
[Federal Register Volume 76, Number 224 (Monday, November 21, 2011)]
[Rules and Regulations]
[Pages 72050-72075]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-29457]



[[Page 72049]]

Vol. 76

Monday,

No. 224

November 21, 2011

Part II





Environmental Protection Agency





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40 CFR Part 63





National Emission Standards for Hazardous Air Pollutant Emissions for 
Shipbuilding and Ship Repair (Surface Coating); National Emission 
Standards for Wood Furniture Manufacturing Operations; Final Rule

  Federal Register / Vol. 76 , No. 224 / Monday, November 21, 2011 / 
Rules and Regulations  

[[Page 72050]]


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ENVIRONMENTAL PROTECTION AGENCY

40 CFR Part 63

[EPA-HQ-OAR-2010-0786; FRL-9491-4]
RIN 2060-AQ42


National Emission Standards for Hazardous Air Pollutant Emissions 
for Shipbuilding and Ship Repair (Surface Coating); National Emission 
Standards for Wood Furniture Manufacturing Operations

AGENCY: Environmental Protection Agency (EPA).

ACTION: Final rule.

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SUMMARY: This action finalizes the residual risk and technology review 
conducted for two industrial source categories regulated by separate 
national emission standards for hazardous air pollutants. The two 
national emission standards for hazardous air pollutants are: National 
Emissions Standards for Shipbuilding and Ship Repair (Surface Coating) 
and National Emissions Standards for Wood Furniture Manufacturing 
Operations. This action also finalizes revisions to the regulatory 
provisions related to emissions during periods of startup, shutdown and 
malfunction.

DATES: This final action is effective on November 21, 2011.

ADDRESSES: The EPA has established a docket for this action under 
Docket ID Number EPA-HQ-OAR-2010-0786. All documents in the docket are 
listed on the http://www.regulations.gov Web site. Although listed in 
the index, some information is not publicly available, e.g., 
confidential business information or other information whose disclosure 
is restricted by statute. Certain other material, such as copyrighted 
material, is not placed on the Internet, and will be publicly available 
only in hard copy form. Publicly available docket materials are 
available either electronically through http://www.regulations.gov or 
in hard copy at the EPA Docket Center, EPA West Building, Room Number 
3334, 1301 Constitution Ave. NW., Washington, DC. The Public Reading 
Room hours of operation are 8:30 a.m. to 4:30 p.m. Eastern Standard 
Time, Monday through Friday. The telephone number for the Public 
Reading Room is (202) 566-1744 and the telephone number for the Air and 
Radiation Docket and Information Center is (202) 566-1742.

FOR FURTHER INFORMATION CONTACT: For questions about this final action 
regarding the Wood Furniture Manufacturing Operations National Emission 
Standards for Hazardous Air Pollutants (NESHAP), contact Mr. Nicholas 
Swanson, Office of Air Quality Planning and Standards, Sector Policies 
and Programs Division, Natural Resources Group (E143-03), U.S. 
Environmental Protection Agency, Research Triangle Park, NC 27711; 
telephone number: (919) 541-4080; fax number: (919) 685-3219; and email 
address: swanson.nicholas@epa.gov. For questions about this final 
action regarding the Shipbuilding and Ship Repair (Surface Coating) 
NESHAP, contact Ms. Tina Ndoh, Office of Air Quality Planning and 
Standards, Sector Policies and Programs Division, Minerals and 
Manufacturing Group (E243-04), U.S. Environmental Protection Agency, 
Research Triangle Park, NC 27711; telephone number: (919) 541-2750; fax 
number: (919) 685-5450; and email address: ndoh.tina@epa.gov.

SUPPLEMENTARY INFORMATION: For specific information regarding the 
modeling methodology, contact Mr. James Hirtz, Office of Air Quality 
Planning and Standards, Health and Environmental Impacts Division, Air 
Toxics Assessment Group (C539-02), U.S. Environmental Protection 
Agency, Research Triangle Park, NC 27711; telephone number: (919) 541-
0881; fax number: (919) 541-0840; and email address: 
hirtz.james@epa.gov. For information about the applicability of these 
two NESHAP to a particular entity, contact Dr. Rafael Sanchez, Office 
of Enforcement and Compliance Assurance, U.S. Environmental Protection 
Agency, Washington, DC 20460; telephone number: (202) 564-7028; fax 
number: (202) 564-0050; and email address: sanchez.rafael@epa.gov.
    Background Information Document. On December 21, 2010 (75 FR 
80220), the EPA proposed revisions to the Shipbuilding and Ship Repair 
(Surface Coating) NESHAP and the Wood Furniture Manufacturing 
Operations NESHAP, which were evaluated in our residual risk and 
technology review (RTR). A summary of the public comments on the 
proposal and the EPA's responses to the comments is available in Docket 
ID Number EPA-HQ-OAR-2010-0786.
    Organization of this Document. The following outline is provided to 
aid in locating information in the preamble.

I. General Information
    A. Does this action apply to me?
    B. Where can I get a copy of this document?
    C. Judicial Review
II. Background
III. Summary of the Final Rules
    A. What are the final rule amendments for the Shipbuilding and 
Ship Repair (Surface Coating) source category?
    B. What are the final rule amendments for the Wood Furniture 
Manufacturing Operations source category?
    C. What are the requirements during periods of startup, shutdown 
and malfunction?
    D. What are the effective and compliance dates of the standards?
IV. Summary of Significant Changes Since Proposal
    A. What changes did we make to the Shipbuilding and Ship Repair 
(Surface Coating) NESHAP since proposal?
    B. What changes did we make to the Wood Furniture Manufacturing 
Operations NESHAP since proposal?
V. Summary of Significant Comments and Responses
    A. Comments for Both Shipbuilding and Ship Repair (Surface
    Coating) and Wood Furniture Manufacturing Operations
    B. Wood Furniture Manufacturing Operations
    C. Shipbuilding and Ship Repair (Surface Coating)
VI. Impacts of the Final Rules
VII. Statutory and Executive Order Reviews
    A. Executive Orders 12866: Regulatory Planning and Review, and 
Executive Order 13563: Improving Regulation and Regulatory Review
    B. Paperwork Reduction Act (PRA)
    C. Regulatory Flexibility Act (RFA)
    D. Unfunded Mandates Reform Act (UMRA)
    E. Executive Order 13132: Federalism
    F. Executive Order 13175: Consultation and Coordination With 
Indian Tribal Governments
    G. Executive Order 13045: Protection of Children From 
Environmental Health Risks and Safety Risks
    H. Executive Order 13211: Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution or Use
    I. National Technology Transfer and Advancement Act (NTTAA)
    J. Executive Order 12898: Federal Actions To Address 
Environmental Justice in Minority Populations and Low-Income 
Populations
    K. Congressional Review Act (CRA)

I. General Information

A. Does this action apply to me?

    Regulated Entities. Categories and entities potentially regulated 
by this action include:

[[Page 72051]]



------------------------------------------------------------------------
     NESHAP and source category                 NAICS \1\ Code
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Shipbuilding and Ship Repair          336611.
 (Surface Coating).
Wood Furniture Manufacturing          3371, 3372, 3379.
 Operations.
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\1\ North American Industry Classification System.

    This table is not intended to be exhaustive, but rather provides a 
guide for readers regarding entities likely to be affected by the final 
action for the source categories listed. To determine whether your 
facility would be affected, you should examine the applicability 
criteria in the appropriate NESHAP. If you have any questions regarding 
the applicability of either of these NESHAP, please contact the 
appropriate person listed in the preceding FOR FURTHER INFORMATION 
CONTACT section.

B. Where can I get a copy of this document?

    In addition to being available in the docket, an electronic copy of 
this final action will also be available on the World Wide Web (WWW) 
through the Technology Transfer Network (TTN). Following signature, a 
copy of the final action will be posted on the TTN's policy and 
guidance page for newly proposed and promulgated rules at the following 
address: http://www.epa.gov/ttn/atw/rrisk/rtrpg.html. The TTN provides 
information and technology exchange in various areas of air pollution 
control.
    Additionally, information on the source category descriptions, 
detailed emissions and other data that were used as inputs to the risk 
assessments can be found at this site.

C. Judicial Review

    Under section 307(b)(1) of the Clean Air Act (CAA), judicial review 
of this final action is available only by filing a petition for review 
in the United States Court of Appeals for the District of Columbia 
Circuit (the Court) by January 20, 2012. Under section 307(b)(2) of the 
CAA, the requirements established by these final rules may not be 
challenged separately in any civil or criminal proceedings brought by 
the EPA to enforce the requirements.
    Section 307(d)(7)(B) of the CAA further provides that ``[o]nly an 
objection to a rule or procedure which was raised with reasonable 
specificity during the period for public comment (including any public 
hearing) may be raised during judicial review.'' This section also 
provides a mechanism for us to convene a proceeding for 
reconsideration, ``[i]f the person raising an objection can demonstrate 
to EPA that it was impracticable to raise such objection within [the 
period for public comment] or if the grounds for such objection arose 
after the period for public comment (but within the time specified for 
judicial review) and if such objection is of central relevance to the 
outcome of the rule.'' Any person seeking to make such a demonstration 
to us should submit a Petition for Reconsideration to the Office of the 
Administrator, U.S. EPA, Room 3000, Ariel Rios Building, 1200 
Pennsylvania Ave. NW., Washington, DC 20460, with a copy to both the 
person(s) listed in the preceding FOR FURTHER INFORMATION CONTACT 
section and the Associate General Counsel for the Air and Radiation Law 
Office, Office of General Counsel (Mail Code 2344A), U.S. EPA, 1200 
Pennsylvania Ave. NW., Washington, DC 20460.

II. Background

    Section 112 of the CAA establishes a two-stage regulatory process 
to address emissions of hazardous air pollutants (HAP) from stationary 
sources. In the first stage, after the EPA has identified categories of 
sources emitting one or more of the HAP listed in section 112(b) of the 
CAA, section 112(d) calls for us to promulgate NESHAP for those 
sources. ``Major sources'' are those that emit, or have the potential 
to emit, any single HAP at a rate of 10 tons per year (tpy) or more, or 
25 tpy or more of any combination of HAP. For major sources, these 
technology-based standards must reflect the maximum degree of emission 
reductions of HAP achievable (after considering cost, energy 
requirements and nonair quality health and environmental impacts) and 
are commonly referred to as maximum achievable control technology 
(MACT) standards.
    For MACT standards, the statute specifies certain minimum 
stringency requirements, which are referred to as floor requirements, 
and may not be based on cost considerations. See CAA section 112(d)(3). 
For new sources, the MACT floor cannot be less stringent than the 
emission control that is achieved in practice by the best controlled 
similar source. The MACT standards for existing sources can be less 
stringent than floors for new sources, but they cannot be less 
stringent than the average emission limitation achieved by the best-
performing 12 percent of existing sources in the category or 
subcategory (or the best-performing five sources for categories or 
subcategories with fewer than 30 sources). In developing MACT, we must 
also consider control options that are more stringent than the floor 
under CAA section 112(d)(2). We may establish standards more stringent 
than the floor, based on the consideration of the cost of achieving the 
emissions reductions, any nonair quality health and environmental 
impacts and energy requirements. In promulgating MACT standards, CAA 
section 112(d)(2) directs us to consider the application of measures, 
processes, methods, systems or techniques that reduce the volume of or 
eliminate HAP emissions through process changes, substitution of 
materials or other modifications; enclose systems or processes to 
eliminate emissions; collect, capture or treat HAP when released from a 
process, stack, storage or fugitive emissions point; and/or are design, 
equipment, work practice or operational standards.
    In the second stage of the regulatory process, we undertake two 
different analyses, as required by the CAA. Section 112(d)(6) of the 
CAA calls for us to review the technology-based standards and to revise 
them ``as necessary (taking into account developments in practices, 
processes, and control technologies)'' no less frequently than every 8 
years. Within 8 years after promulgation of the technology standards, 
CAA section 112(f) calls for us to evaluate the risk to public health 
remaining after application of the technology-based standards and to 
revise the standards, if necessary, to provide an ample margin of 
safety to protect public health or to prevent, taking into 
consideration costs, energy, safety and other relevant factors, an 
adverse environmental effect. In doing so, the EPA may adopt standards 
equal to existing MACT standards if the EPA determines that the 
existing standards are sufficiently protective. National Resources 
Defense Council (NRDC) v. EPA, 529 F.3d 1077, 1083 (DC Cir. 2008).
    On December 21, 2010, the EPA published a proposed rule in the 
Federal Register for these two NESHAP that took into consideration the 
residual risk and technology review (RTR) analyses. For these NESHAP--
Shipbuilding and Ship Repair (Surface Coating) and Wood Furniture

[[Page 72052]]

Manufacturing Operations--this action provides the EPA's final 
determinations and regulatory amendments pursuant to the RTR provisions 
of CAA section 112. For both NESHAP, we also are finalizing revisions 
to requirements in each NESHAP related to emissions during periods of 
startup, shutdown and malfunction (SSM). This action also addresses 
formaldehyde limits and the use of conventional spray technology for 
the Wood Furniture Manufacturing Operations NESHAP.

III. Summary of the Final Rules

A. What are the final rule amendments for the Shipbuilding and Ship 
Repair (Surface Coating) source category?

    The NESHAP for Shipbuilding and Ship Repair (Surface Coating) were 
promulgated on December 15, 1995 (60 FR 64330), and codified at 40 CFR 
part 63, subpart II. The shipbuilding and ship repair industry consists 
of establishments that build, repair, repaint, convert and alter ships 
which are marine or fresh-water vessels used for military or commercial 
operations. The source category covered by this MACT standard includes 
only the shipbuilding and ship repair surface coating operations that 
occur at facilities that are major sources of HAP.
    We are finalizing the Shipbuilding and Ship Repair (Surface 
Coating) rule as it was proposed, with no changes. For the reasons 
provided in the proposed rule and in the support documents in the 
docket, we have determined that the current MACT standards for 
shipbuilding and ship repair (surface coating) facilities reduce risk 
to an acceptable level, provide an ample margin of safety to protect 
public health and prevent an adverse environmental effect. We are, 
therefore, re-adopting the existing MACT standards to satisfy section 
112(f) of the CAA. We have determined that the developments in 
technology would give minimal health benefits and are not cost 
effective. The costs of implementing developments in practices, 
processes or control technologies since promulgation of the MACT 
standards are disproportionate to the emission reduction that would be 
achieved and, therefore, we are not adopting additional technology 
standards pursuant to CAA section 112(d)(6).
    We are finalizing changes to the Shipbuilding and Ship Repair 
(Surface Coating) MACT standards to eliminate the SSM malfunction 
exemption. These changes revise Table 1 in 40 CFR part 63, subpart II, 
to indicate that several requirements of the 40 CFR part 63 General 
Provisions related to periods of SSM do not apply. We are adding 
provisions to the Shipbuilding and Ship Repair (Surface Coating) MACT 
standards requiring sources to operate in a manner that minimizes 
emissions, removing the SSM plan requirement, clarifying the required 
conditions for performance tests and revising the SSM-associated 
recordkeeping and reporting requirements to require reporting and 
recordkeeping for periods of malfunction. It is required that all 
facilities comply with the NESHAP during startup and shutdown. We are 
also finalizing provisions, generally as proposed, to provide an 
affirmative defense against civil penalties for potential violations of 
emission standards caused by malfunctions, as well as criteria for 
establishing the affirmative defense.
    These revisions to the Shipbuilding and Ship Repair (Surface 
Coating) MACT standards are not expected to result in any emissions 
reduction or economic impacts. We have determined that facilities in 
this source category can meet the applicable emissions standards at all 
times. No changes in costs to industry are predicted.

B. What are the final rule amendments for the Wood Furniture 
Manufacturing Operations source category?

    The NESHAP for Wood Furniture Manufacturing Operations were 
promulgated on December 7, 1995 (60 FR 62930), and codified at 40 CFR 
part 63, subpart JJ. The Wood Furniture Manufacturing Operations source 
category consists of establishments that produce a range of wood 
products, including wood kitchen cabinets, wood residential furniture, 
upholstered residential and office furniture, wood office furniture and 
fixtures, partitions, shelving, lockers and other wood furniture not 
included in one of the categories listed above. The source category 
covered by this MACT standard includes only the wood furniture 
manufacturing operations that occur at facilities that are major 
sources of HAP.
    In the proposal for this rule making, the EPA proposed a 
formaldehyde emissions limit of 400 pounds per 12-month period. As 
discussed in section IV.B.1 below, the EPA received comments concerning 
potential impacts on facilities with high production volume and 
determined that the proposed limit would not be cost effective for all 
facilities in the source category. For this reason, the EPA is 
finalizing two alternative compliance options. Under the authority of 
section 112(d)(6) of the CAA, we are finalizing a limit on formaldehyde 
emissions by limiting formaldehyde content in coatings and contact 
coatings and contact adhesives to 1 percent by weight. As an 
alternative compliance option, we are allowing facilities to comply 
with a formaldehyde usage limit of 400 pounds per rolling 12-month 
period, as we originally proposed. Less than 20 facilities are known to 
exceed 400 pounds per 12-month period based on 2005 National Emissions 
Inventory (NEI) data and communications with wood furniture 
manufacturing facilities.\1\ The phone calls indicated that there were 
reductions in emissions since the 2005 NEI and all but one of the 
facilities contacted were below 400 pounds per 12-month period. This 
leads us to conclude that most of the facilities that exceeded 400 
pounds of formaldehyde per 12 month period according to the 2005 NEI 
are now below that level. We are aware of at least one facility that 
has facilities with high production volume that still exceeds the 400 
pound level. After receiving updated information, we concluded that the 
proposed 400 pounds formaldehyde per rolling 12-month period usage 
limit was not cost effective as a mandatory formaldehyde limit for all 
facilities within the source category. For this reason, the EPA is 
adopting the 400 pound formaldehyde limit as an alternative requirement 
to the requirement to limit formaldehyde content to 1 percent in 
coatings and contact adhesives. The 400 pound limit would not be cost 
effective for facilities with high production volume because, while 
they use low-formaldehyde coatings, these facilities would still exceed 
the 400 pounds per 12-month period because of the quantity of coatings 
and contact adhesives applied. To further reduce formaldehyde 
emissions, these facilities would require the addition of costly 
control devices and/or reconstruction of their spray line system. For 
more information, see Estimated Cost Impact for Wood Furniture 
Manufacturing Industry To Comply With Proposed Formaldehyde Limit on 
Coating Operations Wood Furniture Manufacturing RTR, dated August 4, 
2011, in the docket for this action. Such facilities can, however, 
cost-effectively comply with a standard

