulatory alternatives. With MACT standards, only alternatives at 
least as stringent as the floor may be considered. Information about 
the industry is analyzed to develop model plant populations for 
projecting national impacts, including HAP emission reduction levels, 
costs, energy, and secondary impacts. Several regulatory alternative 
levels (which may be different levels of emissions control or different 
levels of applicability or both) are then evaluated to determine the 
most appropriate regulatory alternative to serve as the basis for the 
standard.
    The regulatory alternatives for new versus existing sources may be 
different, and separate regulatory decisions must be made for new and 
existing sources. For both source types, the selected alternative may 
be more stringent than the MACT floor. However, the control level 
selected as the name maximum achievable control technology indicates, 
must be available, i.e., technically achievable. In selecting a 
regulatory alternative, the Agency considers the achievable reduction 
in emissions of HAP (and possibly other pollutants that are co-
controlled), the cost and economic impacts, the energy requirements, 
and other environmental impacts.
    The selected regulatory alternative is then translated into a 
proposed regulation. The regulation implementing the decision typically 
includes the following sections: applicability, standards, test 
methods, compliance demonstration, monitoring, reporting, and 
recordkeeping. The preamble to the proposed regulation provides an 
explanation of the rationale for the decisions embodied in the rule. 
The public is invited to comment on the proposed regulation. Based on 
an evaluation of these comments, the EPA promulgates the final 
standard.

VI. Process Description and Control Technologies

    This section describes the painting process and technologies that 
can be used to control organic HAP emissions from painting operations 
at shipyards. For more detailed description of the process and control 
technologies, consult the BID for the proposed standards (see ADDRESSES 
at the beginning of this Preamble).
    Over 99 percent of HAP emissions at shipyards are organic solvents 
associated with paints and cleaning. Other activities that collectively 
contribute the remaining 1 percent include welding, metal forming/
cutting, and abrasive blasting. The proposed standards will affect 
operations involving the use of paint and organic solvents.

A. Painting Process

    Marine coatings are applied to the surface of ship components to 
form a protective, functional or decorative films. The basic components 
of a coating are the vehicle (resin or binder), solvent, pigment 
(except in clear coatings), and a variety of additives. Different 
coatings are used for different purposes; depending on where it is 
applied, the intended use of the ship, ship activity, travel routes, 
desired time between coatings (service life), aesthetic desires of the 
ship owner or commanding officer, and fuel costs.
    Marine coatings are vital for protecting the ship from corrosive 
and biotic attacks from the water environment. Many marine coatings 
serve specific functions, such as corrosion protection, heat/fire 
resistance, or antifouling (to prevent the settlement and growth of 
marine organisms on the ship's underwater hull).
    The most popular techniques for applying coatings to marine vessels 
are brushing, rolling, air-atomizing, and airless spraying. Brushing 
and rolling are primarily used for touchup and recessed surfaces where 
spraying is not practical. Spraying is used for all other surfaces 
because of its high application speed.
    Thinning solvent is sometimes added to coatings before application 
even though paint manufacturers state that it is unnecessary. 
Temperature, reportedly can play a big part in the decision to thin; 
cold increases paint viscosity. For such cases, the appropriate solvent 
to use for each coating is specified by the manufacturer. Typically 
these paints and thinning solvents contain one or more of the following 
HAP: xylene, toluene, and/or methyl ethyl ketone.

B. Control Technologies for Painting Operations

    Emissions of VOHAP result primarily from solvent evaporation--both 
solvent in the paint ``as supplied'' by the manufacturer and any 
solvent used by the shipyard to thin the paint. Reaction by-products 
released during the cure of some coatings may also contain HAP. 
Essentially, all organic solvents, including those which are HAP, are 
emitted either as the paint is applied or when it dries/cures. The 
shipyard may limit emissions of HAP from, ``as supplied'' or ``as 
applied,'' coatings as discussed below.
1. Paints As-Supplied by the Manufacturer
    Since the Agency began its program to reduce emissions of volatile 
organics in the late 1970's, the coating industry has made significant 
progress in research of new products with increased solids: organic 
solvent ratios. These liquid paints are of two primary types: 
waterborne and higher solids. Although many new waterborne products 
have been developed, manufacturers of marine coatings have reduced 
solvent primarily by increasing the solids (nonvolatile) content of 
their products. Use of these concentrated or ``higher solids'' coatings 
reduce solvent emissions per surface area painted (at same film 
thickness). Because most hazardous air pollutants are also volatile 
organics, the VOC program has tended to also reduce HAP.
    In addition, some coating manufacturers have reportedly been able 
to reduce the HAP content of certain paints by merely substituting a 
solvent not on the HAP list yielding paints that contain little or no 
HAP solvents. A coating reformulated in this manner may have the same 
or even higher VOC content than the one it replaces. In some cases, the 
HAP to VOC ratio may even increase when a company develops a new 
reformulation with lower VOC. (Note, the absolute HAP emissions are 
likely to go down.)
2. Paints As-Applied by the Shipyard
    There are several alternatives a shipyard may follow to minimize 
HAP emissions from as-applied paints. One is to avoid diluting the 
paint and apply it as-supplied. Another is to only use thinners that 
contain little or no HAP. A third is to reduce paint viscosity by 
heating the paint to avoid or minimize the need for thinning. (Paint 
heaters are heating elements placed in the paint delivery line upstream 
of the spray gun. Depending on the length of the delivery line, the 
coating characteristics, and ambient temperature, multiple paint 
heaters may be required at intervals along the line. These decrease the 
ease of portability and flexibility of the application system.)
    ``Add-on'' pollution control systems are often used to control 
emissions from spray booths when coatings are applied in factory 
operations. Such systems are not now a practical alternative for many 
shipyard operations because the size of ship components is too large to 
enable capturing of the emissions with an enclosure. (There is 
currently under development a mobile enclosure that, if successful, 
will offer shipyards a method of capturing both particulate and 
volatile organics. Metro Machine shipyard in Norfolk, Virginia has 
developed a prototype portable enclosure that mounts adjacent to the 
ship and supports an omni-directional elevator platform used by the 
operator to abrasive blast and paint ship's hulls. The method shows 
promise of containing particulate and volatile organics of 
concentrations great enough to make recovery available at reasonable 
cost. It also provides weather protection thereby allowing work to 
continued in inclement weather. Final evaluation will likely be 
completed in 1996.)

