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Code · REGISTER · 2007-11-16 · Environmental Protection Agency (EPA) · Notices

Notices. Final rule

59,061 words·~268 min read·/register/2007/11/16/07-5681

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

BILLING CODE 4510-29-P 72 221 Friday, November 16, 2007 Rules and Regulations Part III Environmental Protection Agency 40 CFR Parts 60 and 63 Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry; Standards of Performance for Equipment Leaks of VOC in Petroleum Refineries; Final Rule ENVIRONMENTAL PROTECTION AGENCY 40 CFR Parts 60 and 63 [EPA-HQ-OAR-2006-0699; FRL-8492-4] RIN 2060-AN71 Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry;
Standards of Performance for Equipment Leaks of VOC in Petroleum Refineries AGENCY: Environmental Protection Agency (EPA). ACTION: Final rule. SUMMARY: EPA is issuing final amendments to the standards of performance for equipment leaks of volatile organic compounds in the synthetic organic chemicals manufacturing industry and to the standards of performance for equipment leaks of volatile organic compounds in petroleum refineries. The amended standards for the synthetic organic chemicals manufacturing industry apply to affected facilities that are constructed, reconstructed, or modified after January 5, 1981, and on or before November 7, 2006.
The amended standards for petroleum refineries apply to affected facilities that are constructed, reconstructed, or modified after January 4, 1983, and on or before November 7, 2006. In this action, EPA is also issuing new standards of performance for equipment leaks of volatile organic compounds in the synthetic organic chemicals manufacturing industry and for equipment leaks of volatile organic compounds in petroleum refineries which apply to affected facilities that are constructed, reconstructed, or modified after November 7, 2006.
The final amendments and new standards are based on the results of our review of the existing regulations as required by section 111(b)(1)(B) of the Clean Air Act. DATES: This final rule is effective on November 16, 2007. The incorporation by reference of certain publications listed in these rules is approved by the Director of the Federal Register as of November 16, 2007. ADDRESSES: EPA has established a docket for this action under Docket ID No. EPA-HQ-OAR-2006-0699. All documents in the docket are listed in the Federal Docket Management System index at *www.regulations.gov.* Although listed in the index, some information is not publicly available, e.g., Confidential Business Information
(CBI)or other information whose disclosure is restricted by statute. Certain other material, such as copyrighted material, is not placed on the Internet and will be publicly available only in hard copy form. Publicly available docket materials are available either electronically through *www.regulations.gov* or in hard copy at the Air and Radiation Docket, EPA West Building, Room 3334, 1301 Constitution Ave., NW., Washington, DC. The Public Reading Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday, excluding legal holidays. The telephone number for the Public Reading Room is
(202)566-1744, and the telephone number for the Air and Radiation Docket is
(202)566-1742. FOR FURTHER INFORMATION CONTACT: For information concerning the final amendments and new standards, contact Ms. Karen Rackley, Coatings and Chemicals Group, Sector Policies and Programs Division, Office of Air Quality Planning and Standards (E143-01), Environmental Protection Agency, Research Triangle Park, North Carolina 27711; telephone number:
(919)541-0634; fax number:
(919)541-0246; e-mail address: *rackley.karen@epa.gov.* For information concerning compliance and enforcement of the final amendments and new standards, contact Ms. Marcia Mia, Air Compliance Branch, Compliance Assessment and Media Programs Division, Office of Compliance (MC 2223A), Environmental Protection Agency, Washington, DC 20460; telephone number:
(202)564-7042; fax number:
(202)564-0050; and e-mail address: *mia.marcia@epa.gov.* SUPPLEMENTARY INFORMATION: *Regulated Entities.* Categories and entities potentially regulated by this action include: Category NAICS code 1 Examples of potentially regulated entities Industry 324110 Petroleum refiners. Primarily 325110, 325192, 325193, and 325199 Synthetic organic chemical manufacturing industry (SOCMI) units, e.g., producers of benzene, toluene, or any other chemical listed in 40 CFR 60.489. 1 North American Industrial Classification Code. This table is not intended to be exhaustive, but rather provides a guide for readers regarding entities likely to be regulated by this action. To determine whether your facility is regulated by this action, you should examine the applicability criteria in 40 CFR 60.480, 60.590, 60.480a, and 60.590a. If you have any questions regarding the applicability of the final amendments or new standards to a particular entity, contact the people listed in the preceding FOR FURTHER INFORMATION CONTACT section. *Worldwide Web (WWW).* In addition to being available in the docket, an electronic copy of the final rule is available on the WWW through the Technology Transfer Network (TTN). Following signature, EPA will post a copy of the final rule on the TTN's policy and guidance page for newly proposed or promulgated rules at *http://www.epa.gov/ttn/oarpg.* The TTN provides information and technology exchange in various areas of air pollution control. *Judicial Review.* Under section 307(b) of the Clean Air Act (CAA), judicial review of the final rule is available only by filing a petition for review in the United States Court of Appeals for the District of Columbia Circuit by January 15, 2008. Under section 307(d)(7)(B) of the CAA, only an objection to the final rule that was raised with reasonable specificity during the period for pubic comment can be raised during judicial review. Moreover, under section 307(b)(2) of the CAA, the requirements established by this final rule may not be challenged separately in any civil or criminal proceedings brought by EPA to enforce these 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 the EPA that is 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. *Outline.* The information presented in this preamble is organized as follows: I. Background Information A. What is the statutory authority for the final amendments and new standards? B. What are the current equipment leak NSPS? C. How were the final amendments developed? II. Summary of the Final Amendments, New Standards, and Changes Since Proposal A. What are the final amendments to 40 CFR part 60, subpart VV? B. What are the final amendments to 40 CFR part 60, subpart GGG? C. What are the requirements of 40 CFR part 60, subpart VVa? D. What are the requirements of 40 CFR part 60, subpart GGGa? III. Rationale for Changes Since Proposal A. How did EPA develop new standards for 40 CFR part 60, subparts VVa and GGGa? B. How did EPA develop the new compliance requirements in 40 CFR part 60, subparts VVa and GGGa? C. How did EPA develop the final amendments to 40 CFR part 60, subparts VV and GGG? IV. Summary of Comments and Responses A. Applicability B. Standards C. Test Methods and Procedures D. Recordkeeping and Reporting E. Burden Estimates V. Summary of Cost, Environmental, Energy, and Economic Impacts A. What are the impacts for SOCMI process units? B. What are the impacts for petroleum refining process units? C. What are the economic impacts? VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review B. Paperwork Reduction Act C. Regulatory Flexibility Act D. Unfunded Mandates Reform Act E. Executive Order 13132: Federalism F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use I. National Technology Transfer and Advancement Act J. Executive Order 12898: Federal Actions To Address Environmental Justice in Minority Populations and Low-Income Populations K. Congressional Review Act I. Background Information A. What is the statutory authority for the final amendments and new standards? New source performance standards
(NSPS)implement CAA section 111 and are issued for categories of sources which cause, or contribute significantly to, air pollution which may reasonably be anticipated to endanger public health or welfare. The primary purpose of the NSPS are to attain and maintain ambient air quality by ensuring that the best demonstrated emission control technologies are installed as the industrial infrastructure is modernized. Since 1970, the NSPS have been successful in achieving long-term emissions reductions at numerous industries by assuring cost-effective controls are installed on new, reconstructed, or modified sources. Section 111 of the CAA requires that NSPS reflect the application of the best system of emission reductions which (taking into consideration the cost of achieving such emission reductions, any non-air quality health and environmental impact and energy requirements) the Administrator determines has been adequately demonstrated. This level of control is commonly referred to as best demonstrated technology (BDT). Section 111(b)(1)(B) of the CAA requires that EPA periodically review and revise the standards of performance, as necessary, to reflect improvements in methods for reducing emissions. Based on the results of the review required by CAA section 111(b)(1)(B), we proposed amendments to the NSPS for equipment leaks of volatile organic compounds
(VOC)in the synthetic organic chemicals manufacturing industry (SOCMI) and the petroleum refining industry on November 7, 2006 (71 FR 65302). In this action, EPA is finalizing amendments to 40 CFR part 60, subparts VV and GGG and issuing new standards of performance in 40 CFR part 60, subparts VVa and GGGa. B. What are the current equipment leak NSPS? New source performance standards for equipment leaks of VOC have been developed for four source categories. Subpart VV of 40 CFR part 60 applies to SOCMI process units. Subpart DDD of 40 CFR part 60, Standards of Performance for Volatile Organic Compound
(VOC)Emissions from the Polymer Manufacturing Industry, applies to polypropylene, polyethylene, polystyrene, and poly (ethylene terephthalate) process units. Subpart GGG of 40 CFR part 60 applies to petroleum refining process units. Subpart KKK of 40 CFR part 60 applies to onshore natural gas processing plants. Subparts DDD, GGG, and KKK of 40 CFR part 60 cross-reference the requirements in subpart VV, and they specify source category-specific definitions and exceptions to the requirements in subpart VV. The NSPS for equipment leaks of VOC in the SOCMI (40 CFR part 60, subpart VV) were originally promulgated on October 18, 1983 (48 FR 48335) and apply to all equipment, as defined by the rule, within a process unit in the SOCMI that commenced construction, reconstruction, or modification after January 5, 1981. For the purpose of subpart VV, the SOCMI consists of process units producing any of the chemicals listed in 40 CFR 60.489 of subpart VV. The standards apply to pumps, compressors, pressure relief devices, sampling connection systems, open-ended valves or lines (OEL), valves, and flanges or other connectors in VOC service. Depending on the type of equipment, the standards require either periodic monitoring for and repair of leaks, the use of specified equipment to minimize leaks, or specified work practices. Monitoring for leaks must be conducted using EPA Method 21 in appendix A-7 to 40 CFR part 60 or other approved equivalent monitoring techniques. Owners and operators must keep records that identify the equipment that is subject to the standards, identify equipment that is leaking, and document attempts at repair. Information related to leaks and repair attempts also must be included in semiannual reports. This subpart has been amended several times between 1984 and 2000. Typically, these amendments added definitions, exemptions, alternative compliance options, and clarifications. For example, one amendment provides an option to comply with the equipment leak provisions in the Consolidated Federal Air Rule
(CAR)(40 CFR part 65, subpart F). None of these amendments increased the intended performance level of the standards. The NSPS for equipment leaks of VOC in petroleum refineries (40 CFR part 60, subpart GGG) apply to petroleum refining process units for which construction, reconstruction, or modification commenced after January 4, 1983. Those standards were originally promulgated on May 30, 1984 (49 FR 22606), and have been amended only once since the original promulgation (65 FR 61768, October 17, 2000) to update the American Society for Testing and Materials
(ASTM)test method references. C. How were the final amendments developed? We proposed amendments to 40 CFR part 60, subpart VV and 40 CFR part 60, subpart GGG on November 7, 2006 (71 FR 65302). The preamble for the proposed amendments described the rationale for the proposed amendments. Public comments were solicited at the time of proposal. The public comment period lasted from November 7, 2006, to February 8, 2007. We offered at proposal the opportunity for a public hearing concerning the proposed amendments, but no hearing was requested. We also published a Notice of Additional Data Availability
(NODA)on July 9, 2007 (72 FR 37157). The NODA provided additional information regarding OEL. Public comments were solicited at the time of publication, and the public comment period lasted from July 9, 2007, to August 8, 2007. We received a total of 28 public comment letters during the comment periods, 23 on the proposed amendments and five on the NODA. Comments were submitted by industry trade associations and consultants, chemical companies and petroleum refineries, state regulatory agencies, local government agencies, and environmental groups. These final amendments reflect our consideration of all of the comments received during the comment periods. Major public comments on the proposed amendments, along with our responses to those comments, are summarized in this preamble. II. Summary of the Final Amendments, New Standards, and Changes Since Proposal In response to public comments, we have revised the scope and applicability of the proposed amendments to the standards of performance for equipment leaks of VOC for SOCMI (40 CFR part 60, subpart VV) and petroleum refineries (40 CFR part 60, subpart GGG). As proposed, all of the amendments to subparts VV and GGG, except the change in leak definitions for pumps and valves, applied to affected facilities in these industries that commenced construction, reconstruction, or modification after January 5, 1981, (SOCMI) or January 4, 1983, (petroleum refineries). In addition, all of the proposed amendments, except the leak definition change, applied to affected facilities under all other NSPS that cross-reference subpart VV (i.e., 40 CFR part 60, subparts DDD and KKK). Based on the public comments, we decided to include only clarifications, changes that reduce burden, and additional compliance options in the final amendments to 40 CFR part 60, subparts VV and GGG. The final amendments to both subparts also limit which SOCMI and petroleum refinery affected sources are subject to the existing subparts. Specifically, the existing subparts only apply to those existing affected sources that commenced construction, reconstruction, or modification after January 5, 1981, (SOCMI) or January 4, 1983, (petroleum refineries) and on or before November 7, 2006. The final amendments to subpart VV also apply to affected sources under NSPS that cross-reference subpart VV (i.e., 40 CFR part 60, subparts DDD and KKK). In addition to amending 40 CFR part 60, subparts VV and GGG, we also decided to develop new standards in new subparts VVa and GGGa of 40 CFR part 60 that apply only to SOCMI and petroleum refinery affected sources, respectively, that commence construction, reconstruction, or modification after November 7, 2006. These new standards parallel the standards in the amended subparts VV and GGG, but they also include different standards for pumps in light liquid service and valves in gas/vapor or light liquid service (i.e., lower leak definitions than in subparts VV and GGG), and they include additional recordkeeping and instrument calibration requirements. Furthermore, the new standards in 40 CFR part 60, subpart VVa include monitoring and repair requirements for connectors. The new standards do not apply to affected sources under 40 CFR part 60, subparts DDD or KKK because we have not amended those subparts to reference the requirements in subpart VVa and we have not completed an analysis to determine if the new standards are BDT for subparts DDD and KKK. A. What are the final amendments to 40 CFR part 60, subpart VV? The final amendments to 40 CFR part 60, subpart VV provide additional compliance options, clarify ambiguous provisions, and make technical corrections. These changes are summarized in Table 1 in section III.C of this preamble. 1. Applicability The owner or operator of an affected facility subject to 40 CFR part 60, subpart VV may choose to comply with the requirements in new 40 CFR part 60, subpart VVa instead of the requirements in subpart VV. 2. Standards The final amendments simplify the compliance requirements for pumps. When indications of liquids dripping are observed during weekly inspections, 40 CFR part 60, subpart VV requires repair of the leak following the same procedures as if the leak were detected by monitoring. The final amendment in 40 CFR 60.482-2(b)(2) allows the owner or operator to either repair the leak by eliminating the indications of liquids dripping or determine if it is leaking based on the instrument reading obtained by monitoring the pump in accordance with EPA Method 21 (40 CFR part 60, appendix A-7) or other approved equivalent monitoring techniques. This amendment will focus the leak detection and repair
(LDAR)program on finding and repairing VOC leaks. The final amendments also include an alternative compliance option that allows less frequent monitoring for pumps and valves in batch process units that operate part-time during the year. This alternative applies to currently required monthly, quarterly, and semiannual monitoring intervals; less frequent monitoring is not allowed for monitoring that is currently required on an annual or less frequent basis. For example, pumps in a process unit that operate 5,250 hours per year (about 60 percent of full-time operation) may be monitored every other month rather than monthly. This alternative will ensure that monitoring occurs consistently while the process unit is operating. The alternative monitoring schedule for batch processes was developed as part of the development of the hazardous organic national emission standards for hazardous air pollutants (NESHAP)
(HON)(57 FR 62680). This alternative has been determined to be comparable to the provisions for continuous processes. As the time in use increases, the monitoring frequencies are identical for both batch and continuous processes. In response to public comments, we have revised the proposed clarification to the initial monitoring requirements for pumps and valves (that all pumps and valves be monitored within the first month of operation after installation). The final amendments require the owner or operator to monitor all pumps on a monthly basis regardless of whether the pump is new or existing. The owner or operator of a new valve must monitor the valve for the first time within 30 days after being placed into service to ensure proper installation. Any valve for which a leak is not detected for 2 successive months may be monitored the first month of every quarter, beginning with the next quarter, until a leak is detected. As an alternative to monitoring a new valve within 30 days, if the valves in the process unit are monitored under the alternative standards for valves that allow skip period leak detection and repair in 40 CFR 60.483-2, the owner or operator must count the new valve as leaking when calculating the percentage of valves leaking. If less than 2.0 percent of the valves are leaking for that process unit, the valve must be monitored for the first time during the next scheduled monitoring event for existing valves in the process unit or within 90 days, whichever comes first. As an alternative to monitoring all of the valves in the first month of a quarter, an owner or operator may elect to subdivide the process unit into two or three subgroups of valves and monitor each subgroup in a different month during the quarter, provided each subgroup is monitored every 3 months. The owner or operator must keep records of the valves assigned to each subgroup. The clarifications to the requirements for sampling connection systems in 40 CFR 60.482-5 have been revised since proposal to add additional destinations for purged process fluid. All containers must be covered when not being filled or emptied. The amendments also clarify what materials must be captured and returned to the process during sampling. In response to comments, we have revised the proposed option for delay of repair in 40 CFR 60.482-9. The proposed amendment would have allowed the owner or operator to discontinue monitoring for equipment on delay-of-repair. We have not included this in the final amendments and new standards because a leak may worsen while on delay-of-repair and require a more immediate shutdown. Therefore, all equipment on delay-of-repair must be monitored as scheduled. The option to consider equipment to be repaired if two consecutive readings are below the leak definition was not removed. If two consecutive readings are below the applicable leak definition, the owner or operator may remove the equipment from delay-of-repair. 3. Definitions Several amendments clarify the original intent of the definitions in 40 CFR part 60, subpart VV. These definitions include “connector,” “process unit,” and “sampling connection system.” In addition, definitions of “closed-loop system,” “closed-purge system,” “storage vessel,” and “transfer rack” were added to further clarify existing definitions. The definition of “process unit” is discussed in further detail in section IV.A.3 of this preamble. The rationale for revising and adding the other definitions is included in Docket ID No. EPA-HQ-OAR-2006-0699. 4. Miscellaneous Corrections Finally, the final amendments include a few technical corrections to fix references and other miscellaneous errors in 40 CFR part 60, subpart VV. No changes have been made to the proposed corrections, and a number of additional corrections are included in the final amendments. The technical corrections are identified in section III.A.3 of the preamble to the proposed amendments (71 FR 65307-65308, November 7, 2006) as well as Table 1 of this preamble. B. What are the final amendments to 40 CFR part 60, subpart GGG? A few minor changes have been made to the 40 CFR part 60, subpart GGG amendments since proposal. The heading and 40 CFR 60.590(b) were revised to clarify that the subpart applies to sources that commence construction, reconstruction, or modification on or before November 7, 2006, and 40 CFR 60.590(d) was revised to exclude facilities subject to 40 CFR part 60, subpart VVa. Proposed revisions that remain in the final amendments to subpart GGG include a definition of “asphalt” and an exemption from the requirements for OEL in 40 CFR 60.482-6(a) through
(c)for OEL containing asphalt. The definition of “process unit” is comparable to the definition in 40 CFR part 60, subpart VV. The final amendments also include a few technical corrections to fix references and other miscellaneous errors in 40 CFR part 60, subpart GGG. These changes are identified in section III.B.5 of the preamble to the proposed amendments (71 FR 65309, November 7, 2006). No changes have been made to these corrections since proposal. C. What are the requirements of 40 CFR part 60, subpart VVa? 40 CFR part 60, subpart VVa applies to affected facilities in the SOCMI that are constructed, reconstructed, or modified after November 7, 2006. This new subpart includes all the requirements of 40 CFR part 60, subpart VV, as amended, along with new provisions. The owner or operator of an affected facility subject to subpart VVa may elect to comply with the CAR at 40 CFR part 65, subpart F, or the HON at 40 CFR part 63, subpart H, instead of the requirements in subpart VVa, provided they still comply with the requirements in 40 CFR 60.482-6a. 40 CFR part 60, subpart VVa includes lower leak definitions for pumps and valves than 40 CFR part 60, subpart VV. Under subpart VVa, the leak definition for pumps in light liquid service is 2,000 parts per million
(ppm)(5,000 ppm for pumps handling polymerizing monomers) instead of 10,000 ppm. The leak definition for valves in gas/vapor service or light liquid service is 500 ppm instead of 10,000 ppm. Rationale for this new standard was provided in section III.A.1 of the preamble to the proposed amendments and is discussed further in section III.A.1 of this preamble. 40 CFR part 60, subpart VVa also includes requirements for monitoring connectors. The owner or operator is required to monitor connectors at a leak definition of 500 ppm and at a frequency that is based on the percentage of connectors found to be leaking. The rationale supporting the LDAR provisions for connectors is located in section III.A.2 of this preamble. 40 CFR part 60, subpart VVa includes additional recordkeeping requirements and quality assurance measures. Records must identify the monitoring instrument, operator, equipment, the date, and maximum instrument reading. A calibration drift assessment is required at the end of each day of monitoring and records of monitoring instrument calibrations are required. The calibration drift assessment requirements proposed for 40 CFR part 60, subpart VV were revised based on public comments. The requirements in the new standards include a requirement to remonitor equipment if the drift assessment shows positive drift. The requirements in the new standards provide for a less stringent remonitoring effort for drift assessments showing negative drift. D. What are the requirements of 40 CFR part 60, subpart GGGa? 40 CFR part 60, subpart GGGa applies to affected facilities at petroleum refineries that are constructed, reconstructed, or modified after November 7, 2006. New subpart GGGa includes the requirements in 40 CFR part 60, subpart GGG, as amended. Affected facilities must comply with the requirements in new subpart VVa of 40 CFR part 60, except for the monitoring requirements applicable to connectors. III. Rationale for Changes Since Proposal A. How did EPA develop new standards for 40 CFR part 60, subparts VVa and GGGa? Five sources of information were considered in reviewing the appropriateness of the current NSPS requirements for new sources:
(1)Applicable Federal regulations;
(2)applicable state and local regulations;
(3)data from National Enforcement Investigations Center
(NEIC)inspections;
(4)emissions data provided by industry representatives; and
(5)petroleum refinery consent decrees. (A significant number of refineries, representing about 77 percent of the national refining capacity, are subject to consent decrees that limit the emissions from 40 CFR part 60, subpart GGG process units.) Once we identified leak definitions for various equipment types, we evaluated these leak definitions in conjunction with technical feasibility, costs, and emission reductions to determine BDT for each type of equipment. The cost methodology incorporates the calculation of annualized costs and emission reductions associated with each of the options presented. Cost-effectiveness is the annualized cost of control divided by the annual emission reductions achieved. For NSPS regulations, the standard metric for expressing costs and emission reductions is the impact on all affected facilities accumulated over the first 5 years of the regulation. Details of the calculations can be found in the public docket (EPA-OAR-HQ-2006-0699). Our BDT determinations took all relevant factors into account, including cost considerations. For each of the new standards, the predominant method used to reduce emissions from equipment leaks is the work practice of an LDAR program that includes periodic monitoring of equipment using EPA Method 21. This method has been used for more than 20 years to detect leaks and is currently the most widely-used test method. However, other approved methods may be used to detect leaks. We also considered an equipment standard requiring installation of “leakless” equipment. “Leakless” equipment, such as diaphragm valves, is less likely to leak than standard equipment, but leaks may still develop. Therefore, monitoring or other type of observation is appropriate to ensure that leaks are caught if they develop. In addition, these types of equipment may not be suitable for all possible process operating temperatures, pressures, and fluid types. We could not identify any new “leakless” technologies that could be applied in all applications. Therefore, requiring “leakless” equipment is not technically feasible and this option was not considered to be BDT for SOCMI or petroleum refining sources. We note that 40 CFR part 60, subpart VV does include provisions for equipment designed for no detectable emissions, so owners or operators that do replace existing equipment with “leakless” equipment have options for compliance. 1. Leak Definitions for Pumps and Valves We previously demonstrated that leak definitions of 2,000 ppm for pumps and 500 ppm for valves are BDT in the preamble to the proposed amendments to 40 CFR part 60, subparts VV and GGG (November 7, 2006, 71 FR 65305, with additional discussion at 71 FR 65308). Since proposal, the cost-effectiveness values for this new requirement have changed slightly based on changes to the assumptions used to develop emission estimates; section V of this preamble includes details on the specific changes. For SOCMI, the estimated emission reductions are 94 tons of VOC per year at a cost savings of $380/ton. For petroleum refineries, the estimated emission reductions are 13 tons of VOC per year at a cost of $1,600/ton. The cost to achieve these emission reductions is still considered to be reasonable; therefore, we maintain our original conclusion that EPA Method 21 monitoring of pumps and valves and repair of leaks above 2,000 ppm for pumps and 500 ppm for valves is BDT. We have also evaluated the cost-effectiveness of lowering the leak definitions even further for valves because there are some state rules and petroleum refinery consent decrees at lower levels. The results of that analysis show that an LDAR program for valves at a leak definition lower than 500 ppm is not cost-effective. The analysis shows emission reductions of 26 tons of additional VOC per year at a cost-effectiveness of $5,700/ton for SOCMI and emission reductions of 8 tons of additional VOC per year at a cost-effectiveness of $16,000/ton for refineries. The additional VOC emission reductions at a leak definition lower than 500 ppm is not cost-effective. The results of the impacts analysis is provided in the docket (Docket ID No. EPA-HQ-OAR-2006-0699). We decided not to consider a lower leak definition for pumps because we do not have evidence that it will achieve significant emission reductions at reasonable cost and because such a requirement would impose an unwarranted increase in the compliance burden. No other Federal or state rules require repair of pumps with leaks below 2,000 ppm, and concerns have been expressed in the past that repair of pumps with lower concentrations could result in significant and costly maintenance. We also cannot estimate the emission reductions because we are unsure how effective repairs will be for pumps with low leak concentrations. In addition, many facilities that will be subject to the new standards have other process units that are subject to other standards. Including a leak definition in the new standards that differs from the leak definitions in all other rules would make compliance more challenging at such facilities and unnecessarily increase the potential for inadvertent errors. We also did not consider increasing the number of times per year that valves and pumps must be monitored. Valves and pumps are already subject to monthly monitoring. The cost to monitor more frequently would outweigh the possible emission reductions. Additionally, pumps are subject to weekly inspections for indications of liquids dripping. Therefore, the monitoring frequency was not changed and is still considered BDT. 2. Other New Standards in 40 CFR Part 60, Subpart VVa *Connector Monitoring.* The current NSPS in 40 CFR part 60, subpart VV limits VOC emissions from connectors by specifying that if a potential leak is found by visual, audible, olfactory, or any other detection method, the owner or operator must eliminate the indications of the potential leak or monitor the connector to determine whether the potential leak is leaking VOC greater than 10,000 ppm. If the potential leak is actually a leak, it must be repaired. When the current NSPS were promulgated, we concluded that this procedure would reduce emissions by correcting major leaks. After consideration of current operating practices, we concluded that repairing connector leaks as they are discovered is still the predominant method for reduction of VOC from connectors. However, during our review of the current requirements, we found a number of Federal and state regulations that require additional efforts to reduce emissions, including regular monitoring and repair. Therefore, we evaluated options to achieve further emission reductions from connectors. Federal rules in which connector monitoring and repair of leaks above 500 ppm is required include the National Emission Standards for Organic Hazardous Air Pollutants for Equipment Leaks
(HON)in 40 CFR part 63, subpart H, the National Emission Standards for Equipment Leaks—Control Level 2 Standards (Generic MACT) in 40 CFR part 63, subpart UU, the National Emission Standards for Hazardous Air Pollutants for Source Categories: Generic Maximum Achievable Control Technology Standards (Ethylene NESHAP) in 40 CFR part 63, subpart YY, and the CAR. The National Emission Standards for Hazardous Air Pollutants: Miscellaneous Organic Chemical Manufacturing
(MON)in 40 CFR part 63, subpart FFFF also includes connector monitoring and repair of leaks above 500 ppm for new sources. In addition, the National Emission Standards for Hazardous Air Pollutants From Petroleum Refineries (Refinery NESHAP) in 40 CFR part 63, subpart CC provides a higher maximum value for percent of leaking valves under which an owner or operator may use the skip period provisions if connector monitoring is included in the LDAR program. Based on this information, we felt that additional VOC control could be achieved by requiring connector monitoring and repair, but we needed additional information to determine whether connector monitoring is BDT. As a result, we requested comment on whether we should require periodic monitoring and repair of connectors to ensure that any leaks are corrected more quickly. Upon consideration and review of the public comments, we evaluated whether the connector monitoring and repair provisions included in the Generic MACT are BDT for 40 CFR part 60, subparts VVa and GGGa. The Generic MACT provisions include a leak definition of 500 ppm and a monitoring frequency based on the number of connectors found to be leaking during the initial monitoring campaign. For SOCMI, the estimated emission reductions achieved by connector monitoring and repair of leaks above 500 ppm are 230 tons of VOC per year at a cost of $2,500/ton. For petroleum refineries, the estimated emission reductions are 92 tons of VOC per year at a cost of $20,000/ton. The cost to achieve these emission reductions is considered to be reasonable for SOCMI sources but is not reasonable for petroleum refineries. Based on these impacts and consideration of current operating practices, we concluded that BDT for connectors at SOCMI sources is monitoring using EPA Method 21 or another approved alternative method at a frequency based on the number of connectors found leaking during initial monitoring and repair of leaks above 500 ppm. We concluded that BDT for connectors at petroleum refineries is equivalent to the current 40 CFR part 60, subpart GGG requirements. Therefore, we are promulgating connector monitoring and repair standards consistent with this determination for SOCMI sources subject to 40 CFR part 60, subpart VVa that will not apply to petroleum refinery sources subject to 40 CFR part 60, subpart GGGa. B. How did EPA develop the new compliance requirements in 40 CFR part 60, subparts VVa and GGGa? The recordkeeping requirements in the final amendments and new standards are authorized by section 114 of the CAA. Section 114 of the CAA allows EPA to require one-time, periodic, or continuous records for the purpose of determining if the owner or operator is in compliance with the standard. The recordkeeping requirements in the final amendments are the minimum necessary for affected facilities to demonstrate compliance and for EPA to enforce the rule. The recordkeeping requirements in the new standards include a few requirements in addition to the requirements in the final amendments. Most of these requirements are associated with new monitoring and repair requirements; other additional requirements are minimal and are necessary for EPA to enforce the rule. Further rationale for the new requirements is available below and in section IV.D of this preamble. We have made significant changes to the proposed recordkeeping requirements as a result of the changes made to the scope and applicability of the standards. Because the final amendments to 40 CFR part 60, subparts VV and GGG include only clarifications to existing requirements, burden reducing provisions, and new compliance options, no changes or additions to the recordkeeping requirements in subpart VV or GGG are needed to document and/or enforce these amendments. Sources subject to the new standards in 40 CFR part 60, subpart VVa are required to keep records of the same information required by 40 CFR part 60, subpart VV and certain additional information described below. Sources subject to 40 CFR part 60, subpart GGGa must comply with the requirements in subpart VVa except for the monitoring requirements applicable to connectors (and the associated recordkeeping requirements). Facilities subject to 40 CFR part 60, subparts DDD, GGG, or KKK are excluded from the requirement to comply with the recordkeeping provisions of subpart VVa because these subparts are not being amended to reference the new standards in subpart VVa. The new recordkeeping provisions in 40 CFR part 60, subpart VVa require general identifying information for each monitoring activity required by the rule. As explained in the preamble to the proposed amendments (71 FR 65308, November 7, 2006), many facilities already record this information. This information requirement is consistent with other equipment leak standards and is needed by enforcement representatives to determine if the facility is complying with the standards. Specifically, EPA found that the results of the LDAR review demonstrated that the current requirements are not sufficient to verify that all monitoring requirements have been performed. For example, EPA enforcement initiatives have found missed monitoring (monitoring at an inappropriate interval, monitoring late, or not monitoring), understated leak rates, leaks not found or repaired, and monitoring records indicating that more equipment was monitored than physically possible given the time needed to meet EPA Method 21 requirements, among other issues. Since we cannot physically inspect every facility on the schedule required by the LDAR program, these additional records will provide safeguards that the program is being implemented as intended. Other new recordkeeping requirements include specific information that is necessary to demonstrate compliance with the new monitoring provisions for connectors and pumps in light liquid service (weekly visual inspections for indications of dripping liquids). Records are also required to demonstrate compliance with the requirement for a calibration drift assessment at the end of each day and comparison of the results of the assessment with the most recent calibration results. We eliminated the proposed requirement to keep records of information on bypass lines because the new subpart does not include the requirement to monitor bypass lines. In addition, records of information related to the proposed initial monitoring requirement for pumps and valves added to a process unit are not required because this monitoring requirement was revised since proposal, making additional records unnecessary. We have reviewed the recordkeeping requirements and believe that these are the minimum needed to ensure compliance and that the requirements do not impose excessive costs. The costs of the recordkeeping requirements for 40 CFR part 60, subpart VVa, including the time required to enter and store additional information, are included in the information collection request
(ICR)(see section V.B of this preamble). C. How did EPA develop the final amendments to 40 CFR part 60, subparts VV and GGG? The amendments to 40 CFR part 60, subpart VV are listed in Table 1 of this preamble. Most of the technical corrections for 40 CFR part 60, subparts VV and GGG were discussed in the preamble to the proposed amendments (71 FR 65302, November 7, 2006). Other technical corrections and amendments are the result of public comments, and these are discussed in detail in the responses to the applicable comments. For each amendment that is more significant than an editorial or grammatical correction, Table 1 to this preamble includes a reference to the rule language and a reference to the location of the detailed explanation. Table 1.—Summary of Final Amendments to 40 CFR Part 60, Subpart VV and Rationale for Clarifications, Additional Compliance Options, and Technical Corrections Citation Explanation or location of explanation 1 Amendment Heading Revised to clarify applicability of subpart. 60.480(b) Revised to identify applicability to affected facilities that were constructed, reconstructed, or modified after January 5, 1981 and on or before November 7, 2006. 60.480(d)(2) Clarified that design capacity refers to a chemical listed in 40 CFR 60.489. 60.480(d)(2)-(5) Revised reference to nonexistent 40 CFR 60.482 to refer to 40 CFR 60.482-1 through 60.482-10. 60.480(e)(1) Renumbered paragraph (e)(1) as (e)(1)(i) and paragraph (e)(2) as (e)(1)(ii); changed reference to paragraph (e)(2) to (e)(1)(ii). 60.480(e)(2) Added paragraph that allows owners or operators to comply with 40 CFR part 60, subpart VVa as an alternative to 40 CFR part 60, subpart VV. 60.481 71 FR 65308, column 3 Corrected editorial errors in definition of “Capital expenditures.” 60.481 71 FR 65307, column 2 and section 5.4.3 of RTC Added new definition for “Closed-loop system.” 60.481 71 FR 65307, column 2 and section 5.4.3 of RTC Added new definition for “Closed-purge system.” 60.481 Section 5.3.2 of RTC Revised definition of “Connector.” 60.481 Added missing word “the” before the word “atmosphere” and removed the word “rapid” Revised definition of “First attempt at repair.” 60.481 71 FR 65308, column 3 and updated the mailing address for ASME Revised definition of “Hard piping.” 60.481 Section IV.A.2 of this preamble Revised definition of “Process unit.” 60.481 Section 5.9.3 of RTC Revised definition of “Process unit shutdown.” 60.481 71 FR 65308, column 1 Revised definition of “Repaired.” 60.481 Section 3.2.1 of RTC Added new definition for “Storage vessel.” 60.481 71 FR 65307, column 3 Added new definition for “Transfer rack.” 60.482-1(e) Section 3.3 of RTC Added paragraph