[[Page 72053]]

that limits the formaldehyde content of coatings and contact adhesives 
to 1 percent.\2\ While the formaldehyde content of coating and contact 
adhesive formulations have been reduced since promulgation of the 1995 
NESHAP, the EPA has received information that some facilities may still 
rely on formulations that contain greater than 1 percent 
formaldehyde.\3\ The EPA has determined that some of these facilities 
could not readily meet the 1 percent formaldehyde limit and so is 
allowing, as an alternative compliance option, the originally proposed 
400 pound formaldehyde limit.
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    \1\ The memo to the docket, Impacts of Implementing a Limit on 
Formaldehyde Usage in the Wood Furniture Manufacturing Operations 
Source Category, dated October 19, 2010, shows that there are 27 
facilities that exceed 400 pounds per year of formaldehyde emissions 
according to 2005 NEI data. Calls to industry showed that many of 
these facilities have lowered their emissions of formaldehyde 
significantly since 2005 as shown in the memo Updated Formaldehyde 
Emissions from Select Wood Furniture Manufacturers, dated August 3, 
2011, in the docket for this action.
    \2\ The concentrations of formaldehyde received from the known 
facility with high production volume exceeds 400 pounds per 12-month 
period is in the Estimated Cost Impact for Wood Furniture 
Manufacturing Industry To Comply With Proposed Formaldehyde Limit on 
Coating Operations Wood Furniture Manufacturing RTR, dated August 4, 
2011, in the docket for this action.
    \3\ For more details, see Conversation with a Representative of 
Kitchen Cabinet Manufacturers Association (KCMA) Regarding Add-On 
Control Devices and High Formaldehyde Concentration in Coatings, 
dated June 23, 2011, in the docket for this action.
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    We are also finalizing, with one modification, the proposed 
prohibition on the use of conventional spray \4\ guns pursuant to CAA 
section 112(d)(6). As explained in the proposed rule and supporting 
documents in the docket, we have determined that use of non-
conventional spray guns results in lower HAP emissions than use of 
conventional spray guns. When spraying a piece of wood furniture with a 
coating, there is a prescribed amount of coating to be applied to the 
wood surface. With the higher spray efficiency associated with non-
conventional spray guns, less spray is generally required to apply the 
desired amount of coating so less coating is used. This means that less 
overspray will occur, creating fewer emissions. Conventional spray guns 
are now used infrequently in the wood furniture manufacturing industry, 
and the costs to use non-conventional spray guns are approximately 
equal to conventional spray guns. The EPA estimates that the switch to 
non-conventional spray guns does not incur a cost burden associated 
with decreased product consumption and cost.\5\
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    \4\ The definition of ``conventional spray'' can be found in the 
1995 Wood Furniture Manufacturing Operations NESHAP.
    \5\ See Developments in Practices, Processes, and Control 
Technologies, dated August 24, 2010 in the docket for this action.
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    Considering information received during the comment period that 
some facilities route conventional spray gun overspray to control 
devices, we are modifying the proposed prohibition on the use of 
conventional spray guns to retain an exception in the NESHAP to allow 
the use of conventional spray guns if emissions from the finishing 
station are routed to a control device. See 40 CFR 63.803(h)(4). The 
efficiency of the control device, even when coupled with the 
conventional spray gun, reduces excess emissions better than a change 
to high efficiency spray technology. The EPA does not expect facilities 
will incur the significant cost of installing a control device for the 
sole purpose of using conventional spray guns. We expect the vast 
majority of facilities to use non-conventional applicators of wood 
furniture finishes, with only a small number of facilities choosing to 
use conventional spray guns with a control device.
    We are also finalizing changes to the Wood Furniture Manufacturing 
Operations NESHAP to eliminate the SSM exemption. These changes revise 
Table 1 in 40 CFR part 63, subpart JJ, to indicate that several 
requirements of the 40 CFR part 63 General Provisions related to 
periods of SSM do not apply. We are adding provisions to the Wood 
Furniture Manufacturing Operations MACT standards requiring sources to 
operate in a manner that minimizes emissions, removing the SSM plan 
requirement, clarifying the required conditions for performance tests 
and revising the SSM-associated recordkeeping and reporting 
requirements to require reporting and recordkeeping for periods of 
malfunction. We are also adding provisions to provide an affirmative 
defense against civil penalties for exceedances of emission standards 
caused by malfunctions, as well as criteria for establishing the 
affirmative defense.
    We are finalizing language to clarify the applicability for Wood 
Furniture Manufacturing Operations to be consistent with surface 
coating rules issued after the promulgation of the Wood Furniture MACT 
standards in 1995. These include the subparts for Surface of 
Miscellaneous Metal Parts and Products (MMMM), Surface Coating of 
Plastic Parts and Products (PPPP), Surface Coating of Wood Building 
Products (QQQQ), and Surface Coating of Metal Furniture (RRRR) of 40 
CFR part 63. Subparts MMMM, PPPP, QQQQ and RRRR exempt surface coating 
operations that are subject to other subparts of 40 CFR part 63, such 
as the Wood Furniture Operations MACT standards. (See 40 CFR 
63.3881(c)(6), 63.4481(c)(7), 63.4681(c)(2), 63.4881(c)(2)). Therefore, 
we are finalizing amendments to the Wood Furniture Operations MACT 
standards to acknowledge that surface coating operations that are 
subject to subparts MMMM, PPPP, QQQQ or RRRR of 40 CFR part 63 are not 
subject to the Wood Furniture Manufacturing Operations standards.
    In this action, we are taking a step to improve data accessibility. 
Owners and operators demonstrating compliance using the test methods 
cited in Sec.  63.805(c), as an alternative to Sec.  63.9(h), are not 
required but may submit electronic copies of required performance test 
reports through the Electronic Reporting Tool (ERT). The ERT transmits 
the electronic report through EPA's Central Data Exchange network for 
storage in the WebFIRE database making submittal of data very 
straightforward and easy. The WebFIRE database was constructed to store 
performance test data for use in developing emission factors. A 
description of the ERT can be found at http://www.epa.gov/ttn/chief/ert/ert_tool.html. A description of the WebFIRE database is available 
at http://cfpub.epa.gov/oarweb/index.cfm?action=fire.main.
    The ERT would allow for an electronic review process rather than a 
manual data assessment, making review and evaluation of the source-
provided data and calculations easier and more efficient. Finally, 
having data submitted electronically, the EPA would be able to develop 
improved emission factors, make fewer information requests and 
promulgate better regulations. These revisions to the Wood Furniture 
Manufacturing Operations MACT standards are not expected to result in 
economic or quantifiable environmental impacts. We have determined that 
facilities in this source category can meet the applicable emissions 
standards at all times.

C. What are the requirements during periods of startup, shutdown and 
malfunction?

    The Court vacated portions of two provisions in the EPA's CAA 
section 112 regulations governing the emissions of HAP during periods 
of SSM. Sierra Club v. EPA, 551 F.3d 1019 (D.C. Cir. 2008). 
Specifically, the Court vacated the SSM exemption contained in 40 CFR 
63.6(f)(1) and 40 CFR 63.6(h)(1), that is part of a regulation, 
commonly referred to as the ``General Provisions Rule,'' that the EPA 
promulgated under section 112 of the CAA. When incorporated into CAA 
section 112(d) regulations for specific source categories, these two 
provisions exempt sources from the requirement to comply with the 
otherwise applicable CAA section 112 emission standards during periods 
of SSM.

[[Page 72054]]

    While the Court's ruling in Sierra Club v. EPA, 551 F.3d 1019 (DC 
Cir. 2008), did not directly affect the two NESHAP addressed here, the 
legality of source category-specific SSM provisions, such as those in 
both NESHAP, are called into question based on the reasoning in that 
decision.
    Consistent with Sierra Club v. EPA, we have eliminated the SSM 
exemptions in these two NESHAP. We have also revised Table 1 (the 
General Provisions table) for subparts II and JJ in several respects. 
For example, we have eliminated the incorporation of the General 
Provisions' requirement that the source develop an SSM plan. We have 
also eliminated or revised certain recordkeeping and reporting 
requirements that related to the SSM exemption. The EPA has attempted 
to ensure that we have removed any provisions that are inappropriate, 
unnecessary or redundant in the absence of the SSM exemption in the 
regulatory language.
    The EPA has not established different standards for periods of 
startup and shutdown for these NESHAP because we believe compliance 
with the standards is achievable during these periods. For facilities 
that comply with the NESHAP by using compliant coatings and contact 
adhesives, there are no startup or shutdown events that would cause 
emissions that are different than those that occur during normal 
operations. For facilities that use control devices, there is 
sufficient ability for the control device to be started prior to the 
spray lines being started and conversely shutdown after the spray lines 
have shutdown. In the example of a regenerative thermal oxidizer (RTO), 
supplemental fuel can be provided during startup and shutdown of the 
spray lines to prevent noncompliance. Thus, we are not aware of any 
technical limitations such that emissions from startup or shutdown 
cannot be controlled by control devices to the level achieved during 
normal operations.
    Periods of startup, normal operations and shutdown are all 
predictable and routine aspects of a source's operations. However, by 
contrast, malfunction is defined as a ``sudden, infrequent, and not 
reasonably preventable failure of air pollution control equipment, 
process equipment, or a process to operate in a normal or usual manner. 
* * *'' (40 CFR 63.2). The EPA has determined that CAA section 112 does 
not require emissions that occur during periods of malfunction to be 
factored into development of CAA section 112 standards. Under section 
112, emissions standards for new sources must be no less stringent than 
the level ``achieved'' by the best controlled similar source, and for 
existing sources, generally must be no less stringent than the average 
emission limitation ``achieved'' by the best performing 12 percent of 
sources in the category. There is nothing in section 112 that directs 
the agency to consider malfunctions in determining the level 
``achieved'' by the best performing or best controlled sources when 
setting emission standards. Moreover, while the EPA accounts for 
variability in setting emissions standards consistent with section 112 
case law, nothing in that case law requires the agency to consider 
malfunctions as part of that analysis. Section 112 uses the concept of 
``best controlled'' and ``best performing'' unit in defining the level 
of stringency that section 112 performance standards must meet. 
Applying the concept of ``best controlled'' or ``best performing'' to a 
unit that is malfunctioning presents significant difficulties, as 
malfunctions are sudden and unexpected events.
    Further, accounting for malfunctions would be difficult, if not 
impossible, given the myriad different types of malfunctions that can 
occur across all sources in the category, and given the difficulties 
associated with predicting or accounting for the frequency, degree and 
duration of various malfunctions that might occur. As such, the 
performance of units that are malfunctioning is not ``reasonably'' 
foreseeable. See, e.g., Sierra Club v. EPA, 167 F. 3d 658, 662 (D.C. 
Cir. 1999) (The EPA typically has wide latitude in determining the 
extent of data-gathering necessary to solve a problem. We generally 
defer to an agency's decision to proceed on the basis of imperfect 
scientific information, rather than to ``invest the resources to 
conduct the perfect study''). See also, Weyerhaeuser v. Costle, 590 
F.2d 1011, 1058 (D.C. Cir. 1978) (``In the nature of things, no general 
limit, individual permit, or even any upset provision can anticipate 
all upset situations. After a certain point, the transgression of 
regulatory limits caused by `uncontrollable acts of third parties,' 
such as strikes, sabotage, operator intoxication or insanity, and a 
variety of other eventualities, must be a matter for the administrative 
exercise of case-by-case enforcement discretion, not for specification 
in advance by regulation.''). In addition, the goal of a best 
controlled or best performing source is to operate in such a way as to 
avoid malfunctions of the source, and accounting for malfunctions could 
lead to standards that are significantly less stringent than levels 
that are achieved by a well-performing non-malfunctioning source. The 
EPA's approach to malfunctions is consistent with section 112 and is a 
reasonable interpretation of the statute.
    In the event that a source fails to comply with the applicable CAA 
section 112 standards as a result of a malfunction event, the EPA would 
determine an appropriate response based on, among other things, the 
good faith efforts of the source to minimize emissions during 
malfunction periods, including preventative and corrective actions, as 
well as root cause analyses to ascertain and rectify excess emissions. 
The EPA would also consider whether the source's failure to comply with 
the CAA section 112 standard was, in fact, ``sudden, infrequent, not 
reasonably preventable'' and was not instead ``caused in part by poor 
maintenance or careless operation.'' 40 CFR 63.2 (definition of 
malfunction).
    Finally, the EPA recognizes that even equipment that is properly 
designed and maintained can sometimes fail, and that such failure can 
sometimes cause an exceedance of the relevant emission standard. (See, 
e.g., State Implementation Plans: Policy Regarding Excessive Emissions 
During Malfunctions, Startup, and Shutdown (Sept. 20, 1999); Policy on 
Excess Emissions During Startup, Shutdown, Maintenance, and 
Malfunctions (Feb. 15, 1983)). The EPA is, therefore, adding to the 
final rule an affirmative defense to civil penalties for exceedances of 
emission limits that are caused by malfunctions. See 40 CFR 63.782 
(Shipbuilding and Ship Repair (Surface Coating)) and 63.801 (Wood 
Furniture Manufacturing Operations) (defining ``affirmative defense'' 
to mean, in the context of an enforcement proceeding, a response or 
defense put forward by a defendant, regarding which the defendant has 
the burden of proof, and the merits of which are independently and 
objectively evaluated in a judicial or administrative proceeding). We 
also have added other regulatory provisions to specify the elements 
that are necessary to establish this affirmative defense. See 40 CFR 
63.781 (Shipbuilding and Ship Repair (Surface Coating)) and 63.800 
(Wood Furniture Manufacturing Operations). The source must prove by a 
preponderance of the evidence that it has met all of the elements set 
forth in the affirmative defense. See also 40 CFR 22.24. The criteria 
ensure that the affirmative defense is available only where the event 
that causes an exceedance of the emission limit meets the narrow 
definition of malfunction in 40 CFR 63.2 (sudden, infrequent, not 
reasonably

[[Page 72055]]

preventable and not caused by poor maintenance and/or careless 
operation). For example, to successfully assert the affirmative 
defense, the source must prove by a preponderance of the evidence that 
excess emissions ``[w]ere caused by a sudden, infrequent, and 
unavoidable failure of air pollution control and monitoring equipment, 
process equipment, or a process to operate in a normal or usual manner. 
* * *'' The criteria also are designed to ensure that steps are taken 
to correct the malfunction, to minimize emissions in accordance with 40 
CFR 63.783(b)(1) and 63.802(c) and to prevent future malfunctions. For 
example, the source must prove by a preponderance of the evidence that 
``[r]epairs were made as expeditiously as possible when the applicable 
emission limitations were being exceeded * * *'' and that ``[a]ll 
possible steps were taken to minimize the impact of the excess 
emissions on ambient air quality, the environment and human health * * 
*'' In any judicial or administrative proceeding, the Administrator may 
challenge the assertion of the affirmative defense, and, if the 
respondent has not met its burden of proving compliance with all of the 
requirements in the affirmative defense, appropriate penalties may be 
assessed in accordance with section 113 of the CAA (see also 40 CFR 
22.27).
    The EPA included an affirmative defense in the final rule in an 
attempt to balance a tension, inherent in many types of air regulation, 
to ensure adequate compliance while simultaneously recognizing that 
despite the most diligent of efforts, emission limits may be exceeded 
under circumstances beyond the control of the source. The EPA must 
establish emission standards that ``limit the quantity, rate, or 
concentration of emissions of air pollutants on a continuous basis.'' 
42 U.S.C. 7602(k)(defining ``emission limitation and emission 
standard''). See generally Sierra Club v. EPA, 551 F.3d 1019, 1021 
(D.C. Cir. 2008). Thus, the EPA is required to ensure that section 112 
emissions limitations are continuous. The affirmative defense for 
malfunction events meets this requirement by ensuring that even where 
there is a malfunction, the emission limitation is still enforceable 
through injunctive relief. While ``continuous'' limitations, on the one 
hand, are required, there is also case law indicating that in many 
situations, it is appropriate for the EPA to account for the practical 
realities of technology. For example, in Essex Chemical v. Ruckelshaus, 
486 F.2d 427, 433 (D.C. Cir. 1973), the DC Circuit acknowledged that in 
setting standards under CAA section 111 ``variant provisions'' such as 
provisions allowing for upsets during startup, shutdown and equipment 
malfunction ``appear necessary to preserve the reasonableness of the 
standards as a whole and that the record does not support the `never to 
be exceeded' standard currently in force.'' See also, Portland Cement 
Association v. Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973). Though 
intervening case law such as Sierra Club v. EPA and the CAA 1977 
amendments undermine the relevance of these cases today, they support 
the EPA's view that a system that incorporates some level of 
flexibility is reasonable. The affirmative defense simply provides for 
a defense to civil penalties for excess emissions that are proven to be 
beyond the control of the source. By incorporating an affirmative 
defense, the EPA has formalized its approach to upset events. In a 
Clean Water Act setting, the Ninth Circuit required this type of 
formalized approach when regulating ``upsets beyond the control of the 
permit holder.'' Marathon Oil Co. v. EPA, 564 F.2d 1253, 1272-73 (9th 
Cir. 1977). But see, Weyerhaeuser Co. v. Costle, 590 F.2d 1011, 1057-58 
(D.C. Cir. 1978) (holding that an informal approach is adequate). The 
affirmative defense provisions give the EPA the flexibility to both 
ensure that its emission limitations are ``continuous'' as required by 
42 U.S.C. 7602(k), and account for unplanned upsets and thus support 
the reasonableness of the standard as a whole.

D. What are the effective and compliance dates of the standards?

    The revisions to the MACT standards being promulgated in this 
action are effective on November 21, 2011. For the two MACT standards 
addressed in this action, the compliance date for the revised SSM-
related requirements is November 21, 2011. For the Wood Furniture 
Manufacturing Operations NESHAP, the compliance date for the 1 percent 
formaldehyde coating and contact adhesive limit and the alternative 400 
pound per 12-month formaldehyde use limit as well as the prohibition on 
the use of conventional spray guns is 3 years from the effective date 
of the standards, November 21, 2014. Beyond the revised SSM provisions, 
there are no changes to the Shipbuilding and Ship Repair (Surface 
Coating) NESHAP.

IV. Summary of Significant Changes Since Proposal

A. What changes did we make to the Shipbuilding and Ship Repair 
(Surface Coating) NESHAP since proposal?

    Following the proposed notice of the RTR for Shipbuilding and Ship 
Repair (Surface Coating), the EPA did not receive any new data 
demonstrating any cost effective technology updates or data that would 
affect our analyses of risks. Accordingly, we have made no changes to 
the proposed rule language for the Shipbuilding and Ship Repair 
(Surface Coating) NESHAP. However, we corrected an inadvertent error 
made in the preamble to the proposed rule. In describing the 
Shipbuilding and Ship Repair (Surface Coating) source category, we 
incorrectly stated that there were approximately 85 facilities subject 
to the Shipbuilding and Ship Repair (Surface Coating) MACT, and that 71 
of these 85 facilities, or approximately 84 percent of the source 
category, were modeled for the risk analysis. At proposal, we actually 
estimated that there were 90 facilities subject to the MACT, and of 
those 90 facilities, we modeled approximately 94 percent, or 85 
facilities, in the risk analysis. This correction to the preamble text 
does not affect the estimated risks or any conclusions of the risk 
review. This correction only affects the inadvertent error made in the 
preamble text for the proposed rule.