C. Handling, Transfer, and Storage of Volatile Organic HAP Containing 
Materials

    Volatile organic emissions (including HAP) result from storage, 
handling, and transfer of solvents and paint wastes that contain VOHAP. 
These solvents, typically stored in 55-gallon drums, are frequently 
transferred by pump or spigot into small buckets or 1 gallon containers 
for transport to the painting site. Waste solvent and HAP also 
evaporate from solvent-laden rags and spent solvent used in cleaning 
activities and coating operations.
    These HAP emissions may be minimized with appropriate work 
practices including managed chemical (paint and solvent) distribution 
systems designed to curb the volume of material exposed to the 
atmosphere and the length of the exposure. For example, solvent-soaked 
cleaning rags should be kept in impervious bags or containers that are 
normally closed when not in use.

VII. Selection Rationale

A. Selection of Emission Points to be Covered

    The proposed standards would limit VOHAP emissions from surface 
coating operations at shipbuilding facilities that are major sources in 
accordance with the EPA's list of source categories published in the 
Federal Register on July 16, 1992 (57 FR 31576). Standards are being 
proposed to limit the VOHAP content of 23 categories of coatings used 
in shipyards. In addition, the proposed standards would require work 
practice measures for handling, transfer, and storage of solvent and 
paint wastes.
    Welding, gas freeing (tank degassing), metal fabrication, fuel 
combustion, flame cutting, cooling towers, asbestos removal, and 
cleaning would not be regulated under the proposed rule, although their 
emissions must be included in determining if a facility qualifies as a 
major source. Asbestos removal is covered in 40 CFR part 61, subpart M; 
cooling towers are treated in the industrial process cooling tower rule 
proposed on August 12, 1993; and chromium emissions by the rule for 
hard and decorative electroplating and anodizing operations proposed on 
November 30, 1993. Methodology for determining and managing emissions 
from cleaning solvents is detailed in the ACT document--Industrial 
Cleaning Solvents, EPA-453/R-94-015.