(e)to address equipment in service less than 300 hours per year. 60.482-1(f) 71 FR 65304, column 3 and sections 5.6.1 and 5.6.2 of RTC Added paragraph
(f)that allows less frequent monitoring of pumps and valves on batch process units that operate less than 365 days per year. 60.482-1(g) Section IV.A.2 of this preamble Added paragraph that clarifies inclusion of shared tanks in a process unit subject to this subpart. 60.482-2(a)(1) 71 FR 65307, column 1, and section IV.B.1 of this preamble Added clarification for pumps that begin operation in light liquid service after the initial startup date for the process unit. 60.482-2(a)(2) Added reference to 40 CFR 60.482-1(f) as an exception to the requirement for weekly visual inspections of pumps in light liquid service. 60.482-2(b)(2) 71 FR 65304, column 2, 71 FR 65306, column 1, and section 5.2.2 of RTC Added monitoring and repair requirements if weekly visual inspection of pumps in light liquid service indicates liquids dripping from pump seal. 60.482-2(c)(2) 71 FR 65307, column 1 Added examples of first attempt at repair practices for pumps in light liquid service. 60.482-2(d) Editorial correction and clarification to address renumbering of paragraphs (d)(1) through (6). 60.482-2(d)(1)(ii) Replaced first word “Equipment” with “Equipped.” 60.482-2(d)(4)(i) Renumbered paragraph (d)(4) as (d)(4)(i). 60.482-2(d)(4)(ii) 71 FR 65304, column 2, 71 FR 65306, column 1, and section 5.2.2 of RTC Added monitoring and repair requirements if weekly visual inspection of a pump equipped with dual mechanical seals indicates liquids dripping from pump seal. 60.482-2(d)(5)(i) Removed “and” from end of sentence. 60.482-2(d)(5)(iii) Added paragraph to specify how a leak is detected. 60.482-2(d)(6) 71 FR 65304, column 2 and 71 FR 65306, column 1 Revised to clarify procedure and time allowed for repair of leaks. 60.482-2(e) Revised to add “s” to the end of “no detectable emission.” 60.482-3(a) Section 5.3.5 of RTC Added reference to exemption in 40 CFR 60.482-3(j). 60.482-3(j) 71 FR 65308, column 3 Editorial clarification of section and paragraph references. 60.482-5(a) and
(b)71 FR 65307, column 2 and section 5.3.5 of RTC Rearranged paragraphs within these two paragraphs and made editorial corrections to provide clarity. 60.482-5(b)(2) 71 FR 65307, column 2, and section 5.4.3 of RTC Added provision that containers part of a closed-purge system must be covered or closed when not being filled or emptied. 60.482-5(b)(3) Section 5.4.1 of RTC Added provision that gases remaining in the tubing or other apparatus once the closed-purge system valve(s) and sample container valve(s) are closed are not required to be collected or captured. 60.482-5(b)(4)-(b)(4)(iv)(A)-(C) Rearranged paragraph numbering and made a few editorial clarifications Same as current paragraph (b)(4) except for editorial clarifications. 60.482-5(b)(4)(iv)(D) Section 5.4.2 of RTC Added provision for use of a waste management unit meeting the requirements of 40 CFR 61.348(a). 60.482-5(b)(4)(iv)(E) Section 5.4.2 of RTC Added provision for use of a device used to burn off-specification used fuel oil in accordance with 40 CFR part 279, subpart G. 60.482-6(a)(1) Section 5.3.5 of RTC Added reference to exemptions in 40 CFR 60.482-6(d) and (e). 60.482-7(a)(1) Corrected section designations Clarified current paragraph
(a)to specify that valves must be monitored monthly except as provided in 40 CFR 60.482-7(f), (g), and (h); 40 CFR 60.482-1(c) and (e); and 40 CFR 60.483-1 and 2. 60.482-7(a)(2)(i) and
(ii)71 FR 65307, column 1, and section IV.B.1 of this preamble Added clarification for valves that begin operation in light liquid service after the initial startup date for the process unit. 60.482-7(c)(1)(i) Paragraph (c)(1) redesignated as paragraph (c)(1)(i). 60.482-7(c)(1)(ii) 71 FR 65307, column 3 through 71 FR 65308, column 1, and section 5.1.2 of RTC Added paragraph to allow an owner or operator to subdivide valves in a process unit. 60.482-8(a)(2) Section 5.7 of RTC Added clarification that audio visual olfactory indications of potential leaks should be eliminated within 5 calendar days of detection. 60.482-8(d) 71 FR 65307, column 1 Revised to require that first attempt at repair of pumps and valves in heavy liquid service, pressure relief devices in light liquid or heavy liquid service, and connectors must include best practices under 40 CFR 60.482-2(c)(2) and 40 CFR 60.482-7(e). 60.482-9(a) Section 5.9.3 of RTC Clarified that for repair that occurs during a process unit shutdown, monitoring to verify that repair must occur within 15 days after startup of the process unit. 60.482-9(f) Section 5.9.3 of RTC Added new paragraph for a leaking pump or valve for which a delay in repair is allowed. 60.483-1(d) and 60.483-2(b)(5) Added reference to new 40 CFR 60.485(h) that provides more detailed explanation for calculating the percent of valves leaking. 60.483-2(a)(7) 71 FR 65307, column 1, and section IV.B.1 of this preamble Added clarification for valves that begin operation in light liquid service after the initial startup date for the process unit. 60.483-2(b)(7) Added paragraph to specify that a new valve must be monitored according to 40 CFR 60.482-7(a)(2)(i) or
(ii)before the provisions of 40 CFR 60.483-2 can be applied to the valve. 60.484(a) 71 FR 65308, column 3 Editorial correction. 60.484(b)(2) Editorial clarification. 60.485(b) Revised reference to nonexistent 40 CFR 60.482 to refer to 40 CFR 60.482-1 through 40 CFR 60.482-10. 60.485(e) 71 FR 65308 Clarified that the requirements apply to a piece of equipment. 60.485(e)(1) and
(2)Section 6.3 of RTC Clarified to specify that light liquids are organic compounds. 60.485(g)(4) Corrected exponents in equation Corrected equation for the net heating value of the gas being combusted in a flare. 60.485(g)(5) Added ASTM D6420-99 as an alternative to EPA Method 18. 60.485(h) Section 5.1.4 of RTC Added equation and clarifications for calculating percent of valves leaking. 60.486(e)(2)(ii) Section 7.4 of RTC Revised to allow an alternative to requiring a signature for the list of equipment with no detectable emissions. 60.486(e)(6) Section 3.3 of RTC Added recordkeeping requirements for equipment in VOC service less than 300 hours per year. 60.487(c)(2)(i), 60.487(c)(2)(iii), 60.487(c)(2)(iv) These changes are related to rearranging of paragraphs in 60.482-2 Corrected references to specific sections and other editorial corrections. 1 RTC refers to *Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry and Standards of Performance for Equipment Leaks of VOC in Petroleum Refineries. Background Information for Final Standards. Summary of Public Comments and Responses.* See Docket ID No. EPA-HQ-OAR-2006-0699. IV. Summary of Comments and Responses We proposed amendments to 40 CFR part 60, subpart VV and 40 CFR part 60, subpart GGG on November 7, 2006 (71 FR 65302). We published a NODA regarding OEL on July 9, 2007 (72 FR 37157). A total of 28 comment letters were received during the comment periods for the two notices. In response to these public comments, several changes were made in developing these final amendments and new standards. The major comments and our responses are summarized in the following sections. A summary of the remainder of the comments received during the comment period and responses thereto can be found in the docket for the final amendments and new standards (EPA-OAR-HQ-2006-0699). A. Applicability 1. Affected Sources Under the Current NSPS *Comment:* Numerous commenters objected to the proposed application of substantive new requirements to affected sources that became subject to 40 CFR part 60, subpart VV (or any of the subparts that reference subpart VV) on or before November 7, 2006 (hereafter referred to as “subpart VV sources”). Proposed provisions that these commenters considered to be substantive are:
(1)Changes to the definition of process unit;
(2)annual EPA Method 21 monitoring of OEL;
(3)bypass monitoring requirements for closed vent systems to control devices;
(4)calibration drift assessments;
(5)initial monitoring requirements for pumps and valves; and
(6)maintaining records of all monitoring results. The commenters argued that applying the new provisions to subpart VV sources is unlawful. To address the issue of compliance dates, several commenters recommended that EPA amend 40 CFR part 60, subpart VV so that it applies only to existing sources and develop a new 40 CFR part 60, subpart VVa that applies to affected sources that commence construction, reconstruction, or modification after November 7, 2006. In contrast, two commenters urged EPA to apply the proposed requirements to all existing SOCMI and refinery process units, and a third commenter recommended applying the proposed leak definitions for pumps and valves to all SOCMI and refinery affected sources. All of these commenters noted that existing facilities are more likely than new sources to have problems with leaks and, thus, should receive extra scrutiny. *Response:* In this action, EPA has decided to include any new requirements in a new 40 CFR part 60, subpart VVa, consistent with the commenter's suggestions. The new standards in subpart VVa include lower leak definitions for pumps (2,000 ppm) and valves (500 ppm), monitoring of connectors, a calibration drift assessment, and expanded recordkeeping requirements. The proposed requirement to monitor bypass lines has not been included in the new standards because few facilities capture and vent equipment leak emissions to a control device. Additionally, most control devices would be subject to other standards. The proposed requirement to monitor OEL has not been included in the new standards because this requirement has been determined to not be cost-effective. The cost-effectiveness for SOCMI was found to be $3,800/ton for 25 tons/yr of VOC emission reductions. For petroleum refineries, the cost-effectiveness was found to be $14,700/ton for 2.4 tons/yr of VOC emission reductions. Taking the low emission reductions into consideration, the Agency has determined that monitoring OEL is not BDT. As discussed in sections IV.B.1 and IV.A.2 of this preamble, the initial monitoring requirements for new pumps and valves and the changes to the definition of “process unit” are not new standards, and these changes are retained in the final amendments to 40 CFR part 60, subpart VV as well as being included in the new subpart VVa. Instead of referencing 40 CFR part 60, subpart VVa from 40 CFR part 60, subpart GGG, we decided to create a new 40 CFR part 60, subpart GGGa that applies to new petroleum refining affected sources. This new subpart GGGa references all of the new standards in subpart VVa except for the monitoring requirements for connectors. Reasons for the differences in standards between subparts VVa and GGGa are described elsewhere in this preamble. Sources subject to 40 CFR part 60, subpart DDD and 40 CFR part 60, subpart KKK, and sources subject to the Refinery NESHAP (40 CFR part 63, subpart CC), but not subject to 40 CFR part 60, subparts VV or GGG, are not required to comply with 40 CFR part 60, subpart VVa at this time. While we understand there is a concern that existing sources are more likely to leak, there is no provision in section 111 of the CAA that allows us to retroactively apply new standards to sources already subject to the NSPS. EPA agrees with the statements made by the commenters that relate to the application of new requirements under NSPS to existing sources. Section 111 of the CAA does state that NSPS will apply only to new, reconstructed, or modified sources after the date of proposal. The authority to regulate existing sources under section 111(d) of the CAA does not authorize EPA to regulate criteria pollutants or precursors to such pollutants. Therefore, we have not included any new requirements for existing sources in the final amendments to 40 CFR part 60, subpart VV and subpart GGG. These requirements will apply only to sources that commence construction, reconstruction, or modification after the November 7, 2006 proposal date. 2. Definition of Process Unit *Comment:* Numerous commenters expressed concern that the revised definition of process unit is inconsistent with EPA's original intent when 40 CFR part 60, subpart VV was proposed (i.e., it expands the scope), that it complicates compliance, or that it creates additional confusion. One commenter stated that under the existing definition, a component is part of a process unit based on its function, not whether it is classified as a specific type of equipment. The commenter indicated that since 1981, sources and their regulators have decided what constitutes a process unit based on what equipment serves the functions described in the definition, and this process unit may be different from process units under other rules. After reading the preamble discussion of the proposed change, one commenter expressed concern that the proposed definition inadvertently includes valves and other equipment on storage tanks. Other commenters objected to the inclusion of all feed, intermediate, and product storage vessels and transfer operations in the definition because the following discussion from the original rulemaking notice for 40 CFR part 60, subpart VV (46 FR 1139, January 5, 1981) makes it clear that EPA's original intent was to include storage in the process unit only if it is within the battery limits of the process: “A process unit is specifically defined as equipment assembled to produce one or more of the chemicals listed in proposed appendix E which can operate independently if supplied with sufficient feed or raw materials and sufficient storage facilities for the final product. A process unit includes intermediate storage or surge tanks and all fluid transport equipment connecting reaction, separation, and purification devices. All equipment within the battery limits is included. However, offsite fluid transport and storage facilities are excluded.” Several commenters described ways the proposed change could complicate compliance. For example, two commenters indicated that it would increase the difficulty of tracking equipment, process units, and applicable requirements at refineries where the storage and transfer areas are consolidated into “logistical process units” that support numerous process units, particularly when storage tanks are shared by multiple process units. One commenter added that it may also either restrict the ability of a facility to use its tanks as needed, because they will have been forced into an arbitrary association with a given unit, or create a useless recordkeeping exercise each time a tank switches contents or services a different process. To avoid immediate compliance problems for affected sources that are currently subject to 40 CFR part 60, subpart VV, a commenter requested that existing facilities be allowed 180 days after promulgation of the amendments so that they will have time to include the additional equipment in the applicable LDAR programs. Commenters also noted that the rule should clarify how to assign storage vessels and transfer racks that are shared by multiple processes; they suggested using language in the HON and the Refinery NESHAP as a guide. One commenter stated that EPA should clarify that a compressor is still a separate affected facility from the group of equipment in a refinery process unit under 40 CFR part 60, subpart GGG. *Response:* The first sentence in the definition of “process unit” in the final amendments and new standards includes the term “components” as in the existing definition rather than “equipment” as in the proposed amendments. This correction distinguishes major process vessels such as reactors and distillation units (i.e., “components”) from pieces of equipment, as defined in the rule, that are subject to the LDAR standards. In addition, the last sentence of the proposed definition has been replaced to reference “equipment” as it is defined in the applicable subpart. This change should address concerns that compressors at petroleum refineries are separate affected sources. Otherwise, there are no differences between the proposed and final definitions. The amended definition of process unit clarifies EPA's original intent and is consistent with the language provided by the commenters from the January 1981 rulemaking. It is clear from the 1981 rulemaking that all equipment that is located within the battery limits is included as part of the process unit. Likewise, there is no question that any fluid transport and storage facilities located outside of the facility property are not included. However, the 1981 language also states that a process unit includes storage tanks and all fluid transport equipment. There is no specification that these components are only included if within the battery limits. There has been confusion in the past regarding the inclusion of components outside of the battery limits but within the property of the facility. To clarify this issue, EPA previously issued formal guidance (see April 6, 1994 letter from John Rasnic to Raymond Hiley in Docket ID No. EPA-HQ--OAR-2006-0699). We agree that the determination of whether a particular tank is a storage tank, feed tank, or intermediate tank and part of a process unit must be done on a site-specific basis, dependent on how the tank functions within a particular plant site. The physical proximity of the storage tank to the other processing equipment within a process unit is not a sole determinate in establishing whether a storage tank is part of the process or not. The final amendments and new standards include provisions for assigning a shared storage tank to a specific process unit for the purposes of an LDAR program. The owner or operator will need to determine what process units the storage tank is associated with. They will then determine which process unit, or combination of units subject to the same subpart, has the greatest annual quantity of stored materials in that tank. The subpart that the process unit (or combination of units subject to the same subpart) associated with the greatest use of that tank is subject to will be the applicable subpart for the tank. The process unit, which is subject to the same subpart as the tank, with the greatest annual quantity of stored materials in that tank will be the process unit the tank is assigned to. If a tank is shared equally between two process units that are subject to 40 CFR part 60 standards, the process unit with the most stringent requirements will be the unit the tank is assigned to. For example, if the predominant use of a storage tank is to service a process unit subject to 40 CFR part 60, subpart VV, that storage tank is a part of that process unit and subject to subpart VV and the equipment must be monitored at a leak definition of 10,000 ppm. *Comment:* Two commenters wondered how the change in the definition of “process unit” would affect modification and reconstruction determinations. One commenter expressed concern that it will make it easier for an owner or operator to add new equipment to an existing process unit without triggering the threshold that would make the process unit a new affected source. The second commenter noted that including feed tanks in the definition changes the basis for the modification and reconstruction cost test and asked how changes that have already occurred should be handled in this determination. *Response:* Since the amended definition is a clarification of our original intent with respect to applicability of 40 CFR part 60, subpart VV to equipment on storage tanks and lines between storage tanks and processing equipment, there will be no impact on modification or reconstruction determinations. If a facility believes that they have performed a previous modification or reconstruction determination in error, they should contact their delegated authority. B. Standards 1. Initial Monitoring of Pumps and Valves *Comment:* Numerous commenters objected to the proposed clarifications for the initial monitoring of pumps and valves that are installed after the startup of the process unit. Several commenters stated that the proposed provisions are significant new requirements and cannot be finalized without demonstrating that they represent BDT and giving the public a chance to comment on the supporting analyses. Two commenters indicated that they are unaware of any SOCMI facilities that routinely monitor new pumps and valves within 1 month of startup, and the supporting documentation for the proposal contains no data from SOCMI sources. Several commenters requested that EPA allow at least 90 or 180 days because complying within 1 month would be burdensome, particularly for facilities that use third party contracting for monitoring; 1 month is not enough time to integrate new equipment into the monitoring program; 40 CFR 60.8 of the General Provisions provides 180 days for performance tests; and EPA has not explicitly stated how monitoring within 1 month will reduce emissions. Two commenters noted that EPA's justification of the requirement for valves is that it is needed to ensure that the valve does not leak until its first quarterly or annual monitoring, but no data were presented to show such leakage occurs or is a problem. The commenters also requested that when establishing the final requirement for initial monitoring of pumps and valves, the timeframe be given in days, not months. In contrast with the above comments, three commenters supported the proposed language or more stringent requirements. One of these commenters recommended monitoring new pumps within 1 month after installation to minimize the time period for potential leaks. A second commenter recommended that monitoring be required even sooner after installation. This commenter also questioned why a clarification of the requirements for pumps was needed because the preamble to the proposed amendments did not explain how industry currently handles new pumps and why that practice is a problem. This commenter also objected to the second sentence in 40 CFR 60.482-7(a)(2) because it means valves added to a process would not have to be monitored for 2 consecutive months before implementing skip monitoring, which is less stringent than the requirements for valves in an entirely new process. *Response:* The language pertaining to the initial monitoring of new pumps and valves was added to the final amendments and new standards to clarify how new equipment should be handled in the existing monitoring schedule, but these are not new requirements. Under the current rule, pumps are to be monitored monthly whether they are newly installed or installed prior to the process unit becoming an affected source (40 CFR 60.482-2(a)(1)). It is unclear to us how a facility is complying with the requirements for pumps if they are not being monitored monthly. Also under the current rule, all new valves are to be monitored monthly (i.e., base period) until two consecutive monthly readings are found below the applicable leak definition, at which point the valve may be monitored quarterly until a subsequent leak is found (40 CFR 60.482-7(a)). Finding of a subsequent leak reverts the monitoring back to monthly until two consecutive monthly readings below the applicable leak definition is reestablished. The current rule also has an alternative standard for valves at 40 CFR 60.483-2 which allows for longer “skip” periods based on continued performance. Again, we are uncertain that a facility is complying with the requirements for these valves if they are not monitoring new valves within the first month of operation. However, to provide operational flexibility, we have decided to add an option for newly installed valves in the final amendments and new standards. If a new valve is placed into service during a skip period, the source has the option to either monitor the valve on the monthly schedule and establish the skip period for that valve, or count the valve as a leaker in the percent leaking calculation. If the result of the percent leaking calculation remains below 2.0 percent with the new valve counted as a leaker, the owner or operator must monitor the new valve by the next scheduled skip period or within 90 days, whichever comes first. We have stated the timeframe for these requirements in days instead of months in the final amendments and new standards (30 days for pumps and either 30 or 90 days for valves, depending on whether the owner or operator is complying with the skip monitoring option). *Comment:* Three commenters requested clarification of the applicability of the proposed initial monitoring provision. Two commenters stated that the term “placed in service” clearly implies that pumps and valves should follow the initial monitoring schedule after they are initially installed. However, the term “placed in service” also implies that previously installed pumps and valves should be monitored after they have been placed back into service after maintenance, turnarounds, and repairs. Both commenters recommended changes to clarify that only newly installed or rebuilt pumps and valves should be monitored following the schedule for initial monitoring. *Response:* The initial monitoring requirement is for pumps and valves that come into VOC service through a process expansion or replacement not associated with a repair (e.g., preventative maintenance). These pumps and valves may be newly purchased or they may be equipment that was previously in service elsewhere in the process unit or facility. A newly purchased, rebuilt, repaired, or remanufactured pump or valve installed to repair a leaking pump or valve is not subject to the initial monitoring requirements. Instead, the pump or valve should be monitored to verify that there is no longer a leak (as required in the definition of “repaired”) and may be subsequently monitored according to the schedule that applied to the previously leaking pump or valve. To further clarify this issue, we have revised 40 CFR 60.482-2(a)(1), 40 CFR 60.482-7(a)(2), 40 CFR 60.483-2(b)(7), 40 CFR 60.482-2a(a)(1), 40 CFR 60.482-7a(a)(2), and 40 CFR 60.483-2a(b)(7). 2. Weekly Pump Inspections *Comment:* Numerous commenters addressed the proposed changes to the requirements for weekly inspections of pumps. One commenter supported the proposed changes, including the changes to 40 CFR 60.482-2(b)(2)(ii), which states that if a visible liquid leak is found, it may be repaired by removing the visible indication of the leak. Based on the commenter's experience, a visible leak does not always indicate a regulatory leak. Another commenter agreed with the clarification allowing facilities to determine if a leak is emitting VOC using EPA Method 21 because it will help to focus repairs on pumps leaking hydrocarbons. Three commenters did not support the proposed changes to the weekly inspection requirements. Two of these commenters disagreed with EPA's conclusion that the existing requirements are overly burdensome. According to one commenter, an operator should be required to make a showing of an undue burden; simply stating that an operator may have to conduct more inspections and repair more leaks than absolutely necessary does not demonstrate an undue burden. Two commenters noted that eliminating evidence of liquids dripping does not guarantee that the pump is no longer leaking VOC. As a result, these two commenters stated that monitoring should be required after eliminating evidence of liquids dripping to verify that repair was successful. Even if liquids dripping are not process fluid, one commenter noted that the liquid is probably either seal barrier fluids or condensate from a pump jacket used for temperature control. Regardless of the cause or fluid, one commenter noted that any liquid dripping may be a first sign of a potential maintenance problem that is best addressed as soon as possible as a matter of good operational practice as well as good environmental practice. *Response:* The aim of the LDAR program is to find and repair leaks of VOC. In some instances, the liquids found dripping from pumps are not VOC-containing liquids or otherwise would not meet the leak definition. In these cases, the pump would not be required to be repaired under the LDAR program. Adding the option to monitor allows the owner or operator to determine if the liquids dripping constitute a VOC leak, thus focusing their efforts on reducing VOC emissions. If the owner or operator chooses not to monitor the pump to determine if the liquids dripping are a VOC leak, the liquids dripping from the pump are classified as a VOC leak. The leak must be repaired by eliminating indications of liquids dripping, and the appropriate recordkeeping and reporting requirements for leaks apply to that pump. We agree with the commenter that persistent liquids dripping may indicate an operation problem that should be addressed by maintenance. If indications of liquids dripping are noted for one pump during multiple weekly inspections, we encourage facilities to ensure that the pump is operating properly. We do not agree that more frequent EPA Method 21 monitoring is necessary because pumps are currently monitored on a monthly basis and the additional monitoring would not result in substantial emission reductions. 3. Connectors *Comment:* In response to our request for comments regarding whether connector monitoring should be required, three commenters expressed support for it, and nine commenters opposed it. Supporters argued that significant reductions could be achieved at a reasonable cost. Opponents argued that the impacts analysis overstated the emission reductions and underestimated the costs. According to two of the opponents, EPA did not require connector monitoring in the MON (40 CFR part 63, subpart FFFF) because the cost was determined to be unreasonable. One commenter indicated that monitoring as proposed is not worth the effort because most connectors are adjacent to valves, and these connectors are investigated and monitored when valve monitoring results in abnormal readings. Six commenters objected to some of the assumptions we used to estimate equipment leak emissions. Some of these commenters stated that our emission reduction estimates were high because we used assumed leak frequencies and leak rates from *Protocol for Equipment Leak Emission Estimates* (EPA-453/R-95-017, November 1995) (the Protocol document) rather than actual field data. One commenter added that these data often predict emissions an order of magnitude higher than the actual emissions. Another commenter submitted a report that concluded there is no statistical difference in average leak rates between initial and subsequent monitoring at HON and MON units. This commenter also questioned the assumption that all leaking connectors would be successfully repaired after each monitoring cycle. Several commenters objected to estimating emissions based on leak rates equal to 170 percent of actual observed leak rates. One commenter noted that one refinery monitored more than 22,000 connectors and found only four leaking at greater than 1,000 ppm. Less than 0.5 percent of the connectors in process units subject to the HON at another refinery were leaking at greater than 500 ppm. Four commenters objected to various elements in the cost estimates. These commenters noted that more connectors than valves are difficult to monitor, and the cost analysis did not include the cost for the additional labor and equipment needed to monitor these connectors. One commenter stated that the unit cost for monitoring connectors should be more than $1.50 per connector because the time required to monitor a connector is longer than for other types of equipment. The increased monitoring time is the result of several factors:
(1)The distance that must be traversed per component is greater;
(2)connectors often are in hard-to-reach locations, requiring the operator to squeeze through small spaces, often having to remove the monitor backpack; and
(3)connectors tend to be spread out and are hard to find. In addition, this commenter noted that recordkeeping for connectors is more burdensome and complicated than for valves. Connectors are not typically shown on process and instrumentation drawings, making them difficult to find. The commenter stated that our estimate of 10 hours per year to complete administrative tasks and reports associated just with monitoring connectors is inadequate. Finally, the commenter noted that our cost estimates omit the cost of a data collection system or monitoring device rental; the commenter estimated these costs to be $14,500 for data collection systems and $135 per day for monitor rental. The commenter stated that even if a facility has a data collection system, additional licenses are needed to add connectors. Another commenter stated that rationale for requiring monitoring at SOCMI facilities does not apply to natural gas processing plants; thus, this commenter requested that an impact analysis be performed to address natural gas processing plants before making that industry subject to connector monitoring. In contrast with the above comments, three commenters were in favor of adding connector monitoring to the rule. One commenter suggested that connectors be monitored annually or biennially because they have significant leak potential that would go undetected without monitoring. Regardless of the uncertainties in the leak rates and emissions factors, another commenter stated that connector monitoring should be required because emissions reductions can be achieved at a relatively low cost. The third commenter supported a requirement to monitor connectors at SOCMI sources because it is technically feasible, our impacts analysis shows it is economically feasible, and it would achieve greater reductions than the proposed amendments for pumps and valves. According to this commenter, more accurate emissions data in the impacts analysis is unnecessary because emissions inventories based on monitoring data typically show emissions that are higher than the emissions estimated using engineering calculations and emission factors, which would only strengthen the argument for monitoring. This commenter also argued that refineries should be required to monitor connectors because such monitoring is technically feasible, it is already required for some refineries in Texas and California, and our impacts analysis showed connectors at refineries were more likely to leak than connectors at SOCMI sources. *Response:* Both the HON and MON regulations are based on emissions of hazardous air pollutants (HAP). NSPS are based on VOC emissions (both HAP and non-HAP). When calculating the cost-effectiveness for NSPS, there are more possible emission points and a higher percentage of regulated pollutants in the emissions because the analysis is not based only on HAP emissions. This results in a different conclusion for cost-effectiveness than in the HON or MON. The commenter's claim that we used the leak frequencies and leak rates in the Protocol document for the SOCMI analysis is incorrect. We used the same initial leak frequency (0.36 percent) as in the MON analysis. We also started with the same initial leak rate (0.000186 kilogram (kg)/hour (hr)/connector), but we then escalated it in the same manner that leak rates for pumps and valves were escalated. The leak frequencies and leak rates in the MON analysis were based on industry-supplied data for almost 165,000 connectors. We decided not to use the leak rate data in the report supplied by one of the commenters because it contains a smaller data set (29,000 connectors), and it is possible that these data are also included in the larger data set. However, our assumption that the subsequent leak frequency is the same as the initial leak frequency is consistent with the conclusion in the report cited by the commenter. The new standards in 40 CFR part 60, subpart VVa include connector monitoring because we have determined that it is cost-effective at SOCMI sources. The specific monitoring provisions are the same as in the Generic MACT. However, we have determined that connector monitoring is not cost-effective for petroleum refineries. Therefore, an exemption from the provisions for connector monitoring has been included in 40 CFR part 60, subpart GGGa. At this time, we are not reviewing 40 CFR part 60, subpart KKK; therefore, no cost analysis has been performed on connector monitoring for these sources, and natural gas processing plants subject to 40 CFR part 60, subpart KKK are not subject to the connector monitoring requirements in subpart VVa. After reviewing the comments, we revised the impacts analyses to include two of the suggested changes to the cost estimates. First, we corrected an error, which increased the estimated time for reporting and administrative activities related to connectors from 10 hr/year
(yr)to 50 hr/yr. Second, although we are not aware that monitoring contractors charge a higher fee for connectors than for other equipment, we accept the commenter's suggested fee of $2.50/connector because the $1.50/connector that we used in the original analysis may be closer to the low end of the range than the average. We disagree with the other changes suggested by the commenters. Details of the revised impacts analysis, including rationale for not making the suggested changes, are provided in the docket (Docket ID No. EPA-HQ-OAR-2006-0699). C. Test Methods and Procedures *Comment:* Two commenters supported the requirement to conduct calibration drift assessments and remonitor when the assessment shows a negative drift of more than 10 percent. Other commenters acknowledged that a drift check is a good practice or a useful quality assurance/quality control (QA/QC) tool, and one commenter agreed with EPA's rationale for requiring drift checks. On the other hand, four commenters opposed the drift check requirement, saying it is unnecessary and provides no environmental benefit. One of these commenters added that monitoring instruments such as the Foxboro TVA 1000 FID/PID or Foxboro TVA 1000B are quite stable over a 24-hour period, and EPA has not presented data or an analysis showing the need for calibration assessments. A second commenter noted that instruments typically drift in a positive direction. A third commenter argued that a drift check and re-monitoring is a futile effort to make the equipment leak monitoring method more accurate than was originally intended and than the instruments can achieve because of the following:
(1)The Foxboro TVA 1000B instrument accuracy is only ±25 percent for readings between 1 and 10,000 parts per million by volume (ppmv);
(2)a response factor as high as 10 is allowed for compounds of interest;
(3)the 10 percent drift limit is inconsistent with the level of the instrument's accuracy allowed by EPA Method 21; and
(4)leaking equipment does not emit a constant concentration. In addition, this commenter noted that drift checks conducted to satisfy consent decrees have shown only about 10 percent of instruments drift more than 10 percent every 2 to 3 weeks, and the release of calibration gases would be considered a negative environmental impact. *Response:* We are removing the requirement for a post-test calibration drift assessment from the final amendments but retaining the requirement for the new subparts. Post-test calibration drift assessments constitute good practice and are a useful QA/QC tool to validate the proper operation of the monitor during the monitoring period and, hence, the measurement data. The requirement for a calibration drift assessment is not an effort to make the method more accurate than was originally intended, but is intended as an additional quality assurance check. *Comment:* Numerous commenters considered the proposed re-monitoring requirement to be excessive. Instead of re-monitoring when instrument readings are greater than 20 percent of the applicable leak definition, two commenters suggested changing the threshold to 75 or 80 percent. Another commenter suggested using a percentage equal to 100 minus the percent of negative drift. If re-monitoring is required when negative drift occurs, two commenters stated that an owner or operator should also have the option of re-monitoring when positive drift occurs and reclassifying leakers as nonleakers. One of these commenters also suggested four additional changes:
(1)Because monitoring shifts may vary, require the assessment at the end of each day rather than the end of each monitoring shift;
(2)allow an unlimited number of calibration drift assessments per day;
(3)determine drift relative to the most recent calibration value rather than the initial value for the day; and
(4)specify that a drift assessment is not required after re-monitoring. *Response:* We agree with the suggestion to establish the retest criterion at the percentage equal to 100 minus the percent of negative drift and are modifying the requirement accordingly. We also agree with the commenter's suggestion that an owner or operator should have the option of re-monitoring when positive drift occurs and reclassifying leakers as non-leakers when the re-monitoring after recalibration due to positive drift indicates the previously identified leak is below the leak definition concentration. We agree that monitoring shifts may vary, and the new standards require the assessment at the end of each day rather than the end of each monitoring shift. The new standards allow an unlimited number of calibration drift assessments per day, and we have clarified that the drift assessment is determined relative to the most recent calibration value rather than the initial value for the day. We do not agree that a drift assessment is not required after remonitoring and have not made this change to the new standards. D. Recordkeeping and Reporting *Comment:* One commenter supported the proposed requirement to keep records of all monitoring results because more and better data can only help facility owners and operators efficiently and effectively address the problem of fugitive emissions. Another commenter stated that records of weekly pump inspections are needed to make the inspection requirement enforceable. On the other hand, many commenters either opposed or urged us to reconsider the need for one or more of the following proposed recordkeeping requirements:
(1)Results of all monitoring events;
(2)time of each monitoring event;
(3)information related to the proposed initial monitoring requirement for pumps and valves added to a process unit;
(4)results of the proposed monitoring of OEL;
(5)information related to the proposed requirement to monitor bypass lines;
(6)results of calibration drift checks; and