B. What changes did we make to the Wood Furniture Manufacturing 
Operations NESHAP since proposal?

1. Formaldehyde Limit
    The potential risk reductions associated with advancement in 
coating and adhesive formulations, described below, led us to propose a 
formaldehyde limit of 400 pounds per rolling 12-month period, in part 
because we believed that this limit could be achieved cost-effectively. 
We stated in the proposal that there are many coatings and adhesives 
available that contain no or low quantities of formaldehyde, and we 
expected any facilities above the 400 pounds per 12 month limit to be 
able to reduce their emissions below the 400 pound level by using 
coatings and adhesives with no or low formaldehyde. We proposed the 
formaldehyde usage limit under the authority of CAA section 112(f) and 
solicited comment on whether the proposed limit on formaldehyde use 
should be issued under CAA section 112(d)(6).
    Comments received after proposal led the EPA to conduct further 
analyses of

[[Page 72056]]

the compliance costs associated with the proposed 400 pound usage 
limit. Data received from one facility, which already uses no- and low-
formaldehyde content coatings and contact adhesives, indicated that 
reduction in formaldehyde use to 400 pounds per 12-month period would 
not be possible by simply using no- and low-formaldehyde content 
coatings and contact adhesives due to the size of its operations and 
the amount of coatings and contact adhesives used. To comply with the 
proposed 400 pound limit, a spray line reconfiguration (adding five 
drying/curing ovens) would be needed. The cost-effectiveness of 
formaldehyde reduction for the spray line reconfiguration was estimated 
to be $658,000/ton of formaldehyde reduced annually. We believe other 
large operation facilities would face similar circumstances. The EPA 
does not have specific information on compliance costs for facilities 
other than Kitchen Kompact, but even if we assume all other wood 
furniture facilities with formaldehyde emissions above 400 pounds per 
12-month period in the 2005 NEI database would reduce their 
formaldehyde emissions to 400 pound per 12-month period and would incur 
zero costs in doing so, the cost-effectiveness would be $43,000/ton of 
formaldehyde reduced. We conclude this is not cost effective.\6\
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    \6\ For more information regarding cost estimates for compliance 
with the proposed 400 pound per year formaldehyde limit, refer to 
Estimated Cost Impact for Wood Furniture Manufacturing Industry to 
Comply with Proposed Formaldehyde Limit on Coating Operations Wood 
Furniture Manufacturing RTR, dated August 4, 2011.
---------------------------------------------------------------------------

    Since the MACT was promulgated, manufacturers of coatings and 
contact adhesives have been able to replace formaldehyde with less 
toxic chemicals, resulting in products that are known in the industry 
as ``low-formaldehyde'' or ``no-formaldehyde.'' This development is 
particularly evident in the reformulation of conversion varnishes used 
in kitchen cabinet manufacturing (see Conversation with Valspar 
Regarding Formaldehyde Replacement Chemicals in Coatings, dated August 
4, 2011, in the docket for this action).The EPA's proposed 400 pound 
limit was based on the availability of low-formaldehyde coatings and 
contact adhesives and their use as the current state of technology. 
Although there is no formal industry definition of the term ``low-
formaldehyde,'' the EPA found that a formaldehyde content equal to or 
less than 1 percent by weight currently is consistent with the industry 
trend of continually reducing low formaldehyde formulations. We are 
aware of a range of values used in the industry to indicate ``low-
formaldehyde'' (from 0.1 percent to 1.0 percent). Based on information 
available to the EPA, we determined that a formaldehyde content level 
of 1 percent is the lowest concentration that is clearly cost effective 
for the entire source category. We are, therefore, finalizing a limit 
of 1 percent formaldehyde by weight based on the availability of 
coatings and technical specifications necessary to maintain product 
quality and cost-effectiveness.\7\ A content less than 1 percent would 
not allow facilities the flexibility to use coatings and adhesives that 
are suitable for a range of different products, from cabinets to home 
furnishings, without compromising their quality, cost or production.\8\ 
Also, in many cases, the 1 percent formaldehyde content limit will 
allow flexibility in different types of line configurations.\9\
---------------------------------------------------------------------------

    \7\ Discussion with a coatings manufacturer revealed that the 
label of ``Low-Formaldehyde'' is subjective and it trends towards 
lower and lower concentrations of formaldehyde. For more details, 
see Telephone Call with Valspar Regulatory Affairs Manager--Wood 
Coatings Wood Furniture Manufacturing RTR dated June 29, 2011 in the 
docket for this action. Also as noted previously, Valspar does not 
carry any products that exceed 1 percent in formaldehyde 
concentration.
    \8\ It is necessary for some facilities to minimize levels of 
formaldehyde in the coating formulation to promote cross-linking 
nucleation. This process directly affects the quality and durability 
of the wood furniture. See notes from the Marsh Furniture Site Visit 
in the docket for this action for reference.
    \9\ For additional information, please see memo to the docket, 
EPA Meeting with Kitchen Cabinet Manufacturers Association (KCMA) 
and Select Representatives, dated August 17, 2011.
---------------------------------------------------------------------------

    The proposed formaldehyde limit (400 pounds per rolling 12-month 
period) under CAA section 112(f) was based on these grounds--that wood 
furniture manufacturers can and are reducing their formaldehyde 
emissions through the use of newer low-formaldehyde coating and contact 
adhesive formulations (see 75 FR 80246). The limit of 1 percent 
formaldehyde in coatings and contact adhesives in this final rulemaking 
is an outgrowth of what the expected means of compliance was during the 
proposal for the proposed 400 pound limit. The EPA has confirmed that 
most facilities are using low- and no-formaldehyde coatings and contact 
adhesives (i.e., coatings and adhesives that have a formaldehyde 
concentration not exceeding 1 percent by weight).\10\ Facilities can 
thus achieve formaldehyde emissions reductions that are greater than 
those required under the existing MACT standard. The original Wood 
Furniture Manufacturing Operations NESHAP achieved an 89 percent 
reduction in HAP. The industry, for the most part, has gone beyond the 
original NESHAP for formaldehyde emissions by continuing to use lower 
concentrations of formaldehyde in the coatings and contact adhesives. 
By codifying these practices, the EPA is setting a more stringent 
standard than was adopted in 1995 and will prevent backsliding into 
techniques and formulations used in the past.
---------------------------------------------------------------------------

    \10\ The confirmation of most facilities was obtained in the 
following memos in the docket for this action: Telephone Call with 
Valspar Regulatory Affairs Manager--Wood Coatings on the 
Availability and Use of Low- and No-Formaldehyde Coatings, dated 
June 24, 2011. Also, one of the major manufacturers of wood 
furniture coatings, Valspar, does not carry any products that have 
greater than 1 percent formaldehyde leading to the conclusion that 
coatings greater than 1 percent formaldehyde are mostly unnecessary 
in the industry. http://www.valsparwood.com/valsparwood/msds/msds.jsp.
---------------------------------------------------------------------------

    CAA section 112(d)(6) requires us to revise emissions standards 
taking into account developments in practices, processes and control 
technologies. Thus, to codify current industry practice since the MACT 
was promulgated and to prevent potential increases in formaldehyde 
emissions in the future from coating and contact adhesive use in the 
wood furniture manufacturing industry, we are finalizing, under section 
112(d)(6) of the CAA, formaldehyde emissions limits through two 
compliance options. One option is for new and existing sources to use 
only those coatings and contact adhesives with a formaldehyde content 
of 1 percent by weight or less. As these low-formaldehyde coatings are 
readily available in the marketplace and are comparable in cost to 
other coating and contact adhesive formulations, we expect no 
additional costs associated with the use of low-formaldehyde coatings 
and contact adhesives.
    Moreover, we are retaining the proposed standard--a limit on the 
use of formaldehyde of 400 pounds per rolling 12-month period--as an 
alternative emission limit to the 1 percent formaldehyde formulation 
limit. While the EPA recognizes it is not cost effective for at least 
one facility to achieve a limit on the use of formaldehyde of 400 
pounds per 12 month period, we acknowledge that most wood furniture 
manufacturing facilities' formaldehyde use is already below this 
limit.\11\ It is likely that a small subset of low-emitting niche 
facilities use higher concentration formaldehyde coatings that may 
prefer

[[Page 72057]]

to comply with the alternate formaldehyde use limit.\12\ These niche 
facilities use greater concentrations of formaldehyde to provide 
products to small specialized markets. The EPA is promulgating this 1 
percent formulation formaldehyde limit to ensure that we are not 
limiting the production of facilities while still encouraging 
facilities to limit formaldehyde in their coatings and contact 
adhesives. In support of our proposed CAA section 112(f)(2) residual 
risk determination, we conducted a risk assessment for the Wood 
Furniture Manufacturing Operations source category that provided 
estimates of the Maximum Individual Risk (MIR) posed by the allowable 
and actual HAP emissions from each source in the category, the 
distribution of cancer risks within the exposed populations, cancer 
incidence, hazard index for chronic exposures to HAP with noncancer 
health effects, and hazard quotients (HQ) for acute exposures to HAP 
with noncancer health effects. We found that risks remaining after 
compliance with the MACT standard are acceptable.
---------------------------------------------------------------------------

    \11\ For more information, see Updated Formaldehyde Emissions 
from Select Wood Furniture Manufacturers, dated August 3, 2011 and 
Impacts of Implementing a Limit on Formaldehyde Usage in the Wood 
Furniture Manufacturing Operations Source Category, dated October 
19, 2011 in the docket for this rule.
    \12\ A representative of KCMA stated that there are facilities 
that use coatings and contact adhesives with higher concentrations 
of formaldehyde. For more information see, Conversation with a 
Representative of Kitchen Cabinet Manufacturers Association (KCMA) 
Regarding Add-On Control Devices and High Formaldehyde Concentration 
in Coatings, dated June 23, 2011 in the docket for this action.
---------------------------------------------------------------------------

    In making our proposed ample margin of safety determination under 
CAA section 112(f)(2), we subsequently evaluated the risk reductions 
and costs associated with various emissions control options to 
determine whether we should impose additional standards to reduce risks 
further. We proposed a standard that would limit the use of 
formaldehyde to 400 pounds per rolling 12 month period because we 
projected that such a limit would lead to reductions in cancer risks 
and the potential for acute noncancer health effects. Specifically, we 
estimated that the limit would reduce formaldehyde emissions by an 
estimated 9.46 tpy from the baseline level of 20.125 tpy. We also 
estimated the maximum individual incremental lifetime cancer risk would 
be reduced to approximately 10-in-1 million from a baseline of 20-in-1 
million, the estimated cancer incidence due to emissions from the 
source category would be reduced by about 15 percent nationwide, and 
the estimated maximum acute HQ would be reduced from 7 to 3, based on 
the Reference Exposure Levels (REL) for formaldehyde, and from 0.35 to 
0.15, based on the acute exposure guideline level (AEGL-1) for 
formaldehyde. We believed that there would be either no or minimal 
additional costs associated with this option, as the cost of low-
formaldehyde coatings and adhesives are approximately equal to other 
coating and adhesive products containing larger quantities of 
formaldehyde. Also, we believed there were minimal costs associated 
with the recordkeeping and reporting requirements for compliance with 
the rule.
    Our estimates of the source category maximum cancer risks have 
changed since proposal due to information received during the comment 
period. One facility that was included in the risk analysis at proposal 
has been determined to not be part of the Wood Furniture Manufacturing 
source category. The facility is a manufacturer of wood and melamine 
bowls and food service supplies and is not a wood furniture 
manufacturer. At proposal, the MIR estimated for the bowl manufacturing 
facility was 20 in-1-million due to formaldehyde emissions, based on 
actual emissions. This facility MIR was the highest in the source 
category. With the elimination of the bowl manufacturing facility from 
the category, the source category MIR is 10 in-1-million due to 
emissions of ethylbenzene and formaldehyde, based on actual emissions. 
The bowl manufacturing facility also was one of two facilities for 
which we estimated an acute HQ of 7 for formaldehyde. The maximum acute 
formaldehyde HQ of 7 for the other facility in the source category is 
unchanged.
    Since proposal we also have further evaluated acute exposures 
resulting from emissions from facilities in the source category. To 
better characterize the potential health risks associated with 
estimated worst-case acute exposures to HAP, and in response to a key 
recommendation from the Science Advisory Board's (SAB) peer review of 
the EPA's RTR risk assessment methodologies,\13\ we routinely have 
examined a wider range of available acute health metrics than we do for 
our chronic risk assessments. This is in response to the 
acknowledgement that there are generally more data gaps and 
inconsistencies in acute reference values than there are in chronic 
reference values. By definition, acute California-Reference Exposure 
Levels (CA-REL) represent a health-protective level of exposure, with 
no risk anticipated at or below those levels, even for repeated 
exposures; however, the health risk from higher-level exposures is 
unknown. Therefore, when a CA-REL is exceeded and an AEGL-1 or 
emergency response planning guidelines (ERPG-1) level is available 
(i.e., levels at which mild effects are anticipated in the general 
public for a single exposure), we have used them as a second 
comparative measure. Historically, comparisons of the estimated maximum 
off-site 1-hour exposure levels have not been typically made to 
occupational levels for the purpose of characterizing public health 
risks in RTR assessments. For most chemicals, the 15 minute 
occupational ceiling values are set at levels higher than a 1 hour 
AEGL-1, making comparisons to them irrelevant unless the AEGL-1 or 
ERPG-1 levels are exceeded. This is not the case when comparing the 
available acute inhalation health effect reference values for 
formaldehyde.\14\
---------------------------------------------------------------------------

    \13\ The SAB peer review of RTR Risk Assessment Methodologies is 
available at: http://yosemite.epa.gov/sab/sabproduct.nsf/
4AB3966E263D943A8525771F00668381/$File/the EPA-SAB-10-007-
unsigned.pdf.
    \14\ U.S. the EPA. (2009) Chapter 2.9, Chemical Specific 
Reference Values for Formaldehyde in Graphical Arrays of Chemical-
Specific Health Effect Reference Values for Inhalation Exposures 
(Final Report). U.S. Environmental Protection Agency, Washington, 
DC, the EPA/600/R-09/061, and available online at http://cfpub.epa.gov/ncea/cfm/recordisplay.cfm?deid=211003.
---------------------------------------------------------------------------

    The worst-case maximum estimated 1-hour exposure to formaldehyde 
outside the facility fence line for this source category is 0.47 mg/
m\3\. This estimated worst-case exposure exceeds the 1-hour REL by a 
factor of 8 (HQREL = 8) and is below the 1-hour AEGL-1 
(HQAEGL-1 = 0.4). Although this exposure estimate does not 
exceed the AEGL-1, it exceeds the workplace ceiling level guideline for 
the value developed by the NIOSH \15\ ``for any 15 minute period in a 
work day'' (NIOSH REL-ceiling value of 0.12 mg/m\3\; HQNIOSH 
= 4). Additionally, the estimated maximum acute exposure exceeds the 
Air Quality Guideline value that was developed by the World Health 
Organization \16\ for 30-minute exposures (0.1 mg/m\3\; 
HQWHO = 5). The estimated HQ equals 1 when the ACGIH TLV-
Ceiling value (0.37 mg/m\3\), a value defined as ``not to be exceeded 
at any time,'' is compared to the worst-case acute exposure screening 
level.\17\ As we proposed, the EPA concludes that the

[[Page 72058]]

risk posed by the source category is acceptable. Our estimate of 
maximum individual cancer risk for this source category has decreased 
since proposal. This decrease is due to a miscategorization of a 
facility within the source category. While our screening for acute 
impacts has identified the potential for acute formaldehyde exposures 
to exceed some public health and occupational exposure guidelines at 
some wood furniture facilities, after considering the limited extent to 
potential exposures, the fact that the maximum estimate of acute risk 
has not changed, the fact that one of these facilities no longer uses 
formaldehyde, and the conservative nature of this screening process, 
these additional estimates do not change our overall judgment of risk 
acceptability. As explained in the proposal, in accordance with the 
approach established in the Benzene NESHAP, the EPA weighs all health 
risk measures and information considered in the risk acceptability 
determination, along with the costs and economic impacts of emissions 
controls, technological feasibility, uncertainties, and other relevant 
factors, in making our ample margin of safety determination and 
deciding whether standards are necessary to reduce risks further. 
Considering all of this information, in particular our revised 
estimates of the maximum cancer risks associated with the Wood 
Furniture Manufacturing source category and our revised estimate of the 
costs of additional controls that would reduce risk further, the EPA 
has determined that additional standards under CAA section 112(f)(2) 
are not necessary to provide an ample margin of safety to protect 
public health. We further note that we are finalizing standards under 
our CAA section 112(d)(6) authority that, while not expected to result 
in further reduction in current emissions or risk levels, are expected 
to reduce the emissions that would have been allowed under the 1995 
MACT standard.
---------------------------------------------------------------------------

    \15\ National Institutes for Occupational Safety and Health 
(NIOSH). Occupational Safety and Health Guideline for Formaldehyde; 
http://www.cdc.gov/niosh/docs/81-123/pdfs/0293.pdf
    \16\ WHO (2000). Chapter 5.8 Formaldehyde, in Air Quality 
Guidelines for Europe, second edition. World Health Organization 
Regional Publications, European Series, No. 91. Copenhagen, Denmark. 
Available on-line at http://www.euro.who.int/_data/assets/pdf_file/0005/74732/E71922.pdf.
    \17\ EPA considers this HQ of 1 not to represent an exceedance 
of the ACGIH value.
---------------------------------------------------------------------------

2. Advances in Spray Technology
    The EPA proposed to prohibit the use of conventional spray guns, as 
defined by the 1995 Wood Furniture Manufacturing NESHAP, pursuant to 
CAA section 112(d)(6). This final rule promulgates this ban on 
conventional spray guns with one modification. Based on comments 
received, we are retaining an existing provision allowing the use of 
conventional spray guns when the overspray is routed to a control 
device. As reflected in the comments, some facilities are using 
overspray from conventional spray guns to partially fuel control 
devices such as RTOs. This exception from the ban allows facilities to 
avoid having to supplement fuel to a control device. The efficiency of 
the control device more than sufficiently reduces excess emissions 
associated with the decreased spray efficiency of conventional spray 
guns.\18\ This exception for control devices is the sole exception for 
conventional spray gun use maintained from the 1995 NESHAP.
---------------------------------------------------------------------------

    \18\ A typical transfer efficiency of an HVLP gun is 65-80 
percent compared to 25-45 percent for conventional guns under 
similar conditions. This is a difference of 40 percent spray 
efficiency. When compared to an estimate of 90 percent efficiency of 
an add-on control device, the control device more than compensates 
for the 40 percent reduction in efficiency of guns. For more 
information on transfer efficiencies of spray technologies, see the 
memo to the docket, Impacts of Prohibiting the Use of Conventional 
Spray Guns in the Wood Furniture Manufacturing Operations Source 
Category, dated October 29, 2010.
---------------------------------------------------------------------------

    The EPA estimates that the switch to high efficiency spray guns 
from conventional spray guns does not incur a cost burden due to 
decreased product consumption and cost. Some of the high efficiency 
spray devices are more costly than conventional guns, but the savings 
in coating costs attributed to the increased spray efficiency more than 
compensates for increased cost of spray technology. Because the EPA 
lacks data regarding the number of conventional spray guns used in the 
industry and the change of spray efficiency in replacing conventional 
spray technology, we cannot quantify emissions reductions due to 
changing spray technology. For further information regarding cost and 
emission reductions, refer to the proposed preamble of this rulemaking.