B. Selection of the Basis for the Proposed Standards

    The general methodology for selecting the basis for MACT standards 
was discussed in section V. A more detailed discussion specific to this 
industry is presented below.
1. Coating Operations
    No emission control measures are known to have previously been 
implemented specifically to reduce HAP emissions from this industry. 
Regulations that reduce VOC emissions will limit HAP emissions since 
almost all organic HAP are VOC.
    At shipyards, the only VOC control measure that has been fully 
demonstrated for outdoor coating operations is the use of coatings with 
inherently lower emissions. Such coatings have and are being developed 
by an enlightened industry to reduce its environmental impact. The new 
products are used for compliance with VOC regulations in Louisiana and 
some California jurisdictions. There are as yet no known cases where 
add-on pollution control systems have been used to control VOC 
emissions from outdoor coating operations at shipyards.
    The California and Louisiana regulations limit the allowable 
quantity of VOC in each of several categories of coatings, as applied. 
Because VOHAP are VOC (with the exception noted above), such 
regulations also reduce, or at a minimum, put a ceiling on the 
allowable HAP content of these coatings.
    The California regulations (VOC limits) are more stringent than 
those in Louisiana. Thus, the major sources subject to those California 
rules represent the ``best controlled sources.'' Because three major 
source facilities are located in California, the single best controlled 
facility and the median facility of the best performing five sources 
are both subject to the stringent California regulations. Therefore, 
the Agency has determined that the MACT floor for both new and existing 
sources is identical to the current California VOC limits on marine 
coatings, except for one additional paint category [weld-through (shop) 
primer].
    A variety of more stringent alternatives were considered, including 
more restrictive limits based on HAP content (rather than VOC content), 
more stringent VOC limits, and requiring use of pollution control 
equipment. These alternatives are discussed below.
    To evaluate other potential limits, the EPA gathered existing data 
on HAP content from marine coating manufacturers and shipyards. 
Information compiled from a material safety data sheet (MSDS) was used 
to determine (estimate) the HAP content of each paint. Most of the data 
came from MSDSs and product data sheets. Based on these data, the 
percentage of VOC in marine coatings that are HAP varies from zero to 
100 percent and averaged 30 percent by weight for all paints in the 
project data base. (The HAP content could exceed the VOC content in 
coatings containing non-VOC HAP.)
    Industry subsequently informed EPA that the quality of HAP-specific 
data on MSDSs is poor. The MSDSs are prepared primarily to meet 
Occupational Health and Safety Administration (OSHA) requirements. 
Although one section addresses hazardous constituents, the industry 
indicated that information and format required for OSHA purposes are 
not as detailed or accurate as would be desired for development of a 
regulation. Further, the list of hazardous materials that OSHA 
regulations require must be addressed in MSDSs is different from the 
HAP list in section 112(b) of the Act. In addition, it is acceptable to 
give a concentration range on the MSDS, rather than a specific value. 
Finally, many entries on the MSDS are generic petroleum solvents, such 
as mineral spirits, which are mixtures of many organics (some of which 
may be HAP) and vary in composition from lot to lot.
    Because of these drawbacks in MSDS data, the EPA considered it not 
accurate enough to be used in setting limits for VOHAP. The Agency 
believes, however, that the resulting data base is sufficiently 
accurate for use in estimating broad parameters, such as the potential 
reduction associated with limitations on VOC content.
    Enforcement of a limit on HAP content would require an EPA 
reference test method. Although one is under development by the Agency, 
it has not yet been published. Based on the quality of the HAP content 
data on the MSDSs and the lack of an approved test method for 
speciating and quantifying HAP, the EPA has determined that VOC will be 
used as a surrogate to limit HAP emissions. Consequently, the proposed 
rule would establish the VOHAP limit at the VOC limit of the California 
rules using VOC as a surrogate for HAP and the Agency's VOC test 
method, Method 24, for determining compliance.
    The EPA considered requiring limits more stringent than the 
existing California limits. The data base indicates that within each 
category of coatings there are coatings with VOC contents below the 
California limit. (Some may have been developed in response to the 
technology-forcing provisions of the California regulations that 
provide for more stringent limits to come into effect in September 1994 
for some coating categories.)
    Although coatings with lower VOC contents than the rule requires 
are marketed in each category, they reportedly would not perform for 
the full range of potential applications within a coating category.
    An important consideration in examining control requirements for 
this industry is U.S. Navy military specifications or ``milspecs.'' 
Because of the need for coatings for specialized applications and the 
demand for predictable performance, the Navy oversees exhaustive 
performance testing procedures. Naval personnel indicate an ongoing 
program to qualify lower VOC coatings. The California rules were 
developed with considerable input from the Navy, and according to a 
Naval representative, reflect the ``state of the art'' for lower-VOC 
shipbuilding coatings. Volatile organic compound limits more stringent 
than proposed would require that the Navy use paints for which they 
have not yet completed long term testing, hence are not milspec 
approved. Given these considerations, the EPA is proposing MACT 
emission levels based on the 1992 California regulations that limit the 
total VOC as-applied paint.
    The EPA also evaluated the potential of add-on VOC control devices 
(i.e., carbon adsorbers and incinerators). Although no cases are known 
where add-on controls are used for outdoor painting at shipyards, they 
have been used to reduce spraybooth emissions by many other industries. 
Most coating operations at shipyards take place outdoors, primarily 
because of the size of parts painted. This makes capture of emissions 
difficult and expensive. Use of add-on controls for outdoor painting 
was not selected as the basis for MACT for these reasons. It should be 
noted, however, that a portable enclosure that will contain particulate 
and VOC during abrasive blasting and coating of ships' hulls is under 
commercial development. Should these enclosures prove technically and 
economically feasible, their performance should be considered by any 
State or the Federal Government in developing future rules for this 
industry.
    Two types of coating operations at shipyards where emissions are 
more available to capture were examined more closely for the 
feasibility of add-on controls: indoor coating operations and painting 
inside of ship's tanks or other internal enclosed spaces. Based on a 
brief screening analyses, using the limited available data that assumes 
all spray areas are continually drafted to the control device (whether 
painting operations are underway in all areas or not), add-on control 
was estimated to be on the order of $150,000/Mg of VOHAP removed. The 
EPA believes that this cost is not reasonable for this source category. 
As a result, add-on controls were not investigated further nor selected 
as the basis for MACT.
    In reality, the amount of VOC and HAP controlled at a site is 
dependent on the rate of paint application, the concentration of these 
compounds in the exhaust air stream during the painting operation, the 
flow rate of the air stream flowing into the add-on control unit and a 
host of other factors. The suitability of add-on controls can only be 
determined on a case-by-case basis.
    After review of alternatives more stringent than the MACT floor, 
the EPA is proposing to set the MACT standard at the floor based on the 
California marine coatings rule which is for both new and existing 
sources. The costs of the control option for new and existing sources 
is expected to be the same. The Agency solicits comments on this 
determination.
    ``Models'' of shipyards were developed to help determine the need 
to differentiate among classes of shipyards in identifying the MACT.'' 
Models were developed for classes of yards based on market segment 
(yards that construct ships versus those that only repair) and size 
(large versus medium). The EPA concluded there is no basis for 
differentiating among classes of major source shipyards, but 
specifically solicits comments on whether this category should be 
subcategorized; and if so, how.
2. Handling, Transfer, and Storage of VOHAP Containing Material
    Based on information received from industry, a variety of ``work 
practice'' measures are used to reduce evaporative losses of VOC from 
transfer, handling, and storage of solvent and paint wastes. These 
include spill minimization techniques (use of spouts, funnels, or catch 
basins during transfer of liquids from one container to another), the 
use of normally closed containers or piping to transport liquids, and 
the use of close-fitting or tight covers on containers for solvent, wet 
rags, and waste.
    Many more than five facilities employ some type of work practice 
measures. Facilities in California are subject to regulations to 
minimize evaporative emissions; other facilities employ such measures 
to decrease solvent usage or to minimize exposure of workers. However, 
data to quantify accurately the emission reductions achievable by 
different work practice measures is unavailable. The beneficial effect 
of a specific change is largely a function of the previous plant 
practice being remedied. As a result, even though such activities 
obviously reduce emissions, there is no way to distinguish between the 
``best controlled source'' and the ``best performing five existing 
sources.'' Therefore, the EPA has designated the same select work 
practice measures as the MACT floor for control of emissions from 
handling and transfer of VOHAP containing material at both new and 
existing facilities. For emissions from storage containers, the MACT 
floor is use of tight-fitting covers that must be normally closed; that 
is, in place except when materials are being added to or withdrawn. The 
Agency believes that this is a reasonable approach. Because work 
practice measures typically entail negligible cost, any emission 
reduction that is achieved is believed to be worthwhile. The EPA 
specifically solicits comments on this determination.
    No other more effective control options for these VOHAP emissions 
from cleaning activities were found. Use of lower-HAP or lower-vapor-
pressure substitutes to minimize evaporative losses may be feasible, 
although this option depends on the availability of a suitable 
replacement cleaning material.
    Capture and control of fugitive emissions from the many transfer, 
handling, and storage of solvents (and operation wastes) although 
conceivable, is impractical, making it difficult to invoke any 
quantifiable standard other than work practice requirements. Associated 
monitoring and recordkeeping are included for determining compliance. 
In an attempt to ensure that employees understand and comply with the 
requirements, the proposed standards also require each source to 
implement a training program for all involved personnel.