(7)results of weekly pump inspections. Several commenters stated that the additional recordkeeping would be burdensome and either would not improve the rule's effectiveness or is excessive relative to any minimal improvement in performance. In addition, one commenter stated that the proposal preamble did not adequately explain how we estimated the cost of the additional recordkeeping and reporting for SOCMI sources to be $369,000/yr, and another stated that the proposal preamble did not explain why the current monitoring requirements are not sufficient to verify that monitoring was performed. According to one commenter, recording the time of monitoring has hindered many programs and reduced productivity, and the additional records will generate an administrative backlog of data and create issues with storage and accessibility. Although this commenter agreed that the proposed records can be useful in verifying quality control of the LDAR program, the commenter asserted that a more cost-effective way to achieve quality control is to physically monitor the program. Furthermore, this commenter stated that by requiring the records, we are specifying the means by which a facility must implement the LDAR program rather than outlining the performance standard. Another commenter expressed concern that the additional recordkeeping exposes facilities to the potential of incurring deviations for records that serve no purpose. *Response:* As stated in section III.B of this preamble, the recordkeeping requirements in the final amendments and new standards are authorized by section 114 of the CAA. We have made significant changes to the proposed recordkeeping requirements as a result of the changes made to the scope and applicability of the standards. Because the final amendments to 40 CFR part 60, subparts VV and GGG include only clarifications to existing requirements, burden reducing provisions, and new compliance options, no changes or additions to the recordkeeping requirements in subpart VV or GGG are needed to document and/or enforce these amendments. The recordkeeping requirements apply to the new standards (40 CFR part 60, subparts VVa and GGGa), as proposed, with a few exceptions. First, we removed the requirement to record the time of each monitoring event because the total number of pieces of equipment that are monitored each day should be sufficient for evaluating the ability of an operator to properly perform EPA Method 21. Second, records of information on bypass lines are not required because the new subpart does not include the requirement to monitor bypass lines. Third, because sources subject to subpart GGGa are not required to comply with the monitoring requirements applicable to connectors, the associated recordkeeping requirements do not apply to those sources. CAA section 114 specifically provides that we may have access to and copy any records and inspect any monitoring equipment and compliance method. E. Burden Estimates *Comment:* According to one commenter, the burden impact analyses of the proposed new recordkeeping and reporting requirements as presented in the preamble and docket do not comply with the ICR requirements of the Paperwork Reduction Act (PRA). The proposed new requirements of concern to the commenter are the requirements to keep records of information for all monitoring events, the time of each monitoring event, the time a new pump or valve is placed in service and results of new monitoring requirements for such pumps and valves, results from the new monitoring requirement for OEL, results of the new calibration drift checks, and results of weekly pump inspections. Another commenter also stated that the ICR requirements in the PRA were not met for recordkeeping and reporting associated with the proposed initial monitoring requirement for valves. A third commenter expressed a general concern that the proposed recordkeeping requirements may not meet the administrative requirements for proposing new NSPS. One commenter noted several specific deficiencies and concerns with the burden impact analyses. First, it is not clear if all of the proposed new requirements are addressed in the ICR for sources subject to NSPS 40 CFR part 60, subpart GGG because the ICR does not discuss the incremental effects of the new requirements. Second, the ICR for SOCMI sources appears to address impacts only for those sources that elect to comply with the CAR option, not those that would comply directly with 40 CFR part 60, subpart VV. Third, no ICR analyses were provided for sources that are subject to other rules that reference subpart VV (i.e., NSPS subparts DDD and KKK of 40 CFR part 60, and the Refinery NESHAP). Fourth, the available analyses appear to address burden impacts only for sources that become subject to subparts VV and GGG in the future, but the proposed new requirements also would apply to sources that are currently subject to subpart VV or any of the rules that reference it. Fifth, even if some facilities voluntarily collect some of the records of concern, a requirement making their collection mandatory is still subject to the PRA, Regulatory Flexibility Act, and Executive Order 12866. Sixth, the commenter noted that the claim in the preamble that records of all monitoring events would be “useful” is not a legal basis for imposing the recordkeeping requirement. Seventh, if the total burden for all of the sources exceeds $100 million per year, additional review is triggered under other laws and Executive Order 12866. Based on the lack of analyses, the commenter stated that proposed recordkeeping and reporting requirements cannot be imposed on any sources, except perhaps new sources subject to subpart GGG, without additional proposal notice and opportunity for public comment. *Response:* We disagree with the conclusions drawn by the commenters regarding the availability of the ICR. Document number EPA-HQ-OAR-2006-0699-0038 is the ICR associated with the CAR and all subparts that reference the CAR. This supporting statement displays the burden for sources that opt to comply with the CAR and for sources that opt to comply with their own referenced subpart, including 40 CFR part 60, subpart VV. For reference, pages 2-3, 6-7, 12-16, 33, 53, 77, and 112 all provide information specific to 40 CFR part 60, subpart VV. For the final amendments and new standards, we have made adjustments to the supporting statements for all subparts involved. The burden associated with the amended 40 CFR part 60, subpart VV and the new 40 CFR part 60, subpart VVa is included in the supporting statement for the CAR and all other referenced subparts. The burden associated with the amended 40 CFR part 60, subpart GGG and the new 40 CFR part 60, subpart GGGa is included in the supporting statement that originally just supplied information for subpart GGG. Because this particular rulemaking did not evaluate sources subject to 40 CFR part 60, subparts DDD and KKK or the Refinery NESHAP, we have not included any changes to the associated ICR for these subparts. V. Summary of Cost, Environmental, Energy, and Economic Impacts In setting standards, the CAA requires us to consider alternative emission control approaches, taking into account the estimated costs and benefits, as well as the energy, solid waste, and other effects. We are presenting estimates of the impacts for the 500 ppm leak definition for valves and the 2,000 ppm leak definition for pumps in 40 CFR part 60, subparts VVa and GGGa and connector monitoring in subpart VVa. The final amendments are clarifications to the existing subpart VV and subpart GGG to 40 CFR part 60; they have no associated emission reduction impacts. The cost, environmental, and economic impacts of the new standards are expressed as incremental differences between the impacts of SOCMI and petroleum refining process units complying with the new subparts and the current NSPS requirements (i.e., baseline). The impacts are presented for SOCMI and petroleum refining process units constructed, reconstructed, or modified over the next 5 years. The analyses and the supporting documentation referenced below can be found in Docket ID No. EPA-HQ-OAR-2006-0699. EPA estimates that there are no significant energy or secondary environmental impacts as a result of the new standards. The new standards are changes to work practice requirements and do not require changes to equipment or control devices. Therefore, use of fuel or electricity is not expected to increase significantly as a result of the new standards. Likewise, the new standards do not require physical changes that have the potential to increase wastewater or solid waste from SOCMI or petroleum refinery process units. A. What are the impacts for SOCMI process units? The methodology used to estimate impacts for the lower leak definitions for pumps and valves in the new 40 CFR part 60, subpart VVa is essentially the same as the methodology described in section VI.A of the preamble for the proposed amendments (71 FR 65311, November 7, 2006). There are, however, a few changes in the assumptions. We adjusted the estimates of baseline emissions and monitoring frequencies for new, modified, and reconstructed process units not subject to the HON, the MON, or the Ethylene NESHAP to better reflect baseline conditions. In addition, we added emission reduction and cost impacts for the monitoring of connectors. The analysis completed for the proposed amendments to 40 CFR part 60, subpart VV was documented in a technical memorandum (EPA-HQ-OAR-2006-0699-0035). Based on the leak frequencies obtained from *Revised MACT Floor, Regulatory Alternatives, and Nationwide Impacts for Equipment Leaks at Chemical Manufacturing Facilities* (EPA-HQ-OAR-2003-0121-0004) at a leak definition of 500 ppm, we estimated that connectors would be monitored once every 4 years. SOCMI process units subject to the HON are already required to monitor connectors, so the baseline impacts for process units subject to these standards were equivalent to the impacts of the new standards. The methodology did not change for the analysis of the impacts for connectors subject to the new subpart VVa of 40 CFR part 60. Based on the assumptions described above, we estimate that the new standards will reduce emissions of VOC about 325 tons/yr from the baseline. The estimated increase in annual cost, including annualized initial costs, is about $821,000. The cost-effectiveness is about $1,700 per ton of VOC removed. The estimated nationwide 5-year incremental emissions reductions and cost impacts for each of the new standards are summarized in Table 2 of this preamble. Table 2.—National Emission Reductions and Cost Impacts for SOCMI Units Subject to Standards Under Subpart VVa of 40 CFR Part 60 [5th Year After Proposal] Requirement Annual emission reductions, tons/yr Total initial cost, $million Annualized cost, $thousand/yr Recovery credit, 1 $thousand/yr Total annual cost, $thousand/yr Cost-effectiveness, $/ton Lower leak definition for valves and pumps 94 0.15 41 77 −36 −380 Monitor connectors 230 3.1 780 190 590 2,500 Total 325 3.25 821 270 554 1,700 1 Value of recovered product is $818/ton. B. What are the impacts for petroleum refining process units? The methodology used to estimate impacts for the new 40 CFR part 60, subpart GGGa is essentially the same as the methodology described in section VI.B of the preamble for the proposed amendments (71 FR 65311). There are, however, a few changes in the assumptions. For example, we originally assumed that the leak definitions in the Refinery NESHAP for valves and pumps on new sources since July 14, 1994, are equivalent to the leak definitions in 40 CFR part 60, subparts VVa and GGGa. However, the leak definitions in subparts VVa and GGGa are, in fact, more stringent than the Refinery NESHAP (proposed amendments at 72 FR 50716, September 4, 2007, did not include any changes to the equipment leak standards). Therefore, process units subject to both standards will comply with the leak definitions in subpart GGGa, so we revised the analysis of the impacts for the promulgated amendments to include the impacts for sources subject to both the Refinery NESHAP and subpart GGGa. We also adjusted the estimates of baseline emissions and monitoring frequencies for process units not subject to a consent decree. The revised impacts analysis is described in detail in Docket ID No. EPA-HQ-OAR-2006-0699. We estimate that the new standards will reduce emissions of VOC about 13 tons/yr from the baseline. The estimated increase in annual cost, including annualized initial costs, is about $26,000. The cost-effectiveness is about $1,600 per ton of VOC removed. The estimated nationwide 5-year incremental emissions reductions and cost impacts for the new standards are summarized in Table 3 of this preamble. Table 3.—National Emission Reductions and Cost Impacts for Petroleum Refinery Units Subject to Standards Under Subpart GGGa of 40 CFR Part 60 [5th Year After Proposal] Requirement Annual emission reductions, tons/yr Total initial cost, $thousand Total annual cost, $thousand/yr Recovery credit, 1 $thousand/yr Total annual cost, $thousand/yr Cost-effectiveness, $/ton Lower leak definition for valves and pumps 13 24 26 7 19 1,600 1 Value of recovered product is $545/ton. C. What are the economic impacts? An economic impact analysis was performed to compare the control costs associated with producing a product at petroleum refineries and various types of SOCMI facilities to the average value of shipments from such facilities. Since we are unable to associate projected control costs with specific facilities, we examined two polar cases for each industry,
(1)a worst-case and
(2)a best-case scenario. For the SOCMI, the polar cases are:
(1)No more than eight complex process units located at a single facility and
(2)no more than one process unit per facility. For petroleum refineries, the polar cases are:
(1)All of the affected process units associated with one facility in the industry and
(2)no more than one affected process unit at any given facility. In all cases, the magnitude of the costs is quite small. The only scenario for which the control costs reach 0.3 percent of the facility value of shipments is if an average ethyl alcohol manufacturing facility (in terms of value of shipments) experienced the worst case scenario of 8 complex processing units requiring control. Therefore, while the distribution of costs to small entities is unknown, no significant impact is expected for facilities of any size. The impact of the regulation on prices and profitability depends on the extent that the costs of control are passed on in the form of higher prices or absorbed by the facility. Because the costs are so small, any price increases or loss of profit would be quite small. No significant impact is expected as a result of the final amendments or the new standards of performance for equipment leaks of VOC for the petroleum refining industry and SOCMI. VI. Statutory and Executive Order Reviews A. Executive Order 12866: Regulatory Planning and Review Under Executive Order 12866 (58 FR 51735, October 4, 1993), this action is a “significant regulatory action” because it may raise novel legal or policy issues. Accordingly, EPA submitted this action to the Office of Management and Budget
(OMB)for review under Executive Order 12866, and any changes made in response to OMB recommendations have been documented in the docket for this action. B. Paperwork Reduction Act The final amendments to the standards of performance for SOCMI and petroleum refineries (40 CFR part 60, subparts VV and GGG) do not impose any new information collection burden. The final amendments to these existing rules contain only clarifications, burden reducing provisions, and new compliance options. OMB has previously approved the information collection requirements contained in the existing regulations under the provisions of the Paperwork Reduction Act, 44 U.S.C. 3501, *et seq.* , and has assigned OMB control number 2060-0443, EPA ICR number 1854.04, to the ICR for subpart VV and OMB control number 2060-0067, EPA ICR number 0983.08, to the ICR for subpart GGG. A copy of the OMB-approved ICR may be obtained from Susan Auby, Collection Strategies Division, Environmental Protection Agency (2822T), 1200 Pennsylvania Ave., NW., Washington, DC 20460 or by calling
(202)566-1672. The information collection requirements in these new final standards (40 CFR part 60, subparts VVa and GGGa) have been submitted for approval to OMB under the Paperwork Reduction Act, 44 U.S.C. 3501, *et seq.* The information collection requirements are not enforceable until OMB approves them. The information to be collected for the new standards are based on recordkeeping and reporting requirements in the NSPS General Provisions in 40 CFR part 60, subpart A, which are mandatory for all operators subject to NSPS. These recordkeeping and reporting requirements are specifically authorized by section 114 of the CAA (42 U.S.C. 7414). All information submitted to EPA pursuant to the recordkeeping and reporting requirements for which a claim of confidentiality is made is safeguarded according to EPA policies set forth in 40 CFR part 2, subpart B. Facilities subject to 40 CFR part 60, subpart VVa are required to comply with the same monitoring, recordkeeping, and reporting requirements for equipment leaks as required by 40 CFR part 60, subpart VV, along with certain additional requirements. The new recordkeeping provisions in subpart VVa require general identifying information for each monitoring activity required by the rule and specific information needed to demonstrate compliance with the new monitoring provisions for connectors and pumps in light liquid service (weekly visual inspections for indications of dripping liquids). Records are also required to demonstrate compliance with the QA/QC requirement for a calibration drift assessment at the end of each day and comparison of the results of the assessment with the most recent calibration value. A new, reconstructed, or modified affected facility subject to 40 CFR part 60, subpart VVa or GGGa must submit a notification of compliance status report and include information about leaking connectors in semi-annual compliance reports. Affected facilities subject to subpart GGGa are required to comply with the monitoring, recordkeeping, and reporting requirements in subpart VVa except for the monitoring requirements applicable to connectors (and the associated recordkeeping/reporting requirements). The annual average burden for the information collection requirements in 40 CFR part 60, subpart VVa is estimated at 7,194 labor-hours per year, with a total annual cost of $527,104 per year. The hour burden is based on an estimated 29 hours per response on a semi-annual basis by 76 respondents. Total capital/startup costs associated with the monitoring equipment over the 3-year period of the ICR are estimated at $4,200. The operation of the monitors is included in the monitoring costs, and maintenance costs on these units are incidental; therefore, no maintenance or operation costs are incurred. The annual average burden for the information collection requirements in 40 CFR part 60, subpart GGGa is estimated at 4,216 labor-hours per year, with a total annual cost of $330,353 per year. The hour burden is based on an estimated 70 hours per response on a semi-annual basis by 20 respondents. No capital/startup costs or operation and maintenance costs are associated with the information collection requirements. Burden means the total time, effort, or financial resources expended by persons to generate, maintain, retain, or disclose or provide information to or for a Federal agency. This includes the time needed to review instructions; develop, acquire, install, and utilize technology and systems for the purposes of collecting, validating, and verifying information, processing and maintaining information, and disclosing and providing information; adjust the existing ways to comply with any previously applicable instructions and requirements; train personnel to be able to respond to a collection of information; search data sources; complete and review the collection of information; and transmit or otherwise disclose the information. 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 EPA's regulations in 40 CFR are listed in 40 CFR part 9. When this ICR is approved by OMB, the Agency will publish a technical amendment for the approved information collection requirements contained in the new standards. C. Regulatory Flexibility Act The Regulatory Flexibility Act
(RFA)generally requires an agency to prepare a regulatory flexibility analysis of any rule subject to notice and comment rulemaking requirements under the Administrative Procedures 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 impacts of the final amendments and new standards on small entities, small entity is defined as:
(1)A small business according to Small Business Administration size standards by the North American Industry Classification System (NAICS) category of the owning entity;
(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 that is independently owned and operated and is not dominant in its field. For the SOCMI, a small business ranges from less than 500 employees to less than 1,000 employees, depending on the NAICS code. For petroleum refiners, a small business has no more than 1,500 employees and a crude oil distillation capacity of no more than 125,000 barrels per calendar day. After considering the economic impacts of these final amendments on small entities, I certify that this action will not have a significant economic impact on a substantial number of small entities. We have determined that no facilities subject to the final amendments to the standards of performance for the SOCMI (40 CFR part 60, subpart VV) and petroleum refineries (40 CFR part 60, subpart GGG), including small businesses, will incur any adverse impacts because the final amendments do not create any new requirements or burdens. The final amendments include only clarifications, burden-reducing provisions, and new compliance options. We have determined that no facilities, large or small, subject to the new standards of performance for the SOCMI (40 CFR part 60, subpart VVa) or petroleum refineries (40 CFR part 60, subpart GGGa) will incur any economic impact greater than 0.3 percent of their revenues. For more information on the results of the analysis of small entity impacts, please refer to the economic impact analysis for the final amendments and new standards in Docket ID No. EPA-HQ-OAR-2006-0699. D. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act
(UMRA)of 1995, Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, EPA generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures by State, local, and tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. Before promulgating an EPA rule for which a written statement is needed, section 205 of the UMRA generally requires EPA to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. The provisions of section 205 do not apply when they are inconsistent with applicable law. Moreover, section 205 allows EPA to adopt an alternative other than the least costly, most cost-effective, or least burdensome alternative if the Administrator publishes with the final rule an explanation why that alternative was not adopted. Before EPA establishes any regulatory requirements that may significantly or uniquely affect small governments, including tribal governments, it must have developed under section 203 of the UMRA a small government agency plan. The plan must provide for notifying potentially affected small governments, enabling officials of affected small governments to have meaningful and timely input in the development of EPA regulatory proposals with significant Federal intergovernmental mandates, and informing, educating, and advising small governments on compliance with the regulatory requirements. EPA has determined that this final action does 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. As discussed earlier in this preamble, no costs are associated with the final amendments, which contain only clarifications, burden-reducing provisions, and new compliance options. For the new standards, the estimated annual expenditures for the private sector in the fifth year after proposal are $821,000 for SOCMI and $26,000 for petroleum refineries. Thus, the final amendments and the new standards are not subject to the requirements of sections 202 and 205 of the UMRA. In addition, EPA has determined that the final action contains no regulatory requirements that might significantly or uniquely affect small governments. The final action contains no requirements that apply to such governments, imposes no obligations upon them, and will not result in expenditures by them of $100 million or more in any 1 year or any disproportionate impacts on them. Therefore, the final action is not subject to the requirements of section 203 of the UMRA. E. Executive Order 13132: Federalism Executive Order 13132, entitled “Federalism” (64 FR 43255, August 10, 1999), requires EPA to develop an accountable process to ensure “meaningful and timely input by state and local officials in the development of regulatory policies that have federalism implications.” “Policies that have federalism implications” is defined in the Executive Order to include regulations that 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.” The final action does not have federalism implications. The final amendments and the new standards 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. None of the affected facilities are owned or operated by State governments. Thus, Executive Order 13132 does not apply to this final action. F. Executive Order 13175: Consultation and Coordination With Indian Tribal Governments Executive Order 13175, entitled “Consultation and Coordination with Indian Tribal Governments” (65 FR 67249, November 9, 2000), requires EPA to develop an accountable process to ensure “meaningful and timely input by tribal officials in the development of regulatory policies that have tribal implications.” The final action does not have tribal implications, as specified in Executive Order 13175. The final amendments and the new standards will not have substantial direct effects 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 final action. G. Executive Order 13045: Protection of Children From Environmental Health Risks and Safety Risks Executive Order 13045, entitled “Protection of Children from Environmental Health Risks and Safety Risks” (62 FR 19885, April 23, 1997), applies to any rule that:
(1)Is determined to be “economically significant” as defined under Executive Order 12866, and
(2)concerns an environmental health or safety risk that EPA has reason to believe may have a disproportionate effect on children. If the regulatory action meets both criteria, the Agency must evaluate the environmental health or safety effects of the planned rule on children, and explain why the planned regulation is preferable to other potentially effective and reasonably feasible alternatives considered by the Agency. EPA interprets Executive Order 13045 as applying only to those regulatory actions that are based on health or safety risks, such that the analysis required under section 5-501 of the Executive Order has the potential to influence the regulation. This final action is not subject to Executive Order 13045 because the final amendments and the new standards are based on technology performance and not on health or safety risks. H. Executive Order 13211: Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use This final action is not a “significant energy action” as defined in Executive Order 13211, “Actions Concerning Regulations That Significantly Affect Energy Supply, Distribution, or Use” (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. Further, we have concluded that this final action is not likely to have any adverse energy effects. The final action will not have any significant or adverse energy impacts because no additional pollution controls or other equipment that consume energy are required by the final amendments or new standards. I. National Technology Transfer and Advancement Act As noted in the proposal, section 12(d) of the National Technology Transfer and Advancement Act (NTTAA) of 1995 (Public Law No. 104-113, 12(d) (15 U.S.C. 272 note), directs EPA to use voluntary consensus standards
(VCS)in its regulatory activities, unless to do so would be inconsistent with applicable law or otherwise impractical. 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 EPA to provide Congress, through OMB, explanations when the Agency decides not to use available and applicable VCS. This rulemaking involves technical standards. The EPA cites the following methods: EPA Method 2, 2A, 2C, 2D, 18, 21, and 22 of 40 CFR part 60, appendix A. In addition, the EPA cites the following ASTM methods that are also VCS: ASTM E260-73, E260-91, E260-96 (reapproved 2006), E168-67, E168-77, E168-92, E169-63, E169-77, and E169-93 when determining if a piece of equipment is in VOC service; ASTM D2879-83, D2879-96, and D2879-97 (reapproved 2007) when determining if a piece of equipment is in light liquid service, and ASTM D2504-67, D2504-77, D2504-88 (reapproved 1993), D2382-76, D2382-88, and D4809-95 when determining the maximum permitted velocity for air-assisted flares; ASTM E260-73, E260-91, E260-96, E168-67, E168-77, E168-92, E169-63, E169-77, and E169-93 when determining if a piece of equipment is in hydrogen service; and ASTM D86-78, D86-82, D86-90, D86-95, and D86-96 when determining if a piece of equipment is in light liquid service. These VCS will be incorporated by reference into § 60.17. Consistent with the NTTAA, EPA conducted searches to identify VCS in addition to these EPA methods. No applicable VCS were identified for EPA Methods 2A, 2D, 21, and 22. The search and review results are in the docket for this rule. The search identified one VCS as an acceptable alternative to an EPA Method. The standard ASTM D6420-99 (2004), “Test Method for Determination of Gaseous Organic Compounds by Direct Interface Gas Chromatography/Mass Spectrometry,” is cited in this rule as an alternative to EPA Method 18 for measuring gaseous organic HAP. Similar to EPA's performance-based Method 18, ASTM D6420-99 is also a performance-based method for measurement of gaseous organic compounds. However, ASTM D6420-99 was written to support the specific use of highly portable and automated gas chromatography (GC)/mass spectrometry (MS). While offering advantages over the traditional EPA Method 18, the ASTM method does allow some less stringent criteria for accepting GC/MS results than required by EPA Method 18. Therefore, ASTM D6420-99 is a suitable alternative to EPA Method 18 only where:
(1)The target compound(s) are those listed in Section 1.1 of ASTM D6420-99, and
(2)The target concentration is between 150 parts per billion by volume and 100 ppmv. For target compound(s) not listed in Section 1.1 of ASTM D6420-99, but potentially detected by mass spectrometry, the regulation specifies that the additional system continuing calibration check after each run, as detailed in Section 10.5.3 of the ASTM method, must be followed, met, documented, and submitted with the data report even if there is no moisture condenser used or the compound is not considered water soluble. For target compound(s) not listed in Section 1.1 of ASTM D6420-99, and not amenable to detection by mass spectrometry, ASTM D6420-99 does not apply. As a result, EPA will cite ASTM D6420-99 in this rule. The EPA will also cite EPA Method 18 as a GC option in addition to ASTM D6420-99. This will allow the continued use of GC configurations other than GC/MS. The search for emissions measurement procedures identified four other VCS. The EPA determined that these four standards identified for measuring emissions of the HAP or surrogates subject to emission standards in this rule were impractical alternatives to EPA test methods for the purposes of this rule. Therefore, EPA does not intend to adopt these standards for this purpose. The reasons for the determinations for the four methods are discussed in the docket to this rule. A source may apply to EPA for permission to use alternative test methods or alternative monitoring requirements in place of any required testing methods, performance specifications, or procedures. Potential standards are reviewed to determine if they meet the requirements of EPA Method 301 for accepting alternative methods or scientific, engineering, and policy equivalence to procedures in EPA reference methods. 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 environmental justice. Its main provision directs Federal agencies, to the greatest extent practicable and permitted by law, to make environmental justice 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. EPA has determined that this final action will not have disproportionately high and adverse human health or environmental effects on minority or low-income populations. The final amendments to the standards of performance for SOCMI (40 CFR part 60, subpart VV) and petroleum refineries (40 CFR part 60, subpart GGG) are comprised of clarifications, burden-reducing provisions, and new compliance options that do not affect the current level of control at facilities subject these rules. The new standards of performance for SOCMI (40 CFR part 60, subpart VVa) and petroleum refineries (40 CFR part 60, subpart GGGa) will increase the level of environmental protection for all affected populations without having any disproportionately high and adverse human health or environmental effects on any population, including any minority or low-income population. The new subparts will increase the stringency of the standards of performance by reducing the leak definitions for certain pumps and valves, and subpart VVa will increase the stringency further by requiring the monitoring of certain connectors. K. Congressional Review Act The Congressional Review Act, 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 Congress and to the Comptroller General of the United States. EPA will submit a report containing this final action 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 action 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). This final rule is effective on November 16, 2007. List of Subjects 40 CFR Part 60 Environmental protection, Administrative practice and procedure, Air pollution control, Incorporation by reference, Intergovernmental relations, Reporting and recordkeeping requirements. 40 CFR Part 63 Environmental protection, Administrative practice and procedure, Air pollution control, Incorporation by reference, Intergovernmental relations. Dated: October 31, 2007. Stephen L. Johnson, Administrator. For the reasons cited in the preamble, title 40, chapter I, parts 60 and 63 of the Code of Federal Regulations are amended as follows: PART 60—[AMENDED] 1. The authority citation for part 60 continues to read as follows: Authority: 42 U.S.C. 7401, *et seq.* Subpart A—[Amended] 2. Section 60.17 is amended by revising paragraphs (a)(7), (35), (36), (41), (70), (88), (89), and
(90)to read as follows: § 60.17 Incorporations by reference.
(a)* * *
(7)ASTM D86-78, 82, 90, 93, 95, 96, Distillation of Petroleum Products, IBR approved for §§ 60.562-2(d), 60.593(d), 60.593a(d), and 60.633(h).
(35)ASTM D2382-76, 88, Heat of Combustion of Hydrocarbon Fuels by Bomb Calorimeter (High-Precision Method), IBR approved for §§ 60.18(f)(3), 60.485(g)(6), 60.485a(g)(6), 60.564(f)(3), 60.614(e)(4), 60.664(e)(4), and 60.704(d)(4).
(36)ASTM D2504-67, 77, 88 (Reapproved 1993), Noncondensable Gases in C3 and Lighter Hydrocarbon Products by Gas Chromatography, IBR approved for §§ 60.485(g)(5) and 60.485a(g)(5).
(41)ASTM D2879-83, 96, 97, Test Method for Vapor Pressure-Temperature Relationship and Initial Decomposition Temperature of Liquids by Isoteniscope, IBR approved for §§ 60.111b(f)(3), 60.116b(e)(3)(ii), 60.116b(f)(2)(i), 60.485(e)(1), and 60.485a(e)(1).
(70)ASTM D4809-95, Standard Test Method for Heat of Combustion of Liquid Hydrocarbon Fuels by Bomb Calorimeter (Precision Method), IBR approved for §§ 60.18(f)(3), 60.485(g)(6), 60.485a(g)(6), 60.564(f)(3), 60.614(d)(4), 60.664(e)(4), and 60.704(d)(4).
(88)ASTM E168-67, 77, 92, General Techniques of Infrared Quantitative Analysis, IBR approved for §§ 60.485a(d)(1), 60.593(b)(2), 60.593a(b)(2), and 60.632(f).
(89)ASTM E169-63, 77, 93, General Techniques of Ultraviolet Quantitative Analysis, IBR approved for §§ 60.485a(d)(1), 60.593(b)(2), 60.593a(b)(2), and 60.632(f).
(90)ASTM E260-73, 91, 96, General Gas Chromatography Procedures, IBR approved for §§ 60.485a(d)(1), 60.593(b)(2), 60.593a(b)(2), and 60.632(f). Subpart VV—Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry for which Construction, Reconstruction, or Modification Commenced After January 5, 1981, and on or Before November 7, 2006 3. The heading for Subpart VV is revised as set out above. 4. Section 60.480 is amended by revising paragraphs (b), (d)(2) through (d)(5), and
(e)to read as follows: § 60.480 Applicability and designation of affected facility.
(b)Any affected facility under paragraph
(a)of this section that commences construction, reconstruction, or modification after January 5, 1981, and on or before November 7, 2006, shall be subject to the requirements of this subpart.
(d)* * *
(2)Any affected facility that has the design capacity to produce less than 1,000 Mg/yr (1,102 ton/yr) of a chemical listed in § 60.489 is exempt from §§ 60.482-1 through 60.482-10.
(3)If an affected facility produces heavy liquid chemicals only from heavy liquid feed or raw materials, then it is exempt from §§ 60.482-1 through 60.482-10.
(4)Any affected facility that produces beverage alcohol is exempt from §§ 60.482-1 through 60.482-10.
(5)Any affected facility that has no equipment in volatile organic compounds
(VOC)service is exempt from §§ 60.482-1 through 60.482-10.
(e)*Alternative means of compliance* —
(1)*Option to comply with part 65.*
(i)Owners or operators may choose to comply with the provisions of 40 CFR part 65, subpart F, to satisfy the requirements of §§ 60.482 through 60.487 for an affected facility. When choosing to comply with 40 CFR part 65, subpart F, the requirements of § 60.485(d), (e), and
(f)and § 60.486(i) and
(j)still apply. Other provisions applying to an owner or operator who chooses to comply with 40 CFR part 65 are provided in 40 CFR 65.1.
(ii)*Part 60, subpart A* . Owners or operators who choose to comply with 40 CFR part 65, subpart F must also comply with §§ 60.1, 60.2, 60.5, 60.6, 60.7(a)(1) and (4), 60.14, 60.15, and 60.16 for that equipment. All sections and paragraphs of subpart A of this part that are not mentioned in this paragraph (e)(1)(ii) do not apply to owners and operators of equipment subject to this subpart complying with 40 CFR part 65, subpart F, except that provisions required to be met prior to implementing 40 CFR part 65 still apply. Owners and operators who choose to comply with 40 CFR part 65, subpart F, must comply with 40 CFR part 65, subpart A.
(2)*Subpart VVa* . Owners or operators may choose to comply with the provisions of subpart VVa of this part 60 to satisfy the requirements of this subpart VV for an affected facility. 5. Section 60.481 is amended by: a. In the definition of “Capital expenditure” remove the table heading in paragraph (a)(3) and add in its place the heading “Table for Determining Applicable Value for B”; b. Revising the definitions for the terms “Connector,” “First attempt at repair,” “Hard piping,” “Process unit,” “Process unit shutdown,” and “Repaired”; and c. Adding, in alphabetical order, new definitions for the terms “Closed-loop system,” “Closed-purge system,” “Storage vessel,” and “Transfer rack” to read as follows: § 60.481 Definitions. *Closed-loop system* means an enclosed system that returns process fluid to the process. *Closed-purge system* means a system or combination of systems and portable containers to capture purged liquids. Containers for purged liquids must be covered or closed when not being filled or emptied. *Connector* means flanged, screwed, or other joined fittings used to connect two pipe lines or a pipe line and a piece of process equipment or that close an opening in a pipe that could be connected to another pipe. Joined fittings welded completely around the circumference of the interface are not considered connectors for the purpose of this subpart. *First attempt at repair* means to take action for the purpose of stopping or reducing leakage of organic material to the atmosphere using best practices. *Hard-piping* means pipe or tubing that is manufactured and properly installed using good engineering judgment and standards such as ASME B31.3, Process Piping (available from the American Society of Mechanical Engineers, PO Box 2300, Fairfield, NJ 07007-2300). *Process unit* means the components assembled and connected by pipes or ducts to process raw materials and to produce, as intermediate or final products, one or more of the chemicals listed in § 60.489. A process unit can operate independently if supplied with sufficient feed or raw materials and sufficient storage facilities for the product. For the purpose of this subpart, process unit includes any feed, intermediate and final product storage vessels (except as specified in § 60.482-1(g)), product transfer racks, and connected ducts and piping. A process unit includes all equipment as defined in this subpart. *Process unit shutdown* means a work practice or operational procedure that stops production from a process unit or part of a process unit during which it is technically feasible to clear process material from a process unit or part of a process unit consistent with safety constraints and during which repairs can be accomplished. The following are not considered process unit shutdowns:
(1)An unscheduled work practice or operational procedure that stops production from a process unit or part of a process unit for less than 24 hours.
(2)An unscheduled work practice or operational procedure that would stop production from a process unit or part of a process unit for a shorter period of time than would be required to clear the process unit or part of the process unit of materials and start up the unit, and would result in greater emissions than delay of repair of leaking components until the next scheduled process unit shutdown.
(3)The use of spare equipment and technically feasible bypassing of equipment without stopping production. *Repaired* means that equipment is adjusted, or otherwise altered, in order to eliminate a leak as defined in the applicable sections of this subpart and, except for leaks identified in accordance with §§ 60.482-2(b)(2)(ii) and (d)(6)(ii) and (iii), 60.482-3(f), and 60.482-10(f)(1)(ii), is re-monitored as specified in § 60.485(b) to verify that emissions from the equipment are below the applicable leak definition. *Storage vessel* means a tank or other vessel that is used to store organic liquids that are used in the process as raw material feedstocks, produced as intermediates or final products, or generated as wastes. Storage vessel does not include vessels permanently attached to motor vehicles, such as trucks, railcars, barges, or ships. *Transfer rack* means the collection of loading arms and loading hoses, at a single loading rack, that are used to fill tank trucks and/or railcars with organic liquids. 6. Section 60.482-1 is amended by adding paragraphs (e), (f), and
(g)to read as follows: § 60.482-1 Standards: General.