V. Summary of Significant Comments and Responses

    In the proposed action, we requested public comments on our 
residual risk reviews, our technology reviews, proposed amendments 
related to periods of SSM, the proposed prohibition of conventional 
spray guns in the wood furniture manufacturing industry, the proposed 
limit on formaldehyde use in coatings and contact adhesives for the 
wood furniture manufacturing industry and clarification of rule 
provisions. We received written comments from 18 commenters. Our 
responses to the public comments that changed the basis for our 
decisions, or are otherwise significant, are provided below.\19\
---------------------------------------------------------------------------

    \19\ See Summary of Public Comments and Responses for 
Shipbuilding and Ship Repair (Surface Coating) and Wood Furniture 
Manufacturing Operations NESHAP, dated October 31, 2011, for 
summaries of all comments and our responses to them.
---------------------------------------------------------------------------

A. Comments for Both Shipbuilding and Ship Repair (Surface Coating) and 
Wood Furniture Manufacturing Operations

    Comment: A commenter pointed out that the EPA's own data show 
greater emissions reductions are being achieved and able to be 
achieved. According to the commenter, the EPA recognizes that certain 
sources have ``achieved'' a level of ``actual'' emissions that is below 
the level allowed under the existing MACT standards. The commenter 
further states that the EPA explains that ``the `actual' emission 
levels are often lower than the emission levels that a facility might 
be allowed to emit and still comply with the MACT standards.'' The 
commenter says that the EPA's expectation that sources in these two 
categories are generally operating at half the level of emissions 
allowed under the existing MACT standard is at the core of its emission 
data analysis. Once the EPA has this information, it must factor this 
into the technology review under section 112(d)(6). Doing so should 
lead the EPA to revise the existing MACT for both source categories to 
require additional emission reductions.
    The commenter further states that as part of the required section 
112(d)(6) rulemaking, the EPA can have no possible justification for 
failing to recalculate the MACT floors based on new technology or 
emission reductions now achieved by these source categories.
    The Court in the Hazardous Organic NESHAP (HON) decision stated 
that it did ``not think the words `review, and revise as necessary' '' 
required the EPA to recalculate the floors ``from scratch'' in that 
case. NRDC, 529 F.3d at 1084. In short, the NRDC Court expressly 
declined to decide whether the EPA was required to recalculate floors 
where, as here, there have been developments in practices, processes, 
and control technologies.
    As already noted above, for these source categories, there are such 
``developments.'' Therefore, the EPA cannot rely on the HON case to 
evade its duty to satisfy section 112(d)(6). The HON case did not 
authorize the EPA to ignore data showing that significant emission 
reductions below the ``MACT-allowable'' emissions level have been 
``achieved'' in practice. Even under NRDC--assuming arguendo that its 
section 112(d)(6) holding is in any way relevant here--section 
112(d)(6) requires the EPA to recalculate the MACT floor when there 
have been advances in technology (after taking account of the factors 
listed in section 112(d)(6)), and when there is

[[Page 72059]]

information showing that greater emission reductions are ``achieved in 
practice.'' Commenters contend that, based on the information the EPA 
has, it is therefore ``necessary'' for the EPA to strengthen the 
existing MACT floor to ensure it now complies with section 112(d)(2)-
(3).
    The EPA must consider and address whether the existing MACT, 
including the floor, remains lawful in view of the greater levels of 
emission reductions that have been achieved.
    Response: The commenter is mistaken on several grounds. First, the 
commenter asserts that ``the EPA recognizes that certain sources have 
`achieved' a level of `actual' emissions that is below the level 
allowed under the existing MACT standards'' and cites the Notice of 
Proposed Rulemaking preamble at 75 FR at 80227. This was a qualitative, 
introductory statement about how the NEI and other sources of data 
typically contain estimates of actual emissions that are ``often'' 
lower than allowable emissions. The statement was not specific to Wood 
Furniture or Shipbuilding facilities or data and in any event did not 
contain any quantitative determination about actual emissions levels.
    Second, the commenter asserts that the EPA has an ``expectation'' 
that wood furniture and shipbuilding sources are ``generally 
operating'' at half of allowable emissions and once the EPA has this 
information, it must use it under CAA section 112(d)(6) to revise MACT 
standards, including recalculating MACT floors under section 112(d)(2)-
(3). The comment apparently refers to the MACT allowable to actual 
emissions ratio developed for the source categories in this rulemaking. 
The commenter is incorrect in characterizing this ratio as a 
determination of the level of actual emissions achieved in practice in 
either source category. The actual to allowable ratio represents the 
lowest concentration of HAP in a coating available to the industry 
compared to the maximum allowed under the MACT. The allowable ratio is 
used for providing a worst-case scenario for estimating allowable 
emissions from the source. As clarification, for these coating rules, 
the concentrations of HAP in the coatings are considered the emissions 
from the source.
    Third, the commenter is incorrect in asserting that the EPA must 
recalculate MACT floors under CAA section 112(d)(2)-(3). As explained 
in prior RTR rulemakings, the EPA does not read 112(d)(6) as requiring 
a reanalysis or recalculation of MACT floors. See proposed National 
Emission Standards for Coke Oven Batteries (69 FR 48388, 48351 (August 
9, 2004)). Instead, we interpret section 112(d)(6) as essentially 
requiring us to consider developments in pollution control in the 
industry (``taking into account developments in practices, processes, 
and control technologies''), and assessing the costs of potentially 
stricter standards reflecting those developments. We read this 
provision as providing the EPA with substantial latitude in weighing 
these factors and arriving at an appropriate balance in considering 
revisions to our standards. This discretion also provides us with 
substantial flexibility in choosing how to apply modified standards, if 
necessary, to the affected industry.
    The EPA reviewed other potential developments in practices, 
processes and control technologies for the Wood Furniture Manufacturing 
Operations and Shipbuilding and Ship Repair (Surface Coating) source 
categories and evaluated costs of potentially more stringent standards 
reflecting any such developments.\20\ The EPA believes this review and 
the revisions finalized in this rulemaking satisfy the EPA's 
obligations under CAA 112(d)(6) for the Wood Furniture and Shipbuilding 
source categories.
---------------------------------------------------------------------------

    \20\ The EPA's review and analysis for the shipbuilding source 
category can be found in Affordability of Add-on Controls for 
Surface Coating Operations at Shipbuilding and Ship Repair 
Facilities, dated 10/28/2010, and for the wood furniture surface 
category in Affordability of Lower VHAP Coating and Add-on Controls 
for Wood Furniture Manufacturing Operations, dated October 28, 2010. 
Other significant memos describing the EPAs technology review are:
     Developments in Practices, Processes, and Control Technologies 
for Wood Furniture Manufacturing Operations, dated August 24, 2010; 
Impacts of Prohibiting the Use of Conventional Spray Guns in the 
Wood Furniture Manufacturing Operations Source Category, dated 
October 19, 2010;
     Cost Analyses for Control Options, dated September 27, 2010; 
Cost Analyses for Add-on Controls for Surface Coating Operations at 
Shipbuilding and Ship Repair Facilities, dated September 9, 2010.
---------------------------------------------------------------------------

B. Wood Furniture Manufacturing Operations

    Comment: A commenter stated the EPA has provided no rational 
explanation for refusing to update the technology standards for both 
categories to meet the CAA section 112(d)(6) requirement, at minimum, 
by matching the limits of what sources have achieved and what other 
jurisdictions have required. The commenter stated:

    We urge the EPA to do so in the final rule. Where, as here, 
there are ``significant developments'' in technology, and where, as 
here, sources have achieved lower levels of emissions ``in 
practice'' than are ``MACT-allowable,'' it is abundantly clear that 
Sec.  112(d)(6) requires the EPA to revise its standards in 
accordance with CAA Sec.  112(d)(2)-(3), (6), 42 U.S.C. Sec.  
7412(d)(2)-(3), (6).

    The commenter also inquires why the EPA did not adopt more 
stringent standards based on other regulating bodies within the 
country.
    Response: The EPA has concluded the technology review for the wood 
furniture manufacturing operations NESHAP by setting a formaldehyde 
limit based on formulation (1 percent by weight) of finish coatings and 
contact adhesives with a compliance alternative using no more than 400 
pounds of formaldehyde per 12 months. Also under the technology review, 
we are adopting a restriction of conventional spray guns limiting use 
to when emissions from finishing applications are routed to a control 
device. The commenter refers to volatile organic compounds (VOC) 
standards of the Bay Area and South Coast Air Quality Management 
Districts (BAAQMD and SCAQMD). These two standards are nearly identical 
in VOC formulation limits. Through the RTR process, the EPA evaluates 
risk and technology developments associated with HAP for the source 
categories under consideration. Hazardous air pollutants and VOC 
describe different sets of compounds, although a large subset of VOC 
are considered HAP. As discussed in the preamble of the proposed rule, 
we estimate that of all VOC in wood furniture coatings, 50 percent on 
average are HAP. This is an average value that in fact varies from 
facility to facility and coating to coating, depending on the 
facility's use of coatings specific to their operation. This is 
especially true for many niche companies. The EPA acknowledges BAAQMD 
and SCAQMD implementation of VOC limits, but these limits are not 
justified as nation-wide standards to reduce HAP from Wood Furniture 
Manufacturing. They are not technically feasible to be implemented 
nationally based on different operating and environmental conditions as 
well as the cost-effectiveness. By the commenter's own admission, there 
are facilities that are having a difficult time complying with the 
BAAQMD standard within its region. Moreover, based on available 
information, the EPA maintains that both area regulations are not cost 
effective as national standards to reduce HAP. As discussed in the 
preamble to the proposed rule, adoption of the BAAQMD VOC limits would 
result in 56 tpy of HAP reduction at a cost of $30,000 per ton. 
Although the commenter asserts based on a

[[Page 72060]]

conversation with BAAQMD staff that companies in the area are generally 
complying with BAAQMD limits, the EPA already assumed compliance when 
we estimated HAP reductions and cost-effectiveness of the BAAQMD 
limits. We have not changed our conclusion that the BAAQMD and SCAQMD 
regulation are not cost effective as a national standard.
    Comment: Two commenters stated that the facility with the highest 
reported formaldehyde emissions (Kitchen Kompact located in 
Jeffersonville, Indiana) is not a representative wood coating 
manufacturing facility.
    The commenters offered the following reasons:
    a. The facility finishes products 4 days a week (as opposed to the 
EPA's 5-day assumption);
    b. The facility uses uses higher VOC coating without a control 
device; and
    c. The facility has all operations at one facility (other large 
facilities may spread operations over several facilities).
    Another commenter believed that it is arbitrary for the EPA to set 
the formaldehyde limit based on data indicating that 3 percent (more 
likely 1 percent, see below) of facilities have formaldehyde emissions 
that could result in exceedances of the acute REL. The commenter 
offered the following reasons why the EPA's conclusion that 11 
facilities (about 3 percent of the facilities) have formaldehyde 
emissions that could result in exceedances of the acute REL is 
problematic:
    a. The EPA identified four facilities for emissions verification, 
two of which were reported to have formaldehyde emissions. One of these 
two, Chromcraft, no longer uses coatings that contain or emit 
formaldehyde. The other, Kitchen Kompact, emits less formaldehyde than 
reported and is not a representative facility. Both facilities are 
problematic and indicate that the facility data used in the risk 
assessment are suspect.
    b. Three of the 11 facilities either no longer use formaldehyde-
containing coatings or contact adhesives (Chromcraft) or have lower 
production than the EPA identified (Kitchen Kompact and Legacy 
Cabinets). Removing Chromcraft, only 10 facilities, or 2.5 percent of 
the total, have emissions that could result in exceedances of the acute 
REL.
    c. The refined modeling approach that used aerial photographs of 
the facilities identified two major problems with the Human Exposure 
Model-3 (HEM-3) screening results:
     The REL, for several facilities, were overestimated due to 
global positioning system errors and;
     Moving the ``polar ring'' has a significant impact on the 
risk assessment. An evaluation of the aerial map indicated that the REL 
needed to be lowered in some cases by as much as 74 percent. While 
developing refined acute risks based on review of aerial maps is better 
than the screening approach, it is subjective at best.
    d. Three of the 10 facilities had refined predicted acute risks 
greater than 3. The remaining 7 facilities had refined predicted acute 
risks of less than 3, and a majority of these had predicted acute risks 
just above 1 (1.5, 1.5, 1.6,\21\ 1.8). The commenter suggested that the 
risks for these facilities should be discounted.
---------------------------------------------------------------------------

    \21\ The value of 1.6 refers to Legacy Cabinets which, as the 
commenter asserts, no longer has any coatings or contact adhesives 
with formaldehyde in them.
---------------------------------------------------------------------------

    After removing these data points discussed above, the commenter 
noted that there are six facilities (approximately 1 percent of the 
facilities) with acute risks greater than 1. The commenter noted that 
setting a standard based on six facilities (or 1 percent of all wood 
furniture facilities) is unjustified and arbitrary.
    Response: The EPA acknowledges that there have been changes to 
formaldehyde emissions since 2005. According to the comments received 
as well as phone conversations with several facilities, the EPA has 
received indications that facilities have changed and lowered 
formaldehyde emissions, subsequent to the 2005 NEI data. These updates, 
however, are not being used to replace the 2005 NEI data because data 
were not provided to support the assertions. Because the data are 
unverified, the EPA used source data from 2005 NEI to keep a verified 
source for purposes of risk assessment. As discussed elsewhere in this 
preamble, we are not adopting any new or additional requirements based 
on the risk assessment under section 112(f). We have found risk to be 
acceptable for this rule making.
    Comment: Multiple commenters offered comments on the use of 
formaldehyde dose-response values.
    Two commenters supported the use of the Integrated Risk Management 
System (IRIS) dose-response value for formaldehyde in the risk 
assessment.
    One of the commenters stated that it is not only appropriate for 
the EPA to end its use of the Chemical Industry Institute of Toxicology 
(CIIT) Centers for Health Research risk value for formaldehyde 
emissions, doing the contrary would be arbitrary, capricious and 
unlawful. The commenter supported the IRIS value because it is more 
than 2,000 times greater than the CIIT value and thus more health-
protective.
    Alternatively, six commenters did not support the use of 
``outdated'' and ``overly conservative'' models, such as that used to 
derive the IRIS dose-response value for formaldehyde.
    One commenter stated that the EPA must use the best available 
science in its risk assessment, which is not the IRIS value. The 
commenter noted that the EPA has previously determined that the IRIS 
value ``no longer represents the best available science in the peer 
reviewed literature.'' 69 FR 18,327, 18,333 (Apr. 7, 2004). It was 
stated that the decision to discontinue use of CIIT model is 
inappropriate. The CIIT model should continue to be used to inform 
formaldehyde risk assessments. The criticisms of the model by Crump and 
colleagues lack foundation because the manipulations and alterations of 
the model on which they are based did not have an adequate basis in the 
underlying biology.
    Response: In 2004, the EPA determined that the Chemical Industry 
Institute of Toxicology (CIIT) cancer dose-response value for 
formaldehyde (5.5 x 10-\9\ per [mu]g/m\3\) was based on 
better science than the IRIS dose-response value (1.3 x 
10-\5\ per [mu]g/m\3\), and we switched from using the IRIS 
value to the CIIT value in risk assessments supporting regulatory 
actions. Based on subsequent published research, however, the EPA 
changed its determination regarding the CIIT model, and in 2010 the EPA 
returned to using 1991 IRIS value. The National Academy of Sciences 
(NAS) completed its review of the EPA's draft assessment in April of 
2011 (http://www.nap.edu/catalog.php?record_id=13142), and the EPA has 
been working on revising the formaldehyde assessment. The EPA will 
follow the NAS Report recommendations and will present results obtained 
by implementing the biologically based dose response (BBDR) model for 
formaldehyde. The EPA will compare these estimates with those currently 
presented in the External Review draft of the assessment and will 
discuss their strengths and weaknesses. As recommended by the NAS 
committee, appropriate sensitivity and uncertainty analyses will be an 
integral component of implementing the BBDR model. In the interim, we 
will present findings using the 1991 IRIS value as a primary estimate, 
and may also consider other information as the science

[[Page 72061]]

evolves. The EPA notes that risk estimates based on both the IRIS and 
the CIIT unit risk estimates for formaldehyde were presented in the 
proposal for this final rule and that the risks were acceptable in both 
cases.
    Comment: A commenter stated that the best available science 
indicates that formaldehyde in outdoor air does not present a risk to 
human health.
    In support of their assertion, the commenter quoted WHO which 
stated that ``[i]n ambient air, formaldehyde is quickly photo-oxidized 
in carbon dioxide. It also reacts very quickly with the hydroxyl 
radicals to give formic acid. The half-life estimated for these 
reactions is about one hour depending on the environmental 
conditions.'' (WHO, 2010, at 103). Further, WHO concluded that because 
levels in ambient air are low, outdoor air does not contribute 
significantly to indoor pollution. Id. at 108. Therefore, the EPA's 
proposed cap on formaldehyde use is an unnecessary restriction that 
will not reduce residual risk, if any, to public health.
    Response: Everyone is exposed to small amounts of formaldehyde in 
air and some foods and products. Nasal and eye irritation, neurological 
effects, and increased risk of asthma and/or allergy have been observed 
in humans breathing 0.1 to 0.5 ppm. Eczema and changes in lung function 
have been observed at 0.6 to 1.9 ppm. The Department of Health and 
Human Services (DHHS) has determined that formaldehyde is a known human 
carcinogen based on human and animal inhalation studies.\22\ The EPA 
considers formaldehyde as a ``Probable Human Carcinogen'' in IRIS; 
http://www.epa.gov/iris/subst/0419.htm. The International Agency for 
Research on Cancer (IARC) classifies formaldehyde as a human 
carcinogen; http://monographs.iarc.fr/ENG/Monographs/vol88/index.
---------------------------------------------------------------------------

    \22\ This is according to the Agency for Toxic Substances and 
Disease Registry. http://www.atsdr.cdc.gov/toxfaqs/tf.asp?id=219&tid=39.
---------------------------------------------------------------------------

    Ambient modeling of formaldehyde in the National Scale Air Toxics 
Assessment (NATA) at major urban centers indicate that formaldehyde 
exposures over the long term for excess cancer risks could be up to 100 
in a million with a national average of 20 in a million based upon the 
current IRIS Unit Risk Estimate (URE). Monitoring at the National Air 
Toxics Trends Sites for formaldehyde are in good agreement with the 
NATA, refer to the following Web site; http://www.epa.gov/ttn/atw/nata2005/compare.html.
    The dispersion modeling for wood furniture manufacturing and 
shipbuilding does not incorporate photochemical decay. The EPA 
conducted a sensitivity analysis and determined this feature in AERMOD 
\23\ does not have a significant effect on near-field exposures and is 
most relevant for population exposures in the far field especially for 
pollutants with half-lives less than 30 minutes. The rate of decay is 
also very dependent temporally with less reactivity occurring during 
evening hours as well as during colder seasons. For more information on 
the sensitivity analysis, please refer to Section 4.6: Sensitivity 
Analysis--Atmospheric Chemistry in ``the EPA's Risk and Technology 
Review (RTR) Risk Assessment Methodologies,'' that was reviewed by the 
EPA's SAB; http://www.epa.gov/ttn/atw/rrisk/rtrpg.html. Based upon the 
rate of decay for formaldehyde varying from 1 hour to 16 hours and the 
fact that the MIR location for this source category is located within 
300 meters of the emission source, we find that photochemical decay 
will not have an effect on the MIR.
---------------------------------------------------------------------------

    \23\ AERMOD was developed by the American Meteorological Service 
(AMS)/EPA Regulatory Model Improvement Committee (AERMIC). This is 
the preferred model by EPA for modeling point, area and volume 
sources of continuous air emissions from facilities.
---------------------------------------------------------------------------

    Comment: A commenter stated the EPA's sole justification for 
setting the formaldehyde limit at 400 lbs per rolling 12-month period 
appears to be the fact that this level is already contained in the 
existing MACT as a work practice requirement. Specifically, the 
commenter contended:

    The EPA has stated that adopting this level as an emission 
standard would create ``either no or minimal additional costs.'' Id. 
at 80,247. This number was chosen in 1995, however. Where this 
number came from initially is unclear. While it may be convenient 
for industry to use a level with which it is already familiar and 
that would incur little or no extra cost, the EPA has not provided a 
reasoned explanation based on the required statutory health-based 
criteria for choosing this limit, rather than a more stringent 
limit. The record does not show why this is the appropriate limit to 
set as a residual risk standard in today's world.
    The EPA must complete this analysis and set an appropriately 
protective standard to satisfy CAA section 112(f)(2). Specifically, 
the EPA must consider and address how much emissions would be 
reduced if the EPA set a lower standard, and what level of emission 
standard is required to provide an ``ample margin of safety.'' 42 
U.S.C. Sec.  7412(f)(2). The EPA must address what emission standard 
would be needed to bring the MIR down to 1-in-1-million as the 
statute directs. Id. The EPA must address what standard is needed 
``to provide maximum feasible protection against risks to health'' 
by ``protecting the greatest number of persons possible'' to a 
lifetime risk level no greater than 1-in-1 million. 75 Fed. Reg. at 
80,223 (quoting Benzene NESHAP). The need for this analysis is 
amplified by the fact that the EPA has recognized numerous 
``uncertainties related to the risk assessments, particularly for 
formaldehyde and glycol ether emissions.'' Id. at 80,242-43. For 
example, the EPA has stated that it is concerned that its risk 
analysis has failed to account for additional formaldehyde emissions 
that likely occur during curing and gluing. Id. at 80,243. The 
uncertain amount of additional risk unaccounted for provides another 
reason for the EPA to set a more protective formaldehyde emission 
standard than the level chosen as a work practice standard in 1995.