C. Selection of the Format of the Proposed Standards

1. Coating Operations
    Most HAP emissions from coating operations in this industry occur 
outdoors where the technology for their capture has not been 
demonstrated. As a result the only available technology for reducing 
emissions is to require use of coatings with lower volatile content. 
Virtually all of the HAP and VOC contained in marine coatings are 
emitted to the atmosphere during the course of application and drying. 
Thus, an emission standard based on limiting both HAP and VOC content 
of the coatings, as applied, is appropriate for these operations, 
particularly because any additional HAP and VOC that may be formed and 
emitted during the curing process are detected and measured by the 
reference measurement methodology.
    As a result, the types of coatings used by the industry were 
identified and maximum, never-to-be-exceeded HAP limits were selected 
for each of the several coating categories. To allow additional 
flexibility, the ability to average limits across categories was also 
considered. Under an averaging approach, any coating regardless of 
volatile organic content, can be used as long as the volume weighted 
average as applied VOHAP content, i.e., as measured by the reference 
method, of all coatings does not exceed the average calculated from 
their individual limits. In developing the limits, the Agency 
considered two types of averages: (1) Separate averages for coating 
within each of the coating categories and (2) a single average for all 
coatings used by a facility. The option of establishing limits based on 
weighted averages of various coatings of different pollution content 
was abandoned when the industry indicated that time and effort to plan, 
track, and demonstrate compliance would be too burdensome. As a result, 
the limits are based on never-to-be-exceeded VOHAP contents for 23 
categories of coatings and permits ``averaging'' for purposes of 
compliance under certain conditions. The proposed coating categories 
and associated HAP limits are presented in Table 1.
2. Handling, Transfer, and Storage of VOHAP Containing Material
    The proposed work practice standards require that these operations 
be carried out in such a manner that minimizes spills. For storage and 
transport, the proposed standards require use of containers that are 
normally closed.
    To provide a measure of enforceability to these standards, each 
source will be required to indicate how it intends to comply with the 
standards as part of the initial notification that is required of all 
sources under the part 63 general provisions. After the Administrator 
or her designee negotiates and approves these compliance measures as 
part of the operating permit program, each source will have a specific 
set of requirements for which compliance can be determined by 
monitoring, observation and/or inspection.

D. Selection of Compliance Dates

    The proposed rule would require that existing sources comply within 
1 year after the effective date of the rule. This provides time for 
shipyards and coating manufacturers to deplete most existing 
inventories of contemporary coatings. An existing unaffected area 
source that increases its emissions (or potential to emit) such that it 
becomes a major source would be required to comply within 1 year after 
becoming a major source.

   Table 1.--Proposed Volatile Organic HAP (VOHAP) Content Limits for   
                             Marine Coatings                            
------------------------------------------------------------------------
                                 VOHAP limitsa,d     VOHAPalt limitsc,d 
                             -------------------------------------------
                                           Pounds                Pounds 
      Coating category        Grams per     per     Grams per     per   
                              liter (g/    gallon   liter (g/    gallon 
                                  L)     (lb/gal)b      L)     (lb/gal)b
------------------------------------------------------------------------
General use.................        340       2.83        571       4.76
Specialty:                                                              
  Air flask.................        340       2.83        571       4.76
  Antenna...................        530       4.42      1,439      12.00
  Antifoulant...............        400       3.33        765       6.38
  Heat resistant............        420       3.50        841       7.00
  High gloss................        420       3.50        841       7.00
  High temperature..........        500       4.17      1,237      10.31
  Inorganic zinc high-build                                             
   primer...................        340       2.83        571       4.76
  Military exterior.........        340       2.83        571       4.76
  Mist......................        610       5.08      2,235      18.63
  Navigational aids.........        550       4.58      1,597      13.31
  Nonskid...................        340       2.83        571       4.76
  Nuclear...................        420       3.50        841       7.00
  Organic zinc..............        360       3.00        630       5.25
  Pre-treatment wash primer.        780       6.50     11,095      92.46
  Repair and maintenance of                                             
   thermoplastic coating of                                             
   commercial vessels.......        550       4.58      1,597      13.31
  Rubber camouflage.........        340       2.83        571       4.76
  Sealant coat for thermal                                              
   spray aluminum...........        610       5.08      2,235      18.63
  Special marking...........        490       4.08      1,178       9.82
  Specialty interior........        340       2.83        571       4.76
  Tack coat.................        610       5.08      2,235      18.63
  Undersea weapons systems..        340       2.83        571       4.76
  Weld-through (shop) primer        650       5.42      2,885      24.04
------------------------------------------------------------------------
aVolatile organic HAP limits (for compliance options 1 through 4) are   
  expressed in units of mass of VOHAP per volume of coating less water  
  and non-HAP ``exempt'' solvents, as applied. Volatile compounds       
  classified by EPA as having negligible photochemical reactivity are   
  listed as ``exempt'' in 40 CFR 51.100(s) (except those on the HAP     
  list).                                                                
bTo convert from g/L to lb/gal, multiply by: [(3.785 L/gal)(lb/453.6 g)]
  or (lb-L/120 g-gal).                                                  
cAlternate volatile organic HAP (VOHAPalt) limits (for compliance option
  5) are expressed in units of mass of VOHAP per volume of solids, a    
  value that assumes the volumes of all components within a coating are 
  additive.                                                             
dFor compliance purposes, the metric limits are the standard.           

    Any new or reconstructed sources would be required to adhere to the 
compliance schedule in Sec. 63.6(b) of subpart A of the general 
provisions. For new or reconstructed sources whose startup date is 
before the effective date of the rule, the compliance date would be the 
effective date of the rule. For new or reconstructed sources whose 
startup date is after the effective date of the rule, the compliance 
date would be the startup date. A new unaffected area source that 
increases its emissions (or potential to emit) such that it becomes a 
major source would be required to comply immediately upon becoming a 
major source.
    Many shipyards in California have been complying with VOC limits 
equal to those in the proposed BACM since September 1991. Hence, 
coatings that meet the limits should be readily available.