(e)Equipment that an owner or operator designates as being in VOC service less than 300 hours (hr)/yr is excluded from the requirements of §§ 60.482-2 through 60.482-10 if it is identified as required in § 60.486(e)(6) and it meets any of the conditions specified in paragraphs (e)(1) through
(3)of this section.
(1)The equipment is in VOC service only during startup and shutdown, excluding startup and shutdown between batches of the same campaign for a batch process.
(2)The equipment is in VOC service only during process malfunctions or other emergencies.
(3)The equipment is backup equipment that is in VOC service only when the primary equipment is out of service. (f)(1) If a dedicated batch process unit operates less than 365 days during a year, an owner or operator may monitor to detect leaks from pumps and valves at the frequency specified in the following table instead of monitoring as specified in §§ 60.482-2, 60.482-7, and 60.483-2: Operating time (percent of hours during year) Equivalent monitoring frequency time in use Monthly Quarterly Semiannually 0 to <25 Quarterly Annually Annually. 25 to <50 Quarterly Semiannually Annually. 50 to <75 Bimonthly Three quarters Semiannually. 75 to 100 Monthly Quarterly Semiannually.
(2)Pumps and valves that are shared among two or more batch process units that are subject to this subpart may be monitored at the frequencies specified in paragraph (f)(1) of this section, provided the operating time of all such process units is considered.
(3)The monitoring frequencies specified in paragraph (f)(1) of this section are not requirements for monitoring at specific intervals and can be adjusted to accommodate process operations. An owner or operator may monitor at any time during the specified monitoring period (e.g., month, quarter, year), provided the monitoring is conducted at a reasonable interval after completion of the last monitoring campaign. Reasonable intervals are defined in paragraphs (f)(3)(i) through
(iv)of this section.
(i)When monitoring is conducted quarterly, monitoring events must be separated by at least 30 calendar days.
(ii)When monitoring is conducted semiannually ( *i.e.* , once every 2 quarters), monitoring events must be separated by at least 60 calendar days.
(iii)When monitoring is conducted in 3 quarters per year, monitoring events must be separated by at least 90 calendar days.
(iv)When monitoring is conducted annually, monitoring events must be separated by at least 120 calendar days.
(g)If the storage vessel is shared with multiple process units, the process unit with the greatest annual amount of stored materials (predominant use) is the process unit the storage vessel is assigned to. If the storage vessel is shared equally among process units, and one of the process units has equipment subject to subpart VVa of this part, the storage vessel is assigned to that process unit. If the storage vessel is shared equally among process units, none of which have equipment subject to subpart VVa of this part, the storage vessel is assigned to any process unit subject to this subpart. If the predominant use of the storage vessel varies from year to year, then the owner or operator must estimate the predominant use initially and reassess every 3 years. The owner or operator must keep records of the information and supporting calculations that show how predominant use is determined. All equipment on the storage vessel must be monitored when in VOC service. 7. Section 60.482-2 is amended by: a. Revising paragraph (a); b. Revising paragraph(b)(2); c. Revising paragraph (c)(2); d. Revising paragraphs
(d)introductory text, (d)(1)(ii), (d)(4), (d)(5), and (d)(6); and e. Revising paragraph
(e)introductory text to read as follows: § 60.482-2 Standards: Pumps in light liquid service. (a)(1) Each pump in light liquid service shall be monitored monthly to detect leaks by the methods specified in § 60.485(b), except as provided in § 60.482-1(c) and
(f)and paragraphs (d), (e), and
(f)of this section. A pump that begins operation in light liquid service after the initial startup date for the process unit must be monitored for the first time within 30 days after the end of its startup period, except for a pump that replaces a leaking pump and except as provided in § 60.482-1(c) and
(f)and paragraphs (d), (e), and
(f)of this section.
(2)Each pump in light liquid service shall be checked by visual inspection each calendar week for indications of liquids dripping from the pump seal, except as provided in § 60.482-1(f).
(b)* * *
(2)If there are indications of liquids dripping from the pump seal, the owner or operator shall follow the procedure specified in either paragraph (b)(2)(i) or
(ii)of this section. This requirement does not apply to a pump that was monitored after a previous weekly inspection if the instrument reading for that monitoring event was less than 10,000 ppm and the pump was not repaired since that monitoring event.
(i)Monitor the pump within 5 days as specified in § 60.485(b). If an instrument reading of 10,000 ppm or greater is measured, a leak is detected. The leak shall be repaired using the procedures in paragraph
(c)of this section.
(ii)Designate the visual indications of liquids dripping as a leak, and repair the leak within 15 days of detection by eliminating the visual indications of liquids dripping.
(c)* * *
(2)A first attempt at repair shall be made no later than 5 calendar days after each leak is detected. First attempts at repair include, but are not limited to, the practices described in paragraphs (c)(2)(i) and
(ii)of this section, where practicable.
(i)Tightening the packing gland nuts;
(ii)Ensuring that the seal flush is operating at design pressure and temperature.
(d)Each pump equipped with a dual mechanical seal system that includes a barrier fluid system is exempt from the requirements of paragraph
(a)of this section, provided the requirements specified in paragraphs (d)(1) through
(6)of this section are met.
(1)* * *
(ii)Equipped with a barrier fluid degassing reservoir that is routed to a process or fuel gas system or connected by a closed vent system to a control device that complies with the requirements of § 60.482-10; or (4)(i) Each pump is checked by visual inspection, each calendar week, for indications of liquids dripping from the pump seals.
(ii)If there are indications of liquids dripping from the pump seal at the time of the weekly inspection, the owner or operator shall follow the procedure specified in either paragraph (d)(4)(ii)(A) or
(B)of this section.
(A)Monitor the pump within 5 days as specified in § 60.485(b) to determine if there is a leak of VOC in the barrier fluid. If an instrument reading of 10,000 ppm or greater is measured, a leak is detected.
(B)Designate the visual indications of liquids dripping as a leak. (5)(i) Each sensor as described in paragraph (d)(3) of this section is checked daily or is equipped with an audible alarm.
(ii)The owner or operator determines, based on design considerations and operating experience, a criterion that indicates failure of the seal system, the barrier fluid system, or both.
(iii)If the sensor indicates failure of the seal system, the barrier fluid system, or both, based on the criterion established in paragraph (d)(5)(ii) of this section, a leak is detected. (6)(i) When a leak is detected pursuant to paragraph (d)(4)(ii)(A) of this section, it shall be repaired as specified in paragraph
(c)of this section.
(ii)A leak detected pursuant to paragraph (d)(5)(iii) of this section shall be repaired within 15 days of detection by eliminating the conditions that activated the sensor.
(iii)A designated leak pursuant to paragraph (d)(4)(ii)(B) of this section shall be repaired within 15 days of detection by eliminating visual indications of liquids dripping.
(e)Any pump that is designated, as described in § 60.486(e)(1) and (2), for no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, is exempt from the requirements of paragraphs (a), (c), and
(d)of this section if the pump: 8. Section 60.482-3 is amended by revising paragraphs
(a)and
(j)to read as follows: § 60.482-3 Standards: Compressors.
(a)Each compressor shall be equipped with a seal system that includes a barrier fluid system and that prevents leakage of VOC to the atmosphere, except as provided in § 60.482-1(c) and paragraphs (h), (i), and
(j)of this section.
(j)Any existing reciprocating compressor in a process unit which becomes an affected facility under provisions of § 60.14 or § 60.15 is exempt from paragraphs
(a)through
(e)and
(h)of this section, provided the owner or operator demonstrates that recasting the distance piece or replacing the compressor are the only options available to bring the compressor into compliance with the provisions of paragraphs
(a)through
(e)and
(h)of this section. 9. Section 60.482-5 is amended by revising paragraphs
(a)and
(b)to read as follows: § 60.482-5 Standards: Sampling connection systems.
(a)Each sampling connection system shall be equipped with a closed-purge, closed-loop, or closed-vent system, except as provided in § 60.482-1(c) and paragraph
(c)of this section.
(b)Each closed-purge, closed-loop, or closed-vent system as required in paragraph
(a)of this section shall comply with the requirements specified in paragraphs (b)(1) through
(4)of this section.
(1)Gases displaced during filling of the sample container are not required to be collected or captured.
(2)Containers that are part of a closed-purge system must be covered or closed when not being filled or emptied.
(3)Gases remaining in the tubing or piping between the closed-purge system valve(s) and sample container valve(s) after the valves are closed and the sample container is disconnected are not required to be collected or captured.
(4)Each closed-purge, closed-loop, or closed-vent system shall be designed and operated to meet requirements in either paragraph (b)(4)(i), (ii), (iii), or
(iv)of this section.
(i)Return the purged process fluid directly to the process line.
(ii)Collect and recycle the purged process fluid to a process.
(iii)Capture and transport all the purged process fluid to a control device that complies with the requirements of § 60.482-10.
(iv)Collect, store, and transport the purged process fluid to any of the following systems or facilities:
(A)A waste management unit as defined in § 63.111, if the waste management unit is subject to and operated in compliance with the provisions of 40 CFR part 63, subpart G, applicable to Group 1 wastewater streams;
(B)A treatment, storage, or disposal facility subject to regulation under 40 CFR part 262, 264, 265, or 266;
(C)A facility permitted, licensed, or registered by a state to manage municipal or industrial solid waste, if the process fluids are not hazardous waste as defined in 40 CFR part 261;
(D)A waste management unit subject to and operated in compliance with the treatment requirements of § 61.348(a), provided all waste management units that collect, store, or transport the purged process fluid to the treatment unit are subject to and operated in compliance with the management requirements of §§ 61.343 through 61.347; or
(E)A device used to burn off-specification used oil for energy recovery in accordance with 40 CFR part 279, subpart G, provided the purged process fluid is not hazardous waste as defined in 40 CFR part 261. 10. Section 60.482-6 is amended by revising paragraph (a)(1) to read as follows: § 60.482-6 Standards: Open-ended valves or lines. (a)(1) Each open-ended valve or line shall be equipped with a cap, blind flange, plug, or a second valve, except as provided in § 60.482-1(c) and paragraphs
(d)and
(e)of this section. 11. Section 60.482-7 is amended by revising paragraphs
(a)and (c)(1) to read as follows: § 60.482-7 Standards: Valves in gas/vapor service and in light liquid service. (a)(1) Each valve shall be monitored monthly to detect leaks by the methods specified in § 60.485(b) and shall comply with paragraphs
(b)through
(e)of this section, except as provided in paragraphs (f), (g), and
(h)of this section, § 60.482-1(c) and (f), and §§ 60.483-1 and 60.483-2.
(2)A valve that begins operation in gas/vapor service or light liquid service after the initial startup date for the process unit must be monitored according to paragraphs (a)(2)(i) or (ii), except for a valve that replaces a leaking valve and except as provided in paragraphs (f), (g), and
(h)of this section, § 60.482-1(c), and §§ 60.483-1 and 60.483-2.
(i)Monitor the valve as in paragraph (a)(1) of this section. The valve must be monitored for the first time within 30 days after the end of its startup period to ensure proper installation.
(ii)If the valves on the process unit are monitored in accordance with § 60.483-1 or § 60.483-2, count the new valve as leaking when calculating the percentage of valves leaking as described in § 60.483-2(b)(5). If less than 2.0 percent of the valves are leaking for that process unit, the valve must be monitored for the first time during the next scheduled monitoring event for existing valves in the process unit or within 90 days, whichever comes first. (c)(1)(i) Any valve for which a leak is not detected for 2 successive months may be monitored the first month of every quarter, beginning with the next quarter, until a leak is detected.
(ii)As an alternative to monitoring all of the valves in the first month of a quarter, an owner or operator may elect to subdivide the process unit into 2 or 3 subgroups of valves and monitor each subgroup in a different month during the quarter, provided each subgroup is monitored every 3 months. The owner or operator must keep records of the valves assigned to each subgroup. 12. Section 60.482-8 is amended by revising paragraphs (a)(2) and
(d)to read as follows: § 60.482-8 Standards: Pumps and valves in heavy liquid service, pressure relief devices in light liquid or heavy liquid service, and connectors.
(a)* * *
(2)The owner or operator shall eliminate the visual, audible, olfactory, or other indication of a potential leak within 5 calendar days of detection.
(d)First attempts at repair include, but are not limited to, the best practices described under §§ 60.482-2(c)(2) and 60.482-7(e). 13. Section 60.482-9 is amended by revising paragraph
(a)and adding paragraph
(f)to read as follows: § 60.482-9 Standards: Delay of repair.
(a)Delay of repair of equipment for which leaks have been detected will be allowed if repair within 15 days is technically infeasible without a process unit shutdown. Repair of this equipment shall occur before the end of the next process unit shutdown. Monitoring to verify repair must occur within 15 days after startup of the process unit.
(f)When delay of repair is allowed for a leaking pump or valve that remains in service, the pump or valve may be considered to be repaired and no longer subject to delay of repair requirements if two consecutive monthly monitoring instrument readings are below the leak definition. 14. Section 60.483-1 is amended by revising paragraph
(d)to read as follows: § 60.483-1 Alternative standards for valves—allowable percentage of valves leaking.
(d)Owners and operators who elect to comply with this alternative standard shall not have an affected facility with a leak percentage greater than 2.0 percent, determined as described in § 60.485(h). 15. Section 60.483-2 is amended by revising paragraph (b)(5) and adding paragraph (b)(7) to read as follows: § 60.483-2 Alternative standards for valves—skip period leak detection and repair.
(b)* * *
(5)The percent of valves leaking shall be determined as described in § 60.485(h).
(7)A valve that begins operation in gas/vapor service or light liquid service after the initial startup date for a process unit following one of the alternative standards in this section must be monitored in accordance with § 60.482-7(a)(2)(i) or
(ii)before the provisions of this section can be applied to that valve. 16. Section 60.484 is amended by: a. Removing the word “equivalance” and adding in its place the word “equivalence” in paragraph (a); and b. Revising paragraph (b)(2) to read as follows: § 60.484 Equivalence of means of emission limitation.
(b)* * *
(2)The Administrator will compare test data for demonstrating equivalence of the means of emission limitation to test data for the equipment, design, and operational requirements. 17. Section 60.485 is amended by: a. Revising paragraph
(b)introductory text; b. Revising paragraphs
(e)introductory text, (e)(1) and (e)(2); c. Revising paragraphs (g)(4) and (5); and d. Adding paragraph
(h)to read as follows: § 60.485 Test methods and procedures.
(b)The owner or operator shall determine compliance with the standards in §§ 60.482-1 through 60.482-10, 60.483, and 60.484 as follows:
(e)The owner or operator shall demonstrate that a piece of equipment is in light liquid service by showing that all the following conditions apply:
(1)The vapor pressure of one or more of the organic components is greater than 0.3 kPa at 20 °C (1.2 in. H <sup>2</sup> O at 68 °F). Standard reference texts or ASTM D2879-83, 96, or 97 (incorporated by reference—see § 60.17) shall be used to determine the vapor pressures.
(2)The total concentration of the pure organic components having a vapor pressure greater than 0.3 kPa at 20 °C (1.2 in. H <sup>2</sup> O at 68 °F) is equal to or greater than 20 percent by weight.
(g)* * *
(4)The net heating value (H <sup>T</sup> ) of the gas being combusted in a flare shall be computed using the following equation: ER16NO07.039 Where: K = Conversion constant, 1.740 × 10 − 7 (g-mole)(MJ)/(ppm-scm-kcal) (metric units) = 4.674 × 10 − 6 [(g-mole)(Btu)/(ppm-scf-kcal)] (English units) C <sup>i</sup> = Concentration of sample component “i,” ppm H <sup>i</sup> = Net heat of combustion of sample component “i” at 25 °C and 760 mm Hg (77 °F and 14.7 psi), kcal/g-mole
(5)Method 18 or ASTM D6420-99
(2004)(where the target compound(s) are those listed in Section 1.1 of ASTM D6420-99, and the target concentration is between 150 parts per billion by volume and 100 parts per million by volume) and ASTM D2504-67, 77 or 88 (Reapproved 1993) (incorporated by reference—see § 60.17) shall be used to determine the concentration of sample component “i.”
(h)The owner or operator shall determine compliance with § 60.483-1 or § 60.483-2 as follows:
(1)The percent of valves leaking shall be determined using the following equation: %V <sup>L</sup> = (V <sup>L</sup> /V <sup>T</sup> ) * 100 Where: %V <sup>L</sup> = Percent leaking valves V <sup>L</sup> = Number of valves found leaking V <sup>T</sup> = The sum of the total number of valves monitored
(2)The total number of valves monitored shall include difficult-to-monitor and unsafe-to-monitor valves only during the monitoring period in which those valves are monitored.
(3)The number of valves leaking shall include valves for which repair has been delayed.
(4)Any new valve that is not monitored within 30 days of being placed in service shall be included in the number of valves leaking and the total number of valves monitored for the monitoring period in which the valve is placed in service.
(5)If the process unit has been subdivided in accordance with § 60.482-7(c)(1)(ii), the sum of valves found leaking during a monitoring period includes all subgroups.
(6)The total number of valves monitored does not include a valve monitored to verify repair. 18. Section 60.486 is amended by revising paragraph (e)(2)(ii) and adding paragraph (e)(6) to read as follows: § 60.486 Recordkeeping requirements.
(e)* * *
(2)* * *
(ii)The designation of equipment as subject to the requirements of § 60.482-2(e), § 60.482-3(i), or § 60.482-7(f) shall be signed by the owner or operator. Alternatively, the owner or operator may establish a mechanism with their permitting authority that satisfies this requirement.
(6)A list of identification numbers for equipment that the owner or operator designates as operating in VOC service less than 300 hr/yr in accordance with § 60.482-1(e), a description of the conditions under which the equipment is in VOC service, and rationale supporting the designation that it is in VOC service less than 300 hr/yr. 19. Section 60.487 is amended by: a. Revising paragraphs (c)(2)(i), (c)(2)(iii), and (c)(2)(iv) to read as follows: § 60.487 Reporting requirements.
(c)* * *
(2)* * *
(i)Number of valves for which leaks were detected as described in § 60.482-7(b) or § 60.483-2,
(iii)Number of pumps for which leaks were detected as described in § 60.482-2(b), (d)(4)(ii)(A) or (B), or (d)(5)(iii),
(iv)Number of pumps for which leaks were not repaired as required in § 60.482-2(c)(1) and (d)(6), 20. Part 60 is amended by adding subpart VVa to read as follows: Subpart VVa—Standards of Performance for Equipment Leaks of VOC in the Synthetic Organic Chemicals Manufacturing Industry for Which Construction, Reconstruction, or Modification Commenced After November 7, 2006 Sec. 60.480a Applicability and designation of affected facility. 60.481a Definitions. 60.482-1a Standards: General. 60.482-2a Standards: Pumps in light liquid service. 60.482-3a Standards: Compressors. 60.482-4a Standards: Pressure relief devices in gas/vapor service. 60.482-5a Standards: Sampling connection systems. 60.482-6a Standards: Open-ended valves or lines. 60.482-7a Standards: Valves in gas/vapor service and in light liquid service. 60.482-8a Standards: Pumps, valves, and connectors in heavy liquid service and pressure relief devices in light liquid or heavy liquid service. 60.482-9a Standards: Delay of repair. 60.482-10a Standards: Closed vent systems and control devices. 60.482-11a Standards: Connectors in gas/vapor service and in light liquid service. 60.483-1a Alternative standards for valves—allowable percentage of valves leaking. 60.483-2a Alternative standards for valves—skip period leak detection and repair. 60.484a Equivalence of means of emission limitation. 60.485a Test methods and procedures. 60.486a Recordkeeping requirements. 60.487a Reporting requirements. 60.488a Reconstruction. 60.489a List of chemicals produced by affected facilities. § 60.480a Applicability and designation of affected facility. (a)(1) The provisions of this subpart apply to affected facilities in the synthetic organic chemicals manufacturing industry.
(2)The group of all equipment (defined in § 60.481a) within a process unit is an affected facility.
(b)Any affected facility under paragraph
(a)of this section that commences construction, reconstruction, or modification after November 7, 2006, shall be subject to the requirements of this subpart.
(c)Addition or replacement of equipment for the purpose of process improvement which is accomplished without a capital expenditure shall not by itself be considered a modification under this subpart. (d)(1) If an owner or operator applies for one or more of the exemptions in this paragraph, then the owner or operator shall maintain records as required in § 60.486a(i).
(2)Any affected facility that has the design capacity to produce less than 1,000 Mg/yr (1,102 ton/yr) of a chemical listed in § 60.489 is exempt from §§ 60.482-1a through 60.482-11a.
(3)If an affected facility produces heavy liquid chemicals only from heavy liquid feed or raw materials, then it is exempt from §§ 60.482-1a through 60.482-11a.
(4)Any affected facility that produces beverage alcohol is exempt from §§ 60.482-1a through 60.482-11a.
(5)Any affected facility that has no equipment in volatile organic compounds
(VOC)service is exempt from §§ 60.482-1a through 60.482-11a.
(e)*Alternative means of compliance* —(1) *Option to comply with part 65.*
(i)Owners or operators may choose to comply with the provisions of 40 CFR part 65, subpart F, to satisfy the requirements of §§ 60.482-1a through 60.487a for an affected facility. When choosing to comply with 40 CFR part 65, subpart F, the requirements of §§ 60.485a(d), (e), and (f), and 60.486a(i) and
(j)still apply. Other provisions applying to an owner or operator who chooses to comply with 40 CFR part 65 are provided in 40 CFR 65.1.
(ii)*Part 60, subpart A.* Owners or operators who choose to comply with 40 CFR part 65, subpart F must also comply with §§ 60.1, 60.2, 60.5, 60.6, 60.7(a)(1) and (4), 60.14, 60.15, and 60.16 for that equipment. All sections and paragraphs of subpart A of this part that are not mentioned in this paragraph (e)(1)(ii) do not apply to owners or operators of equipment subject to this subpart complying with 40 CFR part 65, subpart F, except that provisions required to be met prior to implementing 40 CFR part 65 still apply. Owners and operators who choose to comply with 40 CFR part 65, subpart F, must comply with 40 CFR part 65, subpart A.
(2)*Part 63, subpart H.*
(i)Owners or operators may choose to comply with the provisions of 40 CFR part 63, subpart H, to satisfy the requirements of §§ 60.482-1a through 60.487a for an affected facility. When choosing to comply with 40 CFR part 63, subpart H, the requirements of § 60.485a(d), (e), and (f), and § 60.486a(i) and
(j)still apply.
(ii)*Part 60, subpart A.* Owners or operators who choose to comply with 40 CFR part 63, subpart H must also comply with §§ 60.1, 60.2, 60.5, 60.6, 60.7(a)(1) and (4), 60.14, 60.15, and 60.16 for that equipment. All sections and paragraphs of subpart A of this part that are not mentioned in this paragraph (e)(2)(ii) do not apply to owners or operators of equipment subject to this subpart complying with 40 CFR part 63, subpart H, except that provisions required to be met prior to implementing 40 CFR part 63 still apply. Owners and operators who choose to comply with 40 CFR part 63, subpart H, must comply with 40 CFR part 63, subpart A. § 60.481a Definitions. As used in this subpart, all terms not defined herein shall have the meaning given them in the Clean Air Act
(CAA)or in subpart A of part 60, and the following terms shall have the specific meanings given them. *Capital expenditure* means, in addition to the definition in 40 CFR 60.2, an expenditure for a physical or operational change to an existing facility that:
(a)Exceeds P, the product of the facility's replacement cost, R, and an adjusted annual asset guideline repair allowance, A, as reflected by the following equation: P = R × A, where:
(1)The adjusted annual asset guideline repair allowance, A, is the product of the percent of the replacement cost, Y, and the applicable basic annual asset guideline repair allowance, B, divided by 100 as reflected by the following equation: A = Y × (B ÷ 100);
(2)The percent Y is determined from the following equation: Y = 1.0 − 0.575 log X, where X is 2006 minus the year of construction; and
(3)The applicable basic annual asset guideline repair allowance, B, is selected from the following table consistent with the applicable subpart: Table for Determining Applicable Value for B Subpart applicable to facility Value of B to be used in equation VVa 12.5 GGGa 7.0 *Closed-loop system* means an enclosed system that returns process fluid to the process. *Closed-purge system* means a system or combination of systems and portable containers to capture purged liquids. Containers for purged liquids must be covered or closed when not being filled or emptied. *Closed vent system* means a system that is not open to the atmosphere and that is composed of hard-piping, ductwork, connections, and, if necessary, flow-inducing devices that transport gas or vapor from a piece or pieces of equipment to a control device or back to a process. *Connector* means flanged, screwed, or other joined fittings used to connect two pipe lines or a pipe line and a piece of process equipment or that close an opening in a pipe that could be connected to another pipe. Joined fittings welded completely around the circumference of the interface are not considered connectors for the purpose of this regulation. *Control device* means an enclosed combustion device, vapor recovery system, or flare. *Distance piece* means an open or enclosed casing through which the piston rod travels, separating the compressor cylinder from the crankcase. *Double block and bleed system* means two block valves connected in series with a bleed valve or line that can vent the line between the two block valves. *Duct work* means a conveyance system such as those commonly used for heating and ventilation systems. It is often made of sheet metal and often has sections connected by screws or crimping. Hard-piping is not ductwork. *Equipment* means each pump, compressor, pressure relief device, sampling connection system, open-ended valve or line, valve, and flange or other connector in VOC service and any devices or systems required by this subpart. *First attempt at repair* means to take action for the purpose of stopping or reducing leakage of organic material to the atmosphere using best practices. *Fuel gas* means gases that are combusted to derive useful work or heat. *Fuel gas system* means the offsite and onsite piping and flow and pressure control system that gathers gaseous stream(s) generated by onsite operations, may blend them with other sources of gas, and transports the gaseous stream for use as fuel gas in combustion devices or in-process combustion equipment, such as furnaces and gas turbines, either singly or in combination. *Hard-piping* means pipe or tubing that is manufactured and properly installed using good engineering judgment and standards such as ASME B31.3, Process Piping (available from the American Society of Mechanical Engineers, P.O. Box 2300, Fairfield, NJ 07007-2300). *In gas/vapor service* means that the piece of equipment contains process fluid that is in the gaseous state at operating conditions. *In heavy liquid service* means that the piece of equipment is not in gas/vapor service or in light liquid service. *In light liquid service* means that the piece of equipment contains a liquid that meets the conditions specified in § 60.485a(e). *In-situ sampling systems* means nonextractive samplers or in-line samplers. *In vacuum service* means that equipment is operating at an internal pressure which is at least 5 kilopascals
(kPa)(0.7 psia) below ambient pressure. *In VOC service* means that the piece of equipment contains or contacts a process fluid that is at least 10 percent VOC by weight. (The provisions of § 60.485a(d) specify how to determine that a piece of equipment is not in VOC service.) *Initial calibration value* means the concentration measured during the initial calibration at the beginning of each day required in § 60.485a(b)(1), or the most recent calibration if the instrument is recalibrated during the day (i.e., the calibration is adjusted) after a calibration drift assessment. *Liquids dripping* means any visible leakage from the seal including spraying, misting, clouding, and ice formation. *Open-ended valve or line* means any valve, except safety relief valves, having one side of the valve seat in contact with process fluid and one side open to the atmosphere, either directly or through open piping. *Pressure release means* the emission of materials resulting from system pressure being greater than set pressure of the pressure relief device. *Process improvement* means routine changes made for safety and occupational health requirements, for energy savings, for better utility, for ease of maintenance and operation, for correction of design deficiencies, for bottleneck removal, for changing product requirements, or for environmental control. *Process unit* means the components assembled and connected by pipes or ducts to process raw materials and to produce, as intermediate or final products, one or more of the chemicals listed in § 60.489. A process unit can operate independently if supplied with sufficient feed or raw materials and sufficient storage facilities for the product. For the purpose of this subpart, process unit includes any feed, intermediate and final product storage vessels (except as specified in § 60.482-1a(g)), product transfer racks, and connected ducts and piping. A process unit includes all equipment as defined in this subpart. *Process unit shutdown* means a work practice or operational procedure that stops production from a process unit or part of a process unit during which it is technically feasible to clear process material from a process unit or part of a process unit consistent with safety constraints and during which repairs can be accomplished. The following are not considered process unit shutdowns:
(1)An unscheduled work practice or operational procedure that stops production from a process unit or part of a process unit for less than 24 hours.
(2)An unscheduled work practice or operational procedure that would stop production from a process unit or part of a process unit for a shorter period of time than would be required to clear the process unit or part of the process unit of materials and start up the unit, and would result in greater emissions than delay of repair of leaking components until the next scheduled process unit shutdown.
(3)The use of spare equipment and technically feasible bypassing of equipment without stopping production. *Quarter* means a 3-month period; the first quarter concludes on the last day of the last full month during the 180 days following initial startup. *Repaired* means that equipment is adjusted, or otherwise altered, in order to eliminate a leak as defined in the applicable sections of this subpart and, except for leaks identified in accordance with §§ 60.482-2a(b)(2)(ii) and (d)(6)(ii) and (d)(6)(iii), 60.482-3a(f), and 60.482-10a(f)(1)(ii), is re-monitored as specified in § 60.485a(b) to verify that emissions from the equipment are below the applicable leak definition. *Replacement cost* means the capital needed to purchase all the depreciable components in a facility. *Sampling connection system* means an assembly of equipment within a process unit used during periods of representative operation to take samples of the process fluid. Equipment used to take nonroutine grab samples is not considered a sampling connection system. *Sensor* means a device that measures a physical quantity or the change in a physical quantity such as temperature, pressure, flow rate, pH, or liquid level. *Storage vessel* means a tank or other vessel that is used to store organic liquids that are used in the process as raw material feedstocks, produced as intermediates or final products, or generated as wastes. Storage vessel does not include vessels permanently attached to motor vehicles, such as trucks, railcars, barges or ships. *Synthetic organic chemicals manufacturing industry* means the industry that produces, as intermediates or final products, one or more of the chemicals listed in § 60.489. *Transfer rack* means the collection of loading arms and loading hoses, at a single loading rack, that are used to fill tank trucks and/or railcars with organic liquids. *Volatile organic compounds* or VOC means, for the purposes of this subpart, any reactive organic compounds as defined in § 60.2 Definitions. § 60.482-1a Standards: General.
(a)Each owner or operator subject to the provisions of this subpart shall demonstrate compliance with the requirements of §§ 60.482-1a through 60.482-10a or § 60.480a(e) for all equipment within 180 days of initial startup.
(b)Compliance with §§ 60.482-1a to 60.482-10a will be determined by review of records and reports, review of performance test results, and inspection using the methods and procedures specified in § 60.485a. (c)(1) An owner or operator may request a determination of equivalence of a means of emission limitation to the requirements of §§ 60.482-2a, 60.482-3a, 60.482-5a, 60.482-6a, 60.482-7a, 60.482-8a, and 60.482-10a as provided in § 60.484a.
(2)If the Administrator makes a determination that a means of emission limitation is at least equivalent to the requirements of §§ 60.482-2a, 60.482-3a, 60.482-5a, 60.482-6a, 60.482-7a, 60.482-8a, or 60.482-10a, an owner or operator shall comply with the requirements of that determination.
(d)Equipment that is in vacuum service is excluded from the requirements of §§ 60.482-2a through 60.482-10a if it is identified as required in § 60.486a(e)(5).
(e)Equipment that an owner or operator designates as being in VOC service less than 300 hr/yr is excluded from the requirements of §§ 60.482-2a through 60.482-11a if it is identified as required in § 60.486a(e)(6) and it meets any of the conditions specified in paragraphs (e)(1) through
(3)of this section.
(1)The equipment is in VOC service only during startup and shutdown, excluding startup and shutdown between batches of the same campaign for a batch process.
(2)The equipment is in VOC service only during process malfunctions or other emergencies.
(3)The equipment is backup equipment that is in VOC service only when the primary equipment is out of service. (f)(1) If a dedicated batch process unit operates less than 365 days during a year, an owner or operator may monitor to detect leaks from pumps, valves, and open-ended valves or lines at the frequency specified in the following table instead of monitoring as specified in §§ 60.482-2a, 60.482-7a, and 60.483.2a: Operating time (percent of hours during year) Equivalent monitoring frequency time in use Monthly Quarterly Semiannually 0 to <25 Quarterly Annually Annually. 25 to <50 Quarterly Semiannually Annually. 50 to <75 Bimonthly Three quarters Semiannually. 75 to 100 Monthly Quarterly Semiannually.
(2)Pumps and valves that are shared among two or more batch process units that are subject to this subpart may be monitored at the frequencies specified in paragraph (f)(1) of this section, provided the operating time of all such process units is considered.
(3)The monitoring frequencies specified in paragraph (f)(1) of this section are not requirements for monitoring at specific intervals and can be adjusted to accommodate process operations. An owner or operator may monitor at any time during the specified monitoring period (e.g., month, quarter, year), provided the monitoring is conducted at a reasonable interval after completion of the last monitoring campaign. Reasonable intervals are defined in paragraphs (f)(3)(i) through
(iv)of this section.
(i)When monitoring is conducted quarterly, monitoring events must be separated by at least 30 calendar days.
(ii)When monitoring is conducted semiannually ( *i.e.* , once every 2 quarters), monitoring events must be separated by at least 60 calendar days.
(iii)When monitoring is conducted in 3 quarters per year, monitoring events must be separated by at least 90 calendar days.
(iv)When monitoring is conducted annually, monitoring events must be separated by at least 120 calendar days.
(g)If the storage vessel is shared with multiple process units, the process unit with the greatest annual amount of stored materials (predominant use) is the process unit the storage vessel is assigned to. If the storage vessel is shared equally among process units, and one of the process units has equipment subject to this subpart, the storage vessel is assigned to that process unit. If the storage vessel is shared equally among process units, none of which have equipment subject to this subpart of this part, the storage vessel is assigned to any process unit subject to subpart VV of this part. If the predominant use of the storage vessel varies from year to year, then the owner or operator must estimate the predominant use initially and reassess every 3 years. The owner or operator must keep records of the information and supporting calculations that show how predominant use is determined. All equipment on the storage vessel must be monitored when in VOC service. § 60.482-2a Standards: Pumps in light liquid service. (a)(1) Each pump in light liquid service shall be monitored monthly to detect leaks by the methods specified in § 60.485a(b), except as provided in § 60.482-1a(c) and
(f)and paragraphs (d), (e), and
(f)of this section. A pump that begins operation in light liquid service after the initial startup date for the process unit must be monitored for the first time within 30 days after the end of its startup period, except for a pump that replaces a leaking pump and except as provided in § 60.482-1a(c) and paragraphs (d), (e), and
(f)of this section.