    Response: The EPA is not finalizing the 400 pounds per rolling 12-
month period formaldehyde use limit as proposed under 112(f) of the 
CAA. See section III of the preamble for a discussion of our final 
action.
    The EPA is promulgating a formaldehyde standard under section 
112(d)(6). Please refer to earlier descriptions in the preamble for 
further justification of section 112(d)(6) of the CAA. All wood 
furniture coatings and contact adhesives must be low- or no- 
formaldehyde (concentration not to exceed 1 percent by weight 
formaldehyde) or, as a compliance alternative, formaldehyde emissions 
from wood furniture facilities must not exceed 400 pounds per rolling 
12-month period. The compliance options are designed to promote 
continuing reductions in formaldehyde emissions from wood furniture 
without requiring equipment changes that are not cost effective or 
limiting in production. The formaldehyde limits will avoid constraining 
the production of wood furniture products facilities while encouraging 
facilities to maintain or decrease levels of formaldehyde within 
coatings and contact adhesives.
    The 400 pounds per 12 month period formaldehyde limit is based on 
the threshold level in Table 5 of the 1995 NESHAP, which itself was a 
result of negotiations with industry. In this RTR, we took the familiar 
numerical threshold for formaldehyde emissions and made it a level not 
to exceed as a compliance alternative. This was done, in the proposal, 
to reduce the HQ of formaldehyde from 7 to 3 in a cost effective 
manner. Between proposal and promulgation, it became clear through 
public comments that this limit was not cost effective for the source 
category. As discussed in greater detail of section IV of this 
preamble, this limit is now a compliance alternative under section 
112(d)(6).

[[Page 72062]]

    The science is unclear as to the degree of formaldehyde curing 
under different environmental conditions. We did not receive any public 
comments containing substantive or relevant emissions information on 
formaldehyde emissions from curing at wood furniture facilities. Until 
there is more data relevant to how cure formaldehyde is formed and/or 
in what quantities, we are unable to set limits for such emissions.
    Comment: Five commenters disagreed with the 400 pound per 12 month 
period formaldehyde limit. Two of the commenters noted that limiting 
formaldehyde emissions from the wood furniture manufacturing operations 
source category is not supported by the EPA's risk analysis and is 
therefore arbitrary. One commenter noted that the total estimated 
cancer incidence due to actual emissions is 0.005 excess cancer cases 
per year or one case in every 200 years.
    Another commenter further stated that the limit is not necessary 
because formaldehyde emissions are likely to decrease further during 
the 2-year compliance period, without any further regulations.
    A commenter stated that the EPA is not justified in adopting this 
standard under CAA section 112(f)(2)(A) or CAA section 112(d)(6). On a 
related note, a different commenter questioned the authority of the EPA 
to establish a 400 pounds per year limit on formaldehyde emissions. The 
basis for the commenter's assertion is that a 400 pound limit will 
limit production at facilities and will inhibit companies from meeting 
industry performance standards. A commenter noted that the EPA chose 
the 400 pound per year formaldehyde limit based on Table 5 of the MACT 
standard (List of VHAP of Potential Concern Identified by Industry). 
Currently, facilities that exceed their baseline level would need no 
further explanation to permitting authorities if the exceedance is no 
more than 15 percent above the baseline, or if the use is below the 
level in Table 5. According to the commenter, the EPA did not note the 
number of facilities that use the formaldehyde limit versus the 
baseline exceedance option. Without more data, it is not known if 
facilities use the 400 pound per year limit. The commenter assumed that 
most facilities comply via the exceedance of baseline option and not 
the 400 pound per year limit.
    A commenter also stated that the EPA improperly presumed a ``one-
size fits all'' approach to coatings and adhesives is feasible in the 
manufacture of wood furniture/cabinet products. The EPA failed to take 
into account the performance, quality and customer requirements of 
these manufactured goods. The coatings and adhesives used for cabinet 
manufacture are specialized and may contain higher amounts of 
formaldehyde due to unique customer requirements.
    A commenter noted that based on the data in an EPA memorandum,\24\ 
the difference in price between coatings with formaldehyde and those 
that are formaldehyde-free is $3.02 per gallon. The commenter assumed a 
1 percent formaldehyde content in the lower priced coating and a 
coating density of 8 pounds per gallon. The $3.02 per gallon additional 
cost for a formaldehyde-free coating would reduce formaldehyde 
emissions by 0.08 pounds for a cost of $37.75 per pound of formaldehyde 
eliminated or $75,500 per ton.
---------------------------------------------------------------------------

    \24\ See: Impacts of Implementing a Limit on Formaldehyde Usage 
in the Wood Furniture Manufacturing Operations Source Category, 
October 19, 2010. This document is available in the docket for this 
rulemaking.
---------------------------------------------------------------------------

    The commenter also evaluated the replacement cost for a topcoat 
containing 0.25-percent formaldehyde with a material containing only 
0.005 percent formaldehyde. The price differential of $3.58 per gallon 
resulting in a cost of over $365,000 per ton of formaldehyde 
eliminated.
    The commenter noted the high cost of replacement of contact 
adhesives. Based on the relatively low formaldehyde content in the 
current materials used, an incremental cost of only $1 to $2 per gallon 
could result in a cost exceeding $20,000 per ton.
    Response: Based on information received in the comments and further 
inquiry of the effects of the proposed limit of 400 pounds formaldehyde 
per rolling 12-month period, the EPA has revised the standard to 
require the formaldehyde content of coatings and contact adhesives to 
be less than or equal to 1 percent by weight with an alternate 
compliance option of the 400 pounds per rolling 12-month period 
formaldehyde use limit, as explained elsewhere in the preamble.
    This approach is promulgated under the technology review 
requirements under the CAA section 112(d)(6). Risk was determined to be 
acceptable under section 112(f)(2) of the CAA (residual risk). This 
technology rule will not limit production or result in significant 
costs for high production facilities and will encourage further 
reductions in the future without compromising the integrity of product.
    The EPA has information that indicates that most facilities will be 
able to cost-effectively comply with the 1 percent by weight 
formaldehyde limit.\25\ A commenter asserts that coatings and contact 
adhesives that are 1 percent formaldehyde are cost effective. This 
level of formaldehyde will be sufficient to create the cross-linking 
nucleation that provides durability to wood furniture products in many 
cases. By also having a formulation restriction as an alternative to 
the 400 pound per year limit, there will not be a restriction of 
production.
---------------------------------------------------------------------------

    \25\ One of the major manufacturers of wood furniture coatings, 
Valspar, does not carry any products that have greater than 1 
percent formaldehyde leading to the conclusion that coatings greater 
than 1 percent formaldehyde are mostly unnecessary in the industry. 
http://www.valsparwood.com/valsparwood/msds/msds.jsp
---------------------------------------------------------------------------

    Comment: Multiple commenters offered comments related to the EPA's 
estimate of the cost for meeting the proposed formaldehyde standard.
    One of the commenters noted that the EPA does not adequately 
support its cost estimate. The commenter stated that the EPA provided 
no data or analysis to support its assumption that all facilities 
operate in the same way or that the use of no- or low- formaldehyde 
coatings and contact adhesives would be suitable for use by all 
facilities.
    The commenter further noted that the EPA's ``cost analysis'' 
consists of price information, from one supplier, of 13 no- or low-
formaldehyde coatings that the agency considers to be suitable for use 
in wood furniture manufacturing operations.\26\ The commenter noted 
that the EPA does not analyze whether the available coatings can be 
used in all applications or would meet industry performance standards.
---------------------------------------------------------------------------

    \26\ See U.S. the EPA, Memorandum, Impacts of Implementing a 
Limit on Formaldehyde Use in the Wood Furniture Manufacturing 
Operations Source Category dated October 19, 2010 in the docket for 
this action.
---------------------------------------------------------------------------

    A different commenter stated that the technical and cost analyses 
the EPA puts forth in support of the 400 pound per year limit are not 
backed up by any critical analysis or actual data. According to the 
commenter, this analysis amounts to the assertion that, ``because some 
facilities are doing it, all facilities should be able to do it. This 
is an empty `analysis' that provides no support for the proposed 400 lb 
per year limit. On top of that, the EPA also asserts that the new 
standard can be met `at little or no extra cost.' '' The commenter 
stated that a much more robust cost analysis would be needed to justify 
imposing an additional emissions limitation.
    Moreover, two commenters noted that the EPA does not address the 
additional costs incurred due to the potential need

[[Page 72063]]

for new equipment, the significant expenses to adapt to a new finish 
material.
    Response: Based on information received in comments, we have 
adopted a 1 percent by weight formaldehyde limit with a 400 pounds 
formaldehyde per rolling 12-month period alternative compliance limit 
that allows wood furniture manufacturers to use their discretion to 
reformulate to lower formaldehyde coatings and contact adhesives while 
not necessitating the expense of production line reconfiguration. As 
discussed above, we have updated the cost-effectiveness analysis for 
the proposed formaldehyde limit and concluded that the 400 pound per 12 
month limit as proposed would not be cost effective.\27\
---------------------------------------------------------------------------

    \27\ For further detail, see memo to the docket, Estimated Cost 
Impact for Wood Furniture Manufacturing Industry to Comply with 
Proposed Formaldehyde Limit on Coating Operations Wood Furniture 
Manufacturing RTR, dated July 15, 2011.
---------------------------------------------------------------------------

    Using low-formaldehyde coatings and contact adhesives reflects 
developments in technology and was described in the proposal as the 
method to achieve compliance with the proposed 400 pounds formaldehyde 
per rolling 12-month period. A limit of 1 percent formaldehyde in 
coatings and adhesives allows facilities the flexibility to use 
coatings and adhesives that are suitable for a range of different 
products, from cabinets to home furnishings, without compromising their 
quality, cost or production.\28\ Also, in many cases, the 1 percent 
formaldehyde limit will allow flexibility in different types of line 
configurations.\29\
---------------------------------------------------------------------------

    \28\ It is necessary for some facilities to minimize levels of 
formaldehyde in the coating formulation to promote cross-linking 
nucleation. This process directly affects the quality and durability 
of the wood furniture. See notes from the Marsh Furniture Site Visit 
in the docket for this action for reference.
    \29\ For additional information, please see memo to the docket, 
EPA Meeting with Kitchen Cabinet Manufacturers Association (KCMA) 
and Select Representatives, dated August 17, 2011.
---------------------------------------------------------------------------

    Comment: Multiple commenters noted that the EPA overestimated the 
health risk from glycol ethers by using ethylene glycol methyl ether as 
the representative glycol ether.\30\ Given that the use of glycol 
ethers other than ethylene glycol methyl ether is the norm for the 
industry, the risk associated with this class of compounds is 
overstated in the EPA's analysis and no additional regulation of glycol 
ethers is warranted. The table contains a summary of speciated glycol 
ethers that are less toxic than ethylene glycol methyl ether. This 
shows, in the commenter's opinion, the EPA's overestimation of the 
health risk from these compounds.
---------------------------------------------------------------------------

    \30\ The commenters referred to Table 4 in the EPA's October 22, 
2010, memorandum, Review of Glycol Ether Emissions Associated with 
Wood Furniture Manufacturing Source Category.
---------------------------------------------------------------------------

    One commenter offered another assessment approach for glycol 
ethers:

    A more reasonable assessment of glycol ethers would be the 
example based on data from all facilities of a large wood furniture 
manufacturing company. Glycol ether emissions in 2010 totaled 3.76 
tons, of which over 95 percent of the emissions were ethylene glycol 
monobutyl ether, with the remainder comprising diethylene glycol 
phenyl ether, diethylene glycol butyl ether and phenoxyethanol. 
Based on the preponderance of ethylene glycol monobutyl ether in 
these emissions, a risk assessment using the significantly higher 
REL for ethylene glycol monobutyl ether (REL = 14 vs. REL for 
ethylene glycol methyl ether of 0.093 ref: http://www.oehha.ca.gov/air/pdf/acuterel.pdf) would conclude that the risk from glycol 
ethers is approximately 150 times lower than the EPA's analysis 
shows. Even if the REL for another glycol ether--Ethylene Glycol 
Monoethyl Ether, REL 0.37--were used, the risk associated with 
glycol ethers would be reduced by a factor of 4.

    A second commenter offered a different option. The commenter 
recommended that the HQ derived by the EPA for Propyl 
Cellosolve[supreg] (ethylene glycol mono-n-propyl ether (EGME)) be 
recalculated using an REL they propose for ethylene glycol phenyl ether 
(EGPE). The commenter contends that information provided in their 
comments demonstrates that sufficient information exists to derive an 
REL for EGPE, which would be more appropriate for risk management than 
the REL for EGME.
    Response: As we acknowledged in the proposal, the use of the EGME 
REL in our acute risk screening assessments provided us with a 
conservative (i.e., health-protective) estimate of potential acute 
health risks from glycol ethers when the exact speciation profile of 
emitted glycol ethers was uncertain. For this source category, 
approximately 70 percent of facilities reporting glycol ether emissions 
reported them without any speciation information. Since there are no 
AEGL or ERPG values available for any glycol ethers, this further 
limits our ability to interpret the potential acute impacts of glycol 
ethers. Since this uncertainty remains, the EPA is not convinced that 
the use of less health-protective assumptions (such as those 
recommended by the commenters) represents any improvement in the 
assessment of potential acute impacts. Even so, because of the health-
protective nature of our assessment, we do not believe that these 
estimated worst-case acute glycol ether impacts warrant the adoption of 
additional control measures.
    Comment: A commenter suggested that the EPA either define the term 
``conventional'' or mention the types of spray guns that are to be used 
to assist the regulated community in complying with this rule. The 
commenter suggested specific items, mentioned in the Paint Stripping 
and Miscellaneous Surface Coating Operations rule (Subpart HHHHHH): 
High-volume low-pressure (HVLP) spray guns, electrostatic applications, 
airless or air-assisted airless spray guns, or air-assisted airless 
equivalent technologies.
    Another commenter suggested that the EPA exclude the following 
components from the definition: Handheld non-refillable aerosol 
containers, touch-up markers, marking pens, and the application of 
paper film or plastic film which may be pre-coated with an adhesive by 
the manufacturer. These items are allowed by the miscellaneous metal 
parts and products NESHAP (subpart MMMM).
    Response: The existing Wood Furniture Manufacturing Operations MACT 
standards define ``conventional air spray'' as:

a spray coating method in which the coating is atomized by mixing it 
with compressed air and applied at an air pressure greater than 10 
pounds per square inch (gauge) at the point of atomization. Airless 
and air assisted airless spray technologies are not conventional air 
spray because the coating is not atomized by mixing it with 
compressed air. Electrostatic spray technology is also not 
considered conventional air spray because an electrostatic charge is 
employed to attract the coating to the workpiece. 40 CFR 63.801(a).

Many of the above suggestions for specific coating applications are 
clearly included or excluded by the definition of conventional spray 
provided in the 1995 NESHAP. The technologies listed above such as 
touch-up markers, marking pens and manufacturer pre-coated adhesive 
film are not affected by the ban on use of conventional spray guns 
because they do not have a spray, i.e., they are not ``a spray coating 
method.'' Despite certain technologies being incorporated to other rule 
makings such as subpart HHHHHH, the commenter did not explain why these 
applications are necessary for this rule making. Examples of compliant 
spray technology include, but are not limited to HVLP spray guns, low-
volume low-pressure guns (LVLP), electrostatic applications, airless 
and air-assisted airless spray guns. Low-capacity HVLP cup guns may be 
used for small batch operations.
    Comment: A commenter suggested that the EPA clarify in the rule 
that facilities with controls can continue to use conventional spray 
guns. Any

[[Page 72064]]

emissions would be controlled via the control device.
    Another commenter noted that several RTOs, which rely on rich VOC 
waste streams, are being operated in the industry. To impose air-
assisted-airless guns reduces RTO efficiency and requires more fossil 
fuel to be consumed. Regenerative thermal oxidizers are fueled by 
overspray and fossil fuels; when the quantity of overspray is 
decreased, the more fossil fuel that is needed to keep the RTO 
functioning.
    Response: The proposed rule has been revised to allow use of 
conventional spray guns when the overspray is routed to a functioning 
control device. The efficiency of the control device sufficiently 
reduces excess emissions associated with the decreased spray efficiency 
of conventional spray guns.\31\
---------------------------------------------------------------------------

    \31\ A typical transfer efficiency of an HVLP gun is 65-85 
percent compared to 25-45 percent for conventional guns under 
similar conditions. This is a difference of 40 percent spray 
efficiency. When compared to an estimate of 90 percent efficiency of 
an add-on control device, the control device more than compensates 
for the 40 percent reduction in efficiency of guns. For more 
information on transfer efficiencies of spray technologies see the 
memo to the docket, Impacts of Prohibiting the Use of Conventional 
Spray Guns in the Wood Furniture Manufacturing Operations Source 
Category, dated October 29, 2010.
---------------------------------------------------------------------------

    Comment: Two commenters noted that the EPA offered an incorrect 
premise that all applicator improvements to increase transfer 
efficiency of the sprayed material will result in reduced emissions 
simply due to higher transfer efficiencies. The premise does not 
consider the low-use application considerations required for trials, 
touchups and product repairs.
    One of the commenters noted:

    HVLP and equivalent high efficiency applicators require larger 
volumes of premixed materials for application and are best used 
where large quantities of materials are intended (usually volumes 
larger than one gallon to as much as 30 gallons) and in production 
quantity applications where large surface areas are coated. Under 
large volume spray applications, the high transfer efficiency 
equipment results in reduced material consumptions resulting in 
lower operating costs and lower emissions. Under high volume 
application conditions, there are both economic and environmental 
advantages for operations to use high transfer efficiency equipment.
    However, for low use applications such as low volume color 
stains, trial materials, small touchups and repairs, mixing large 
batches for use in high transfer efficiency equipment will result in 
increased material consumption and waste, increased cleanup solvent 
consumption and waste, and, for catalyzed top coat materials, 
material loss through restricted pot life. The proposed applicator 
changes would result in an inability to properly mix small batch 
work coatings (stains, sealers, topcoats, etc.), resulting in more 
wasted raw material, increased cleanup material use, waste and 
emissions and an unnecessary increase in generated waste volume.
    Arguably, the use of low volume conventional spray equipment 
such as cup guns, etc., affords the industry a small volume spray 
alternative that would otherwise require a part to be re-finished or 
scrapped entirely. Failed finish repairs with minimal rework and 
reapplication to the part and in some instances salvage of an 
otherwise scrapped production part makes production and 
environmental sense. Indeed small quantity applicators (generally 
those with a restricted volume of 1.0 U.S. quart or less) may 
actually result in lower VOC and VHAP emissions due to the 
restricted use and inherent limited production capability of the 
application equipment itself.
    Such an overreaching requirement for all spray equipment to be 
of the HVLP spray type or equivalent is not reasonable and does not 
consider the other adverse environmental impacts discussed above.