E. Selection of Compliance Procedures

    The proposed rule would allow affected sources to choose from five 
options for demonstrating compliance with the VOHAP standards. 
Regardless of the option(s) chosen, for each coating, affected sources 
would be required to first determine: (1) its coating category in Table 
1 (e.g., general use, air flask, antenna, etc.), (2) the applicable 
VOHAP limit, and (3) the VOC (or VOHAP) content for each manufactured 
batch of coating. The VOC (or VOHAP) content of the batch would be 
determined through certification as explained in part III.D. (It is in 
the best interest of affected sources to use manufacturers that certify 
their coatings.)
    For options 1 through 4 involving VOC content determinations, the 
compliance method is the Agency's Method 24. Affected sources would be 
allowed any of the methods described below to avoid testing every 
container. The ultimate referee method, however, is Method 24. Option 5 
involves VOHAP content determinations; the compliance method has to be 
approved by the Administrator and comply with EPA requirements for 
sample preparation.
    The proposed rule does not specify compliance procedures for the 
handling, transfer, and storage standard. Each affected source would be 
required to develop and include specific compliance procedures for 
their facility in the initial notification to the Administrator.
    An affected source would be allowed to select any of the following 
methods for compliance and may choose to use only one of the options 
for all coatings at the facility or use a combination of options.
Option 1. Certification of Each Container or Coating, As-Applied
    Procedures for certifying the quantity of VOC emitted by paints, 
ink, and other coatings are combined in the EPA publication 450/3-84-
019 (revised 6/86). Compliance with the VOHAP content limits would be 
achieved by sampling, testing, and certifying the VOC content of each 
container of coating, as applied. If the as-applied VOC content is less 
than or equal to the VOHAP limit in Table 1, the coating complies.
Option 2. Coatings To Which Thinning Solvent Will Not Be Added
    If thinning solvents will not be added to the coating under any 
circumstances, the affected source may demonstrate compliance with the 
VOHAP content limit by certifying the as-applied VOC content by 
manufacturer's batch. The as- applied certification may be based on a 
coating that has been certified by the manufacturer as to the as-
supplied content and simply requires documentation that no thinning 
solvent was added to the coating. No additional testing would be 
necessary.
    All painters would have to be notified that no thinning solvent may 
be added to the coating before application. This notification may be 
accomplished through a label affixed to each container in the batch or 
through another means of notification specified in the source's initial 
notification that is required in Sec. 63.9(b) of subpart A of the 
general provisions. Other means of notifying painters may include use 
of a bar coding system or posting of a list of coatings that should not 
have thinning solvents added.
    This option is the least burdensome to affected sources, but it may 
only be used for coatings that will not be thinned. However, any Method 
24 tests on individual containers of coating, as applied, that show 
noncompliance with the standards would take precedence and indicate a 
violation.
Option 3. Coatings to Which Thinning Solvent Is Added--Coating-by-
Coating Compliance
    If thinning solvents are added to the coating, the affected source 
could determine the allowed level of dilution for purpose of 
demonstrating compliance on a coating-by-coating basis. The source 
would determine the as-supplied VOC content of each type of thinning 
solvent. Then, using the as-supplied certification for the coating and 
the maximum allowable limit from Table 1, the source would calculate 
the maximum allowable thinning ratio that would not violate the VOHAP 
content limit.
    The persons responsible for applying each coating shall be notified 
of the designated thinner and maximum allowable dilution ratio for that 
coating by affixing a label to each container of coating in the batch 
or through another means as discussed in the rule.
    (A) For coatings and thinning solvents that do not contain water or 
exempt compounds, use Equation 1 as follows:

TP06DE94.013

where:

Rd=Maximum allowable thinning ratio (L thinner/L coating 
as supplied);
VOCs=As-supplied VOC content of the coating (g VOC/L coating as 
supplied, less water and exempt solvents);
HAPa=Allowable as-applied VOHAP content of the coating (g VOHAP/L 
coating as applied, less water and exempt solvents);
Rd=Density of the thinners (g thinner/L thinner);

    (B) For coatings or thinners that contain water or exempt 
compound(s), use Equation 2 as follows:

TP06DE94.014

where:

(Vw)s=Volume fraction of water and exempt solvents in the 
coating as supplied (L water and exempt solvents/L coating as 
supplied);
(Vw)d=Volume fraction of water and exempt solvents in the 
thinner (L water and exempt solvents/L thinner); and
(Ww)d=Weight fraction of water and exempt solvents in the 
thinner (g water and exempt solvents/g thinner).

    (C) The procedures specified under test methods and procedures may 
be used to determine the values of variables defined in this paragraph, 
as necessary.
    A source is to determine the total allowable volume of thinner for 
each coating for the month using the following equation.

TP06DE94.015

where:

Vd=Total allowable volume of thinner for the coating for the 
previous month (L thinner);
Vc=Volume of each batch of the coating, as supplied, used during 
the month (L coating as supplied);
i=Each batch of coating; and
n=Total number of batches of the coating.