(2)Each pump in light liquid service shall be checked by visual inspection each calendar week for indications of liquids dripping from the pump seal, except as provided in § 60.482-1a(f). (b)(1) The instrument reading that defines a leak is specified in paragraphs (b)(1)(i) and
(ii)of this section.
(i)5,000 parts per million
(ppm)or greater for pumps handling polymerizing monomers;
(ii)2,000 ppm or greater for all other pumps.
(2)If there are indications of liquids dripping from the pump seal, the owner or operator shall follow the procedure specified in either paragraph (b)(2)(i) or
(ii)of this section. This requirement does not apply to a pump that was monitored after a previous weekly inspection and the instrument reading was less than the concentration specified in paragraph (b)(1)(i) or
(ii)of this section, whichever is applicable.
(i)Monitor the pump within 5 days as specified in § 60.485a(b). A leak is detected if the instrument reading measured during monitoring indicates a leak as specified in paragraph (b)(1)(i) or
(ii)of this section, whichever is applicable. The leak shall be repaired using the procedures in paragraph
(c)of this section.
(ii)Designate the visual indications of liquids dripping as a leak, and repair the leak using either the procedures in paragraph
(c)of this section or by eliminating the visual indications of liquids dripping. (c)(1) When a leak is detected, it shall be repaired as soon as practicable, but not later than 15 calendar days after it is detected, except as provided in § 60.482-9a.
(2)A first attempt at repair shall be made no later than 5 calendar days after each leak is detected. First attempts at repair include, but are not limited to, the practices described in paragraphs (c)(2)(i) and
(ii)of this section, where practicable.
(i)Tightening the packing gland nuts;
(ii)Ensuring that the seal flush is operating at design pressure and temperature.
(d)Each pump equipped with a dual mechanical seal system that includes a barrier fluid system is exempt from the requirements of paragraph
(a)of this section, provided the requirements specified in paragraphs (d)(1) through
(6)of this section are met.
(1)Each dual mechanical seal system is:
(i)Operated with the barrier fluid at a pressure that is at all times greater than the pump stuffing box pressure; or
(ii)Equipped with a barrier fluid degassing reservoir that is routed to a process or fuel gas system or connected by a closed vent system to a control device that complies with the requirements of § 60.482-10a; or
(iii)Equipped with a system that purges the barrier fluid into a process stream with zero VOC emissions to the atmosphere.
(2)The barrier fluid system is in heavy liquid service or is not in VOC service.
(3)Each barrier fluid system is equipped with a sensor that will detect failure of the seal system, the barrier fluid system, or both. (4)(i) Each pump is checked by visual inspection, each calendar week, for indications of liquids dripping from the pump seals.
(ii)If there are indications of liquids dripping from the pump seal at the time of the weekly inspection, the owner or operator shall follow the procedure specified in either paragraph (d)(4)(ii)(A) or
(B)of this section prior to the next required inspection.
(A)Monitor the pump within 5 days as specified in § 60.485a(b) to determine if there is a leak of VOC in the barrier fluid. If an instrument reading of 2,000 ppm or greater is measured, a leak is detected.
(B)Designate the visual indications of liquids dripping as a leak. (5)(i) Each sensor as described in paragraph (d)(3) is checked daily or is equipped with an audible alarm.
(ii)The owner or operator determines, based on design considerations and operating experience, a criterion that indicates failure of the seal system, the barrier fluid system, or both.
(iii)If the sensor indicates failure of the seal system, the barrier fluid system, or both, based on the criterion established in paragraph (d)(5)(ii) of this section, a leak is detected. (6)(i) When a leak is detected pursuant to paragraph (d)(4)(ii)(A) of this section, it shall be repaired as specified in paragraph
(c)of this section.
(ii)A leak detected pursuant to paragraph (d)(5)(iii) of this section shall be repaired within 15 days of detection by eliminating the conditions that activated the sensor.
(iii)A designated leak pursuant to paragraph (d)(4)(ii)(B) of this section shall be repaired within 15 days of detection by eliminating visual indications of liquids dripping.
(e)Any pump that is designated, as described in § 60.486a(e)(1) and (2), for no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, is exempt from the requirements of paragraphs (a), (c), and
(d)of this section if the pump:
(1)Has no externally actuated shaft penetrating the pump housing;
(2)Is demonstrated to be operating with no detectable emissions as indicated by an instrument reading of less than 500 ppm above background as measured by the methods specified in § 60.485a(c); and
(3)Is tested for compliance with paragraph (e)(2) of this section initially upon designation, annually, and at other times requested by the Administrator.
(f)If any pump is equipped with a closed vent system capable of capturing and transporting any leakage from the seal or seals to a process or to a fuel gas system or to a control device that complies with the requirements of § 60.482-10a, it is exempt from paragraphs
(a)through
(e)of this section.
(g)Any pump that is designated, as described in § 60.486a(f)(1), as an unsafe-to-monitor pump is exempt from the monitoring and inspection requirements of paragraphs
(a)and (d)(4) through
(6)of this section if:
(1)The owner or operator of the pump demonstrates that the pump is unsafe-to-monitor because monitoring personnel would be exposed to an immediate danger as a consequence of complying with paragraph
(a)of this section; and
(2)The owner or operator of the pump has a written plan that requires monitoring of the pump as frequently as practicable during safe-to-monitor times, but not more frequently than the periodic monitoring schedule otherwise applicable, and repair of the equipment according to the procedures in paragraph
(c)of this section if a leak is detected.
(h)Any pump that is located within the boundary of an unmanned plant site is exempt from the weekly visual inspection requirement of paragraphs (a)(2) and (d)(4) of this section, and the daily requirements of paragraph (d)(5) of this section, provided that each pump is visually inspected as often as practicable and at least monthly. § 60.482-3a Standards: Compressors.
(a)Each compressor shall be equipped with a seal system that includes a barrier fluid system and that prevents leakage of VOC to the atmosphere, except as provided in § 60.482-1a(c) and paragraphs (h), (i), and
(j)of this section.
(b)Each compressor seal system as required in paragraph
(a)of this section shall be:
(1)Operated with the barrier fluid at a pressure that is greater than the compressor stuffing box pressure; or
(2)Equipped with a barrier fluid system degassing reservoir that is routed to a process or fuel gas system or connected by a closed vent system to a control device that complies with the requirements of § 60.482-10a; or
(3)Equipped with a system that purges the barrier fluid into a process stream with zero VOC emissions to the atmosphere.
(c)The barrier fluid system shall be in heavy liquid service or shall not be in VOC service.
(d)Each barrier fluid system as described in paragraph
(a)shall be equipped with a sensor that will detect failure of the seal system, barrier fluid system, or both. (e)(1) Each sensor as required in paragraph
(d)of this section shall be checked daily or shall be equipped with an audible alarm.
(2)The owner or operator shall determine, based on design considerations and operating experience, a criterion that indicates failure of the seal system, the barrier fluid system, or both.
(f)If the sensor indicates failure of the seal system, the barrier system, or both based on the criterion determined under paragraph (e)(2) of this section, a leak is detected. (g)(1) When a leak is detected, it shall be repaired as soon as practicable, but not later than 15 calendar days after it is detected, except as provided in § 60.482-9a.
(2)A first attempt at repair shall be made no later than 5 calendar days after each leak is detected.
(h)A compressor is exempt from the requirements of paragraphs
(a)and
(b)of this section, if it is equipped with a closed vent system to capture and transport leakage from the compressor drive shaft back to a process or fuel gas system or to a control device that complies with the requirements of § 60.482-10a, except as provided in paragraph
(i)of this section.
(i)Any compressor that is designated, as described in § 60.486a(e)(1) and (2), for no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, is exempt from the requirements of paragraphs
(a)through
(h)of this section if the compressor:
(1)Is demonstrated to be operating with no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, as measured by the methods specified in § 60.485a(c); and
(2)Is tested for compliance with paragraph (i)(1) of this section initially upon designation, annually, and at other times requested by the Administrator.
(j)Any existing reciprocating compressor in a process unit which becomes an affected facility under provisions of § 60.14 or § 60.15 is exempt from paragraphs
(a)through
(e)and
(h)of this section, provided the owner or operator demonstrates that recasting the distance piece or replacing the compressor are the only options available to bring the compressor into compliance with the provisions of paragraphs
(a)through
(e)and
(h)of this section. § 60.482-4a Standards: Pressure relief devices in gas/vapor service.
(a)Except during pressure releases, each pressure relief device in gas/vapor service shall be operated with no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, as determined by the methods specified in § 60.485a(c). (b)(1) After each pressure release, the pressure relief device shall be returned to a condition of no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, as soon as practicable, but no later than 5 calendar days after the pressure release, except as provided in § 60.482-9a.
(2)No later than 5 calendar days after the pressure release, the pressure relief device shall be monitored to confirm the conditions of no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, by the methods specified in § 60.485a(c).
(c)Any pressure relief device that is routed to a process or fuel gas system or equipped with a closed vent system capable of capturing and transporting leakage through the pressure relief device to a control device as described in § 60.482-10a is exempted from the requirements of paragraphs
(a)and
(b)of this section. (d)(1) Any pressure relief device that is equipped with a rupture disk upstream of the pressure relief device is exempt from the requirements of paragraphs
(a)and
(b)of this section, provided the owner or operator complies with the requirements in paragraph (d)(2) of this section.
(2)After each pressure release, a new rupture disk shall be installed upstream of the pressure relief device as soon as practicable, but no later than 5 calendar days after each pressure release, except as provided in § 60.482-9a. § 60.482-5a Standards: Sampling connection systems.
(a)Each sampling connection system shall be equipped with a closed-purge, closed-loop, or closed-vent system, except as provided in § 60.482-1a(c) and paragraph
(c)of this section.
(b)Each closed-purge, closed-loop, or closed-vent system as required in paragraph
(a)of this section shall comply with the requirements specified in paragraphs (b)(1) through
(4)of this section.
(1)Gases displaced during filling of the sample container are not required to be collected or captured.
(2)Containers that are part of a closed-purge system must be covered or closed when not being filled or emptied.
(3)Gases remaining in the tubing or piping between the closed-purge system valve(s) and sample container valve(s) after the valves are closed and the sample container is disconnected are not required to be collected or captured.
(4)Each closed-purge, closed-loop, or closed-vent system shall be designed and operated to meet requirements in either paragraph (b)(4)(i), (ii), (iii), or
(iv)of this section.
(i)Return the purged process fluid directly to the process line.
(ii)Collect and recycle the purged process fluid to a process.
(iii)Capture and transport all the purged process fluid to a control device that complies with the requirements of § 60.482-10a.
(iv)Collect, store, and transport the purged process fluid to any of the following systems or facilities:
(A)A waste management unit as defined in 40 CFR 63.111, if the waste management unit is subject to and operated in compliance with the provisions of 40 CFR part 63, subpart G, applicable to Group 1 wastewater streams;
(B)A treatment, storage, or disposal facility subject to regulation under 40 CFR part 262, 264, 265, or 266;
(C)A facility permitted, licensed, or registered by a state to manage municipal or industrial solid waste, if the process fluids are not hazardous waste as defined in 40 CFR part 261;
(D)A waste management unit subject to and operated in compliance with the treatment requirements of 40 CFR 61.348(a), provided all waste management units that collect, store, or transport the purged process fluid to the treatment unit are subject to and operated in compliance with the management requirements of 40 CFR 61.343 through 40 CFR 61.347; or
(E)A device used to burn off-specification used oil for energy recovery in accordance with 40 CFR part 279, subpart G, provided the purged process fluid is not hazardous waste as defined in 40 CFR part 261.
(c)In-situ sampling systems and sampling systems without purges are exempt from the requirements of paragraphs
(a)and
(b)of this section. § 60.482-6a Standards: Open-ended valves or lines. (a)(1) Each open-ended valve or line shall be equipped with a cap, blind flange, plug, or a second valve, except as provided in § 60.482-1a(c) and paragraphs
(d)and
(e)of this section.
(2)The cap, blind flange, plug, or second valve shall seal the open end at all times except during operations requiring process fluid flow through the open-ended valve or line.
(b)Each open-ended valve or line equipped with a second valve shall be operated in a manner such that the valve on the process fluid end is closed before the second valve is closed.
(c)When a double block-and-bleed system is being used, the bleed valve or line may remain open during operations that require venting the line between the block valves but shall comply with paragraph
(a)of this section at all other times.
(d)Open-ended valves or lines in an emergency shutdown system which are designed to open automatically in the event of a process upset are exempt from the requirements of paragraphs (a), (b), and
(c)of this section.
(e)Open-ended valves or lines containing materials which would autocatalytically polymerize or would present an explosion, serious overpressure, or other safety hazard if capped or equipped with a double block and bleed system as specified in paragraphs
(a)through
(c)of this section are exempt from the requirements of paragraphs
(a)through
(c)of this section. § 60.482-7a Standards: Valves in gas/vapor service and in light liquid service. (a)(1) Each valve shall be monitored monthly to detect leaks by the methods specified in § 60.485a(b) and shall comply with paragraphs
(b)through
(e)of this section, except as provided in paragraphs (f), (g), and
(h)of this section, § 60.482-1a(c) and (f), and §§ 60.483-1a and 60.483-2a.
(2)A valve that begins operation in gas/vapor service or light liquid service after the initial startup date for the process unit must be monitored according to paragraphs (a)(2)(i) or (ii), except for a valve that replaces a leaking valve and except as provided in paragraphs (f), (g), and
(h)of this section, § 60.482-1a(c), and §§ 60.483-1a and 60.483-2a.
(i)Monitor the valve as in paragraph (a)(1) of this section. The valve must be monitored for the first time within 30 days after the end of its startup period to ensure proper installation.
(ii)If the existing valves in the process unit are monitored in accordance with § 60.483-1a or § 60.483-2a, count the new valve as leaking when calculating the percentage of valves leaking as described in § 60.483-2a(b)(5). If less than 2.0 percent of the valves are leaking for that process unit, the valve must be monitored for the first time during the next scheduled monitoring event for existing valves in the process unit or within 90 days, whichever comes first.
(b)If an instrument reading of 500 ppm or greater is measured, a leak is detected. (c)(1)(i) Any valve for which a leak is not detected for 2 successive months may be monitored the first month of every quarter, beginning with the next quarter, until a leak is detected.
(ii)As an alternative to monitoring all of the valves in the first month of a quarter, an owner or operator may elect to subdivide the process unit into two or three subgroups of valves and monitor each subgroup in a different month during the quarter, provided each subgroup is monitored every 3 months. The owner or operator must keep records of the valves assigned to each subgroup.
(2)If a leak is detected, the valve shall be monitored monthly until a leak is not detected for 2 successive months. (d)(1) When a leak is detected, it shall be repaired as soon as practicable, but no later than 15 calendar days after the leak is detected, except as provided in § 60.482-9a.
(2)A first attempt at repair shall be made no later than 5 calendar days after each leak is detected.
(e)First attempts at repair include, but are not limited to, the following best practices where practicable:
(1)Tightening of bonnet bolts;
(2)Replacement of bonnet bolts;
(3)Tightening of packing gland nuts;
(4)Injection of lubricant into lubricated packing.
(f)Any valve that is designated, as described in § 60.486a(e)(2), for no detectable emissions, as indicated by an instrument reading of less than 500 ppm above background, is exempt from the requirements of paragraph
(a)of this section if the valve:
(1)Has no external actuating mechanism in contact with the process fluid,
(2)Is operated with emissions less than 500 ppm above background as determined by the method specified in § 60.485a(c), and
(3)Is tested for compliance with paragraph (f)(2) of this section initially upon designation, annually, and at other times requested by the Administrator.
(g)Any valve that is designated, as described in § 60.486a(f)(1), as an unsafe-to-monitor valve is exempt from the requirements of paragraph
(a)of this section if:
(1)The owner or operator of the valve demonstrates that the valve is unsafe to monitor because monitoring personnel would be exposed to an immediate danger as a consequence of complying with paragraph
(a)of this section, and
(2)The owner or operator of the valve adheres to a written plan that requires monitoring of the valve as frequently as practicable during safe-to-monitor times.
(h)Any valve that is designated, as described in § 60.486a(f)(2), as a difficult-to-monitor valve is exempt from the requirements of paragraph
(a)of this section if:
(1)The owner or operator of the valve demonstrates that the valve cannot be monitored without elevating the monitoring personnel more than 2 meters above a support surface.
(2)The process unit within which the valve is located either:
(i)Becomes an affected facility through § 60.14 or § 60.15 and was constructed on or before January 5, 1981; or
(ii)Has less than 3.0 percent of its total number of valves designated as difficult-to-monitor by the owner or operator.
(3)The owner or operator of the valve follows a written plan that requires monitoring of the valve at least once per calendar year. § 60.482-8a Standards: Pumps, valves, and connectors in heavy liquid service and pressure relief devices in light liquid or heavy liquid service.
(a)If evidence of a potential leak is found by visual, audible, olfactory, or any other detection method at pumps, valves, and connectors in heavy liquid service and pressure relief devices in light liquid or heavy liquid service, the owner or operator shall follow either one of the following procedures:
(1)The owner or operator shall monitor the equipment within 5 days by the method specified in § 60.485a(b) and shall comply with the requirements of paragraphs
(b)through
(d)of this section.
(2)The owner or operator shall eliminate the visual, audible, olfactory, or other indication of a potential leak within 5 calendar days of detection.
(b)If an instrument reading of 10,000 ppm or greater is measured, a leak is detected. (c)(1) When a leak is detected, it shall be repaired as soon as practicable, but not later than 15 calendar days after it is detected, except as provided in § 60.482-9a.
(2)The first attempt at repair shall be made no later than 5 calendar days after each leak is detected.
(d)First attempts at repair include, but are not limited to, the best practices described under §§ 60.482-2a(c)(2) and 60.482-7a(e). § 60.482-9a Standards: Delay of repair.
(a)Delay of repair of equipment for which leaks have been detected will be allowed if repair within 15 days is technically infeasible without a process unit shutdown. Repair of this equipment shall occur before the end of the next process unit shutdown. Monitoring to verify repair must occur within 15 days after startup of the process unit.
(b)Delay of repair of equipment will be allowed for equipment which is isolated from the process and which does not remain in VOC service.
(c)Delay of repair for valves and connectors will be allowed if:
(1)The owner or operator demonstrates that emissions of purged material resulting from immediate repair are greater than the fugitive emissions likely to result from delay of repair, and
(2)When repair procedures are effected, the purged material is collected and destroyed or recovered in a control device complying with § 60.482-10a.
(d)Delay of repair for pumps will be allowed if:
(1)Repair requires the use of a dual mechanical seal system that includes a barrier fluid system, and
(2)Repair is completed as soon as practicable, but not later than 6 months after the leak was detected.
(e)Delay of repair beyond a process unit shutdown will be allowed for a valve, if valve assembly replacement is necessary during the process unit shutdown, valve assembly supplies have been depleted, and valve assembly supplies had been sufficiently stocked before the supplies were depleted. Delay of repair beyond the next process unit shutdown will not be allowed unless the next process unit shutdown occurs sooner than 6 months after the first process unit shutdown.
(f)When delay of repair is allowed for a leaking pump, valve, or connector that remains in service, the pump, valve, or connector may be considered to be repaired and no longer subject to delay of repair requirements if two consecutive monthly monitoring instrument readings are below the leak definition. § 60.482-10a Standards: Closed vent systems and control devices.
(a)Owners or operators of closed vent systems and control devices used to comply with provisions of this subpart shall comply with the provisions of this section.
(b)Vapor recovery systems (for example, condensers and absorbers) shall be designed and operated to recover the VOC emissions vented to them with an efficiency of 95 percent or greater, or to an exit concentration of 20 parts per million by volume (ppmv), whichever is less stringent.
(c)Enclosed combustion devices shall be designed and operated to reduce the VOC emissions vented to them with an efficiency of 95 percent or greater, or to an exit concentration of 20 ppmv, on a dry basis, corrected to 3 percent oxygen, whichever is less stringent or to provide a minimum residence time of 0.75 seconds at a minimum temperature of 816 °C.
(d)Flares used to comply with this subpart shall comply with the requirements of § 60.18.
(e)Owners or operators of control devices used to comply with the provisions of this subpart shall monitor these control devices to ensure that they are operated and maintained in conformance with their designs.
(f)Except as provided in paragraphs
(i)through
(k)of this section, each closed vent system shall be inspected according to the procedures and schedule specified in paragraphs (f)(1) and
(2)of this section.
(1)If the vapor collection system or closed vent system is constructed of hard-piping, the owner or operator shall comply with the requirements specified in paragraphs (f)(1)(i) and
(ii)of this section:
(i)Conduct an initial inspection according to the procedures in § 60.485a(b); and
(ii)Conduct annual visual inspections for visible, audible, or olfactory indications of leaks.
(2)If the vapor collection system or closed vent system is constructed of ductwork, the owner or operator shall:
(i)Conduct an initial inspection according to the procedures in § 60.485a(b); and
(ii)Conduct annual inspections according to the procedures in § 60.485a(b).
(g)Leaks, as indicated by an instrument reading greater than 500 ppmv above background or by visual inspections, shall be repaired as soon as practicable except as provided in paragraph
(h)of this section.
(1)A first attempt at repair shall be made no later than 5 calendar days after the leak is detected.
(2)Repair shall be completed no later than 15 calendar days after the leak is detected.
(h)Delay of repair of a closed vent system for which leaks have been detected is allowed if the repair is technically infeasible without a process unit shutdown or if the owner or operator determines that emissions resulting from immediate repair would be greater than the fugitive emissions likely to result from delay of repair. Repair of such equipment shall be complete by the end of the next process unit shutdown.
(i)If a vapor collection system or closed vent system is operated under a vacuum, it is exempt from the inspection requirements of paragraphs (f)(1)(i) and (f)(2) of this section.
(j)Any parts of the closed vent system that are designated, as described in paragraph (l)(1) of this section, as unsafe to inspect are exempt from the inspection requirements of paragraphs (f)(1)(i) and (f)(2) of this section if they comply with the requirements specified in paragraphs (j)(1) and
(2)of this section:
(1)The owner or operator determines that the equipment is unsafe to inspect because inspecting personnel would be exposed to an imminent or potential danger as a consequence of complying with paragraphs (f)(1)(i) or (f)(2) of this section; and
(2)The owner or operator has a written plan that requires inspection of the equipment as frequently as practicable during safe-to-inspect times.
(k)Any parts of the closed vent system that are designated, as described in paragraph (l)(2) of this section, as difficult to inspect are exempt from the inspection requirements of paragraphs (f)(1)(i) and (f)(2) of this section if they comply with the requirements specified in paragraphs (k)(1) through
(3)of this section:
(1)The owner or operator determines that the equipment cannot be inspected without elevating the inspecting personnel more than 2 meters above a support surface; and
(2)The process unit within which the closed vent system is located becomes an affected facility through §§ 60.14 or 60.15, or the owner or operator designates less than 3.0 percent of the total number of closed vent system equipment as difficult to inspect; and
(3)The owner or operator has a written plan that requires inspection of the equipment at least once every 5 years. A closed vent system is exempt from inspection if it is operated under a vacuum.
(l)The owner or operator shall record the information specified in paragraphs (l)(1) through
(5)of this section.
(1)Identification of all parts of the closed vent system that are designated as unsafe to inspect, an explanation of why the equipment is unsafe to inspect, and the plan for inspecting the equipment.
(2)Identification of all parts of the closed vent system that are designated as difficult to inspect, an explanation of why the equipment is difficult to inspect, and the plan for inspecting the equipment.
(3)For each inspection during which a leak is detected, a record of the information specified in § 60.486a(c).
(4)For each inspection conducted in accordance with § 60.485a(b) during which no leaks are detected, a record that the inspection was performed, the date of the inspection, and a statement that no leaks were detected.
(5)For each visual inspection conducted in accordance with paragraph (f)(1)(ii) of this section during which no leaks are detected, a record that the inspection was performed, the date of the inspection, and a statement that no leaks were detected.
(m)Closed vent systems and control devices used to comply with provisions of this subpart shall be operated at all times when emissions may be vented to them. § 60.482-11a Standards: Connectors in gas/vapor service and in light liquid service.
(a)The owner or operator shall initially monitor all connectors in the process unit for leaks by the later of either 12 months after the compliance date or 12 months after initial startup. If all connectors in the process unit have been monitored for leaks prior to the compliance date, no initial monitoring is required provided either no process changes have been made since the monitoring or the owner or operator can determine that the results of the monitoring, with or without adjustments, reliably demonstrate compliance despite process changes. If required to monitor because of a process change, the owner or operator is required to monitor only those connectors involved in the process change.
(b)Except as allowed in § 60.482-1a(c), § 60.482-10a, or as specified in paragraph
(e)of this section, the owner or operator shall monitor all connectors in gas and vapor and light liquid service as specified in paragraphs
(a)and (b)(3) of this section.
(1)The connectors shall be monitored to detect leaks by the method specified in § 60.485a(b) and, as applicable, § 60.485a(c).
(2)If an instrument reading greater than or equal to 500 ppm is measured, a leak is detected.
(3)The owner or operator shall perform monitoring, subsequent to the initial monitoring required in paragraph
(a)of this section, as specified in paragraphs (b)(3)(i) through
(iii)of this section, and shall comply with the requirements of paragraphs (b)(3)(iv) and
(v)of this section. The required period in which monitoring must be conducted shall be determined from paragraphs (b)(3)(i) through
(iii)of this section using the monitoring results from the preceding monitoring period. The percent leaking connectors shall be calculated as specified in paragraph
(c)of this section.
(i)If the percent leaking connectors in the process unit was greater than or equal to 0.5 percent, then monitor within 12 months (1 year).
(ii)If the percent leaking connectors in the process unit was greater than or equal to 0.25 percent but less than 0.5 percent, then monitor within 4 years. An owner or operator may comply with the requirements of this paragraph by monitoring at least 40 percent of the connectors within 2 years of the start of the monitoring period, provided all connectors have been monitored by the end of the 4-year monitoring period.
(iii)If the percent leaking connectors in the process unit was less than 0.25 percent, then monitor as provided in paragraph (b)(3)(iii)(A) of this section and either paragraph (b)(3)(iii)(B) or (b)(3)(iii)(C) of this section, as appropriate.
(A)An owner or operator shall monitor at least 50 percent of the connectors within 4 years of the start of the monitoring period.
(B)If the percent of leaking connectors calculated from the monitoring results in paragraph (b)(3)(iii)(A) of this section is greater than or equal to 0.35 percent of the monitored connectors, the owner or operator shall monitor as soon as practical, but within the next 6 months, all connectors that have not yet been monitored during the monitoring period. At the conclusion of monitoring, a new monitoring period shall be started pursuant to paragraph (b)(3) of this section, based on the percent of leaking connectors within the total monitored connectors.
(C)If the percent of leaking connectors calculated from the monitoring results in paragraph (b)(3)(iii)(A) of this section is less than 0.35 percent of the monitored connectors, the owner or operator shall monitor all connectors that have not yet been monitored within 8 years of the start of the monitoring period.
(iv)If, during the monitoring conducted pursuant to paragraphs (b)(3)(i) through
(iii)of this section, a connector is found to be leaking, it shall be re-monitored once within 90 days after repair to confirm that it is not leaking.
(v)The owner or operator shall keep a record of the start date and end date of each monitoring period under this section for each process unit.
(c)For use in determining the monitoring frequency, as specified in paragraphs
(a)and (b)(3) of this section, the percent leaking connectors as used in paragraphs
(a)and (b)(3) of this section shall be calculated by using the following equation: %C <sup>L</sup> = C <sup>L</sup> / C <sup>t</sup> * 100 Where: %C <sup>L</sup> = Percent of leaking connectors as determined through periodic monitoring required in paragraphs
(a)and (b)(3)(i) through
(iii)of this section. C <sup>L</sup> = Number of connectors measured at 500 ppm or greater, by the method specified in § 60.485a(b). C <sup>t</sup> = Total number of monitored connectors in the process unit or affected facility.
(d)When a leak is detected pursuant to paragraphs
(a)and
(b)of this section, it shall be repaired as soon as practicable, but not later than 15 calendar days after it is detected, except as provided in § 60.482-9a. A first attempt at repair as defined in this subpart shall be made no later than 5 calendar days after the leak is detected.
(e)Any connector that is designated, as described in § 60.486a(f)(1), as an unsafe-to-monitor connector is exempt from the requirements of paragraphs
(a)and
(b)of this section if:
(1)The owner or operator of the connector demonstrates that the connector is unsafe-to-monitor because monitoring personnel would be exposed to an immediate danger as a consequence of complying with paragraphs
(a)and
(b)of this section; and
(2)The owner or operator of the connector has a written plan that requires monitoring of the connector as frequently as practicable during safe-to-monitor times but not more frequently than the periodic monitoring schedule otherwise applicable, and repair of the equipment according to the procedures in paragraph
(d)of this section if a leak is detected.
(f)*Inaccessible, ceramic, or ceramic-lined connectors* .
(1)Any connector that is inaccessible or that is ceramic or ceramic-lined (e.g., porcelain, glass, or glass-lined), is exempt from the monitoring requirements of paragraphs
(a)and
(b)of this section, from the leak repair requirements of paragraph
(d)of this section, and from the recordkeeping and reporting requirements of §§ 63.1038 and 63.1039. An inaccessible connector is one that meets any of the provisions specified in paragraphs (f)(1)(i) through
(vi)of this section, as applicable:
(i)Buried;
(ii)Insulated in a manner that prevents access to the connector by a monitor probe;
(iii)Obstructed by equipment or piping that prevents access to the connector by a monitor probe;
(iv)Unable to be reached from a wheeled scissor-lift or hydraulic-type scaffold that would allow access to connectors up to 7.6 meters (25 feet) above the ground;
(v)Inaccessible because it would require elevating the monitoring personnel more than 2 meters (7 feet) above a permanent support surface or would require the erection of scaffold; or
(vi)Not able to be accessed at any time in a safe manner to perform monitoring. Unsafe access includes, but is not limited to, the use of a wheeled scissor-lift on unstable or uneven terrain, the use of a motorized man-lift basket in areas where an ignition potential exists, or access would require near proximity to hazards such as electrical lines, or would risk damage to equipment.
(2)If any inaccessible, ceramic, or ceramic-lined connector is observed by visual, audible, olfactory, or other means to be leaking, the visual, audible, olfactory, or other indications of a leak to the atmosphere shall be eliminated as soon as practical.
(g)Except for instrumentation systems and inaccessible, ceramic, or ceramic-lined connectors meeting the provisions of paragraph
(f)of this section, identify the connectors subject to the requirements of this subpart. Connectors need not be individually identified if all connectors in a designated area or length of pipe subject to the provisions of this subpart are identified as a group, and the number of connectors subject is indicated. § 60.483-1a Alternative standards for valves—allowable percentage of valves leaking.
(a)An owner or operator may elect to comply with an allowable percentage of valves leaking of equal to or less than 2.0 percent.
(b)The following requirements shall be met if an owner or operator wishes to comply with an allowable percentage of valves leaking:
(1)An owner or operator must notify the Administrator that the owner or operator has elected to comply with the allowable percentage of valves leaking before implementing this alternative standard, as specified in § 60.487a(d).
(2)A performance test as specified in paragraph
(c)of this section shall be conducted initially upon designation, annually, and at other times requested by the Administrator.
(3)If a valve leak is detected, it shall be repaired in accordance with § 60.482-7a(d) and (e).
(c)Performance tests shall be conducted in the following manner:
(1)All valves in gas/vapor and light liquid service within the affected facility shall be monitored within 1 week by the methods specified in § 60.485a(b).
(2)If an instrument reading of 500 ppm or greater is measured, a leak is detected.
(3)The leak percentage shall be determined by dividing the number of valves for which leaks are detected by the number of valves in gas/vapor and light liquid service within the affected facility.
(d)Owners and operators who elect to comply with this alternative standard shall not have an affected facility with a leak percentage greater than 2.0 percent, determined as described in § 60.485a(h). § 60.483-2a Alternative standards for valves—skip period leak detection and repair. (a)(1) An owner or operator may elect to comply with one of the alternative work practices specified in paragraphs (b)(2) and
(3)of this section.
(2)An owner or operator must notify the Administrator before implementing one of the alternative work practices, as specified in § 60.487(d)a. (b)(1) An owner or operator shall comply initially with the requirements for valves in gas/vapor service and valves in light liquid service, as described in § 60.482-7a.
(2)After 2 consecutive quarterly leak detection periods with the percent of valves leaking equal to or less than 2.0, an owner or operator may begin to skip 1 of the quarterly leak detection periods for the valves in gas/vapor and light liquid service.
(3)After 5 consecutive quarterly leak detection periods with the percent of valves leaking equal to or less than 2.0, an owner or operator may begin to skip 3 of the quarterly leak detection periods for the valves in gas/vapor and light liquid service.
(4)If the percent of valves leaking is greater than 2.0, the owner or operator shall comply with the requirements as described in § 60.482-7a but can again elect to use this section.
(5)The percent of valves leaking shall be determined as described in § 60.485a(h).
(6)An owner or operator must keep a record of the percent of valves found leaking during each leak detection period.
(7)A valve that begins operation in gas/vapor service or light liquid service after the initial startup date for a process unit following one of the alternative standards in this section must be monitored in accordance with § 60.482-7a(a)(2)(i) or
(ii)before the provisions of this section can be applied to that valve. § 60.484a Equivalence of means of emission limitation.
(a)Each owner or operator subject to the provisions of this subpart may apply to the Administrator for determination of equivalence for any means of emission limitation that achieves a reduction in emissions of VOC at least equivalent to the reduction in emissions of VOC achieved by the controls required in this subpart.
(b)Determination of equivalence to the equipment, design, and operational requirements of this subpart will be evaluated by the following guidelines:
(1)Each owner or operator applying for an equivalence determination shall be responsible for collecting and verifying test data to demonstrate equivalence of means of emission limitation.
(2)The Administrator will compare test data for demonstrating equivalence of the means of emission limitation to test data for the equipment, design, and operational requirements.
(3)The Administrator may condition the approval of equivalence on requirements that may be necessary to assure operation and maintenance to achieve the same emission reduction as the equipment, design, and operational requirements.
(c)Determination of equivalence to the required work practices in this subpart will be evaluated by the following guidelines:
(1)Each owner or operator applying for a determination of equivalence shall be responsible for collecting and verifying test data to demonstrate equivalence of an equivalent means of emission limitation.
(2)For each affected facility for which a determination of equivalence is requested, the emission reduction achieved by the required work practice shall be demonstrated.
(3)For each affected facility, for which a determination of equivalence is requested, the emission reduction achieved by the equivalent means of emission limitation shall be demonstrated.