    Response: First, we note the commenter agrees with the EPA that 
with large volume spray applications, which the commenter defines as 
larger than one gallon and in production quantities, high transfer 
efficiency equipment results in reduced material consumption, lower 
operating costs and lower emissions.\32\ In addition, we find that the 
application technology is available for small batches of coating to be 
applied with non-conventional spray guns such as HVLP cup guns. The use 
of HVLP cup guns will allow for smaller batch mixes. This prevents 
unneeded coating material going to waste. With the higher spray 
efficiency associated with non-conventional spray guns, a greater 
portion of the spray is coating the piece of wood. This means that 
there is less overspray leading to fewer emissions. Other touch-up 
applications such as touch-up markers and handheld non-refillable 
aerosol containers may still be used under the standard. For more 
information see Use of Non-Conventional Spray Technology in the Wood 
Furniture Manufacturing Industry, dated August 3, 2011 and Impacts of 
Prohibiting the Use of Conventional Spray Guns in the Wood Furniture 
Manufacturing Operations Source Category, dated October 19, 2010, in 
the docket for this action.
---------------------------------------------------------------------------

    \32\ For more information please see Impacts of Prohibiting the 
Use of Conventional Spray Guns in the Wood Furniture Manufacturing 
Operations Source Category, dated October 19, 2010, in the docket 
for this action.
---------------------------------------------------------------------------

C. Shipbuilding and Ship Repair (Surface Coating)

    Comment: A commenter stated the EPA has provided no rational 
explanation for refusing to update the technology standards for both 
categories to meet the CAA section 112(d)(6) requirement, at minimum, 
by matching the limits of what sources have achieved and what other 
jurisdictions have required. The commenter stated:

    We urge the EPA to do so in the final rule. Where, as here, 
there are ``significant developments'' in technology, and where, as 
here, sources have achieved lower levels of emissions ``in 
practice'' than are ``MACT-allowable,'' it is abundantly clear that 
Sec.  112(d)(6) requires the EPA to revise its standards in 
accordance with CAA Sec.  112(d)(2)-(3), (6), 42 U.S.C. Sec.  
7412(d)(2)-(3), (6).

The commenter also inquires why the EPA did not adopt more stringent 
standards based on other regulating bodies within the country.
    Response: As explained in the proposal, in accordance with the 
approach established in the Benzene NESHAP, our analysis of risks for 
this source category showed that the maximum source-category cancer 
risks for all facilities are within the range of acceptable risks and 
that the maximum chronic noncancer risks are unlikely to cause health 
impacts. The EPA has weighed all health risk measures and information 
considered in the risk acceptability determination, along with the 
costs and economic impacts of emissions controls, technological 
feasibility, uncertainties, and other relevant factors, in making our 
ample margin of safety determination. The EPA has found the overall 
level of risk to be acceptable for the source category and the ample 
margin of safety determination for this source category indicates that 
potential controls are not cost effective and technically feasible.
    Comment: A commenter stated that the EPA has failed to fulfill its 
CAA section 112(f)(2) duty to fully assess and determine whether the 
risk from this source category is ``acceptable.'' The EPA concludes 
that this category creates an MIR of 20-in-1 million based on allowable 
emissions, and 10-in-1 million based on estimated ``actual'' emissions. 
The EPA does not justify its conclusion on the record that this level 
of risk is acceptable. It simply lists the numbers and different 
factors, without explaining how it is analyzing these factors or why 
they have led the EPA to reach its conclusion. The EPA recognizes that 
disparities in risk exist, with individuals in certain demographic 
groups, including African Americans and people with income below the 
poverty level, more likely to experience a higher level of risk. As 
discussed above, the EPA cannot simply rely on the old Benzene 
presumption that any

[[Page 72065]]

level of risk under 100-in-1 million is acceptable. And, the fact that 
4,000 people is a ``relatively low'' number (i.e., the number estimated 
to be exposed to cancer risks of 1-in-1 million or greater) does not 
justify the EPA's proposal of inaction to protect these people. CAA 
section 112(f)(2) requires the EPA to set standards for the maximum 
exposed individual. The individuals in this group of 4,000 are the very 
people whom the law requires the EPA to be concerned about.
    Response: We do not consider the 1-in-1 million MIR level as a 
`bright line' mandated level of protection for establishing residual 
risk standards. In determining the ample margin of safety (i.e., the 
level of the standard), health risk is one factor that we must 
consider, along with other factors such as cost and technological 
feasibility. Balancing these and other factors with the ability to 
achieve meaningful risk reduction is a critical component of the 
residual risk rulemaking process. We considered reducing risks further 
but concluded that the technology required, such as a portable or 
permanent enclosure big enough to accommodate an entire ship or even a 
section of a ship to capture and control air emissions, would be cost 
prohibitive for this industry. Although our additional analysis of the 
demographics of the exposed population shows some disparities in risks 
between demographic groups for both categories, the EPA has determined 
that no group is exposed to an unacceptable level of risk. In general, 
the contribution of the source category to elevated facilitywide cancer 
or noncancer risks is low throughout the facilities in this source 
category. The primary processes driving the facilitywide cancer and 
noncancer risks are welding and blasting which are not regulated under 
this source activity.
    Comment: A commenter stated that the EPA has determined that 
maximum individual cancer risk at the facilitywide level is 200-in-1 
million based on estimated ``actual'' emissions. This means that the 
risk is likely to be higher based on allowable emissions. Further, of 
the 41 facilities with facilitywide MIR of 1-in-1 million or more, 15 
have shipbuilding and ship repair operations that contribute over 50 
percent to the facilitywide risks. Yet, the EPA does not propose to 
take any action to address that risk. The EPA should investigate ways 
to reduce this residual risk. It does not consider or address whether 
this level of facilitywide risk is acceptable at facilities where this 
source category is contributing so significantly. The EPA must do so to 
complete its CAA section 112(f)(2) duty. Its failure to consider 
regulatory options to address this residual risk is also arbitrary and 
capricious. At minimum, the EPA should consider whether to set a 
residual risk standard in order to reduce this high level of 
facilitywide risk. It should consider requiring extra work practice, 
reporting, monitoring and other measures for facilities that have the 
level of emissions putting them into this highest risk category. In 
sum, the EPA must address what standard is needed ``to provide maximum 
feasible protection against risks to health'' by ``protecting the 
greatest number of persons possible'' to a lifetime risk level no 
greater than 1-in-1 million. (quoting Benzene NESHAP), and its 
facilitywide risk analysis has failed to complete this essential step.
    Response: We examined facilitywide risk to provide additional 
context to the source category risks. Facilitywide risks are driven by 
estimated emissions from blasting and welding sources at shipbuilding 
and ship repair facilities. These sources are not part of the 
Shipbuilding and Ship Repair (surface coating) source category. As 
discussed in the preamble to the proposed actions for this source 
category [75 FR 80237], we intend to list welding and blasting 
operations as a major source category under section 112(c)(5) of the 
CAA.
    Comment: A commenter stated that with respect to the Shipbuilding 
and Ship Repair standard, we are concerned that the EPA based its 
decision that no additional controls are needed and that the existing 
standard provides an ample margin of safety in part due to ``the 
uncertainty and lack of data associated with one potential risk 
reduction option identified, and the technological infeasibility of the 
other option identified.'' The commenter urged the EPA to obtain the 
necessary data regarding the two options to make a more informed 
decision, including contacting air quality agencies that currently 
regulate the source category. We compliment the EPA on its intention to 
list welding and blasting operations at shipbuilding and ship repair 
facilities as a major source category under section 112(c)(5), but 
encourage the EPA to determine the extent to which this action will 
address the risks remaining at these facilities before deciding that 
relying on this strategy is sufficient.
    Another commenter stated that the EPA's proposal fails to satisfy 
the ``ample margin'' requirement. The EPA bases this conclusion in part 
on the fact that it has ``not identified any data regarding the 
availability, use, performance and emissions associated with the use of 
lower overall volatile organic hazardous air pollutants (VOHAP) content 
or lower toxicity VOHAP content.'' Id. The EPA's conclusion is 
incorrect based on the use of the California standards in place. It is 
unclear why the EPA did not simply contact the four identified 
California air quality districts that have more stringent emission 
limits to attempt to gather these data. See Part IV.A.1, infra. This is 
the 8-year residual risk rulemaking and now is the time to collect and 
consider those data. The EPA may not defer or ignore this 
responsibility, or the fact that stricter standards are in use that it 
must address. The EPA also cannot justify a failure to set a residual 
risk standard on a lack of data. The EPA has failed to explain how the 
existing section 112(d) standard could provide the required ``ample 
margin of safety.'' One commenter also stated that where other 
jurisdictions have implemented stronger standards, this provides 
evidence that for the purposes of CAA section 112(d)(6), that more 
stringent limitations are achievable and have been achieved.
    However, the EPA states that there are differences between coating 
limits in the four air districts, and that the 1995 MACT standard 
includes cold weather limits which are not present in the California 
standards due to its moderate climate. Neither of these points is a 
valid reason for the EPA not to further analyze and adopt stronger 
standards based on these California examples. While it may not be 
appropriate to adopt the California standards in full on a national 
basis, the EPA gives no rational justification for not analyzing how to 
take these models and use them to create an appropriate national 
standard under CAA section 112(d)(6). The EPA concludes that ``we do 
not have data to determine whether these lower-VOC content coatings 
could be applied nationwide.'' Gathering and analyzing that data, 
starting with any information already compiled by the California 
districts, is precisely what the section 112(d)(6) rulemaking is 
designed for. A lack of data is not a lawful basis for the EPA to 
decline to adopt a stronger MACT standard.
    Response: The EPA researched current technologies for the 
shipbuilding and ship repair surface coating industry, and did not find 
any cost effective options that would make the current standard more 
stringent. Related to the marine coating limits in the MACT rule, we 
reviewed the general use and 22 specialty coating VOHAP limits and the 
lower limits that some states and air districts have adopted over the 
past decade for some of the specialty categories. Furthermore, we 
requested comment on the availability

[[Page 72066]]

and feasibility of using lower VOHAP coatings but did not receive any 
data or information during the comment period. Following proposal, we 
did contact a shipyard in Maine, and found that the use of lower VOHAP 
coatings, such as those required to meet the limits set by some of the 
California air quality districts, is not feasible in climates that are 
not as moderate and, therefore, necessitate greater thinning of paint.
    As noted by the commenter, some jurisdictions have implemented more 
stringent standards that have resulted in changes to formulations being 
used in those locations. However, temperature and humidity issues 
experienced by other locations would make painting operations having to 
comply with the more stringent limitations more difficult, more 
expensive, and in some cases unachievable.
    There are many different coatings, and in some cases groups of 
specific coatings, comprising each of the marine coating categories. 
Over the past several years, there have been changes to some 
formulations with HAP solvent reductions and solvent replacements, but 
those are coating and manufacturer specific and not reflective of the 
entire marine coating category.\33\
---------------------------------------------------------------------------

    \33\ See following memos to the docket on cost-effectiveness of 
control technologies: Cost Analyses for Add-on Controls for Surface 
Coating Operations at Shipbuilding and Ship Repair Facilities, dated 
September 2, 2010 and Affordability of Add-on Controls for 
Shipbuilding and Ship Repair Source Category, dated October 18, 
2010.
---------------------------------------------------------------------------

    Comment: A commenter stated the EPA recognizes that there are 
``disparities in risks'' for certain minority and lower-income 
individuals. For shipbuilding and ship repair, African Americans and 
people below the poverty level face a cancer risk of at least 1-in-1 
million at a higher rate than their representation in the population. 
The EPA must consider potential ways to address the disproportionate 
impact on minority individuals and communities in deciding whether the 
likelihood of cancer risk is ``acceptable'' and whether there is action 
that could provide an ``ample margin of safety'' for these individuals 
and communities. Indeed, the EPA has recognized this since the 
development of the Benzene NESHAP, although it has failed to take 
action to address this (citing Benzene NESHAP factors, including 
``overall incidence of cancer or other serious health effects within 
the exposed population[hellip] other quantified or unquantified health 
effects''). These additional factors are supposed to be used in 
addition to the MIR. It is neither acceptable, nor just, to avoid the 
need to reduce the correlation between race or income level and a 
disproportionate risk of cancer from toxic air pollution. The EPA's 
proposals for inaction, in the face of the recognized disparities, 
contradict the Administrator's professed commitment to ``fair 
treatment'' (EJ Guidance, infra note 30, at 3). With the knowledge it 
has, the EPA must, at minimum, consider the amount of background 
pollution faced by, and baseline health of, racial minorities and 
communities affected by these two source categories, including for the 
types of health effects that these HAP emissions have potential to 
exacerbate. These types of health data are readily available for the 
EPA to factor into its analysis and to use in proposing a regulatory 
response to the disproportionate risk found. It would be arbitrary and 
capricious to propose to take no further action at all after finding 
these disparities for both source categories.
    The commenter supports the EPA's effort to gather demographic data. 
Merely looking at these numbers in a simplistic manner, however, is no 
substitute for a true environmental justice (EJ) analysis. The EPA 
should develop and undertake an actual analysis of the location and 
community effects of these source categories. It has sufficient data on 
the locations of these facilities to undertake an analysis of the 
effect of their emissions on the maximum exposed individual, the 
history of pollution faced in the most affected community, and to 
consider how to set a just standard in view of these lasting harms.
    Response: The demographic analysis found that African Americans and 
people below the poverty line may be somewhat disproportionately 
impacted by facilitywide air toxics emissions; however, emissions from 
the source category itself contribute minimally to these impacts. The 
EPA also found the overall level of risk from both source categories to 
be acceptable and to provide an ample margin of safety for all 
populations in close proximity to these sources. As noted previously, 
the EPA's ability to quantitatively assess impacts on EJ communities is 
evolving.

VI. Impacts of the Final Rules

    We estimate the only compliance costs for these amendments to the 
Shipbuilding and Ship Repair (Surface Coating) MACT standard to be 
those costs associated with facilities that choose to take advantage of 
the affirmative defense although there is no expectation that a 
facility will have a need for affirmative defense in this source 
category. These estimated costs are $3,141 per year, and are discussed 
in section VII.B. For these amendments to the Wood Furniture 
Manufacturing Operations MACT standards, we estimate the compliance 
costs to be $188,000 per year for the formaldehyde limit reporting and 
recordkeeping provisions, and $3,141 for facilities that choose to take 
advantage of the affirmative defense although there is no expectation 
that a facility will have a need for affirmative defense in this source 
category. These costs are discussed in section VII.B.

VII. Statutory and Executive Order Reviews

A. Executive Orders 12866: Regulatory Planning and Review, and 
Executive Order 13563: Improving Regulation and Regulatory Review

    Under Executive Order 12866 (58 FR 51735, October 4, 1993), this 
action is a ``significant regulatory action.'' Accordingly, the EPA 
submitted this action to the Office of Management and Budget (OMB) for 
review under Executive Order 12866 and Executive Order 13563 (76 FR 
3821, January 21, 2011), and any changes made in response to OMB 
recommendations have been documented in the docket for this action.

B. Paperwork Reduction Act (PRA)

    The information collection requirements in the final rules have 
been submitted for approval to OMB under the PRA, 44 U.S.C. 3501, et 
seq. The information collection requirements are not enforceable until 
OMB approves them.
    The information requirements are based on notification, 
recordkeeping and reporting requirements in the NESHAP General 
Provisions (40 CFR part 63, subpart A), which are mandatory for all 
operators subject to national emission standards. These recordkeeping 
and reporting requirements are specifically authorized by section 114 
of the CAA (42 U.S.C. 7414). All information submitted to the EPA 
pursuant to the recordkeeping and reporting requirements for which a 
claim of confidentiality is made is safeguarded according to agency 
policies set forth in 40 CFR part 2, subpart B.
    These final rules would require maintenance inspections of the 
control devices but would not require any notifications or reports 
beyond those required by the General Provisions. The recordkeeping 
requirements require only the specific information needed to determine 
compliance.
    When a malfunction occurs, sources must report them according to 
the

[[Page 72067]]

applicable reporting requirements of 40 CFR part 63, subparts II and 
JJ. An affirmative defense to civil penalties for exceedances of 
emission limits that are caused by malfunctions is available to a 
source if it can demonstrate that certain criteria and requirements are 
satisfied. The criteria ensure that the affirmative defense is 
available only where the event that causes an exceedance of the 
emission limit meets the narrow definition of malfunction in 40 CFR 
63.2 (sudden, infrequent, not reasonable preventable, and not caused by 
poor maintenance and or careless operation) and where the source took 
necessary actions to minimize emissions. In addition, the source must 
meet certain notification and reporting requirements. For example, the 
source must prepare a written root cause analysis and submit a written 
report to the Administrator documenting that it has met the conditions 
and requirements for assertion of the affirmative defense.
    To provide the public with an estimate of the relative magnitude of 
the burden associated with an assertion of the affirmative defense 
position adopted by a source, the EPA provides an administrative 
adjustment to these ICRs that estimates the costs of the notification, 
recordkeeping and reporting requirements associated with the assertion 
of the affirmative defense. The EPA's estimate for the required 
notification, reports and records, including the root cause analysis, 
associated with a single incident totals approximately $3,141, and is 
based on the time and effort required of a source to review relevant 
data, interview plant employees, and document the events surrounding a 
malfunction that has caused an exceedance of an emission limit. The 
estimate also includes time to produce and retain the records and 
reports for submission to the EPA. The EPA provides this illustrative 
estimate of this burden because these costs are only incurred if there 
has been a violation and a source chooses to take advantage of the 
affirmative defense.
    In these source categories, compliance is primarily achieved 
through reformulation of the coating. Because of this a malfunction of 
equipment, other than control devices, will not result in an exceedance 
of the standard. As noted previously, there is a small percentage of 
wood furniture facilities that use control devices for compliance; 
malfunctions with these devices are unlikely due to limited number in 
the industry compounding the unlikelihood of a malfunction. Therefore, 
we assert that although a cost for affirmative defense is possible, we 
believe that malfunctions are unlikely. Thus for these source 
categories, the EPA is not assigning any burden associated with 
affirmative defense.
    This burden estimate for Shipbuilding and Ship Repair (Surface 
Coating) has been assigned EPA ICR number 1712.07 and for Wood 
Furniture Manufacturing Operations has been assigned EPA ICR number 
1716.08, and both have been updated to reflect the estimate cost of 
availing the affirmative defense should a facility choose this option.
    For the Wood Furniture Manufacturing Operations MACT standards, the 
ICR document prepared by the EPA has also been amended to include 
burden changes associated with the amendments regarding the 
formaldehyde limit added to the rule. The change in respondents' annual 
reporting and recordkeeping burden associated with these amendments for 
this collection (averaged over the first 3 years after the effective 
date of the standards) is estimated to be 2,000 labor hours with a 
total cost of $188,000 per year for the formaldehyde limit reporting 
and recordkeeping provisions. There will be no capital costs associated 
with the information collection requirements of the final rule.
    An agency may not conduct or sponsor, and a person is not required 
to respond to, a collection of information unless it displays a 
currently valid OMB control number. The OMB control numbers for the 
EPA's regulations in 40 CFR are listed in 40 CFR part 9. When these 
ICRs are approved by OMB, the agency will publish a technical amendment 
to 40 CFR part 9 in the Federal Register to display the OMB control 
numbers for the approved information collection requirements contained 
in the final rules.

C. Regulatory Flexibility Act (RFA)

    The RFA generally requires an agency to prepare a regulatory 
flexibility analysis of any rule subject to notice and comment 
rulemaking requirements under the Administrative Procedure Act, or any 
other statute, unless the agency certifies that the rule will not have 
a significant economic impact on a substantial number of small 
entities. Small entities include small businesses, small organizations 
and small governmental jurisdictions.
    For purposes of assessing the impact of these final rules on small 
entities, small entity is defined as: (1) A small business as defined 
by the Small Business Administration's regulations at 13 CFR 121.201; 
(2) a small governmental jurisdiction that is a government of a city, 
county, town, school district or special district with a population of 
less than 50,000; and (3) a small organization that is any not-for-
profit enterprise which is independently owned and operated and is not 
dominant in its field.
    After considering the economic impacts of these final rules on 
small entities, I certify that this action will not have a significant 
economic impact on a substantial number of small entities. The costs 
associated with the new requirements in these final rules (i.e., the 
formaldehyde use limit and conventional spray gun prohibition in the 
Wood Furniture Manufacturing Operations standards) are negligible as 
discussed above.

D. Unfunded Mandates Reform Act (UMRA)

    These rules do not contain a federal mandate that may result in 
expenditures of $100 million or more for state, local and tribal 
governments, in the aggregate, or the private sector in any 1 year. 
Thus, these rules are not subject to the requirements of sections 202 
or 205 of UMRA.
    These rules also do not contain regulatory requirements that might 
significantly or uniquely affect small governments. They contain no 
requirements that apply to such governments or impose obligations upon 
them.