    If the actual thinner volume used for a coating is less than or 
equal to the total allowable thinner volume for that coating then 
compliance is presumed for that coating for the month, unless a 
violation is revealed using Method 24. (If it is greater, the facility 
must report a violation.) Any Method 24 test on individual containers 
of coating, as applied, that shows noncompliance with the standards 
would take precedence and indicate a violation.
Option 4. A Group of Coatings To Which the Same Thinning Solvent Is 
Added--Group Compliance
    Inasmuch as shipyards may use the same solvent to reduce more than 
one category of coating, this option was created to minimize 
recordkeeping in such cases. The group compliance option is similar to 
the coating-by-coating compliance option, except the source does not 
need to maintain thinner usage by individual paint category; it would 
be allowed to calculate the total allowable volume of thinner used for 
a group of coatings. A group would be constituted based on use of 
common thinner. A group could consist of two or more different batches 
of the same coating or different coatings. For example, a group may 
consist of a certain batch of antenna coating combined with all batches 
of general use coatings. However, a group may not contain any coating 
to which thinning solvent will not be added.
    Affected sources would calculate the maximum allowable dilution 
ratio for each coating using equation 1 or 2. All painters would have 
to be notified of the maximum allowable dilution ratio for each 
coating. Beginning with the recorded amount of coating used during the 
previous month, the facility would calculate the net allowable volume 
of thinner that could have been used by each coating in the group. If 
the actual usage was less than or equal to the net allowable volume for 
the group, the source is in compliance. However, any Method 24 test on 
individual containers of coating, as applied, that shows noncompliance 
with the standards would take precedence and indicate a violation. 
Equations 1 through 3 were derived from the EPA's ``Procedures for 
Certifying Quantity of Volatile Organic Compounds Emitted by Paint, 
Ink, and Other Coatings'' (Revised June 1986), EPA--450/3-84-019.
Option 5. Coatings with Noncompliant VOC Contents Used in Areas Without 
VOC Limits
    In those facilities located in areas without required VOC limits 
for marine coatings (i.e., ozone attainment areas; all 25 of the 
existing major source facilities are located in current ozone 
nonattainment areas), the affected source may measure the HAP content 
using the following techniques and using alternate limits derived from 
the limits in the regulation to demonstrate compliance on a coating-by-
coating basis. The VOHAPalt limits were calculated using the 
maximum allowable VOHAP limits (see Table 1) and an assumed average 
density for all solvents. To demonstrate compliance, the source would 
determine (using formulation data from the coating manufacturer) the 
as-supplied VOC content and volume solids (Vs) of each coating.
    Then, using the measured (via any approved test method) VOHAP 
content divided by the volume solids, compliance can then be determined 
with the calculated VOHAPalt limit. The following equations were 
used to calculate the alternate VOHAP limits (for coatings that do not 
contain any exempt solvents or water):*
---------------------------------------------------------------------------

    *Equation 5 only applies to those coatings containing only VOC's 
and (volume) solids.

TP06DE94.016

---------------------------------------------------------------------------
where:

Vs**=Volume fraction of solids in the coating as supplied (L 
solids/L coating as applied);
---------------------------------------------------------------------------

    \*\*For purposes of this general discussion and example 
calculation, volume solids (Vs) has been used interchangeably 
with the term ``nonvolatiles.''
---------------------------------------------------------------------------

VOC=Applicable as-supplied VOC content of the coating (g VOC/L coating 
as supplied, less water and exempt solvents; and
Davg=Average density of solvents in the coating (to demonstrate 
compliance of a marine coating, use the solvent mixture in the coating 
to calculate Davg.)

    In order to calculate VOHAPalt limits, the VOC content was 
assumed to be equal to the VOHAP limit for each coating category in 
Table 1, therefore:

TP06DE94.017

where:

VOHAPlimit=Applicable as-applied VOHAP limit of the coating 
category (g VOHAP/L coating as applied, less water and non-HAP exempt 
solvents);
Davg=840 g/L (for conversion purposes, the average density of 
solvents used in all marine coatings).

    The VOHAPalt limits were then calculated using the following 
equation:

TP06DE94.018

where:

VOHAPalt=Allowable as-applied alternate VOHAP content of the 
coating (g VOHAP/L solids as applied)
Vs=Volume fraction of solids in the as applied coating (L solids/L 
coating)

    If the measured VOHAP contents for a coating divided by the volume 
solids (Vs) is less than or equal to the calculated VOHAPalt 
limit in Table 1, then compliance is demonstrated.
    An example calculation for determining the VOHAPalt limit for 
a ``general use'' coating follows:
    First, the VOHAP limit=340 g/L and based on the assumption that the 
coating is only comprised of VOC and (volume) solids,

TP06DE94.019

Then,

TP06DE94.020

    When the as-applied coating contains thinner and/or exempt 
compounds, special allowances (calculations) must be

TP06DE94.021

used to determine VOHAPalt limits. These special allowances and 
procedures for compliance testing are covered in a June 30, 1994, memo 
to the project file [Docket A-92-11, II-B-26] from Dr. Mohamed 
Serageldin.
    To further illustrate the VOHAPalt limit calculations, the 
following example is provided: A shipyard wants to use (demonstrate 
compliance using option 5) a general use coating with a VOC content of 
392 g/L less water and exempt solvents, a measured VOHAP content of 288 
g/L less water, and an average solvent density of 880 g/L. Since the 
VOHAP limit for general use coatings is 340 g/L less water, the 
VOHAPalt limits were calculated to be 571 g VOHAP/L solids (see 
Table 1).

TP06DE94.022

    Compliance for the coating is therefore demonstrated because the 
VOHAP content of 519 g/L solids is less than the VOHAPalt limit of 
571 g/L solids.

F. Selection of Test Methods and Procedures

    Since the EPA does not yet have a published reference method for 
analyzing for the amount of VOHAP in a coating, the measure of total 
VOC is to be used as a surrogate. Method 24 is the Agency's reference 
method for determining the total volatile organic content (the total 
amount of VOHAP and other volatile organics). The proposed rule would 
use the VOC content of as-applied coatings to determine compliance with 
the VOHAP content limits (see section VII.B.1).
    Most, if not all, major shipbuilding facilities are believed to be 
located in ozone nonattainment areas. These facilities are likely to be 
required to meet State VOC regulations requiring BACM. As explained 
earlier in this notice, the EPA's draft recommended BACM for the draft 
CTG contains VOC limits equivalent to the VOHAP limits being proposed. 
Thus, using Method 24 to measure compliance with both the VOC and HAP 
rules (i.e., one test to satisfy two concerns) should be the least 
burdensome route of any source having to meet VOC rules in addition to 
HAP rules. However, in case there are any sources which are not 
required to meet VOC rules and have a desire to determine compliance 
through measuring VOHAP instead of VOC, an approach as outlined in 
option 5 is being proposed. (Comments are requested.)
    The proposed rule would require that affected sources use forms and 
procedures comparable to those in the EPA's ``Procedures for Certifying 
Quantity of Volatile Organic Compounds Emitted by Paint, Ink and Other 
Coatings,'' (Revised June 1986) EPA-450/3-84-019 for all certifications 
needed for compliance demonstrations. Consistent use of these forms and 
procedures will provide uniform and complete records that will allow 
determination of ``continuous'' compliance with the standards.
    Procedures other than test methods would be required to demonstrate 
compliance with the handling, transfer, and storage standard. Each 
source is required to submit an implementation plan that will include 
specific procedures to ensure compliance.