(4)Each owner or operator applying for a determination of equivalence shall commit in writing to work practice(s) that provide for emission reductions equal to or greater than the emission reductions achieved by the required work practice.
(5)The Administrator will compare the demonstrated emission reduction for the equivalent means of emission limitation to the demonstrated emission reduction for the required work practices and will consider the commitment in paragraph (c)(4) of this section.
(6)The Administrator may condition the approval of equivalence on requirements that may be necessary to assure operation and maintenance to achieve the same emission reduction as the required work practice.
(d)An owner or operator may offer a unique approach to demonstrate the equivalence of any equivalent means of emission limitation. (e)(1) After a request for determination of equivalence is received, the Administrator will publish a notice in the **Federal Register** and provide the opportunity for public hearing if the Administrator judges that the request may be approved.
(2)After notice and opportunity for public hearing, the Administrator will determine the equivalence of a means of emission limitation and will publish the determination in the **Federal Register** .
(3)Any equivalent means of emission limitations approved under this section shall constitute a required work practice, equipment, design, or operational standard within the meaning of section 111(h)(1) of the CAA. (f)(1) Manufacturers of equipment used to control equipment leaks of VOC may apply to the Administrator for determination of equivalence for any equivalent means of emission limitation that achieves a reduction in emissions of VOC achieved by the equipment, design, and operational requirements of this subpart.
(2)The Administrator will make an equivalence determination according to the provisions of paragraphs (b), (c), (d), and
(e)of this section. § 60.485a Test methods and procedures.
(a)In conducting the performance tests required in § 60.8, the owner or operator shall use as reference methods and procedures the test methods in appendix A of this part or other methods and procedures as specified in this section, except as provided in § 60.8(b).
(b)The owner or operator shall determine compliance with the standards in §§ 60.482-1a through 60.482-11a, 60.483a, and 60.484a as follows:
(1)Method 21 shall be used to determine the presence of leaking sources. The instrument shall be calibrated before use each day of its use by the procedures specified in Method 21 of appendix A-7 of this part. The following calibration gases shall be used:
(i)Zero air (less than 10 ppm of hydrocarbon in air); and
(ii)A mixture of methane or n-hexane and air at a concentration no more than 2,000 ppm greater than the leak definition concentration of the equipment monitored. If the monitoring instrument's design allows for multiple calibration scales, then the lower scale shall be calibrated with a calibration gas that is no higher than 2,000 ppm above the concentration specified as a leak, and the highest scale shall be calibrated with a calibration gas that is approximately equal to 10,000 ppm. If only one scale on an instrument will be used during monitoring, the owner or operator need not calibrate the scales that will not be used during that day's monitoring.
(2)A calibration drift assessment shall be performed, at a minimum, at the end of each monitoring day. Check the instrument using the same calibration gas(es) that were used to calibrate the instrument before use. Follow the procedures specified in Method 21 of appendix A-7 of this part, Section 10.1, except do not adjust the meter readout to correspond to the calibration gas value. Record the instrument reading for each scale used as specified in § 60.486a(e)(7). Calculate the average algebraic difference between the three meter readings and the most recent calibration value. Divide this algebraic difference by the initial calibration value and multiply by 100 to express the calibration drift as a percentage. If any calibration drift assessment shows a negative drift of more than 10 percent from the initial calibration value, then all equipment monitored since the last calibration with instrument readings below the appropriate leak definition and above the leak definition multiplied by (100 minus the percent of negative drift/divided by 100) must be re-monitored. If any calibration drift assessment shows a positive drift of more than 10 percent from the initial calibration value, then, at the owner/operator's discretion, all equipment since the last calibration with instrument readings above the appropriate leak definition and below the leak definition multiplied by (100 plus the percent of positive drift/divided by 100) may be re-monitored.
(c)The owner or operator shall determine compliance with the no-detectable-emission standards in §§ 60.482-2a(e), 60.482-3a(i), 60.482-4a, 60.482-7a(f), and 60.482-10a(e) as follows:
(1)The requirements of paragraph
(b)shall apply.
(2)Method 21 of appendix A-7 of this part shall be used to determine the background level. All potential leak interfaces shall be traversed as close to the interface as possible. The arithmetic difference between the maximum concentration indicated by the instrument and the background level is compared with 500 ppm for determining compliance.
(d)The owner or operator shall test each piece of equipment unless he demonstrates that a process unit is not in VOC service, i.e., that the VOC content would never be reasonably expected to exceed 10 percent by weight. For purposes of this demonstration, the following methods and procedures shall be used:
(1)Procedures that conform to the general methods in ASTM E260-73, 91, or 96, E168-67, 77, or 92, E169-63, 77, or 93 (incorporated by reference—see § 60.17) shall be used to determine the percent VOC content in the process fluid that is contained in or contacts a piece of equipment.
(2)Organic compounds that are considered by the Administrator to have negligible photochemical reactivity may be excluded from the total quantity of organic compounds in determining the VOC content of the process fluid.
(3)Engineering judgment may be used to estimate the VOC content, if a piece of equipment had not been shown previously to be in service. If the Administrator disagrees with the judgment, paragraphs (d)(1) and
(2)of this section shall be used to resolve the disagreement.
(e)The owner or operator shall demonstrate that a piece of equipment is in light liquid service by showing that all the following conditions apply:
(1)The vapor pressure of one or more of the organic components is greater than 0.3 kPa at 20 °C (1.2 in. H <sup>2</sup> O at 68 °F). Standard reference texts or ASTM D2879-83, 96, or 97 (incorporated by reference—see § 60.17) shall be used to determine the vapor pressures.
(2)The total concentration of the pure organic components having a vapor pressure greater than 0.3 kPa at 20 °C (1.2 in. H <sup>2</sup> O at 68 °F) is equal to or greater than 20 percent by weight.
(3)The fluid is a liquid at operating conditions.
(f)Samples used in conjunction with paragraphs (d), (e), and
(g)of this section shall be representative of the process fluid that is contained in or contacts the equipment or the gas being combusted in the flare.
(g)The owner or operator shall determine compliance with the standards of flares as follows:
(1)Method 22 of appendix A-7 of this part shall be used to determine visible emissions.
(2)A thermocouple or any other equivalent device shall be used to monitor the presence of a pilot flame in the flare.
(3)The maximum permitted velocity for air assisted flares shall be computed using the following equation: V <sup>max</sup> = K <sup>1</sup> + K <sup>2</sup> H <sup>T</sup> Where: V <sup>max</sup> = Maximum permitted velocity, m/sec (ft/sec). H <sup>T</sup> = Net heating value of the gas being combusted, MJ/scm (Btu/scf). K <sup>1</sup> = 8.706 m/sec (metric units) = 28.56 ft/sec (English units). K <sup>2</sup> = 0.7084 m 4 /(MJ-sec) (metric units) = 0.087 ft 4 /(Btu-sec) (English units).
(4)The net heating value
(HT)of the gas being combusted in a flare shall be computed using the following equation: ER16NO07.038 Where: K = Conversion constant, 1.740 × 10 − 7 (g-mole)(MJ)/(ppm-scm-kcal) (metric units) = 4.674 × 10 − 6 [(g-mole)(Btu)/(ppm-scf-kcal)] (English units). C <sup>i</sup> = Concentration of sample component “i,” ppm H <sup>i</sup> = net heat of combustion of sample component “i” at 25 °C and 760 mm Hg (77 °F and 14.7 psi), kcal/g-mole.
(5)Method 18 of appendix A-6 of this part or ASTM D6420-99
(2004)(where the target compound(s) are those listed in Section 1.1 of ASTM D6420-99, and the target concentration is between 150 parts per billion by volume and 100 ppmv) and ASTM D2504-67, 77, or 88 (Reapproved 1993) (incorporated by reference-see § 60.17) shall be used to determine the concentration of sample component “i.”
(6)ASTM D2382-76 or 88 or D4809-95 (incorporated by reference-see § 60.17) shall be used to determine the net heat of combustion of component “i” if published values are not available or cannot be calculated.
(7)Method 2, 2A, 2C, or 2D of appendix A-7 of this part, as appropriate, shall be used to determine the actual exit velocity of a flare. If needed, the unobstructed
(free)cross-sectional area of the flare tip shall be used.
(h)The owner or operator shall determine compliance with § 60.483-1a or § 60.483-2a as follows:
(1)The percent of valves leaking shall be determined using the following equation: %V <sup>L</sup> = (V <sup>L</sup> / V <sup>T</sup> ) * 100 Where: %V <sup>L</sup> = Percent leaking valves. V <sup>L</sup> = Number of valves found leaking. V <sup>T</sup> = The sum of the total number of valves monitored.
(2)The total number of valves monitored shall include difficult-to-monitor and unsafe-to-monitor valves only during the monitoring period in which those valves are monitored.
(3)The number of valves leaking shall include valves for which repair has been delayed.
(4)Any new valve that is not monitored within 30 days of being placed in service shall be included in the number of valves leaking and the total number of valves monitored for the monitoring period in which the valve is placed in service.
(5)If the process unit has been subdivided in accordance with § 60.482-7a(c)(1)(ii), the sum of valves found leaking during a monitoring period includes all subgroups.
(6)The total number of valves monitored does not include a valve monitored to verify repair. § 60.486a Recordkeeping requirements. (a)(1) Each owner or operator subject to the provisions of this subpart shall comply with the recordkeeping requirements of this section.
(2)An owner or operator of more than one affected facility subject to the provisions of this subpart may comply with the recordkeeping requirements for these facilities in one recordkeeping system if the system identifies each record by each facility.
(3)The owner or operator shall record the information specified in paragraphs (a)(3)(i) through
(v)of this section for each monitoring event required by §§ 60.482-2a, 60.482-3a, 60.482-7a, 60.482-8a, 60.482-11a, and 60.483-2a.
(i)Monitoring instrument identification.
(ii)Operator identification.
(iii)Equipment identification.
(iv)Date of monitoring.
(v)Instrument reading.
(b)When each leak is detected as specified in §§ 60.482-2a, 60.482-3a, 60.482-7a, 60.482-8a, 60.482-11a, and 60.483-2a, the following requirements apply:
(1)A weatherproof and readily visible identification, marked with the equipment identification number, shall be attached to the leaking equipment.
(2)The identification on a valve may be removed after it has been monitored for 2 successive months as specified in § 60.482-7a(c) and no leak has been detected during those 2 months.
(3)The identification on a connector may be removed after it has been monitored as specified in § 60.482-11a(b)(3)(iv) and no leak has been detected during that monitoring.
(4)The identification on equipment, except on a valve or connector, may be removed after it has been repaired.
(c)When each leak is detected as specified in §§ 60.482-2a, 60.482-3a, 60.482-7a, 60.482-8a, 60.482-11a, and 60.483-2a, the following information shall be recorded in a log and shall be kept for 2 years in a readily accessible location:
(1)The instrument and operator identification numbers and the equipment identification number, except when indications of liquids dripping from a pump are designated as a leak.
(2)The date the leak was detected and the dates of each attempt to repair the leak.
(3)Repair methods applied in each attempt to repair the leak.
(4)Maximum instrument reading measured by Method 21 of appendix A-7 of this part at the time the leak is successfully repaired or determined to be nonrepairable, except when a pump is repaired by eliminating indications of liquids dripping.
(5)“Repair delayed” and the reason for the delay if a leak is not repaired within 15 calendar days after discovery of the leak.
(6)The signature of the owner or operator (or designate) whose decision it was that repair could not be effected without a process shutdown.
(7)The expected date of successful repair of the leak if a leak is not repaired within 15 days.
(8)Dates of process unit shutdowns that occur while the equipment is unrepaired.
(9)The date of successful repair of the leak.
(d)The following information pertaining to the design requirements for closed vent systems and control devices described in § 60.482-10a shall be recorded and kept in a readily accessible location:
(1)Detailed schematics, design specifications, and piping and instrumentation diagrams.
(2)The dates and descriptions of any changes in the design specifications.
(3)A description of the parameter or parameters monitored, as required in § 60.482-10a(e), to ensure that control devices are operated and maintained in conformance with their design and an explanation of why that parameter (or parameters) was selected for the monitoring.
(4)Periods when the closed vent systems and control devices required in §§ 60.482-2a, 60.482-3a, 60.482-4a, and 60.482-5a are not operated as designed, including periods when a flare pilot light does not have a flame.
(5)Dates of startups and shutdowns of the closed vent systems and control devices required in §§ 60.482-2a, 60.482-3a, 60.482-4a, and 60.482-5a.
(e)The following information pertaining to all equipment subject to the requirements in §§ 60.482-1a to 60.482-11a shall be recorded in a log that is kept in a readily accessible location:
(1)A list of identification numbers for equipment subject to the requirements of this subpart. (2)(i) A list of identification numbers for equipment that are designated for no detectable emissions under the provisions of §§ 60.482-2a(e), 60.482-3a(i), and 60.482-7a(f).
(ii)The designation of equipment as subject to the requirements of § 60.482-2a(e), § 60.482-3a(i), or § 60.482-7a(f) shall be signed by the owner or operator. Alternatively, the owner or operator may establish a mechanism with their permitting authority that satisfies this requirement.
(3)A list of equipment identification numbers for pressure relief devices required to comply with § 60.482-4a. (4)(i) The dates of each compliance test as required in §§ 60.482-2a(e), 60.482-3a(i), 60.482-4a, and 60.482-7a(f).
(ii)The background level measured during each compliance test.
(iii)The maximum instrument reading measured at the equipment during each compliance test.
(5)A list of identification numbers for equipment in vacuum service.
(6)A list of identification numbers for equipment that the owner or operator designates as operating in VOC service less than 300 hr/yr in accordance with § 60.482-1a(e), a description of the conditions under which the equipment is in VOC service, and rationale supporting the designation that it is in VOC service less than 300 hr/yr.
(7)The date and results of the weekly visual inspection for indications of liquids dripping from pumps in light liquid service.
(8)Records of the information specified in paragraphs (e)(8)(i) through
(vi)of this section for monitoring instrument calibrations conducted according to sections 8.1.2 and 10 of Method 21 of appendix A-7 of this part and § 60.485a(b).
(i)Date of calibration and initials of operator performing the calibration.
(ii)Calibration gas cylinder identification, certification date, and certified concentration.
(iii)Instrument scale(s) used.
(iv)A description of any corrective action taken if the meter readout could not be adjusted to correspond to the calibration gas value in accordance with section 10.1 of Method 21 of appendix A-7 of this part.
(v)Results of each calibration drift assessment required by § 60.485a(b)(2) (i.e., instrument reading for calibration at end of monitoring day and the calculated percent difference from the initial calibration value).
(vi)If an owner or operator makes their own calibration gas, a description of the procedure used.
(9)The connector monitoring schedule for each process unit as specified in § 60.482-11a(b)(3)(v).
(10)Records of each release from a pressure relief device subject to § 60.482-4a.
(f)The following information pertaining to all valves subject to the requirements of § 60.482-7a(g) and (h), all pumps subject to the requirements of § 60.482-2a(g), and all connectors subject to the requirements of § 60.482-11a(e) shall be recorded in a log that is kept in a readily accessible location:
(1)A list of identification numbers for valves, pumps, and connectors that are designated as unsafe-to-monitor, an explanation for each valve, pump, or connector stating why the valve, pump, or connector is unsafe-to-monitor, and the plan for monitoring each valve, pump, or connector.
(2)A list of identification numbers for valves that are designated as difficult-to-monitor, an explanation for each valve stating why the valve is difficult-to-monitor, and the schedule for monitoring each valve.
(g)The following information shall be recorded for valves complying with § 60.483-2a:
(1)A schedule of monitoring.
(2)The percent of valves found leaking during each monitoring period.
(h)The following information shall be recorded in a log that is kept in a readily accessible location:
(1)Design criterion required in §§ 60.482-2a(d)(5) and 60.482-3a(e)(2) and explanation of the design criterion; and
(2)Any changes to this criterion and the reasons for the changes.
(i)The following information shall be recorded in a log that is kept in a readily accessible location for use in determining exemptions as provided in § 60.480a(d):
(1)An analysis demonstrating the design capacity of the affected facility,
(2)A statement listing the feed or raw materials and products from the affected facilities and an analysis demonstrating whether these chemicals are heavy liquids or beverage alcohol, and
(3)An analysis demonstrating that equipment is not in VOC service.
(j)Information and data used to demonstrate that a piece of equipment is not in VOC service shall be recorded in a log that is kept in a readily accessible location.
(k)The provisions of § 60.7(b) and
(d)do not apply to affected facilities subject to this subpart. § 60.487a Reporting requirements.
(a)Each owner or operator subject to the provisions of this subpart shall submit semiannual reports to the Administrator beginning 6 months after the initial startup date.
(b)The initial semiannual report to the Administrator shall include the following information:
(1)Process unit identification.
(2)Number of valves subject to the requirements of § 60.482-7a, excluding those valves designated for no detectable emissions under the provisions of § 60.482-7a(f).
(3)Number of pumps subject to the requirements of § 60.482-2a, excluding those pumps designated for no detectable emissions under the provisions of § 60.482-2a(e) and those pumps complying with § 60.482-2a(f).
(4)Number of compressors subject to the requirements of § 60.482-3a, excluding those compressors designated for no detectable emissions under the provisions of § 60.482-3a(i) and those compressors complying with § 60.482-3a(h).
(5)Number of connectors subject to the requirements of § 60.482-11a.
(c)All semiannual reports to the Administrator shall include the following information, summarized from the information in § 60.486a:
(1)Process unit identification.
(2)For each month during the semiannual reporting period,
(i)Number of valves for which leaks were detected as described in § 60.482-7a(b) or § 60.483-2a,
(ii)Number of valves for which leaks were not repaired as required in § 60.482-7a(d)(1),
(iii)Number of pumps for which leaks were detected as described in § 60.482-2a(b), (d)(4)(ii)(A) or (B), or (d)(5)(iii),
(iv)Number of pumps for which leaks were not repaired as required in § 60.482-2a(c)(1) and (d)(6),
(v)Number of compressors for which leaks were detected as described in § 60.482-3a(f),
(vi)Number of compressors for which leaks were not repaired as required in § 60.482-3a(g)(1),
(vii)Number of connectors for which leaks were detected as described in § 60.482-11a(b)
(viii)Number of connectors for which leaks were not repaired as required in § 60.482-11a(d), and
(xi)The facts that explain each delay of repair and, where appropriate, why a process unit shutdown was technically infeasible.
(3)Dates of process unit shutdowns which occurred within the semiannual reporting period.
(4)Revisions to items reported according to paragraph
(b)of this section if changes have occurred since the initial report or subsequent revisions to the initial report.
(d)An owner or operator electing to comply with the provisions of §§ 60.483-1a or 60.483-2a shall notify the Administrator of the alternative standard selected 90 days before implementing either of the provisions.
(e)An owner or operator shall report the results of all performance tests in accordance with § 60.8 of the General Provisions. The provisions of § 60.8(d) do not apply to affected facilities subject to the provisions of this subpart except that an owner or operator must notify the Administrator of the schedule for the initial performance tests at least 30 days before the initial performance tests.
(f)The requirements of paragraphs
(a)through
(c)of this section remain in force until and unless EPA, in delegating enforcement authority to a state under section 111(c) of the CAA, approves reporting requirements or an alternative means of compliance surveillance adopted by such state. In that event, affected sources within the state will be relieved of the obligation to comply with the requirements of paragraphs
(a)through
(c)of this section, provided that they comply with the requirements established by the state. § 60.488a Reconstruction. For the purposes of this subpart:
(a)The cost of the following frequently replaced components of the facility shall not be considered in calculating either the “fixed capital cost of the new components” or the “fixed capital costs that would be required to construct a comparable new facility” under § 60.15: Pump seals, nuts and bolts, rupture disks, and packings.
(b)Under § 60.15, the “fixed capital cost of new components” includes the fixed capital cost of all depreciable components (except components specified in § 60.488a(a)) which are or will be replaced pursuant to all continuous programs of component replacement which are commenced within any 2-year period following the applicability date for the appropriate subpart. (See the “Applicability and designation of affected facility” section of the appropriate subpart.) For purposes of this paragraph, “commenced” means that an owner or operator has undertaken a continuous program of component replacement or that an owner or operator has entered into a contractual obligation to undertake and complete, within a reasonable time, a continuous program of component replacement. § 60.489a List of chemicals produced by affected facilities. Process units that produce, as intermediates or final products, chemicals listed in § 60.489 are covered under this subpart. The applicability date for process units producing one or more of these chemicals is November 8, 2006. Subpart GGG—Standards of Performance for Equipment Leaks of VOC in Petroleum Refineries for which Construction, Reconstruction, or Modification Commenced After January 4, 1983, and on or Before November 7, 2006 21. The heading for Subpart GGG is revised as set out above. 22. Section 60.590 is amended by revising paragraphs
(b)and
(d)to read as follows: § 60.590 Applicability and designation of affected facility.
(b)Any affected facility under paragraph
(a)of this section that commences construction, reconstruction, or modification after January 4, 1983, and on or before November 7, 2006, is subject to the requirements of this subpart.
(d)Facilities subject to subpart VV, subpart VVa, or subpart KKK of this part are excluded from this subpart. 23. Section 60.591 is amended by adding a definition of “Asphalt” in alphabetical order and revising the definition of “Process unit” to read as follows: § 60.591 Definitions. *Asphalt* (also known as Bitumen) is a black or dark brown solid or semi-solid thermo-plastic material possessing waterproofing and adhesive properties. It is a complex combination of higher molecular weight organic compounds containing a relatively high proportion of hydrocarbons having carbon numbers greater than C25 with a high carbon to hydrogen ratio. It is essentially non-volatile at ambient temperatures with closed cup flash point of 445 °F (230 °C) or greater. *Process unit* means the components assembled and connected by pipes or ducts to process raw materials and to produce intermediate or final products from petroleum, unfinished petroleum derivatives, or other intermediates. A process unit can operate independently if supplied with sufficient feed or raw materials and sufficient storage facilities for the product. For the purpose of this subpart, process unit includes any feed, intermediate and final product storage vessels (except as specified in § 60.482-1(g)), product transfer racks, and connected ducts and piping. A process unit includes all equipment as defined in this subpart. 24. Section 60.592 is amended by revising paragraph
(b)to read as follows: § 60.592 Standards.
(b)For a given process unit, an owner or operator may elect to comply with the requirements of paragraphs (b)(1), (2), or
(3)of this section as an alternative to the requirements in § 60.482-7.
(1)Comply with § 60.483-1.
(2)Comply with § 60.483-2.
(3)Comply with the Phase III provisions in 40 CFR 63.168, except an owner or operator may elect to follow the provisions in § 60.482-7(f) instead of 40 CFR 63.168 for any valve that is designated as being leakless. 25. Section 60.593 is amended by: a. Revising the first sentence of paragraph (b)(2); b. Revising paragraphs
(c)and (d); and c. Adding paragraph
(f)to read as follows: § 60.593 Exceptions.
(b)* * *
(2)Each compressor is presumed not to be in hydrogen service unless an owner or operator demonstrates that the piece of equipment is in hydrogen service. * * *
(c)Any existing reciprocating compressor that becomes an affected facility under provisions of § 60.14 or § 60.15 is exempt from § 60.482-3(a), (b), (c), (d), (e), and
(h)provided the owner or operator demonstrates that recasting the distance piece or replacing the compressor are the only options available to bring the compressor into compliance with the provisions of § 60.482-3(a), (b), (c), (d), (e), and (h).
(d)An owner or operator may use the following provision in addition to § 60.485(e): Equipment is in light liquid service if the percent evaporated is greater than 10 percent at 150 °C as determined by ASTM Method D86-78, 82, 90, 95, or 96 (incorporated by reference as specified in § 60.17).
(f)Open-ended valves or lines containing asphalt as defined in § 60.591 are exempt from the requirements of § 60.482-6(a) through (c). 26. Part 60 is amended by adding subpart GGGa to read as follows: Subpart GGGa—Standards of Performance for Equipment Leaks of VOC in Petroleum Refineries for which Construction, Reconstruction, or Modification Commenced After November 7, 2006 Sec. 60.590a Applicability and designation of affected facility. 60.591a Definitions. 60.592a Standards. 60.593a Exceptions. § 60.590a Applicability and designation of affected facility. (a)(1) The provisions of this subpart apply to affected facilities in petroleum refineries.
(2)A compressor is an affected facility.
(3)The group of all the equipment (defined in § 60.591a) within a process unit is an affected facility.
(b)Any affected facility under paragraph
(a)of this section that commences construction, reconstruction, or modification after November 7, 2006, is subject to the requirements of this subpart.
(c)Addition or replacement of equipment (defined in § 60.591a) for the purpose of process improvement which is accomplished without a capital expenditure shall not by itself be considered a modification under this subpart.
(d)Facilities subject to subpart VV, subpart VVa, subpart GGG, or subpart KKK of this part are excluded from this subpart. § 60.591a Definitions. As used in this subpart, all terms not defined herein shall have the meaning given them in the Clean Air Act, in subpart A of part 60, or in subpart VVa of this part, and the following terms shall have the specific meanings given them. *Alaskan North Slope* means the approximately 69,000 square mile area extending from the Brooks Range to the Arctic Ocean. *Asphalt* (also known as Bitumen) is a black or dark brown solid or semi-solid thermo-plastic material possessing waterproofing and adhesive properties. It is a complex combination of higher molecular weight organic compounds containing a relatively high proportion of hydrocarbons having carbon numbers greater than C25 with a high carbon to hydrogen ratio. It is essentially non-volatile at ambient temperatures with closed cup flash point of 445 ° F (230 ° C) or greater. *Equipment* means each valve, pump, pressure relief device, sampling connection system, open-ended valve or line, and flange or other connector in VOC service. For the purposes of recordkeeping and reporting only, compressors are considered equipment. *In hydrogen service* means that a compressor contains a process fluid that meets the conditions specified in § 60.593a(b). *In light liquid service* means that the piece of equipment contains a liquid that meets the conditions specified in § 60.593a(c). *Petroleum* means the crude oil removed from the earth and the oils derived from tar sands, shale, and coal. *Petroleum refinery* means any facility engaged in producing gasoline, kerosene, distillate fuel oils, residual fuel oils, lubricants, or other products through the distillation of petroleum, or through the redistillation, cracking, or reforming of unfinished petroleum derivatives. *Process unit* means the components assembled and connected by pipes or ducts to process raw materials and to produce intermediate or final products from petroleum, unfinished petroleum derivatives, or other intermediates. A process unit can operate independently if supplied with sufficient feed or raw materials and sufficient storage facilities for the product. For the purpose of this subpart, process unit includes any feed, intermediate and final product storage vessels (except as specified in § 60.482-1a(g)), product transfer racks, and connected ducts and piping. A process unit includes all equipment as defined in this subpart. § 60.592a Standards.
(a)Each owner or operator subject to the provisions of this subpart shall comply with the requirements of §§ 60.482-1a to 60.482-10a as soon as practicable, but no later than 180 days after initial startup.
(b)For a given process unit, an owner or operator may elect to comply with the requirements of paragraphs (b)(1), (2), or
(3)of this section as an alternative to the requirements in § 60.482-7a.
(1)Comply with § 60.483-1a.
(2)Comply with § 60.483-2a.
(3)Comply with the Phase III provisions in § 63.168, except an owner or operator may elect to follow the provisions in § 60.482-7a(f) instead of § 63.168 for any valve that is designated as being leakless.
(c)An owner or operator may apply to the Administrator for a determination of equivalency for any means of emission limitation that achieves a reduction in emissions of VOC at least equivalent to the reduction in emissions of VOC achieved by the controls required in this subpart. In doing so, the owner or operator shall comply with requirements of § 60.484a.
(d)Each owner or operator subject to the provisions of this subpart shall comply with the provisions of § 60.485a except as provided in § 60.593a.
(e)Each owner or operator subject to the provisions of this subpart shall comply with the provisions of §§ 60.486a and 60.487a. § 60.593a Exceptions.
(a)Each owner or operator subject to the provisions of this subpart may comply with the following exceptions to the provisions of subpart VVa of this part. (b)(1) Compressors in hydrogen service are exempt from the requirements of § 60.592a if an owner or operator demonstrates that a compressor is in hydrogen service.
(2)Each compressor is presumed not to be in hydrogen service unless an owner or operator demonstrates that the piece of equipment is in hydrogen service. For a piece of equipment to be considered in hydrogen service, it must be determined that the percent hydrogen content can be reasonably expected always to exceed 50 percent by volume. For purposes of determining the percent hydrogen content in the process fluid that is contained in or contacts a compressor, procedures that conform to the general method described in ASTM E260-73, 91, or 96, E168-67, 77, or 92, or E169-63, 77, or 93 (incorporated by reference as specified in § 60.17) shall be used. (3)(i) An owner or operator may use engineering judgment rather than procedures in paragraph (b)(2) of this section to demonstrate that the percent content exceeds 50 percent by volume, provided the engineering judgment demonstrates that the content clearly exceeds 50 percent by volume. When an owner or operator and the Administrator do not agree on whether a piece of equipment is in hydrogen service, however, the procedures in paragraph (b)(2) of this section shall be used to resolve the disagreement.
(ii)If an owner or operator determines that a piece of equipment is in hydrogen service, the determination can be revised only after following the procedures in paragraph (b)(2).
(c)Any existing reciprocating compressor that becomes an affected facility under provisions of § 60.14 or § 60.15 is exempt from § 60.482-3a(a), (b), (c), (d), (e), and
(h)provided the owner or operator demonstrates that recasting the distance piece or replacing the compressor are the only options available to bring the compressor into compliance with the provisions of § 60.482-3a(a), (b), (c), (d), (e), and (h).
(d)An owner or operator may use the following provision in addition to § 60.485a(e): Equipment is in light liquid service if the percent evaporated is greater than 10 percent at 150 °C as determined by ASTM Method D86-78, 82, 90, 93, 95, or 96 (incorporated by reference as specified in § 60.17).
(e)Pumps in light liquid service and valves in gas/vapor and light liquid service within a process unit that is located in the Alaskan North Slope are exempt from the requirements of §§ 60.482-2a and 60.482-7a.
(f)Open-ended valves or lines containing asphalt as defined in § 60.591a are exempt from the requirements of § 60.482-6a(a) through (c).
(g)Connectors in gas/vapor or light liquid service are exempt from the requirements in § 60.482-11a, provided the owner or operator complies with § 60.482-8a for all connectors, not just those in heavy liquid service. PART 63—[AMENDED] 27. The authority citation for part 63 continues to read as follows: Authority: 42 U.S.C. 7401, *et seq.* Subpart A—[Amended] 28. Section 63.14 is amended by revising paragraph (b)(28) to read as follows: § 63.14 Incorporations by reference.