E. Executive Order 13132: Federalism

    This action does not have federalism implications. It will not have 
substantial direct effects on the states, on the relationship between 
the national government and the states or on the distribution of power 
and responsibilities among the various levels of government, as 
specified in Executive Order 13132. These final rules primarily affect 
private industry and do not impose significant economic costs on state 
or local governments. Thus, Executive Order 13132 does not apply to 
this action.

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

    This action does not have tribal implications, as specified in 
Executive Order 13175 (65 FR 67249, November 9, 2000). It will not have 
a substantial direct effect on tribal governments, on the relationship 
between the federal government and Indian tribes, or on the 
distribution of power and responsibilities between the federal 
government and Indian tribes, as specified in Executive Order 13175. 
Thus, Executive Order 13175 does not apply to this action.

[[Page 72068]]

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

    This action is not subject to Executive Order 13045 (62 FR 19885, 
April 23, 1997), because it is not economically significant as defined 
in Executive Order 12866, and because the EPA does not believe the 
environmental health or safety risks addressed by this action present a 
disproportionate risk to children. This action will not relax the 
control measures on existing regulated sources, and the EPA's risk 
assessments (included in the docket for the proposed rules) demonstrate 
that the existing regulations are associated with an acceptable level 
of risk and an ample margin of safety to protect public health.

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

    This action is not a ``significant energy action'' as defined in 
Executive Order 13211 (66 FR 28355 (May 22, 2001)), because it is not 
likely to have a significant adverse effect on the supply, distribution 
or use of energy. This action will not create any new requirements for 
sources in the energy supply, distribution or use sectors. Further, we 
have concluded that these final rules are not likely to have any 
adverse energy effects.

I. National Technology Transfer and Advancement Act (NTTAA)

    Section 12(d) of the NTTAA of 1995, Public Law Number 104-113, 
12(d) (15 U.S.C. 272 note) directs the EPA to use voluntary consensus 
standards (VCS) in its regulatory activities, unless to do so would be 
inconsistent with applicable law or otherwise impractical. The VCS are 
technical standards (e.g., materials specifications, test methods, 
sampling procedures and business practices) that are developed or 
adopted by VCS bodies. The NTTAA directs the EPA to provide Congress, 
through OMB, explanations when the agency decides not to use available 
and applicable VCS.
    This action does not involve technical standards. Therefore, the 
EPA did not consider the use of any VCS.

J. Executive Order 12898: Federal Actions To Address Environmental 
Justice in Minority Populations and Low-Income Populations

    Executive Order 12898 (59 FR 7629, February 16, 1994) establishes 
federal executive policy on EJ. Its main provision directs federal 
agencies, to the greatest extent practicable and permitted by law, to 
make EJ part of their mission by identifying and addressing, as 
appropriate, disproportionately high and adverse human health or 
environmental effects of their programs, policies and activities on 
minority populations and low-income populations in the United States.
    The EPA has determined that these final rules will not have 
disproportionately high and adverse human health or environmental 
effects on minority or low-income populations, because we have 
concluded that the existing rules adequately protect human health with 
an adequate margin of safety and the final rules do not decrease the 
level of protection provided to human health or the environment. To 
examine the potential for any EJ issues that might be associated with 
each source category, we evaluated the distributions of HAP-related 
cancer risks across different social, demographic and economic groups 
within the populations living near the facilities where these source 
categories are located. Our analyses show that, for the two source 
categories evaluated, there is no potential for an adverse 
environmental effect or human health multi-pathway effects, and that 
acute and chronic noncancer health impacts are unlikely. Our additional 
analysis of facilitywide risks showed that the maximum facilitywide 
cancer risks for all source categories are within the range of 
acceptable risks and that the maximum chronic noncancer risks are 
unlikely to cause health impacts. Although our additional analysis of 
the demographics of the exposed population shows some disparities in 
risks between demographic groups for both categories, the EPA has 
determined that no group is exposed to an unacceptable level of risk.
    The rules will not relax the control measures on emissions sources 
regulated by the rules, and therefore, will not increase risks to any 
populations exposed to these emissions sources.

K. Congressional Review Act (CRA)

    The CRA, 5 U.S.C. 801, et seq., as added by the Small Business 
Regulatory Enforcement Fairness Act of 1996, generally provides that, 
before a rule may take effect, the agency promulgating the rule must 
submit a rule report, which includes a copy of the rule, to each House 
of the Congress and to the Comptroller General of the United States. 
The EPA will submit a report containing this final rule and other 
required information to the United States Senate, the United States 
House of Representatives, and the Comptroller General of the United 
States prior to publication of the final rule in the Federal Register. 
A major rule cannot take effect until 60 days after it is published in 
the Federal Register. This action is not a ``major rule'' as defined by 
5 U.S.C. 804(2). The final rule will be effective on November 21, 2011.

List of Subjects for 40 CFR Part 63

    Environmental protection, Administrative practice and procedures, 
Air pollution control, Hazardous substances, Intergovernmental 
relations, Reporting and recordkeeping requirements.

    Dated: November 4, 2011.
Lisa P. Jackson,
Administrator.
    For the reasons stated in the preamble, Title 40, chapter I, of the 
Code of Federal Regulations (CFR) is amended as follows:

PART 63--[AMENDED]

0
1. The authority citation for part 63 continues to read as follows:

    Authority:  42 U.S.C. 7401, et seq.

Subpart II--[Amended]

0
2. Section 63.781 is amended by revising paragraph (d) to read as 
follows:


Sec.  63.781  Applicability.

* * * * *
    (d) If you are authorized in accordance with 40 CFR 63.783(c) to 
use an add-on control system as an alternative means of limiting 
emissions from coating operations, in response to an action to enforce 
the standards set forth in this subpart, you may assert an affirmative 
defense to a claim for civil penalties for exceedances of such 
standards that are caused by a malfunction, as defined in 40 CFR 63.2. 
Appropriate penalties may be assessed, however, if you fail to meet 
your burden of proving all the requirements in the affirmative defense. 
The affirmative defense shall not be available in response to claims 
for injunctive relief.
    (1) To establish the affirmative defense in any action to enforce 
such a limit, you must timely meet the notification requirements in 
paragraph (d)(2) of this section, and must prove by a preponderance of 
evidence that:
    (i) The excess emissions:
    (A) Were caused by a sudden, infrequent and unavoidable failure of 
air pollution control and monitoring equipment, process equipment or a 
process to operate in a normal or usual manner; and
    (B) Could not have been prevented through careful planning, proper 
design

[[Page 72069]]

or better operation and maintenance practices; and
    (C) Did not stem from any activity or event that could have been 
foreseen and avoided, or planned for; and
    (D) Were not part of a recurring pattern indicative of inadequate 
design, operation, or maintenance; and
    (ii) Repairs were made as expeditiously as possible when the 
applicable emission limitations were being exceeded. Off-shift and 
overtime labor were used, to the extent practicable to make these 
repairs; and
    (iii) The frequency, amount and duration of the excess emissions 
(including any bypass) were minimized to the maximum extent practicable 
during periods of such emissions; and
    (iv) If the excess emissions resulted from a bypass of control 
equipment or a process, then the bypass was unavoidable to prevent loss 
of life, personal injury or severe property damage; and
    (v) All possible steps were taken to minimize the impact of the 
excess emissions on ambient air quality, the environment and human 
health; and
    (vi) All emissions monitoring and control systems were kept in 
operation if at all possible, consistent with safety and good air 
pollution control practices; and
    (vii) All of the actions in response to the excess emissions were 
documented by properly signed, contemporaneous operating logs; and
    (viii) At all times, the affected source was operated in a manner 
consistent with good practices for minimizing emissions; and
    (ix) A written root cause analysis has been prepared, the purpose 
of which is to determine, correct and eliminate the primary causes of 
the malfunction and the excess emissions resulting from the malfunction 
event at issue. The analysis shall also specify, using best monitoring 
methods and engineering judgment, the amount of excess emissions that 
were the result of the malfunction.
    (2) Notification. The owner or operator of the facility 
experiencing an exceedance of its emission limit(s) during a 
malfunction shall notify the Administrator by telephone or facsimile 
(FAX) transmission as soon as possible, but no later than 2 business 
days after the initial occurrence of the malfunction, if it wishes to 
avail itself of an affirmative defense to civil penalties for that 
malfunction. The owner or operator seeking to assert an affirmative 
defense shall also submit a written report to the Administrator within 
45 days of the initial occurrence of the exceedance of the standard in 
this subpart to demonstrate, with all necessary supporting 
documentation, that it has met the requirements set forth in paragraph 
(d)(1) of this section. The owner or operator may seek an extension of 
this deadline for up to 30 additional days by submitting a written 
request to the Administrator before the expiration of the 45 day 
period. Until a request for an extension has been approved by the 
Administrator, the owner or operator is subject to the requirement to 
submit such report within 45 days of the initial occurrence of the 
exceedance.

0
3. Section 63.782 is amended by adding a definition for ``affirmative 
defense'' to read as follows:


Sec.  63.782  Definitions.

* * * * *
    Affirmative defense means, in the context of an enforcement 
proceeding, a response or a defense put forward by a defendant, 
regarding which the defendant has the burden of proof, and the merits 
of which are independently and objectively evaluated in a judicial or 
administrative proceeding.
* * * * *

0
4. Section 63.783 is amended by redesignating paragraphs (b)(1) and 
(b)(2) as (b)(2) and (b)(3) and adding a new paragraph (b)(1) to read 
as follows:


Sec.  63.783  Standards.

* * * * *
    (b) * * *
    (1) At all times the owner or operator must operate and maintain 
any affected source, including associated air pollution control 
equipment and monitoring equipment, in a manner consistent with safety 
and good air pollution control practices for minimizing emissions. 
Determination of whether such operation and maintenance procedures are 
being used will be based on information available to the Administrator 
which may include, but is not limited to, monitoring results, review of 
operation and maintenance procedures, review of operation and 
maintenance records, and inspection of the source.
* * * * *

0
5. Section 63.785 is amended by adding paragraph (e) before Figure 1 to 
Sec.  63.785 to read as follows:


Sec.  63.785  Compliance procedures.

* * * * *
    (e) Continuous compliance requirements. You must demonstrate 
continuous compliance with the emissions standards and operating limits 
by using the performance test methods and procedures in Sec.  63.786 
for each affected source.
    (1) General requirements.
    (i) You must monitor and collect data, and provide a site specific 
monitoring plan, as required by Sec. Sec.  63.783, 63.785, 63.786 and 
63.787.
    (ii) Except for periods of monitoring system malfunctions, repairs 
associated with monitoring system malfunctions, and required monitoring 
system quality assurance or quality control activities (including, as 
applicable, calibration checks and required zero and span adjustments), 
you must operate the monitoring system and collect data at all required 
intervals at all times the affected source is operating, and periods of 
malfunction. Any period for which data collection is required and the 
operation of the Continuous Emissions Monitoring System (CEMS) is not 
otherwise exempt and for which the monitoring system is out-of-control 
and data are not available for required calculations constitutes a 
deviation from the monitoring requirements.
    (iii) You may not use data recorded during monitoring system 
malfunctions, repairs associated with monitoring system malfunctions or 
required monitoring system quality assurance or control activities in 
calculations used to report emissions or operating levels. A monitoring 
system malfunction is any sudden, infrequent, not reasonably 
preventable failure of the monitoring system to provide valid data. 
Monitoring system failures that are caused in part by poor maintenance 
or careless operation are not malfunctions. The owner or operator must 
use all the data collected during all other periods in assessing the 
operation of the control device and associated control system.
    (2) [Reserved]
* * * * *

0
6. Section 63.786 is amended by adding paragraph (e) to read as 
follows:


Sec.  63.786  Test methods and procedures.

* * * * *
    (e) For add-on control systems approved for use in limiting 
emissions from coating operations pursuant to Sec.  63.783(c), 
performance tests shall be conducted under such conditions as the 
Administrator specifies to the owner or operator based on 
representative performance of the affected source for the period being 
tested. Upon request, the owner or operator shall make available to the 
Administrator such records as may be necessary to demonstrate the 
conditions present during performance tests.

0
7. Section 63.788 is amended by adding paragraph (b)(5) and revising 
paragraph (c) to read as follows:

[[Page 72070]]

Sec.  63.788  Recordkeeping and reporting requirements.

* * * * *
    (b) * * *
    (5) Each owner or operator that receives approval pursuant to Sec.  
63.783(c) to use an add-on control system to control coating emissions 
shall maintain records of the occurrence and duration of each 
malfunction of operation (i.e., process equipment) or the required air 
pollution control and monitoring equipment. Each owner or operator 
shall maintain records of actions taken during periods of malfunction 
to minimize emissions in accordance with Sec.  63.783(b)(1), including 
corrective actions to restore malfunctioning process and air pollution 
control and monitoring equipment to its normal or usual manner of 
operation.
    (c) Reporting requirements. Before the 60th day following 
completion of each 6 month period after the compliance date specified 
in Sec.  63.784, each owner or operator of an affected source shall 
submit a report to the Administrator for each of the previous 6 months. 
The report shall include all of the information that must be retained 
pursuant to paragraphs (b)(2) through (3) of this section, except for 
that information specified in paragraphs (b)(2)(i) through (ii), 
(b)(2)(v), (b)(3)(i)(A), (b)(3)(ii)(A), and (b)(3)(iii)(A). If a 
violation at an affected source is detected, the owner or operator of 
the affected source shall also report the information specified in 
paragraph (b)(4) of this section for the reporting period during which 
the violation(s) occurred. To the extent possible, the report shall be 
organized according to the compliance procedure(s) followed each month 
by the affected source. If there was a malfunction during the reporting 
period, the report must also include the number, duration and a brief 
description of each malfunction which occurred during the reporting 
period and which caused or may have caused any applicable emission 
limitation to be exceeded. The report must also include a description 
of actions taken by an owner or operator during a malfunction of an 
affected source to minimize emissions in accordance with Sec.  
63.783(b)(1), including actions taken to correct a malfunction.

0
8. Table 1 to subpart II of part 63 is amended by:
0
a. Removing entry 63.6(e)-(f);
0
b. Adding entries 63.6(e)(1)(i), 63.6(e)(1)(ii), 63.6(e)(1)(iii), 
63.6(e)(2), 63.6(e)(3), 63.6(f)(1), and 63.6(f)(2)-(f)(3);
0
c. Removing entry 63.7;
0
d. Adding entries 63.7(a)-(d), 63.7(e)(1), and 63.7(e)(2)-(e)(4);
0
e. Revising entry 63.8;
0
f. Removing entry 63.10(a)-(b);
0
g. Adding entries 63.10(a), 63.10(b)(1), 63.10(b)(2)(i), 
63.10(b)(2)(ii), 63.10(b)(2)(iii), 63.10(b)(2)(iv)-(b)(2)(v), 
63.10(b)(2)(vi)-(b)(2)(xiv), and 63.10(b)(3);
0
h. Removing entry 63.10(c);
0
i. Adding entries 63.10(c)(1)-(9), 63.10(c)(10)-(11), 63.10(c)(12)-
(14), and 63.10(c)(15);
0
j. Removing entry 63.10(d); and
0
k. Adding entries 63.10(d)(1)-(4) and 63.10(d)(5).
    The revisions read as follows:

 Table 1--To Subpart II of Part 63--General Provisions of Applicability
                              to Subpart II
------------------------------------------------------------------------
                                    Applies to
           Reference                subpart II            Comment
------------------------------------------------------------------------
 
                              * * * * * * *
63.6(e)(1)(i).................  No...............  See Sec.
                                                    63.783(b)(1) for
                                                    general duty
                                                    requirement.
63.6(e)(1)(ii)................  No.                .....................
63.6(e)(1)(iii)...............  Yes.               .....................
63.6(e)(2)....................  No...............  Section reserved.
63.6(e)(3)....................  No.                .....................
63.6(f)(1)....................  No.                .....................
63.6(f)(2)-(f)(3).............  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then this
                                                    section does apply.
 
                              * * * * * * *
63.7(a)-(d)...................  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then
                                                    these sections do
                                                    apply.
63.7(e)(1)....................  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then see
                                                    Sec.   63.786(e).
63.7(e)(2)-(e)(4).............  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then
                                                    these sections do
                                                    apply.
 
                              * * * * * * *
63.8..........................  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then this
                                                    section does apply,
                                                    with the exception
                                                    of Sec.
                                                    63.8(c)(1)(i), Sec.
                                                     63.8(c)(1)(iii),
                                                    and the last
                                                    sentence of Sec.
                                                    63.8(d)(3).
 
                              * * * * * * *
63.10(a)......................  Yes.               .....................
63.10(b)(1)...................  Yes.               .....................
63.10(b)(2)(i)................  No.                .....................

[[Page 72071]]

 
63.10(b)(2)(ii)...............  No...............  See Sec.
                                                    63.788(b)(5) for
                                                    recordkeeping of
                                                    occurrence,
                                                    duration, and
                                                    actions taken during
                                                    malfunctions.
63.10(b)(2)(iii)..............  Yes.               .....................
63.10(b)(2)(iv)-(b)(2)(v).....  No.                .....................
63.10(b)(2)(vi)-(b)(2)(xiv)...  Yes.               .....................
63.10(b)(3)...................  Yes.               .....................
63.10(c)(1)-(9)...............  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then
                                                    these sections do
                                                    apply.
63.10(c)(10)-(11).............  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then see
                                                    Sec.   63.788(b)(5)
                                                    for records of
                                                    malfunctions.
63.10(c)(12)-(14).............  No...............  If an alternative
                                                    means of limiting
                                                    emissions (e.g., an
                                                    add-on control
                                                    system) is used to
                                                    comply with subpart
                                                    II in accordance
                                                    with Sec.
                                                    63.783(c), then
                                                    these sections do
                                                    apply.
63.10(c)(15)..................  No.                .....................
63.10(d)(1)-(4)...............  Yes.               .....................
63.10(d)(5)...................  No...............  See Sec.   63.788(c)
                                                    for reporting
                                                    malfunctions.
 
                              * * * * * * *
------------------------------------------------------------------------


0
9. Table 3 to subpart II of part 63 is amended by revising entry 
``Determination of whether containers meet the standards described in 
Sec.  63.783(b)(2)'' to read as follows:

           Table 3 to Subpart II of Part 63--Summary of Recordkeeping and Reporting Requirements a b c
----------------------------------------------------------------------------------------------------------------
                                                     All Opts.       Option 1        Option 2        Option 3
                   Requirement                   ---------------------------------------------------------------
                                                    Rec     Rep     Rec     Rep     Rec     Rep     Rec     Rep
----------------------------------------------------------------------------------------------------------------
 
                                                  * * * * * * *
Determination of whether containers meet the          X       X   ......  ......  ......  ......  ......  ......
 standards described in Sec.   63.783(b)(3).....
 
                                                  * * * * * * *
----------------------------------------------------------------------------------------------------------------
\a\ Affected sources that comply with the cold-weather limits must record and report additional information, as
  specified in Sec.   63.788(b)(3)(ii)(C), (iii)(C), and (iv)(D).
\b\ Affected sources that detect a violation must record and report additional information, as specified in Sec.
    63.788(b)(4).
\c\ OPTION 4: The recordkeeping and reporting requirements of Option 4 are identical to those of Options 1, 2,
  or 3, depending on whether and how thinners are used. However, when using Option 4, the term volatile organic
  hazardous air pollutants ``VOHAP'' shall be used in lieu of the term Volatile Organic Compounds ``VOC,'' and
  the owner or operator shall record and report the Administrator-approved VOHAP test method or certification
  procedure.