G. Selection of Notification, Recordkeeping, and Reporting Requirements

1. Notification Requirements
    The proposed rule would require affected sources to submit an 
initial notification and subsequent quarterly notifications of 
compliance status. Exceedances (violations) should be reported on a 
quarterly basis. The notification requirements in Secs. 63.9 (a)-(d) 
and (h)-(j) of subpart A would apply to all affected sources in 
addition to the source category-specific requirements in the proposed 
rule. Sections 63.9 (e)-(g) of subpart A would not apply unless an 
affected source installs an add-on control device.
    Section 63.9(b) of subpart A contains the initial notification 
requirements. The initial notification would alert the Administrator 
of: (1) The applicability for existing facilities or of construction 
for new facilities, (2) how the source plans to comply with the 
proposed standards, and (3) if any delays in compliance are expected. 
This notification would be due no later than 120 calendar days after 
the effective date of the rule for existing sources; for new or 
reconstructed sources, the due date would be within 120 days after 
initial startup if approval of construction or reconstruction is not 
required under Sec. 63.5(d) of subpart A. In addition to the items 
listed in Sec. 63.9(b) of subpart A, sources would be required to 
include in the initial notification: (1) The compliance procedure(s) 
that they intend to use for the coating operation standards; (2) 
procedures for ensuring compliance with the handling, transfer, and 
storage standard; and (3) procedures for maintaining records.
    Section 63.9(h) of subpart A contains the requirements for 
notification of compliance status. These would notify the Administrator 
of whether compliance has been achieved over the past 3 months. These 
notifications would be due before the 60th day following completion of 
each 3-month period. If there are no violations within the first year, 
compliant sources may request permission from the Administrator to go 
to 6-month notifications. Because records would be compiled on a 
monthly basis, 60 days should provide sufficient time to prepare these 
notifications. In addition to the items listed in Sec. 63.9(h) of 
subpart A, affected sources would be required to include in these 
notifications all other records that the source is required to maintain 
and compile on a monthly basis according to the proposed rule.
2. Recordkeeping and Reporting Requirements
    The proposed rule would require affected sources to maintain 
adequate records to verify the compliance status of the source on a 
monthly basis. The recordkeeping and reporting requirements of the 
general provisions in Secs. 63.10 (a)-(b) and (f) of subpart A would 
apply to all affected sources. The source category-specific 
requirements in the proposed rule also apply. Sections 63.10 (c)-(e) of 
subpart A would not apply unless an affected source installs an add-on 
control.
    Affected sources would be required to keep records for 5 years of 
all VOC content certifications, VOHAP content certifications, maximum 
allowable dilution ratios, quantities of coatings and thinner consumed, 
and compliance calculations needed to determine compliance with the 
standards. These records would vary slightly depending on the method(s) 
of determining compliance under Sec. 63.784 that the source chooses to 
use. Records of any Method 24 tests (or VOHAP tests) conducted on 
individual coatings, as applied, would also be maintained. These 
records are required in case the results of any such test conflicts 
with the results of any compliance determination conducted in 
accordance with the other allowable methods.
    The Administrator believes that the records required under the 
proposed rule are necessary for a regulatory agency to determine the 
compliance status of an affected source efficiently and effectively. 
All records would be compiled each calendar month and maintained for a 
minimum of 5 years.

H. Operating Permit Program

    Under the operating permit regulations codified at 40 CFR part 70, 
any source that is considered major under the Act or any nonmajor 
source subject to a standard under sections 111 or 112 of the Act must 
obtain an operating permit [see Sec. 70.3(a)(1)]. Often, emission 
limits, monitoring, and reporting and recordkeeping requirements are 
scattered among numerous provisions of State implementation plans or 
Federal regulations. As discussed in the promulgated regulation for the 
operating permit program published on July 21, 1992 (57 FR 32250), this 
new permit program includes all of the air pollution control 
requirements that pertain to a single major stationary source in a 
single document. Sources subject to the program are required to submit 
complete permit applications within a year after a State operating 
permit program is approved by the EPA; if a State program is not 
approved, sources will submit applications to the EPA within a year 
after the Federal program is promulgated.

I. Solicitation of Comments

    The Administrator solicits comments on all aspects of this 
proposal. However, the Administrator is specifically requesting comment 
on the topics discussed in this section. Commenters should provide 
available data and rationale to support their comments on each topic.
    The Administrator specifically requests comments on the MACT floor 
determination, subcategorization, and claims by some shipyards on the 
need for thinning solvents beyond levels indicated by the manufacturer 
because of viscosity problems attributable to extremely cold weather. 
Specifically, comments are requested on: (1) Are such needs compulsory 
or more convenience, (2) why in-line heaters would not provide 
sufficient viscosity control, (3) what extreme climatic conditions 
(e.g., temperature, humidity, etc.) would justify excess thinning, (4) 
how such additional solvent could be linked in quantity (e.g., dilution 
to a preapproved viscosity setpoint), and (5) any other information 
that would help the Agency in this matter.
    The Administrator also requests comments on the timeframe for 
submitting items in the initial notification that are not required 
under the General Provisions Secs. 63.9(b) (2) and (3) of subpart A. 
These items are the compliance procedure(s) that the source intends to 
use to demonstrate compliance; procedures for ensuring compliance with 
the handling, storage, and transfer standards; and procedures for 
maintaining records. Specifically, comments are requested on whether 
120 days is sufficient time to prepare and submit these items.