(b)* * *
(28)ASTM D6420-99 (Reapproved 2004), Standards Test Method for Determination of Gaseous Organic Compounds by Direct Interface Gas Chromatography-Mass Spectometry, IBR approved for §§ 60.485(g)(5), 60.485a(g)(5), 63.772(a)(1)(ii), 63.2354(b)(3)(i), 63.2354(b)(3)(ii), 63.2354(b)(3)(ii)(A), and 63.2351(b)(3)(ii)(B). [FR Doc. E7-21814 Filed 11-15-07; 8:45 am] BILLING CODE 6560-50-P 72 221 Friday, November 16, 2007 Proposed Rules Part IV Department of Health and Human Services Centers for Medicare & Medicaid Services 42 CFR Part 423 Medicare Program; Proposed Standards for E-Prescribing Under Medicare Part D; Proposed Rule DEPARTMENT OF HEALTH AND HUMAN SERVICES Centers for Medicare & Medicaid Services 42 CFR Part 423 [CMS-0016-P] RIN 0938-AO66 Medicare Program; Proposed Standards for E-Prescribing Under Medicare Part D AGENCY: Centers for Medicare & Medicaid Services (CMS), HHS. ACTION: Proposed rule. SUMMARY: This rule proposes the adoption of final uniform standards for an electronic prescription drug program as required by section 1860D-4(e)(4)(D) of the Social Security Act (the Act). It also proposes the adoption of a standard identifier for providers and dispensers for use in e-prescribing transactions under sections 1860D-4(e)(3) and 1860D-4(e)(4)(C)(ii), and section 1102 of the Social Security Act. The standards proposed under section 1860D-4(e)(4)(D) have been pilot tested and evaluated, and the findings indicate that the proposed standards meet the requirements for final standards that can be used for the Medicare Part D e-prescribing programs. The standards proposed in this rule, in addition to the foundation standards that were already adopted as final standards (see 70 FR 67568), represent an ongoing approach to adopting standards that are consistent with the Medicare Prescription Drug, Improvement and Modernization Act of 2003
(MMA)objectives of patient safety, quality of care, and efficiencies and cost saving in the delivery of care. DATES: To be assured consideration, comments must be received at one of the addresses provided below, no later than 5 p.m. on January 15, 2008. ADDRESSES: In commenting, please refer to file code CMS-0016-P. Because of staff and resource limitations, we cannot accept comments by facsimile
(FAX)transmission. You may submit comments in one of four ways (no duplicates, please): 1. *Electronically.* You may submit electronic comments on specific issues in this regulation to *http://www.cms.hhs.gov/eRulemaking.* Click on the link “Submit electronic comments on CMS regulations with an open comment period.” (Attachments should be in Microsoft Word, WordPerfect, or Excel; however, we prefer Microsoft Word). 2. *By regular mail.* You may mail written comments (one original and two copies) to the following address ONLY: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention CMS-0016-P, P.O. Box 8014, Baltimore, MD 21244-8014. Please allow sufficient time for mailed comments to be received before the close of the comment period. 3. *By express or overnight mail.* You may send written comments (one original and two copies) to the following address ONLY: Centers for Medicare and Medicaid Services, Department of Health and Human Services, Attention: CMS-0016-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850. 4. *By hand or courier.* If you prefer, you may deliver (by hand or courier) your written comments (one original and two copies) before the close of the comment period to one of the following addresses: If you intend to deliver your comments to the Baltimore address, please call telephone number
(410)786-9994 in advance to schedule your arrival with one of our staff members. Room 445-G, Hubert H. Humphrey Building, 200 Independence Avenue SW., Washington, DC 20201; or 7500 Security Boulevard, Baltimore, MD 21244-1850. (Because access to the interior of the HHS Building is not readily available to persons without Federal Government identification, commenters are encouraged to leave their comments in the CMS drop slots located in the main lobby of the building. A stamp-in clock is available for persons wishing to retain a proof of filing by stamping in and retaining an extra copy of the comments being filed.) Comments mailed to the addresses indicated as appropriate for hand or courier delivery may be delayed and received after the close of the comment period. Submission of comments on paperwork requirements: You may submit comments on this document's paperwork requirements by mailing your comments to the addresses provided at the end of the “Collection of Information Requirements” section in this document. For information on viewing public comments, see the beginning of the SUPPLEMENTARY INFORMATION section. FOR FURTHER INFORMATION CONTACT: Denise M. Buenning,
(410)786-6711. SUPPLEMENTARY INFORMATION: *Submitting Comments:* We welcome comments from the public on all issues set forth in this rule to assist us in fully considering issues and developing policies. Comments will be most useful if they are organized by the section of the proposed rule to which they apply. You can assist us by referencing the file code (CMS-0016-P) and the specific “issue identifier” that precedes the section on which you choose to comment. *Inspection of Public Comments:* All comments received before the close of the comment period are available for viewing by the public, including any personally identifiable or confidential business information that is included in a comment. After the close of the comment period, CMS posts all electronic comments received before the close of the comment period on its public website. Comments received timely will be available for public inspection as they are received, generally beginning approximately 3 weeks after publication of a document, at the headquarters of the Centers for Medicare & Medicaid Services, 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday of each week from 8:30 a.m. to 4 p.m. To schedule an appointment to view public comments, please call
(800)743-3951. *Copies:* To order copies of the **Federal Register** containing this document, send your request to: New Orders, Superintendent of Documents, P.O. Box 371954, Pittsburgh, PA 15250-7954. Specify the date of the issue requested and enclose a check or money order payable to the Superintendent of Documents, or enclose your Visa or Master Card number and expiration date. Credit card orders also can be placed by calling the order desk at
(202)512-1800 (or toll-free at
(888)293-6498) or by sending a fax to
(202)512-2250. As an alternative, you can view and photocopy the **Federal Register** document at most libraries designated as Federal Depository Libraries and at many other public and academic libraries throughout the country that receive the **Federal Register** . This **Federal Register** document is also available from the **Federal Register** online database through GPO Access, a service of the U.S. Government Printing Office. The Web site address is *http://www.gpoaccess.gpo.gov/fr/index.html.* I. Background A. Legislative History Section 101 of the Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA)(Pub. L. 108-173) amended title XVIII of the Social Security Act (the Act) to establish a voluntary prescription drug benefit program. Prescription Drug Plan
(PDP)sponsors and Medicare Advantage
(MA)organizations offering Medicare Advantage-Prescription Drug Plans (MA-PD), are required to establish electronic prescription drug programs to provide for electronic transmittal of certain information to the prescribing provider and dispensing pharmacy and pharmacist. This would include information about eligibility, benefits (including drugs included in the applicable formulary, any tiered formulary structure and any requirements for prior authorization), the drug being prescribed or dispensed and other drugs listed in the medication history, as well as the availability of lower cost, therapeutically appropriate alternatives (if any) for the drug prescribed. The MMA directed the Secretary to promulgate uniform standards for the electronic transmission of such data. There is no requirement that prescribers or dispensers implement e-prescribing. However, prescribers and dispensers who electronically transmit prescription and certain other information for covered drugs prescribed for Medicare Part D eligible beneficiaries, directly or through an intermediary, would be required to comply with any applicable final standards that are in effect. Section 1860D-4(e)(4) of the Act generally required the Secretary to conduct a pilot project to test initial standards recognized under 1860D-4(e)(4)(A) of the Act, prior to issuing the final standards in accordance with section 1860D-4(e)(4)(D) of the Act. The initial standards were recognized by the Secretary in 2005 and then tested in a pilot project during calendar year
(CY)2006. The MMA created an exception to the requirement for pilot testing of standards where, after consultation with the National Committee on Vital and Health Statistics (NCVHS), the Secretary determined that there already was adequate industry experience with the standard(s). The first set of such standards, the “foundation standards,” were recognized and adopted through notice and comment rulemaking as final standards without pilot testing. See 70 FR 67568. Based upon the evaluation of the pilot project, and not later than April 1, 2008, the Secretary is required to issue final uniform standards under section 1860D-4(e)(4)(D). These final standards must be effective not later than 1 year after the date of their issuance. In the e-prescribing final rule at 70 FR 67589, we also discussed the estimated start-up costs for e-prescribing for providers and/or dispensers. Based on industry input, we cited approximately $3,000 for annual support, maintenance, infrastructure and licensing costs. Physicians at that time reported paying user-based licensing fees ranging from $80 to $400 per month. For further discussion of the start-up costs associated with e-prescribing, see the regulatory impact analysis section of this proposed regulation, and the e-prescribing final rule at 70 FR 67589. For a further discussion of the statutory basis for this proposed rule and the statutory requirements at section 1860D-4(e) of the Act, please refer to section I. (Background) of the E-Prescribing and the Prescription Drug Program proposed rule, published February 4, 2005 (70 FR 6256). B. Regulatory History In the e-prescribing final rule at 70 FR 67589, we also discussed the estimated start-up costs for e-prescribing for providers and/or dispensers. Based on industry input, we cited approximately $3,000 for annual support, maintenance, infrastructure and licensing costs. Physicians at that time reported paying user-based licensing fees ranging from $80 to $400 per month. For further discussion of the start-up costs associated with e-prescribing, see the regulatory impact analysis section of this proposed regulation, and the e-prescribing final rule at 70 FR 67589. In the November 7, 2005 final rule, we addressed the issues of privacy and security relative to e-prescribing in general. We noted that disclosures of protected health information
(PHI)in connection with e-prescribing transactions would have to meet the minimum necessary requirements of the Privacy Rule if the entity is a covered entity (70 FR 6161). It is important to note that health plans, prescribers, and dispensers are HIPAA covered entities, and that these covered entities under HIPAA must continue to abide by the applicable HIPAA standards including these for privacy and security. E-prescribing provisions do not affect or alter the applicability of the Privacy Act to a particular entity. Entities which are covered by the Privacy Act and the HIPAA Privacy Rule must comply with provisions of both. Entities are responsible for determining whether they fall under the Privacy Act. We continue to agree that privacy and security are important issues related to e-prescribing. Achieving the benefits of e-prescribing require the prescriber and dispenser to have access to patient medical information that may not have been previously available to them. Section 1860-D(e)(2)(C) of the Act requires that disclosure of patient data in e-prescribing must, at a minimum, comply with HIPAA's privacy and security requirements. Although HIPAA standards for privacy and security are flexible and scalable to each entity's situation, they provide comprehensive protections. We will continue to evaluate additional standards for consideration as adopted e-prescribing standards. For further discussion of privacy and security and e-prescribing, refer to the final rule at 70 FR 67581 through 82. 1. Foundation Standards After consulting with the NCVHS, the Secretary found that there was adequate industry experience with several potential e-prescribing standards. Upon adoption through notice and comment rulemaking, these standards were called “foundation” standards, because they would be the first set of final standards adopted for an electronic prescription drug program. Three standards were adopted for purposes of e-prescribing in the E-Prescribing and the Prescription Drug Program final rule, published November 7, 2005 (70 FR 67568). Two of these standards, Accredited Standards Committee
(ASC)X12N 270/271; and The National Council for Prescription Drug Programs (NCPDP) Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), were previously adopted under the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and have been in effect since 2001. These foundation standards are as follows: For the exchange of eligibility information between prescribers and Medicare Part D sponsors: Accredited Standards Committee
(ASC)X12N 270/271—Health Care Eligibility Benefit Inquiry and Response, Version 4010, May 2000, Washington Publishing Company, 004010X092 and Addenda to Health Care Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002, Washington Publishing Company. 004010X092A1 (hereafter referred to as the ASC X12N 270/271 standard). For the exchange of eligibility inquiries and responses between dispensers and Medicare Part D sponsors: The National Council for Prescription Drug Programs (NCPDP) Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), September 1999, and equivalent NCPDP Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000 supporting Telecommunications Standard Implementation Guide Version 5, Release 1 (Version 5.1) for NCPDP Data Record in the Detail Data Record (hereafter referred to as the NCPDP Telecommunications Standard). For the exchange of new prescriptions, changes, renewals, cancellations and certain other transactions between prescribers and dispensers: NCPDP SCRIPT Standard, Implementation Guide, Version 5, Release 0 (Version 5.0), May 12, 2004, excluding the Prescription Fill Status Notification Transaction (and its three business cases; Prescription Fill Status Notification Transaction—Filled, Prescription Fill Status Notification Transaction—Not Filled, and Prescription Fill Status Notification Transaction—Partial Fill), hereafter referred to as NCPDP SCRIPT 5.0. a. Exemptions to Foundation Standard Requirement for Nonprescribing Providers In 42 CFR 423.160(a)(3)(iii) we exempt entities transmitting prescriptions or prescription-related information where the prescriber is required by law to issue a prescription for a patient to a non-prescribing provider (such as a nursing facility) that in turn forwards the prescription to a dispenser from the requirement to use the NCPDP SCRIPT Standard 5.0 adopted by this section in transmitting such prescriptions or prescription-related information. Industry comments indicated that while the e-prescribing standards we proposed were proven to have adequate industry experience in the ambulatory setting, the NCPDP SCRIPT Standard was not proven to support the workflows and legal responsibilities in the long-term care setting. As such, we exempted entities from the requirement to use the NCPDP SCRIPT standard when that entity is required by law to issue a prescription for a patient to a non-prescribing provider (such as a nursing facility) that in turn forwards the prescription to a dispenser. The CY 2006 pilot project tested for such entities' use of the foundation standards in “three-way prescribing communications” between facility, physician, and pharmacy. (For a more detailed discussion see the November 7, 2005 final rule (70 FR 67583). b. Use of HL7 or NCPDP SCRIPT Standard To Conduct Internal Electronic Transmittals for Specified NCPDP SCRIPT Transactions In the E-Prescribing and the Prescription Drug Program final rule, published November 7, 2005 (70 FR 67568), we responded to comments on whether Medicare Part D plans should be required to use the standards for e-prescribing transactions taking place within their own enterprises. In the final rule we stated that entities may use either HL7 or NCPDP SCRIPT standards to conduct internal electronic transmittals for the specified NCPDP SCRIPT transactions. However, entities are required to use the NCPDP SCRIPT Standard if they electronically send prescriptions for Medicare beneficiaries outside the organizations, such as to a non-network pharmacy. Any pharmacy that already accepts e-prescriptions, even if only as a part of a larger legal entity, must be able to receive electronic prescription transmittals for Medicare beneficiaries via NCPDP SCRIPT from outside the enterprise. c. Exemption for Computer-Generated Facsimiles The November 7, 2005 final rule also exempted entities that transmit prescriptions or prescription-related information by means of computer-generated facsimile (faxes) from the requirement to use the adopted NCPDP SCRIPT standard. “Electronic media” was already defined by regulations issued pursuant to the Health Insurance Portability and Accountability Act of 1996 (HIPAA), so e-prescribing utilized the same definition. As a result, faxes that were generated by a prescriber's computer and sent to a dispenser's computer or fax machine which prints out a hard copy of the original computer-generated fax (that is, “computer-generated” faxes) fell within the definition of “electronic media” for e-prescribing. Absent an exemption, computer-generated faxes would be required to comply with the adopted foundation standards. The November 7, 2005 final rule exempted computer-generated faxes from having to comply with the NCPDP SCRIPT standard. In June 2007, CMS proposed to eliminate this exemption. See 72 FR 38195 through 38196 for a discussion of the elimination of this exemption. 2. Updating e-Prescribing Standards In the November 7, 2005 final rule (70 FR 67579), we discussed the means for updating e-prescribing standards. If an e-prescribing transaction standard has also been adopted under 45 CFR parts 160 through 162 (that is, as HIPAA transaction standards), the updating process for the e-prescribing transaction standard must be coordinated with the maintenance and modification of the applicable HIPAA transaction standard. As the final rule adopted and incorporated by reference the relevant HIPAA transaction standards (the ASC X12N 270/271 and the NCPDP Telecommunication Standard), the e-prescribing standards can be modified through a parallel rulemaking whenever the HIPAA transaction standards are modified. A streamlined process was created for updating adopted e-prescribing standards that were not also HIPAA transaction standards. This is done by identifying backward compatible later versions of the standards. This version updating and maintenance of the implementation specifications for the adopted non-HIPAA e-prescribing standards will allow for the correction of technical errors, the elimination of technical inconsistencies, and the addition of functions that support the specified e-prescribing transaction. To do this, we adopted a process for the Secretary to identify a subsequent version(s) of a standard where the new version(s) are backwards compatible with the adopted standard. Use of such subsequent versions of an adopted standard is voluntary. Because HIPAA transaction standards are presently not backward compatible and the HIPAA transactions standards regulation does not currently address the use of subsequent versions of adopted standards that are backward compatible to the adopted standards, the streamlined process cannot presently be used for those HIPAA transactions standards that are also e-prescribing standards. Subsequent industry input indicated that the adopted NCPDP SCRIPT 5.0, should be updated with a later version of the standard NCPDP SCRIPT Standard, Implementation Guide, Version 8, Release 1 (Version 8.1), October 2005, excluding the Prescription Fill Status Notification Transaction (and its three business cases; Prescription Fill Status Notification Transaction—Filled, Prescription Fill Status Notification Transaction—Not Filled, and Prescription Fill Status Notification Transaction—Partial Fill), hereafter referred to as NCPDP SCRIPT 8.1. Using the streamlined process, HHS published an Interim Final Rule on June 23, 2006 (71 FR 36020) updating the adopted NCPDP SCRIPT standard, thereby permitting either version to be used. For more information, see the June 23, 2006 interim final rule with comment (71 FR 36020). 3. National Provider Identifier
(NPI)In the November 7, 2005 final rule (70 FR 67578), we discussed the use of the National Provider Identifier
(NPI)for the Medicare Part D e-prescribing program once it became available. The NPI is the standard that was adopted in the final rule published on January 23, 2004 (69 FR 3434) as the unique health identifier for health care providers that are HIPAA covered entities for use in the health care system. Health plans, health care clearinghouses, and those health care providers who transmit any health information in electronic form in connection with a transaction for which the Secretary has adopted a standard (known as “covered health care providers”) are considered “covered entities” which must use the identifier in connection with HIPAA standard transactions. For a discussion of the NPI, see the final rule published on January 23, 2004 (69 FR 3434). In the November 7, 2005 final rule (70 FR 67578), in response to comments received in the February 4, 2005 proposed rule, we indicated that we would include the NPI in the 2006 pilots to determine how it worked with e-prescribing standards. However, we also noted that accelerating NPI usage for e-prescribing might not be possible, as we might not have had the capacity to issue NPIs to all providers involved in the e-prescribing program by January 1, 2006. At the time the Request for Application was released, we had just begun to use the National Plan/Provider Enumeration System (NPPES) to process provider requests for NPIs. Upon reconsideration and in view of the short time period allowed for pilot testing, it was determined that the focus should be on standards testing and not on NPI as it would constitute a simple bench testing of the identifier and would have no substantive results. Therefore, NPI was not assessed during the pilots, which used other identifiers to accomplish their testing of the standards as outlined in the Request for Application. C. Pilot Testing of Initial Standards The MMA required the Secretary to develop, adopt, recognize or modify “initial uniform standards” relating to the requirements for the e-prescribing programs in 2005. To ensure the efficient implementation of the e-prescribing program requirements, the MMA called for pilot testing of these initial e-prescribing standards in 2006. To fulfill this requirement, the Secretary ultimately recognized (based on NCVHS input) six “initial” standards, which are discussed below. A Request for Applications
(RFA)was issued in September 2005 that laid out the details for how these initial standards were to be pilot tested (Available through *http://www.grants.nih.gov/grants/guide/rfa-files/RFA-HS-06-001.html)* . The pilot test was conducted under four cooperative agreements and one contract that the Agency for Healthcare Research and Quality
(AHRQ)entered into on behalf of CMS. The final pilot site reports are available at *http://www.healthit.ahrq.gov/erxpilots* . 1. Initial Standards [If you choose to comment on issues in this section, please include the caption “Initial Standards” at the beginning of your comments.] As HHS had not yet published a final rule identifying the foundation standards at the time the RFA was published, it conditionally included the proposed foundation standards among the “initial standards” to be tested. Any proposed foundation standards that were not adopted as foundation standards were to be tested as initial standards in the pilot project. Furthermore, if the proposed foundation standards were ultimately adopted as foundation standards, those standards nevertheless were to be used in the pilot project to ensure interoperability with the initial standards. A summary of the initial standards follows: • Formulary and benefit information—The formulary and benefits standard, NCPDP Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0 (version 1.0), hereinafter referred to as the NCPDP Formulary and Benefits Standard 1.0, is intended to provide prescribers with information from a plan about a patient's drug coverage at the point of care. • Exchange of medication history—The medication history standard, included in the National Council for Prescription Drug Programs (NCPDP) Prescriber/Pharmacist Interface SCRIPT Standard, Version 8 Release 1 and its equivalent NCPDP Prescriber/Pharmacist Interface SCRIPT Implementation Guide, Version 8, Release 1, is intended to provide a uniform means for prescribers and payers to communicate about the list of drugs that have been dispensed to a patient. • Structured and Codified SIG—The standard tested was NCPDP's proposed Structured and Codified SIG Standard 1.0. Structured and Codified SIG—instructions for taking medications (such as “by mouth, three times a day”)—that are currently expressed as free text at the end of a prescription. • Fill status notification function—The Fill Status Notification, or RxFill, was included in the NCPDP SCRIPT 5.0, and the updated NCPDP SCRIPT 8.1 but it previously was not proposed as a foundation standard due to lack of industry experience. The dispenser uses the prescription fill status transaction to notify the prescriber if a patient has picked up a prescribed medication at the pharmacy. • Clinical drug terminology (RxNorm)—RxNorm, a standardized nomenclature for clinical drugs developed by the National Library of Medicine (NLM), provides standard names for clinical drugs (active ingredient + strength + dose form) and for dose forms as administered to a patient. • Prior authorization messages—The pilot sites tested to determine the functionality of new versions of the ASC X12N 275, Version 4010 with HL7 and ASC X12N 278, Version 4010A1 to obtain certification from the plan to a provider that the patient meets criteria for a drug to be covered. The RFA also specified that pilot sites would use NCPDP SCRIPT 5.0. With the Secretary's recognition of the updated NCPDP SCRIPT 8.1, AHRQ, in its capacity as the administrator of the pilot project, gave pilot sites the option to voluntarily use NCPDP SCRIPT 8.1. Accordingly, all grantees/contractor in the pilot sites voluntarily employed the updated NCPDP SCRIPT 8.1 in their various testing modalities. 2. Grantees/Contractor and Testing Criteria [If you choose to comment on issues in this section, please include the caption “Grantees/Contractor and Testing Criteria” at the beginning of your comments.] The initial standards were tested in five healthcare/geographic settings to determine whether they were ready for broad adoption. Grantees/contractor tested whether the initial standards allowed participants to effectively communicate the necessary information between all participants in the transactions, such as the pharmacy, pharmacy benefits manager (PBM), router, plan and prescriber. They also tested how the initial standards worked with the foundation standards. Pilot sites also tracked generally anticipated e-prescribing outcomes, such as a reduction in medical errors. For more information on testing parameters and criteria, go to *http://www.grants.nih.gov/grants/guide/rfa-files/RFA-HS-06-001.html. * One of the strengths of the pilot project was the diversity and uniqueness of the five grantees/contractor. Grantees/contractor represented the spectrum of communities involved with e-prescribing, including most practice settings, and focused on utilization by pharmacists, physicians, nurses, and technology vendors. Applications were considered based on specific characteristics/criteria. Each pilot site focused on different perspectives of the functionality and impact of initial standards by evaluating them in different sectors of the healthcare system, different geographies, and different practice settings using different technology application vendors, pharmacies and other stakeholders in the e-prescribing industry. The grantees selected were Achieve Healthcare Information Technologies, L.L.P., Eden Prairie, Minnesota; Brigham and Women's Hospital, Boston, Massachusetts; RAND Corporation, Santa Monica, California; SureScripts, L.L.C., Alexandria, Virginia. The contractor that was selected was the University Hospitals Health System, Cleveland, Ohio. For more information on the pilot project criteria, refer to the Request for Application at *http://www.grants.nih.gov/guide/RFA-HS-06-001.html.* 3. Pilot Test Findings [If you choose to comment on issues in this section, please include the caption “Pilot test findings” at the beginning of your comments.] a. Standard for Formulary and Benefits In the February 4, 2005 proposed rule, we discussed how the adoption of the formulary and benefit standard would enhance e-prescribing capabilities under Medicare Part D by making it possible for the prescriber to obtain information on the patient's benefits, including the formulary status of drugs that the physician is considering prescribing. At that time, we proposed characteristics for a formulary and benefit standard (for a more detailed discussion refer to 70 FR 6262 through 6263). We proposed that if those characteristics for formulary were met by a standard and there was adequate industry experience with it, we would consider adopting it as a foundation standard. The NCVHS, in a September 2, 2004 letter to the Secretary ( *http://www.ncvhs.hhs.gov* ), had recommended the development of an NCPDP formulary and benefit standard, based on an RxHub protocol, to address the need for these desirable characteristics. RxHub submitted this protocol to NCPDP for approval and it was included in the October 2005 release of NCPDP Formulary and Benefit standard 1.0. However, the timing of its release in October 2005 was too late for the Formulary and Benefit standard 1.0 to be considered for approval as a foundation standard in the November 7, 2005 final rule. Also, there was little to no industry experience with the standard. Because of this and other concerns about its interoperability with other standards, at that time we did not adopt NCPDP Formulary and Benefit standard 1.0 as a foundation standard, but agreed to include it in pilot testing. For more details, refer to 70 FR 67573. Formulary and benefits data standards must provide a uniform means for pharmacy benefit payers (including health plans and PBMs) to communicate a range of formulary and benefit information to prescribers via point-of-care
(POC)systems. These include: • General formulary data (for example, therapeutic classes and subclasses); • Formulary status of individual drugs (that is, which drugs are covered); • Preferred alternatives (including any coverage restrictions, such as quantity limits and need for prior authorization); and • Copayment (the copayments for one drug option versus another). The NCPDP Formulary and Benefits Standard 1.0 enables the prescriber to consider this information during the prescribing process, and make the most appropriate drug choice without extensive back-and-forth administrative activities with the pharmacy or the health plan. The NCPDP Formulary and Benefits Standard 1.0 was implemented live in all pilot sites, and technology vendors were certified prior to production. This standard works in tandem with the eligibility request and response (ASC X12N 270/271). Once the individual is identified, the appropriate drug benefit coverage is located and transmitted to the requestor. The pilot sites demonstrated that the NCPDP Formulary and Benefits Standard 1.0 can be successfully implemented between prescriber and plan. The NCPDP Formulary and Benefits Standard 1.0 is quite broad, and there are a number of complex data relationships supported by the standard. This complexity creates a certain level of confusion as to how to properly use the data and leads to implementation issues. While complex, the standard can support the transaction, and is ready for implementation as part of the e-prescribing program under Medicare Part D. Formularies by their very nature are complex. They consist of hundreds of pages of drug names, dosages, etc., that frequently change due to updates in formulations, coverage decisions, etc. In addition, each drug plan has their own formulary that they use for coverage purposes. Coverage of benefits is sometimes a fluid issue; coverage can change from day to day, depending, for example, as to whether a Medicare Part D beneficiary has met out-of-pocket spending thresholds, or has experienced a life-changing situation that might affect their benefit delivery for example, entering a long-term care facility). Adoption of this standard for formulary and benefits transactions between plans and providers may deliver added value in approximating patients’ drug coverage and lead to patient-specific, real-time benefit information. b. Standard for Medication History A medication history standard provides a way for prescribers, dispensers, and payers to communicate about a listing of drugs that have been prescribed or claimed for a patient within a certain timeframe. It may provide information that would be of use in helping to identify drug interactions, including the dispensing pharmacy and the prescribing physician. This standard is relatively mature and widely adopted by the prescribing industry. It has been useful in preventing medication errors, as well as understanding medication management compliance. Results demonstrate there is a difference in how the standard is implemented based on the source of the medication history. In the February 4, 2005 proposed rule, we discussed how the adoption of the medication history standard would enhance e-prescribing capabilities under Medicare Part D by making it possible for the prescriber to obtain information on the medications the patient is already taking, including those prescribed by other providers. At that time, we proposed characteristics for a medication history standard (for a more detailed discussion refer to 70 FR 6262 through 6263). We proposed that if those characteristics for medication history were met, and there was adequate industry experience with them, we would consider adopting foundation standards. The NCVHS, in a September 2, 2004 letter to the Secretary ( *http://www.ncvhs.hhs.gov* ), had recommended the rapid development of an NCPDP medication history standard based on an RxHub protocol. The NCPDP SCRIPT standard 8.1, based on the RxHub protocol, was released in October 2005, featuring those desirable characteristics. However, the timing of its release in October 2005 was too late for the standard to be considered for approval as a foundation standard in the November 7, 2005 final rule, and there was little to no industry experience with the standard. Because of this and other concerns about its interoperability with other standards, at that time we did not adopt the NCPDP SCRIPT standard as a foundation standard for medication history, but agreed to include it in pilot testing. For more details, refer to 70 FR 67573. The pilot sites found that the proposed medication history standard included as a transaction in the NCPDP SCRIPT 8.1 is well structured, supports the exchange of information, would not impose an undue administrative burden on prescribers and dispensers, is compatible with other health IT standards, and is ready to be used as part of the e-prescribing program under Medicare Part D. c. Standard for Structured and Codified SIG Patient instructions for taking medications are placed at the end of a prescription. These are called the *signatura,* commonly abbreviated SIG. Currently, the Food and Drug Administration
(FDA)provides some terminology for SIGS, for example, route of administration and unit of presentation. However, there is no standardized format or vocabulary for SIGs, leaving room for misinterpretation and error. A standard structure and code set for expressing SIGs has the potential to enhance patient safety, although free text capability must be preserved for special circumstances. Pilot sites used a variety of approaches including review of the proposed NCPDP Structured and Codified SIG standard 1.0, identification of test cases, using live transactions and selecting samples of prescriptions with a wide variety of SIGs, recreating each test case in a laboratory environment, and then developing a test harness that would include functions of an electronic information exchange application. Another approach was to analyze an initial sample that would be statistically valid with an attempt to represent each distinct SIG using the proposed standard's 128 data fields. The pilot sites found that the proposed Structured and Codified SIG format needs additional work with reference to field definitions and examples, field naming conventions and clarifications of field use. It is imperative that the prescriber's instructions be translated exactly into e-prescribing and pharmacy practice management systems to reduce medication errors, decrease healthcare costs and improve patient safety. Contradictions with other structured fields exist, and there are limitations on directions for topical drugs (such as the area of application). The *pro re nata*
(PRN)or “as needed” designation could be interpreted as either “as needed” or “as required”, and the standard does not allow for quick revisions for new drug administration. Mistranslations and contradictions in dosage/timing directions leave room for misinterpretation and error. Analysis shows that the NCPDP's proposed Structured and Codified SIG Standard 1.0 is not sufficiently developed for use for Medicare Part D e-prescribing in its current state. d. Standard for Fill Status Notification The Fill Status Notification standard is a function within the NCPDP SCRIPT 8.1, but it was not named a foundation standard due to lack of adequate industry experience. The standard enables a pharmacy to notify a prescriber when the prescription has been dispensed (medication picked up by patient), partially dispensed (partial amount of medication picked up by the patient), or not dispensed (medication not picked up by patient, resulting in the medication being returned to stock). Pilot sites found that the NCPDP SCRIPT 8.1 standard supports the activities of a pharmacy sending messages to the prescriber as to the status of a prescription. The challenges encountered were not related to the structure and format of the standard, but in its implementation. RxFill is intended to encourage adherence and compliance with medication therapy. Although the transaction is technically capable of performing that function, the pilot sites’ experiences and observations indicate there is no marketplace demand for this information, and may cause an unnecessary administrative burden on prescribers and dispensers. Prescribers expressed concerns about being inundated with data if they were informed every time a prescription was filled or not filled, and were unsure of the usefulness of the information. Moreover, implementing the Fill Status transaction would require significant business process changes at pharmacies as well as development of common rules for determining when a prescription becomes a “no-fill.” We question the marketplace demand for Fill Status Notification and solicit comments regarding both stakeholders’ and industry's potential utilization of RxFill. e. Standard for Clinical Drug Terminology: RxNorm RxNorm is a vocabulary resulting from a collaboration between the Food and Drug Administration
(FDA)and the National Library of Medicine
(NLM)that provides standard names for clinical drugs (active ingredient + strength + dose form), and for dose forms as administered to a patient. These concepts are relevant to how a physician would order a drug. It provides links from clinical drugs, both branded and generic, to their active ingredients, drug components (active ingredient + strength), and related brand names. NDCs (National Drug Codes) for specific drug products (where there are often many NDC codes for a single product) are linked to that product in RxNorm. NDCs for specific drug products identify not only the drug but also the manufacturer and the size of the package from which it is dispensed. NDCs are relevant to how a pharmacy would dispense the drug. RxNorm links its names to many of the drug vocabularies commonly used in pharmacy management and drug interaction software. By providing links between these vocabularies, RxNorm can mediate messages between systems not using the same software and vocabulary. RxNorm terminology was evaluated in the context of the NCPDP SCRIPT 8.1 for new prescriptions, renewals, and changes. RxNorm was included in the pilot to determine how well the RxNorm information can be translated from the prescriber's system to the dispenser's system while maintaining the prescriber's intent. The grantees/contractor tested this standard in a laboratory setting, specifically to gain understanding of the completeness and accuracy of RxNorm. The pilot sites demonstrated that RxNorm has significant potential to simplify e-prescribing, create efficiencies, and reduce dependence on NDCs among dispensers. It was able to represent both new prescriptions and renewal requests. In some testing, RxNorm erroneously linked some NDCs to lists of ingredients rather than to the drugs themselves. Testing also revealed cases in which the NDC codes linked by RxNorm did not match to a semantic clinical drug (SCD), which always contains the ingredient(s), strength and dose form, in that order. This indicates there was either an error in matching to the correct RxNorm concept, or an error with RxNorm itself, with more than one term being available for the same clinical drug concept (that is, unresolved synonymy). There is currently no central repository containing a list of all NDC codes, nor a reference guide that indicates all of the NDCs associated with a particular drug. (On August 29, 2006, FDA published a proposed rule [71 FR 51276] which would result in the creation of an electronic drug registration and listing system for which FDA would issue all NDCs, registrants would be required to keep information up to date, and there would be a centralized electronic repository for these NDCs. Through the Structured Product Labeling
(SPL)for each marketed drug product, the NDCs would be linked to the drug product code, proprietary name, established name of the active ingredients, Unique Ingredient Identifiers [UNII], active ingredient strengths and pharmaceutical dosage form.) As with other vocabulary standards, RxNorm will never cover 100 percent of what is needed in every circumstance, so some provisions for exceptions will be needed. One example encountered in the pilots was the lack of standard names and identifiers for pharmacy-compounded drugs. Analysis shows that, as of December 2006, RxNorm was not sufficiently developed for effective and accurate use for Medicare Part D e-prescribing. f. Standard for Prior Authorization The prior authorization standard incorporates real-time prior authorization functionality in the ASC X12N 278 Version 4010A1 Health Care Services Review transaction. Originally there were two models that were to be considered, solicited (prescriber proactively solicits prior authorization criteria/forms from plan) and unsolicited (questions appear via prompts on a point-of-care software system). The solicited model is rarely used and usually results in a paper-based response, versus the unsolicited model which employs e-prescribing technology. Upon consultation between the pilot sites and AHRQ as the administrator of the pilot project, AHRQ advised that the pilot sites use the unsolicited model using the NCPDP Formulary and Benefits Standard 1.0 specification as it would provide a better test of prior authorization in an e-prescribing environment. Prior authorization is a very complex standard to implement, necessitating an understanding of four different standards and multiple payer requirements. The combination of ASC X12N 278, ASC X12N 275 and the HL7 prior authorization
(PA)attachment is cumbersome, confusing and requires expertise that may limit adoption. Because health plans typically require prior authorization only for a small subset of drugs, the pilot sites had limited live experience with this standard. Nevertheless, they pilot tested the ASC X12N 278 version 4010A1 and ASC X12N 275 version 4010 with the HL7 PA attachment and identified several issues that need to be addressed before this standard should be adopted as an e-prescribing final standard, including some inconsistencies between ASC X12N 278 Version 4010A1 and ASC X12N 275 Version 4010 that need to be addressed. Investigators agreed that the HIPAA-named prior authorization standard—the ASC X12N 278 version 4010A1—was not adequate to support prior authorization because it was designed for service or procedure prior authorizations, not for medication prior authorization. One of the challenges of the ASC X12N 275 version 4010 with the HL7 PA attachment is that it did not allow vendors to make questions mandatory, which would ensure that the information required is complete and reduce the need for back-and-forth communication that takes place between plan prior authorization representatives and prescribers. Standards modifications would need to be made prior to adoption as a final standard for the Medicare Part D e-prescribing program. g. Use of Standards in the Long-Term Care
(LTC)Setting Healthcare Delivery in long-term care