* * * * *

Subpart JJ--[AMENDED]

0
10. Section 63.800 is amended by:
0
a. Redesignating paragraphs (f) and (g) as paragraphs (h) and (i);
0
b. Redesignating paragraphs (d) and (e) as paragraphs (e) and (f);
0
c. Adding new paragraphs (d) and (g); and
0
d. Adding paragraph (j) to read as follows:


Sec.  63.800  Applicability.

* * * * *
    (d) This subpart does not apply to any surface coating or coating 
operation that meets any of the criteria of paragraphs (d)(1) through 
(4) of this section.
    (1) Surface coating of metal parts and products other than metal 
components of wood furniture that meets the applicability criteria for 
miscellaneous metal parts and products surface coating (subpart MMMM of 
this part).
    (2) Surface coating of plastic parts and products other than 
plastic components of wood furniture that meets the applicability 
criteria for plastic parts and products surface coating (subpart PPPP 
of this part).
    (3) Surface coating of wood building products that meets the 
applicability criteria for wood building products surface coating 
(subpart QQQQ of this part). The surface coating of millwork and trim 
associated with cabinet manufacturing are subject to subpart JJ.
    (4) Surface coating of metal furniture that meets the applicability 
criteria for metal furniture surface coating (subpart RRRR of this 
part). Surface coating of metal components of wood furniture performed 
at a wood furniture or wood furniture component manufacturing facility 
are subject to subpart JJ.
* * * * *
    (g) Existing affected sources shall be in compliance with Sec.  
63.802(a)(4) and Sec.  63.803(h) no later than November 21, 2014. The 
owner or operator of an existing area source that increases its 
emissions of (or its potential to emit) hazardous air pollutants (HAP) 
such that the source becomes a major source that is subject to this 
subpart shall

[[Page 72072]]

comply with this subpart 1 year after becoming a major source.
* * * * *
    (j) If the owner or operator, in accordance with 40 CFR 63.804, 
uses a control system as a means of limiting emissions, in response to 
an action to enforce the standards set forth in this subpart, you may 
assert an affirmative defense to a claim for civil penalties for 
exceedances of such standards that are caused by malfunction, as 
defined in 40 CFR 63.2. Appropriate penalties may be assessed, however, 
if the respondent fails to meet its burden of proving all the 
requirements in the affirmative defense. The affirmative defense shall 
not be available for claims for injunctive relief.
    (1) To establish the affirmative defense in any action to enforce 
such a limit, the owner or operator must timely meet the notification 
requirements in paragraph (j)(2) of this section, and must prove by a 
preponderance of evidence that:
    (i) The excess emissions:
    (A) Were caused by a sudden, infrequent, and unavoidable failure of 
air pollution control and monitoring equipment, process equipment, or a 
process to operate in a normal or usual manner; and
    (B) Could not have been prevented through careful planning, proper 
design or better operation and maintenance practices; and
    (C) Did not stem from any activity or event that could have been 
foreseen and avoided, or planned for; and
    (D) Were not part of a recurring pattern indicative of inadequate 
design, operation, or maintenance; and
    (ii) Repairs were made as expeditiously as possible when the 
applicable emission limitations were being exceeded. Off-shift and 
overtime labor were used, to the extent practicable to make these 
repairs; and
    (iii) The frequency, amount and duration of the excess emissions 
(including any bypass) were minimized to the maximum extent practicable 
during periods of such emissions; and
    (iv) If the excess emissions resulted from a bypass of control 
equipment or a process, then the bypass was unavoidable to prevent loss 
of life, personal injury, or severe property damage; and
    (v) All possible steps were taken to minimize the impact of the 
excess emissions on ambient air quality, the environment, and human 
health; and
    (vi) All emissions monitoring and control systems were kept in 
operation if at all possible, consistent with safety and good air 
pollution control practices; and
    (vii) All of the actions in response to the excess emissions were 
documented by properly signed, contemporaneous operating logs; and
    (viii) At all times, the facility was operated in a manner 
consistent with good practices for minimizing emissions; and
    (ix) A written root cause analysis has been prepared, the purpose 
of which is to determine, correct and eliminate the primary causes of 
the malfunction and the excess emissions resulting from the malfunction 
event at issue. The analysis shall also specify, using best monitoring 
methods and engineering judgment, the amount of excess emissions that 
were the result of the malfunction.
    (2) Notification. The owner or operator of the facility 
experiencing an exceedance of its emission limit(s) during a 
malfunction shall notify the Administrator by telephone or facsimile 
(FAX) transmission as soon as possible, but no later than 2 business 
days after the initial occurrence of the malfunction, if it wishes to 
avail itself of an affirmative defense to civil penalties for that 
malfunction. The owner or operator seeking to assert an affirmative 
defense shall also submit a written report to the Administrator within 
45 days of the initial occurrence of the exceedance of the standard in 
this subpart to demonstrate, with all necessary supporting 
documentation, that it has met the requirements set forth in paragraph 
(h)(1) of this section. The owner or operator may seek an extension of 
this deadline for up to 30 additional days by submitting a written 
request to the Administrator before the expiration of the 45 day 
period. Until a request for an extension has been approved by the 
Administrator, the owner or operator is subject to the requirement to 
submit such report within 45 days of the initial occurrence of the 
exceedance.

0
11. Section 63.801 is amended by:
0
a. Adding a definition for ``affirmative defense'' and ``low-
formaldehyde'' and revising the definition for ``wood furniture'' in 
paragraph (a); and
0
b. Adding paragraphs (b)(24) through (b)(28).
    The additions and revisions read as follows:


Sec.  63.801  Definitions.

    (a) * * *
    Affirmative defense means, in the context of an enforcement 
proceeding, a response or defense put forward by a defendant, regarding 
which the defendant has the burden of proof and the merits of which are 
independently and objectively evaluated in a judicial or administrative 
proceeding.
* * * * *
    Low-formaldehyde means, in the context of a coating or contact 
adhesive, a product concentration of less than or equal to 1.0 percent 
formaldehyde by weight, as described in a certified product data sheet 
for the material.
* * * * *
    Wood furniture means any product made of wood, a wood product such 
as rattan or wicker, or an engineered wood product such as 
particleboard that is manufactured at any facility that is engaged, 
either in part or in whole, in the manufacture of wood furniture or 
wood furniture components, including, but not limited to, facilities 
under any of the following standard industrial classification codes: 
2434, 2511, 2512, 2517, 2519, 2521, 2531, 2541, 2599, or 5712.
* * * * *
    (b) * * *
    (24) Cf = the formaldehyde content of a finishing 
material (c), in pounds of formaldehyde per gallon of coating (lb/gal).
    (25) Ftotal = total formaldehyde emissions in each 
rolling 12 month period.
    (26) Gf = the formaldehyde content of a contact adhesive 
(g), in pounds of formaldehyde per gallon of contact adhesive (lb/gal).
    (27) Vc = the volume of formaldehyde-containing 
finishing material (c), in gal.
    (28) Vg = the volume of formaldehyde-containing contact 
adhesive (g), in gal.

0
12. Section 63.802 is amended by adding paragraphs (a)(4), (b)(4), and 
(c) to read as follows:


Sec.  63.802  Emission limits.

    (a) * * *
    (4) Limit formaldehyde emissions by complying with the provisions 
specified in either paragraph (a)(4)(i) or (a)(4)(ii) of this section.
    (i) Limit total formaldehyde (Ftotal) use in coatings 
and contact adhesives to no more than 400 pounds per rolling 12 month 
period.
    (ii) Use coatings and contact adhesives only if they are low-
formaldehyde coatings and adhesives, in any wood furniture 
manufacturing operations.
    (b) * * *
    (4) Limit formaldehyde emissions by complying with the provisions 
specified in either paragraph (b)(4)(i) or (b)(4)(ii) of this section.
    (i) Limit total formaldehyde (Ftotal) use in coatings 
and contact adhesives to no more than 400 pounds per rolling 12 month 
period.

[[Page 72073]]

    (ii) Use coatings and contact adhesives only if they are low-
formaldehyde coatings and adhesives, in any wood furniture 
manufacturing operations.
    (c) At all times, the owner or operator must operate and maintain 
any affected source, including associated air pollution control 
equipment and monitoring equipment, in a manner consistent with safety 
and good air pollution control practices for minimizing emissions. 
Determination of whether such operation and maintenance procedures are 
being used will be based on information available to the Administrator 
which may include, but is not limited to, monitoring results, review of 
operation and maintenance procedures, review of operation and 
maintenance records, and inspection of the source.

0
13. Section 63.803 is amended by revising paragraph (h) to read as 
follows:


Sec.  63.803  Work practice standards.

* * * * *
    (h) Application equipment requirements. Each owner or operator of 
an affected source shall not use conventional air spray guns except 
when all emissions from the finishing application station are routed to 
a functioning control device.
* * * * *

0
14. Section 63.804 is amended by adding paragraphs (g)(9) and (h) to 
read as follows:


Sec.  63.804  Compliance procedures and monitoring requirements.

* * * * *
    (g) * * *
    (9) Continuous compliance requirements. You must demonstrate 
continuous compliance with the emissions standards and operating limits 
by using the performance test methods and procedures in Sec.  63.805 
for each affected source.
    (i) General requirements. (A) You must monitor and collect data, 
and provide a site specific monitoring plan as required by Sec. Sec.  
63.804, 63.806 and 63.807.
    (B) Except for periods of monitoring system malfunctions, repairs 
associated with monitoring system malfunctions, and required monitoring 
system quality assurance or quality control activities (including, as 
applicable, calibration checks and required zero and span adjustments), 
you must operate the monitoring system and collect data at all required 
intervals at all times the affected source is operating and periods of 
malfunction. Any period for which data collection is required and the 
operation of the CEMS is not otherwise exempt and for which the 
monitoring system is out-of-control and data are not available for 
required calculations constitutes a deviation from the monitoring 
requirements.
    (C) You may not use data recorded during monitoring system 
malfunctions, repairs associated with monitoring system malfunctions, 
or required monitoring system quality assurance or control activities 
in calculations used to report emissions or operating levels. A 
monitoring system malfunction is any sudden, infrequent, not reasonably 
preventable failure of the monitoring system to provide valid data. 
Monitoring system failures that are caused in part by poor maintenance 
or careless operation are not malfunctions. The owner or operator must 
use all the data collected during all other periods in assessing the 
operation of the control device and associated control system.
    (ii) [Reserved]
    (h) The owner or operator of an existing or new affected source 
subject to Sec.  63.802(a)(4) or (b)(4) shall comply with those 
provisions by using either of the methods presented in Sec.  
63.804(h)(1) and (2) if complying with Sec.  63.802(a)(4)(i) or 
(b)(4)(i) or by using the method presented in Sec.  63.804(h)(3) if 
complying with Sec.  63.802(a)(4)(ii) or (b)(4)(ii).
    (1) Calculate total formaldehyde emissions from all finishing 
materials and contact adhesives used at the facility using Equation 5 
and maintain a value of Ftotal no more than 400 pounds per 
rolling 12 month period.
[GRAPHIC] [TIFF OMITTED] TR21NO11.000

    (2) Use a control system with an overall control efficiency (R) 
such that the calculated value of Ftotal in Equation 6 is no 
more than 400 pounds per rolling 12 month period.
[GRAPHIC] [TIFF OMITTED] TR21NO11.001

    (3) Demonstrate compliance by use of coatings and contact adhesives 
only if they are low-formaldehyde coatings and contact adhesives 
maintaining a certified product data sheet for each coating and contact 
adhesive used, as required by Sec.  63.806(b)(1), and submitting a 
compliance certification with the semiannual report required by Sec.  
63.807(c).
    (i) The compliance certification shall state that low-formaldehyde 
coatings and contact adhesives, as applicable, have been used each day 
in the semiannual reporting period or should otherwise identify the 
periods of noncompliance and the reasons for noncompliance. An affected 
source is in violation of the standard whenever a coating or contact 
adhesive that is not low-formaldehyde, as demonstrated by records or by 
a sample of the coating or contact adhesive, is used. Use of a 
noncompliant coating or contact adhesive is a separate violation for 
each day the noncompliant coating or contact adhesive is used.
    (ii) The compliance certification shall be signed by a responsible 
official of the company that owns or operates the affected source.

0
15. Section 63.805 is amended by redesignating paragraph (a) as 
paragraph (a)(1) and adding paragraph (a)(2) to read as follows:

[[Page 72074]]

Sec.  63.805  Performance test methods.

    (a)(1) * * *
    (2) Performance tests shall be conducted under such conditions as 
the Administrator specifies to the owner or operator based on 
representative performance of the affected source for the period being 
tested. Upon request, the owner or operator shall make available to the 
Administrator such records as may be necessary to determine the 
conditions of performance tests.
* * * * *

0
16. Section 63.806 is amended by removing and reserving paragraph 
(e)(4) and adding paragraphs (b)(4) and (k) to read as follows:


Sec.  63.806  Recordkeeping requirements.

* * * * *
    (b) * * *
    (4) The formaldehyde content, in lb/gal, as applied, of each 
finishing material and contact adhesive subject to the emission limits 
in Sec.  63.802(a)(4) or (b)(4) and chooses to comply with the 400 lb/
yr limits on formaldehyde in Sec.  63.802(a)(4) (i) or (b)(4)(i).
* * * * *
    (k) The owner or operator of an affected source subject to this 
subpart shall maintain records of the occurrence and duration of each 
malfunction of operation (i.e., process equipment) or the air pollution 
control equipment and monitoring equipment. The owner or operator shall 
maintain records of actions taken during periods of malfunction to 
minimize emissions in accordance with Sec.  63.802(c), including 
corrective actions to restore malfunctioning process and air pollution 
control and monitoring equipment to its normal or usual manner of 
operation.

0
17. Section 63.807 is amended by revising paragraphs (c) introductory 
text and (c)(3) and the first sentence in paragraph (d) to read as 
follows:


Sec.  63.807  Reporting requirements.

* * * * *
    (c) The owner or operator of an affected source demonstrating 
compliance in accordance with Sec.  63.804(g)(1), (2), (3), (5), (7), 
(8), (h)(1), and (h)(3) shall submit a report covering the previous 6 
months of wood furniture manufacturing operations.
* * * * *
    (3) The semiannual reports shall include the information required 
by Sec.  63.804(g) (1), (2), (3), (5), (7), (8), (h)(1), and (h)(3), a 
statement of whether the affected source was in compliance or 
noncompliance, and, if the affected source was in noncompliance, the 
measures taken to bring the affected source into compliance. If there 
was a malfunction during the reporting period, the report shall also 
include the number, duration and a brief description for each type of 
malfunction which occurred during the reporting period and which caused 
or may have caused any applicable emission limitation to be exceeded. 
The report must also include a description of actions taken by an owner 
or operator during a malfunction of an affected source to minimize 
emissions in accordance with Sec.  63.802(c), including actions taken 
to correct a malfunction.
* * * * *
    (d) The owner or operator of an affected source demonstrating 
compliance in accordance with Sec.  63.804(g)(4), (6), and (h)(2) of 
this subpart shall submit the excess emissions and continuous 
monitoring system performance report and summary report required by 
Sec.  63.10(e) of subpart A. * * *
* * * * *

0
18. Table 1 to Subpart JJ of part 63 is amended by:
0
a. Removing entry 63.6(e)(1);
0
b. Adding entries 63.6(e)(1)(i), 63.6(e)(1)(ii), 63.6(e)(1)(iii);
0
c. Revising entries 63.6(e)(2) and (e)(3);
0
d. Removing entries 63.7 and 63.8;
0
e. Adding entries 63.7(a)-(d), 63.7(e)(1), 63.7(e)(2)-(e)(4), 63.8(a)-
(b), 63.8(c)(1)(i), 63.8(c)(1)(ii), 63.8(c)(1)(iii), 63.8(c)(2)-(d)(2), 
63.8(d)(3), and 63.8(e)-(g);
0
f. Removing entry 63.10(b)(2);
0
g. Adding entries 63.10(b)(2)(i), 63.10(b)(2)(ii), 63.10(b)(2)(iii), 
63.10(b)(2)(iv)-(b)(2)(v), 63.10(b)(2)(vi)-(b)(2)(xiv);
0
h. Removing entry 63.10(c);
0
i. Adding entries 63.10(c)(1)-(9), 63.10(c)(10)-(11), 63.10(c)(12)-
(c)(14), and 63.10(c)(15); and
0
j. Revising entry 63.10(d)(5) to read as follows:

  Table 1 to Subpart JJ of Part 63--General Provisions Applicability to
                               Subpart JJ
------------------------------------------------------------------------
                                    Applies to
           Reference                subpart JJ            Comment
------------------------------------------------------------------------
 
                              * * * * * * *
63.6(e)(1)(i).................  No...............  See Sec.   63.802(c)
                                                    for general duty
                                                    requirement.
63.6(e)(1)(ii)................  No.                .....................
63.6(e)(1)(iii)...............  Yes.               .....................
63.6(e)(2)....................  No...............  Section reserved.
63.6(e)(3)....................  No.                .....................
63.6(f)(1)....................  No.                .....................
63.7(a)-(d)...................  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
63.7(e)(1)....................  No...............  See Sec.
                                                    63.805(a)(1).
63.7(e)(2)-(e)(4).............  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
63.8(a)-(b)...................  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
63.8(c)(1)(i).................  No.                .....................
63.8(c)(1)(ii)................  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
63.8(c)(1)(iii)...............  No.                .....................
63.8(c)(2)-(d)(2).............  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
63.8(d)(3)....................  Yes, except for    Applies only to
                                 last sentence.     affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
63.8(e)-(g)...................  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
 

[[Page 72075]]

 
                              * * * * * * *
63.10(b)(2)(i)................  No.                .....................
63.10(b)(2)(ii)...............  No...............  See Sec.   63.806(k)
                                                    for recordkeeping of
                                                    occurrence and
                                                    duration of
                                                    malfunctions and
                                                    recordkeeping of
                                                    actions taken during
                                                    malfunctions.
63.10(b)(2)(iii)..............  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
63.10(b)(2)(iv)-(b)(2)(v).....  No.                .....................
63.10(b)(2)(vi)-(b)(2)(xiv)...  Yes..............  Applies only to
                                                    affected sources
                                                    using a control
                                                    device to comply
                                                    with the rule.
 
                              * * * * * * *
63.10(c)(1)-(9)...............  Yes.               .....................
63.10(c)(10)-(11).............  No...............  See Sec.   63.806(k)
                                                    for recordkeeping of
                                                    malfunctions.
63.10(c)(12)-(14).............  Yes.               .....................
63.10(c)(15)..................  No.                .....................
 
                              * * * * * * *
63.10(d)(5)...................  No...............  See Sec.
                                                    63.807(c)(3) for
                                                    reporting of
                                                    malfunctions.
 
                              * * * * * * *
------------------------------------------------------------------------


0
19. Table 3 to Subpart JJ of part 63 is amended by adding an entry for 
``All Finishing Operations and Contact Adhesives'' following the entry 
for ``Contact Adhesives'' to read as follows:

      Table 3 to Subpart JJ of Part 63--Summary of Emission Limits
------------------------------------------------------------------------
           Emission point              Existing source     New source
------------------------------------------------------------------------
 
                              * * * * * * *
All Finishing Operations and Contact
 Adhesives:
    (a) Achieve total free                         400               400
     formaldehyde emissions across
     all finishing operations and
     contact adhesives, lb per
     rolling 12 month period, as
     applied........................
    (b) Use coatings and contact               \f\ 1.0           \f\ 1.0
     adhesives only if they are low-
     formaldehyde coatings and
     contact adhesives..............
 
                              * * * * * * *
 
                              * * * * * * *
------------------------------------------------------------------------
\f\ The limits refer to the formaldehyde content by weight of the
  coating or contact adhesive, as specified on certified product data
  sheets.

[FR Doc. 2011-29457 Filed 11-18-11; 8:45 am]
BILLING CODE 6560-50-P