VIII. Administrative Requirements

A. Public Hearing

    A public hearing will be held, if requested, to discuss the 
proposed standards in accordance with section 307(d)(5) of the Act. 
Persons wishing to make oral presentation on the proposed standards for 
coating operations at shipbuilding facilities should contact the EPA at 
the address given in the ADDRESSES section of this preamble. Oral 
presentations will be limited to 15 minutes each. Any member of the 
public may file a written statement before, during, or within 30 days 
after the hearing. Written statements should be addressed to the Air 
and Radiation Docket and Information Center address given in the 
ADDRESSES section of this preamble, and should refer to Docket No. A-
92-11.
    A transcript of the hearing and written statements will be 
available for public inspection and copying during normal working hours 
at the EPA's Air and Radiation Docket and Information Center in 
Washington, DC (see ADDRESSES section of this preamble).

B. Docket

    The docket is an organized and complete file of all the information 
submitted to or otherwise considered by the EPA in the development of 
this proposed rulemaking. The principal purposes of the docket are: (1) 
To allow interested parties to readily identify and locate documents so 
that they can intelligently and effectively participate in the 
rulemaking process, and (2) to serve as the record in case of judicial 
review [except for interagency review materials (section 
307(d)(7)(A))].

C. Executive Order 12866

    Under Executive Order 12866 (58 FR 51735 (October 4, 1993)), the 
Agency must determine whether the regulatory action is ``significant'' 
and therefore subject to OMB review and the requirements of the 
Executive Order. The Order defines ``significant regulatory action'' as 
one that is likely to result in a rule that may:
    1. Have an annual effect on the economy of $100 million or more or 
adversely affect in a material way the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities;
    2. Create a serious inconsistency or otherwise interfere with an 
action taken or planned by another agency;
    3. Materially alter the budgetary impact of entitlements, grants, 
user fees, or loan programs or the rights and obligations of recipients 
thereof; or
    4. Raise novel legal or policy issues arising out of legal 
mandates, the President's priorities, or the principles set forth in 
the Executive Order. The proposed rule for coating operations at 
shipbuilding facilities does not meet any of the criteria in the 
Executive Order and is therefore not subject to the requirement for a 
regulatory impact analysis.
    It has been determined that this rule is not a ``significant 
regulatory action'' under the terms of the E.O. 12866 and is therefore 
not subject to OMB review.

D. Paperwork Reduction Act

    The information collection requirements in the proposed rule have 
been submitted for approval to OMB under the Paperwork Reduction Act, 
44 U.S.C. 3501 et seq. An Information Collection Request document has 
been prepared by the EPA (ICR No. 1712.01), and a copy may be obtained 
from Ms. Sandy Farmer, Information Policy Branch, U.S. Environmental 
Protection Agency, 401 M Street SW. (Mail Code 2136), Washington, DC 
20460 or by calling (202) 260-2740.
    The public reporting burden for this collection of information is 
estimated to average 845 hours per source for the first year after the 
date of promulgation of the rule, including time for reviewing 
instructions, searching existing data sources, gathering and 
maintaining the data needed, and completing and reviewing the 
collection of information. The cost for this additional burden per 
source is estimated to be $27,158 during the first year.
    Send comments regarding the burden estimate or any other aspect of 
this collection of information, including suggestions for reducing his 
burden, to Chief, Information Policy Branch, 2136, U.S. Environmental 
Protection Agency, 401 M Street SW., Washington, DC 20460; and to the 
Office of Information and Regulatory Affairs, Office of Management and 
Budget, Washington, DC 20503, marked ``Attention: Desk Officer for the 
EPA.'' The final rule will respond to any OMB or public comments on the 
information collection requirements contained in this proposal.

E. Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601 et seq.) requires the 
EPA to consider potential impacts of proposed regulations on small 
business ``entities.'' If a preliminary analysis indicates that a 
proposed regulation would have a significant economic impact on 20 
percent or more of small entities, then a regulatory flexibility 
analysis must be prepared.
    Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 
U.S.C. 605(b), the Administrator certifies that this rule will not have 
a significant economic impact on a substantial number of small 
entities. Using the Small Business Administration's definition of small 
business for SIC Code 3731 of less than 1,000 employees, and examining 
the result of the economic impact analysis it has been determined that 
no small entities will be affected by the proposed rule. Therefore, a 
preliminary assessment of the impact of today's proposed rule on small 
entities indicated that a regulatory flexibility analysis is not 
required.

F. Clean Air Act Section 117

    In accordance with section 117 of the Act, publication of this 
proposal was preceded by consultation with appropriate advisory 
committees, independent experts, and Federal departments and agencies. 
The Administrator will welcome comments on all aspects of the proposed 
rule, including health, economic, technological, or other aspects.

G. Regulatory Review

    In accordance with sections 112(d)(6) and 112(f)(2) of the Act, 
this regulation will be reviewed within 8 years from the date of 
promulgation. This review may include an assessment of such factors as 
evaluation of the residual health risk, any overlap with other 
programs, the existence of alternative methods, enforceability, 
improvements in emission control technology and health data, and 
reporting and recordkeeping requirements.

List of Subjects in 40 CFR Part 63

    Environmental protection, Air pollution control, Hazardous 
substances, Reporting and recordkeeping requirements, Standard for 
shipbuilding and ship repair facilities.

X. Statutory Authority

    The statutory authority for this proposal is provided by sections 
101, 112, 114, 116, and 301 of the Clean Air Act, as amended; 42 
U.S.C., 7401, 7412, 7414, 7416, and 7601.

    Dated: November 22, 1994.
Carol M. Browner,
Administrator.
[FR Doc. 94-29824 Filed 12-5-94; 8:45 am]
BILLING CODE 6560-40-P