(LTC)settings is unique for several reasons. Nurses are frequently the primary caregivers, with off-site physicians who monitor care; specialized long-term care pharmacies are located off-site with drugs being delivered to the facility. While the participants in the Achieve study were drawn from a convenience sample, the setting provided a special opportunity for understanding e-prescribing's impact on an entirely different patient population, provider type, and prescription delivery system. In long-term care, a prescription order typically remains an open order with no end date or a date far in the future. A prescriber may need to modify this order and notify the pharmacy. Changes might include dose, form, strength, route, modifications of frequency, or a minor change related to the order. Also, in the long-term care environment, there is a need to send a refill request from a facility to a pharmacy. An example is when a medication supply for a resident is running low (2-3 doses remaining), and a new supply is needed from the pharmacy. The facility needs a way to notify the pharmacy that a refill for the medication is needed. E-prescribing was evaluated within the unique context of long-term care workflow from facility to pharmacy. The primary purpose of the long-term care pilot site was to test the NCPDP SCRIPT 8.1 in the long-term care setting and found that modifications were required in order to ensure accurate transmission of the data. Through partner agreement, “work-arounds” were identified and implemented. These work-around requests were formally submitted by the pilot site grantee to NCPDP in the form of a DERF (Data Element Request Form) to modify the standard as needed. When an updated version of the NCPDP SCRIPT Standard becomes available that can accommodate the unique prescription workflow of the LTC setting, we will consider removing the current exemption. We solicit industry and other interested stakeholder comments on the impact and timing of lifting this exemption. II. Provisions of the Proposed Rule A. Proposed Retirement of NCPDP SCRIPT 5.0 and Adoption of NCPDP SCRIPT 8.1 as a Final Standard [If you choose to comment on issues in this section, please include the caption “Adoption of NCPDP SCRIPT 8.1” at the beginning of your comments.] We propose to revise § 423.160(b)(1) to replace the NCPDP SCRIPT 5.0 standard with the NCPDP SCRIPT 8.1. Those providers and dispensers using e-prescribing to provide for the electronic communication of a prescription or prescription-related information would be required to use the NCPDP SCRIPT 8.1 for the following transactions: • Get message transaction. • Status response transaction. • Error response transaction. • New prescription transaction. • Prescription change request transaction. • Prescription change response transaction. • Refill prescription request transaction. • Refill prescription response transaction. • Verification transaction. • Password change transaction. • Cancel prescription request transaction. • Cancel prescription response transaction. On June 23, 2006, we published an interim final rule with comment (71 FR 30620) to solicit comments as to whether the NCPDP SCRIPT 8.1 was a backward compatible update to NCPDP SCRIPT 5.0. We received 5 timely public comments on this interim rule with comment. The comments came from a standards setting organization, two national industry associations, and two private corporations actively involved in e-prescribing. All commenters supported the voluntary use of the backward compatible Version 8.1 of the NCPDP SCRIPT Standard. Four recommended that it be adopted as soon as reasonably possible, and that Version 5.0 be retired as soon as reasonably practical. They also indicated that Version 8.1 was already in widespread use throughout their respective industries. One commenter indicated a concern with making backward compatibility “the criteria” for determining if a notice and comment rulemaking is required. That commenter felt that backward compatibility must be viewed as just one factor in making a determination to update, as opposed to modify, a standard. We continue to find that the NCPDP SCRIPT 8.1 is backward compatible to the adopted NCPDP SCRIPT 5.0. Both versions are the same, except that Version 8.1 contains the additional feature of medication history. One commenter expressed that it has been their experience that, while capable of processing Version 5.0, the industry is already implementing Version 8.1, and that few, if any, of their trading partners are using Version 5.0. This is supported by industry reports that numerous software systems now using Version 8.1 have been certified for use by electronic prescribing networks. Regarding the comment that backward compatibility should not be the sole criterion for determining whether use of a subsequent version requires an update or a modification of an e-prescribing standard, we note that it is not the sole criterion. The “backward compatibility” of a subsequent version of an adopted standard simply indicates that entities may voluntarily upgrade their systems with the subsequent version that is “backward compatible,” and still be compliant with the adopted standard. With the backward compatible version, entities may conduct transactions with other entities that continue to use the adopted version of the standard with no deleterious effect on the transmission of information or the transaction itself. We also note that we are required by law to employ notice and comment rulemaking to modify an adopted standard or when entities would be required to transition to a subsequent version. Through the rulemaking process, we must notify the public as to the proposed modifications, receive public comment on our proposals, and take into consideration an analysis of factors such as the modification's impact on affected entities relative to cost, benefit projections, productivity, etc., as well as industry and stakeholder feedback provided by means of the written comment process. We are soliciting comments regarding the retirement of Version 5.0 and the adoption of Version 8.1 as the adopted standard for the e-prescribing functions outlined in 42 CFR 423.160(b)(1), and based on the proposed compliance date described in section II.E. of this proposed rule. B. Proposed Adoption of an E-Prescribing Standard for Medication History Transaction [If you choose to comment on issues in this section, please include the caption “Medication History” at the beginning of your comments.] In the Foundation Standards final rule, 70 FR 67568, we discussed the need for medication history standards, and that we were unaware of any standard for these transactions that clearly met the criteria for adequate industry experience. As a result, a standard for medication history was tested in the 2006 pilot project. The NCVHS noted in its September 2, 2004 letter to the Secretary that medication history information was communicated between payers and prescribers using proprietary messaging standards, frequently the Information File Transfer protocols established by RxHub, a national formulary and benefits information exchange. The NCVHS recommended that HHS actively participate in and support the rapid development of an NCPDP standard for formulary and medication history using the RxHub protocol as a basis. In September 2005, RxHub announced that its propriety data transaction format for Medication History which they had submitted to NCPDP, had been approved and incorporated into the NCPDP Script Standard, and approved by the American National Standard Institute (ANSI). NCVHS considered ANSI accreditation to be one criterion in their recommendation process for adoption of e-prescribing standards, and HHS adopted this as a criterion for determining adequate industry experience. (See 70 FR 67568, 67577 for a discussion of all the criterion considered by NCVHS.) The resulting NCPDP SCRIPT standard was recognized by the Secretary as an initial standard, then pilot tested in accordance with the MMA. The pilot sites demonstrated that the standard can be successfully implemented among a variety of e-prescribing partners and, while complex, the standard can support the Medication History transaction, and is ready for implementation under Medicare Part D. If NCPDP SCRIPT 8.1 is adopted in place of NCPDP SCRIPT 5.0 at § 423.160(b)(1) as proposed above, we also propose to add § 423.160(b)(3) to adopt the NCPDP SCRIPT 8.1 for electronic medication history transactions among the plan sponsor, prescriber, and the dispenser when e-prescribing for covered Medicare Part D drugs for Medicare Part D eligible individuals. The medication history transaction in the NCPDP SCRIPT 8.1 standard is based on the proprietary file transfer protocol developed by RxHub, which is currently being used to communicate this information in many e-prescribing products. Adoption of the NCPDP SCRIPT 8.1 standard for the medication history transaction will provide a uniform communications mechanism for prescribers, dispensers and payers, support reconciliation of useful data from a large number of sources, and raise awareness of its availability and use among providers. Cost savings to the public will be generated based on reductions in the number of preventable adverse drug events (ADEs). Significantly, systems that utilize this proposed transaction in the NCPDP SCRIPT 8.1 standard will be substantially more effective at ADE reduction than those merely utilizing the original foundation standards by allowing prescribers to see what medications have been prescribed by other providers in the past. C. Proposed Adoption of an E-prescribing Standard for Formulary and Benefit Transactions [If you choose to comment on issues in this section, please include the caption “formulary and benefit transactions” at the beginning of your comments.] As a result of pilot testing, we are proposing to add § 423.160(b)(4) to adopt the NCPDP Formulary and Benefit Standard 1.0, for the transaction of communicating formulary and benefit information between the prescriber and the plan sponsor when e-prescribing for covered Medicare Part D drugs for Medicare Part D eligible individuals. This standard is based on a proprietary file transfer protocol developed by RxHub, which is currently being used to communicate this information in many e-prescribing products. The RxHub protocols were submitted to NCPDP for accreditation, and the resulting standard was recognized by the Secretary as an initial standard and pilot-tested in accordance with the MMA. The NCPDP Formulary and Benefits Standard 1.0 was implemented live in all pilot sites. This standard works in tandem with the eligibility request and response (ASC X12N 270/271). Once the individual is identified, the appropriate drug benefit coverage is located and transmitted to the requestor. The pilot sites demonstrated that the NCPDP Formulary and Benefits Standard 1.0 can be successfully implemented among a variety of e-prescribing partners, and while complex, the standard can support the transaction, and is ready for implementation under Medicare Part D. Adoption of this standard for formulary and benefits transactions between plan sponsors and prescribers may deliver added value in approximating patients' drug coverage and lead to patient-specific, real-time benefit information. The NCPDP Formulary and Benefits Standard 1.0 enables the prescriber to consider this information during the prescribing process, and make the most appropriate drug choice without extensive back-and-forth administrative activities with the pharmacy or the plan sponsors. As prescribers prescribe based on the coverage offered by a patient's plan formulary, plans will experience reduced costs through paying for drugs that are specific to their formularies for which they have negotiated favorable rates. Patients will see reduced costs in not having to pay increased out-of-pocket expenses for prescribed drugs that are not on their plan's formularies. D. Adoption of the National Provider Identifier
(NPI)as a Standard for Use in E-Prescribing Transactions [If you choose to comment on issues in this section, please include the caption “Adoption of the National Provider Identifier” at the beginning of your comments.] We are proposing to add § 423.160(b)(5) to adopt the National Provider Identifier as a standard for use in e-prescribing transactions among the plan sponsor, prescriber, and the dispenser. The NCPDP SCRIPT standard 8.1, which we are proposing for adopting in this proposed rule, supports the use of NPI. While the NPI was not tested in the pilot project, we have reason to believe that there is adequate industry experience with the NPI which would support its use in e-prescribing transactions under section 1860D-4(e)(4)(C)(ii). Use of the NPI is already required in order to conduct HIPAA-compliant transactions which require the identity of HIPAA covered health care providers; and the compliance date for the NPI, May 27, 2007, has already passed. The NPI is in widespread use by HIPAA covered entities in HIPAA transactions. Although the NCPDP SCRIPT transaction is not a HIPAA transaction, the prescribers and dispensers that conduct it would be HIPAA covered entities, and as such, they would already be using NPI as they conduct their HIPAA transactions. They would, therefore, already be familiar with the NPI, even though they may not currently use it in the NCPDP SCRIPT transaction. Furthermore, NPI meets the objectives and design criteria laid out at section 1860D-4(e)(3) of the Act, so adoption of the NPI for use in e-prescribing standards is supported by section 1860D-4(e)(3)(A) of the Act as well. Finally, as uniform identifiers are necessary to conduct electronic transactions such as those in the e-prescribing program, adoption of NPI is also supported by section 1102 of the Act. We generally solicit comments from the industry and other stakeholders on the adoption of NPI as an e-prescribing standard, and we specifically request comments as to whether use of the NPI in HIPAA-compliant transactions constitutes adequate industry experience for purposes of using NPI as a covered health care provider identifier in Medicare Part D e-prescribing transactions. E. Proposed Compliance Date In accordance with section 1860D-4(e) of the Act, the Secretary must issue certain final uniform standards for e-prescribing no later than April 1, 2008, to become effective not later than 1 year after the date of their promulgation. Therefore, in accordance with this requirement, the Secretary proposes a compliance date of 1 year after the publication of the final uniform standards. The Secretary also proposes adopting NCPDP SCRIPT 8.1 as the e-prescribing standard for the transactions listed in section III. C. of this proposed rule, effective 1 year after the publication of the final uniform standards. We solicit comments regarding the impact of these proposed dates on industry and other interested stakeholders and whether an earlier compliance date should be adopted. III. Collection of Information Requirements Under the Paperwork Reduction Act of 1995 (PRA), agencies are required to provide a 30-day notice in the **Federal Register** and solicit public comment before a collection of information requirement is submitted to the Office of Management and Budget
(OMB)for review and approval. In order to fairly evaluate whether an information collection should be approved by OMB, section 3506(c)(2)(A) of the PRA requires that we solicit comment on the following issues: • Whether the information collection is necessary and useful to carry out the proper functions of the agency. • The accuracy of the agency's estimate of the information collection burden. • The quality, utility, and clarity of the information to be collected. • Recommendations to minimize the information collection burden on the affected public, including automated collection techniques. We are soliciting public comment on each of these issues for the following sections of this document that contain information collection requirements. Standards for an Electronic Prescribing Program (§ 423.160) The emerging and increasing use of health care electronic data interchange
(EDI)standards and transactions have raised the issue of the applicability of the PRA. It has been determined that a regulatory requirement mandating the use of a particular EDI standard constitutes an agency-sponsored third-party disclosure as defined under the PRA. As a third-party disclosure requirement subject to the PRA, Medicare Part D sponsors offering qualified prescription drug coverage must support and comply with electronic prescription standards relating to covered Medicare Part D drugs, for Medicare Part D enrolled individuals as would be required under § 423.160. However, the requirement that Medicare Part D sponsors support electronic prescription drug programs in accordance with standards set forth in this section, as established by the Secretary, does not require that prescriptions be written or transmitted electronically by prescribers or dispensers. After the promulgation of this set of final standards, these entities will be required to comply with the proposed standards only if they transmit prescription information electronically as discussed in section 1860D-4(e)(1) and
(2)of the Act. Testimony presented to the NCVHS indicates that most health plans/PBMs currently have e-prescribing capability either directly or by contracting with another entity. Therefore, we do not believe that conducting an electronic prescription drug program would be an additional burden for those plans. We solicit industry and other interested stakeholder comments and input on this issue. Since these standards are already familiar to industry, we believe the requirement to adopt them constitutes a usual and customary business practice and the burden associated with the requirements is exempt from the PRA as stipulated under 5 CFR 1320.3(b)(2). As required by section 3504(h) of the Paperwork Reduction Act of 1995, we have submitted a copy of this document to OMB for its review of these information collection requirements. If you comment on any of these information collection requirements, please mail copies directly to the following: Centers for Medicare & Medicaid Services, Office of Strategic Operations and Regulatory Affairs, Regulations Development and Issuances Group, Attn: William Parham, III, CMS-0016-P, Room C5-14-03, 7500 Security Boulevard, Baltimore, MD 21244-1850; and Office of Information and Regulatory Affairs, Office of Management and Budget, Room 10235, New Executive Office Building, Washington, DC 20503. Attn: Carolyn Lovett, CMS Desk Officer, CMS-0016-P, *Carolyn_lovett@omb.eop.gov.* Fax:
(202)395-6974. IV. Response to Comments Because of the large number of public comments we normally receive on **Federal Register** documents, we are not able to acknowledge or respond to them individually. We will consider all comments we receive by the date and time specified in the DATES section of this preamble, and, when we proceed with a final rule, we will respond to the comments in the preamble to that document. V. Regulatory Impact Analysis [If you choose to comment on issues in this section, please include the caption “Regulatory Impact Analysis” at the beginning of your comments.] We have examined the impacts of this rule as required by Executive Order 12866 of September 30, 1993, as further amended; the Regulatory Flexibility Act
(RFA)(September 16, 1980, Pub. L. 96-354); section 1102(b) of the Social Security Act; section 202 of the Unfunded Mandates Reform Act of 1995 (March 22, 1995, Pub. L. 104-4); and Executive Order 13132 of August 4, 1999. Executive Order 12866 (as amended by Executive Order 13258, which merely reassigns responsibility of duties, and further amended by Executive Order 13422) directs agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). According to Executive Order 12866, a regulatory action may reasonably be “significant” if it meets any one of a number of specified conditions, including if the action may reasonably be anticipated to lead to: • An annual effect on the economy of $100 million or more, adversely affecting in a material way the economy, a sector of the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal governments or communities; • A serious inconsistency or otherwise interfering with an action taken or planned by another agency; • Material alteration in the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or • Novel legal or policy issues arising out of legal mandates, the President's priorities, or the principles set forth in Executive Order 12866. This proposed rule is anticipated to have an annual benefit on the economy of $100 million or more and will have “economically significant effects.” We believe that prescribers and dispensers that are now e-prescribing have already largely invested in the hardware, software and connectivity necessary to e-prescribe. We do not anticipate that the proposed modification of the NCPDP SCRIPT 5.0 to the NCPDP SCRIPT 8.1 at § 423.160(b)(1), the adoption of NCPDP SCRIPT 8.1 for the Medication History transaction, the adoption of the NCPDP Formulary and Benefit Standard 1.0 for formulary and benefit transactions, and the adoption of NPI for use in e-prescribing transactions will result in significant costs. We solicit industry and other interested stakeholder comments and input on this issue. We anticipate that the ability to utilize electronic formulary and benefit inquiries will result in administrative efficiencies and increased prescribing of generic drugs versus brand name drugs, and the access to medication history at the point of care will result in reduced adverse drug events (ADEs). The benefits accruing from these transactions will have an economically significant effect on Medicare Part D program costs and patient safety. As this is a significant rule under Executive Order 12866, we are required to prepare a regulatory impact analysis
(RIA)for this rule. The Regulatory Flexibility Act
(RFA)requires agencies to analyze options for regulatory relief of small entities. For purposes of the RFA, small entities include small businesses, nonprofit organizations, and small governmental jurisdictions. Most hospitals and most other providers and suppliers are small entities, either by nonprofit status or by qualifying as small businesses under the Small Business Administration's size standards (revenues of $6.5 million to $31.5 million in any 1 year for the health care industry). States and individuals are not included in the definition of a small entity. For details, see the Small Business Administration's regulation that set forth the current size standards for health care industries at *http://sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf* (refer to the 620000 series). Based on our initial analysis, we expect this proposed rule will not have a significant impact on a substantial number of small entities because, while many prescribing physician practices and independent pharmacies would be small entities, e-prescribing is voluntary for prescribers and pharmacies. For prescribers and dispensers that have already implemented e-prescribing, the adoption of NCPDP SCRIPT 8.1 would in most cases be accommodated through software upgrades whose cost would already be included in annual maintenance fees. Medicare Part D sponsors are required to support e-prescribing, and would incur some costs to support the NCPDP Formulary and Benefit Standard 1.0 and the NCPDP SCRIPT 8.1 medication history transaction. However, using the SBA revenue guidelines, the majority of Medicare Part D plan sponsors would not be considered small entities as they represent major insurance companies with annual revenues of over $31.5 million. We also do not anticipate that the proposed requirement to use NPI in e-prescribing would have any effect on Medicare Part D plans, providers or dispensers as they are already using the NPI in HIPAA-covered transactions. Section 1102(b) of the Act requires us to prepare a regulatory impact analysis if a rule may have a significant impact on the operations of a substantial number of small rural hospitals. This analysis must conform to the provisions of section 603 of the RFA. For purposes of section 1102(b) of the Act, we define a small rural hospital as a hospital that is located outside of a core-bed Metropolitan Statistical Area and has fewer than 100 beds. This proposed rule would not affect small rural hospitals because the program will be directed at outpatient prescription drugs covered under Medicare Part D and not drugs provided during a hospital stay. Prescription drugs provided during hospital stays are covered under Medicare as part of Medicare payments to hospitals. Therefore, for purposes of our obligations under section 1102(b) of the Act, we are not providing an analysis. Section 202 of the Unfunded Mandates Reform Act of 1995 requires Federal agencies to prepare written statements before promulgating any general notice of proposed rulemaking of any rule that includes a Federal mandate that could result in expenditure in any one year by State, local, or tribal governments, in the aggregate, or by the private sector, of $110 million. Since only Medicare Part D plan sponsors are required to support e-prescribing, this proposed rule does not include any mandate that would result in this spending by State, local or tribal governments. We acknowledge that there may be transaction costs borne by payers and pharmacy benefit managers (PBMs), but, based on our analysis, they would fall below the $110 million threshold. We would expect that many Medicare Part D plan sponsors already support the exchange of formulary, benefits and medication history data, because the standards we are proposing are based on proprietary transactions developed by Rx-Hub, which are already in use in the current e-prescribing environment. Executive Order 13132 establishes certain requirements that an agency must meet when it promulgates a proposed rule (and subsequent final rule) that imposes substantial direct costs on State and local governments, preempts State law, or otherwise has Federalism implications. Every State allows for the electronic transmission of prescriptions. In recent years, many States have more actively legislated in this area. The scope and substance of this State activity, however, varies widely among the States. 1 The MMA addresses preemption of State laws at section 1860D-4(e)(5) of the Act as follows: 1 Catizone, Carmen A., National Association of Boards of Pharmacy, Testimony before the NCVHS, July 29, 2004.
(5)Relation to State Laws. The standards promulgated under this subsection shall supercede any State law or regulation that—
(A)Is contrary to the standards or restricts the ability to carry out this part; and
(B)Pertains to the electronic transmission of medication history and of information on eligibility, benefits, and prescriptions with respect to covered part D drugs under this part. In the final rule (70 FR 67568 through 67594), we interpreted this section of the Act as preempting State law provisions that conflicted with Federal electronic prescription program drug requirements that are adopted under Medicare Part D. We viewed it as mandating Federal preemption of State laws and regulations that are either contrary to the Federal standards, or that restrict the ability to carry out (that is, stand as an obstacle to) the electronic prescription drug program requirements, and that also pertain to the electronic transmission of prescriptions or certain information regarding covered Medicare Part D drugs for Medicare Part D enrolled individuals. Consequently, for a State law or regulation to be preempted under this express preemption provision, the State law or regulation would have to meet the requirements of both paragraphs
(A)and (B). Furthermore, there would have to be a Federal standard adopted through rulemaking that creates a conflict for a State law to be preempted. This interpretation closely reflected the language of the statute, and it is consistent with the presumption against Federal preemption of State law 2 and with the fundamental Federalism principles set forth in section 2 of Executive Order 13132. It is also consistent with the Department of Health and Human Service's
(HHS)general position of deferring to State laws regulating the practice of pharmacy and the practice of medicine. 2 See *Davies Warehouse Co.* v. *Bowles* , 321 U.S. 144, 153, 64, S.Ct. 474, 88 L.Ed. 635 (1944), *Pharmaceutical Research and Manufacturers of America* v. *Walsh* , 538 U.S. 644, 661, 123 S.Ct. 1855, 1867, 155 L.Ed.2d 889 (2003). In the final rule at 70 FR 67568 through 67594, we acknowledged that some industry representatives believed that the Congress intended this preemption provision to be much broader. For instance, some expressed the position that this statutory provision preempts all State laws that would in any way restrict the development of e-prescribing for all providers and payors. This position was based on the belief that the Congress intended to preempt the field of e-prescribing through this provision in the MMA. It would have required an interpretation that the word “and” between paragraphs
(A)and
(B)was disjunctive, that is, that “and” means “or” in this context. Under this interpretation, the operative language would be “restricts the ability to carry out this part” in paragraph (A), which arguably would have enabled the standards and requirements adopted for the Federal electronic prescription drug program to preempt all State laws and regulations that restricted the Secretary's ability to carry out the goals of an electronic prescription drug program, even if they were not related to covered Medicare Part D drugs, or Medicare Part D covered individuals. They contended that some States had existing statutory or regulatory barriers that could impede the success of e-prescribing; for example, laws and regulations that were drafted with only paper prescriptions in mind, which may not be well-suited to e-prescribing applications. We determined that this interpretation did not comport with the use of the word “contrary” in the statutory language which generally establishes “conflict preemption.” This interpretation would seem to render paragraph
(B)virtually meaningless and serve to establish “field preemption.” We invited public comment on our proposed interpretation of the scope of preemption, particularly with respect to relevant State statutes and regulations which commenters believe should be preempted, but would not under our proposed interpretation. We specifically asked for comment on whether this preemption provision applied only to transactions and entities that are part of an electronic prescription drug program under Medicare Part D or to a broader set of transactions and entities. We also asked for comment on whether this preemption provision applied to only electronic prescription transactions or to paper transactions as well. For the same reasons given above, we have determined that States would not incur any direct costs as a result of this proposed rule. However, as mandated by section 1860D-4(e) of the Act, and under the Executive Order, we are required to minimize the extent of preemption, consistent with achieving the objectives of the Federal statute, and to meet certain other conditions. We believe that, taken as a whole, this proposed rule would meet these requirements. We do seek comments from States and other entities on possible problems and on ways to minimize conflicts, consistent with achieving the objectives of the MMA, and will be undertaking outreach to States on these issues. We have consulted with the National Association of Boards of Pharmacy directly and through participation in NCVHS hearings and we believe that the approach we suggested provides both States and other affected entities the best possible means of addressing preemption issues. We will consult further with States before issuing the final rule. This section constitutes the Federalism summary impact statement required under the Executive Order. The objective of this regulatory impact analysis is to summarize the cost and benefits of implementing the standards we are proposing in this rule for the conversion from NCPDP SCRIPT 5.0 to NCPDP SCRIPT 8.1 at § 423.160(b)(1), the adoption of standards for the electronic communication of formulary and benefit and medication history information, and the adoption of NPI for use in e-prescribing transactions. These proposed actions build upon the e-prescribing requirements published as a final rule on November 7, 2005 (70 FR 67568) which included adoption of three foundation standards for e-prescribing. The final rule contained an impact analysis that addressed the cost of those foundation standards, and it also discussed in concept the benefits of e-prescribing in general. In the e-prescribing final rule at 70 FR 67589, we noted that commenters suggested that the estimated start-up costs for e-prescribing could be at least $1,500 and perhaps exceed $2,000. For average e-prescribing software implementation, according to a 2003 CITL Report, “The Value of Computerized Provider Order Entry,” a basic-e-prescribing system cost $1,248 plus $1,690 for annual support, maintenance, infrastructure and licensing costs. The total first year cost averaged approximately $3,000. The Journal of Healthcare Information Management has published that physicians reported paying user-based licensing fees ranging from $80 to $400 per month, although we believe through anecdotal information that these licensing fees have decreased over time to between $300 and $800 annually. For further discussion of the start-up costs associated with e-prescribing, see the e-prescribing final rule at 70 FR 67589. This proposed rule builds on the final rule analysis, and we refer to it to assure that costs and benefits are not counted twice. We solicit industry and other interested stakeholder comment and input on this issue. A. Overall Impact According to 2006 CMS data, approximately 24 million beneficiaries were enrolled in a Medicare Part D plan, (either a stand-alone Prescription Drug Plan or a Medicare Advantage Drug Plan). Another 7 million retirees were enrolled in employer or union-sponsored retiree drug coverage receiving the Retiree Drug Subsidy (RDS); 3 million in Federal retiree programs such as TRICARE and the Federal Employees Health Benefits Plans (FEHBP) and 5 million receiving drug coverage from alternative sources, including 2 million who have coverage through the Veterans’ Administration. The breadth of Medicare's coverage suggests that e-prescribing under Medicare Part D could impact virtually every pharmacy and a large percentage of the physician practices in the country. Standards established for Medicare Part D beneficiaries will, as a matter of economic necessity, be adopted by vendors of e-prescribing and pharmacy software, and as a result, would extend to other populations unless they are manifestly unsuited for the purpose. However, we note again that e-prescribing is voluntary for both prescribers and dispensers under the Medicare Part D electronic prescribing program. Our pilot testing and industry collaboration activities were partially intended to prevent the development of multiple, “parallel” e-prescribing environments, with their attendant incremental costs. In general, we attempted to avoid imposing an undue administrative burden on prescribing health care professionals, dispensing pharmacies and pharmacists. The standards we are proposing here, like the foundation standards adopted previously, are maintained by an accredited standards development organization. These proposed standards have been shown through pilot testing to work effectively with the foundation standards. B. Costs Because e-prescribing is voluntary, we anticipate that entities who currently do not now e-prescribe and who will not implement e-prescribing during the period reflected in the regulatory impact analysis will incur neither costs nor benefits. Entities that do not now e-prescribe, but that will implement e-prescribing during the period reflected in the regulatory impact analysis will incur the costs and benefits associated with the foundation standards (which we discussed in the final rule at 70 FR 67568), but we do not claim either in this analysis. We assume that implementation of the NCPDP SCRIPT standards would not significantly affect the implementation cost; that is, the cost to implement the foundation standards and these two standards is not significantly higher than the cost of implementing the foundation standards alone. However, these entities could incur some additional costs for the purchase of new e-prescribing products that include these two transactions in the standard format. They would also incur the benefits of the two proposed standards. We solicit industry and other interested stakeholder comment and input on these issues. We assume that since these standards are new and not currently deployed and implemented in vendor products, that entities do not exist that e-prescribe now and who have software that conducts these two transactions using the NCPDP SCRIPT standards. Entities that e-prescribe now using a software product that cannot conduct the two transactions and cannot be upgraded to conduct them (for example, stand-alone Microsoft Word-based prescription writers) are not required to conduct the two new transactions, and if they decide not to conduct them, they would incur neither cost nor benefit. However, if they decide to upgrade their entire e-prescribing system to take advantage of the benefits of these new transactions, they would incur costs. However, we have no clear sense of how many entities would fall into this category. Entities that e-prescribe now using a product that could be upgraded to conduct the two transactions would incur no cost or benefit if they decide not to upgrade. This would also apply to entities that e-prescribe now using a product that can conduct the two transactions using nonstandard (Non NCPDP SCRIPT) formats, but the functionality is not used. Based on our research, this category likely is the one in which most current e-prescribers fall. If they decide to upgrade, they would incur the cost of the upgrade (unless the upgrade is included in their maintenance agreement) and any testing costs, and would incur the benefits of the two transactions. Entities that e-prescribe now using a product that can conduct the two transactions using nonstandard formats, and who use the transactions would have to upgrade. They would not enjoy all the benefits of the two new transactions since they would have already been performing them in some manner, but definitely would incur cost savings due to the increased interoperability of using the NCPDP SCRIPT standards. In fact, any entity engaging in e-prescribing would incur benefits due to increased interoperability, as the existence of standards simplifies data exchange product selection and testing. We solicit industry and other interested stakeholder comment and input on these issues. In the e-prescribing final rule at 70 FR 67589, we also discussed the estimated start-up costs for e-prescribing for providers and/or dispensers. Based on industry input, we cited approximately $3,000 for annual support, maintenance, infrastructure and licensing costs. Physicians at that time reported paying user-based licensing fees ranging from $80 to $400 per month. For further discussion of the start-up costs associated with e-prescribing, see the regulatory impact analysis section of this proposed regulation, and the e-prescribing final rule at 70 FR 67589. In the November 7, 2005 final rule, we addressed the issues of privacy and security relative to e-prescribing in general. We noted that disclosures of protected health information
(PHI)in connection with e-prescribing transactions would have to meet the minimum necessary requirements of the Privacy Rule if the entity is a covered entity (70 FR 6161). It is important to note that health plans, prescribers, and dispensers are HIPAA covered entities, and that these covered entities under HIPAA must continue to abide by the applicable HIPAA standards including these for privacy and security. We continue to agree that privacy and security are important issues related to e-prescribing. Achieving the benefits of e-prescribing require the prescriber and dispenser to have access to patient medical information that may not have been previously available to them. Section 1860-D(e)(2)(C) of the Act requires that disclosure of patient data in e-prescribing must, at a minimum, comply with HIPAA's privacy and security requirements. Although HIPAA standards for privacy and security are flexible and scalable to each entity's situation, they provide comprehensive protections. We will continue to evaluate additional standards for consideration as adopted e-prescribing standards. For further discussion of privacy and security and e-prescribing, refer to the final rule at 70 FR 67581 through 67582. 1. Retail Pharmacy Because e-prescribing is voluntary for pharmacies, dispensers who do not currently conduct e-prescribing would not incur any costs related to any of the provisions of this rule. However, we recognize that costs would be incurred by those dispensers that currently conduct e-prescribing transactions, as well as those who voluntarily implement e-prescribing during the period reflected in our regulatory impact analysis. Industry estimates are that close to 100 percent of the nation's retail chain pharmacies are connected live to an e-prescribing network, with over 95 percent of those connected to networks capable of receiving and exchanging formulary and benefit and medication history data. This is in contrast to only 20 percent of independent pharmacies that are connected to e-prescribing networks. The transaction using the NCPDP Formulary and Benefit Standard 1.0 is carried out between the plan and prescriber and, therefore, pharmacies will not incur any cost related to this transaction. While the NCPDP SCRIPT 8.1 Medication History transaction supports communication between the dispenser and prescriber, its use is, nonetheless, voluntary for both. We assume for purposes of this analysis that the Medication History transaction will be carried out between the plan and prescriber, and therefore preliminarily conclude that pharmacies will not incur costs related to this transaction. We solicit industry and other interested stakeholder comment and input on this issue. The modification of the NCPDP SCRIPT 5.0 foundation standard to NCPDP SCRIPT 8.1 at § 423.160(b)(1) will impact pharmacies. Pharmacies will have to assure that their software can accept prescription transactions using the 8.1 standard, and they will need to test with prescribers to assure that their electronic transactions are being received and can be processed. We believe there is little, if any, incremental costs associated with these activities. Software vendors are already implementing version 8.1 in their products, and we believe that any needed upgrades will be included in routine version upgrades. The number of current e-prescribers per pharmacy is small, and the testing process is not complicated. We believe that the implementation of the NPI will be accomplished as part of this transition. Prescribers and dispensers already use the NPI to conduct retail pharmacy drug claim transactions. 2. Medical Practices Medical practices, compared to pharmacies, face a different set of costs in implementing information systems for clinical care and financial management. Unlike pharmacies, where technology has become an important part of operations (especially for larger retail chains), many providers have been cautious in their adoption of health information technology. We assume that, based on industry estimates, anywhere from 5 to 18 percent of physicians are e-prescribing today 3 . Because e-prescribing is voluntary for prescribers, medical practices that do not currently conduct e-prescribing would not incur any costs related to any of the provisions of this rule. However, we recognize that costs would be incurred by those prescribers currently e-prescribing, as well as those who voluntarily begin to e-prescribe during the period reflected in our regulatory impact analysis. If a practice decides to implement e-prescribing at a later time, we anticipate that the software products on the market would be compliant with these standards and, therefore, no additional cost would be incurred. In assessing the cost to prescribers that are currently e-prescribing, many of the e-prescribing software products generally already contain some capability to communicate formulary and benefit and medication history information because they incorporate the RxHub proprietary format on which the proposed standards were based. We expect that any changes that might be necessary as a result of this rulemaking would likely be included in routine version upgrades that are covered by annual maintenance and/or subscription fees. We solicit industry and other interested stakeholder comment and input on this issue. For e-prescribers whose software products are not able to generate NCPDP SCRIPT 8.1 transactions, they will not have the capability to conduct the proposed NCPDP Formulary and Benefit Standard 1.0 and NCPDP SCRIPT 8.1 medication history transaction. Costs would be incurred if they were to replace such software with software that generates transactions that comply with the proposed standards. We anticipate that the NCPDP SCRIPT 8.1 will be accommodated in later software version upgrades where that standard is not already utilized. We believe that the implementation of the NPI will be accomplished as part of this transition. Prescribers and dispensers already should be using the NPI to conduct retail pharmacy drug claim transactions. 3 E-Prescribing and the Prescription Drug Program final rule, published November 7, 2005 (70 FR 67568). 3. Medicare Part D Plan Sponsors and Pharmacy Benefit Managers
(PBMs)Plan sponsors will be required to support NCPDP SCRIPT 8.1 for the transactions listed at § 423.160(b)(1), the NCPDP Formulary and Benefit Standard 1.0, and the NCPDP SCRIPT 8.1 Medication History transaction. They will need to assure that their software can receive and create NCPDP Formulary and Benefit Standard 1.0 and NCPDP SCRIPT 8.1 Medication History transaction queries and responses, and that their internal systems and databases can supply the information needed to build the transaction. For example, they will need to be able to extract prescription claims history and format it according to the Medication History transaction in the NCPDP SCRIPT 8.1 Standard. We believe that many plans will have already implemented this functionality because the standards we are proposing are based on proprietary file transfer protocols developed by Rx- Hub that have been included in many e-prescribing products. Plans may need to restructure systems to assure that the data output is in the proper format, but, for the most part, the needed functionality is in place. We recognize that some Medicare Part D plans may need to make additional investments to support these standards, and we solicit industry and other interested stakeholder comment and input on this issue. Because plans typically pay the per transaction network fees for eligibility transactions, which likely includes providing a formulary and benefit response as well as a medication history response, Medicare Part D plans will incur increased transaction costs for formulary and benefit and medication history transactions as the frequency in which these transactions are conducted electronically increases. Through information provided by SureScripts and industry consultants, this transaction fee appears to range from 6 cents to 25 cents per transaction, with the midpoint being 15 cents. In 2006, RxHub, one of the nation's largest electronic prescription and prescription-related information routing networks, estimated that their transaction volume increased 50 percent, from 29 million in 2005 to more than 43 million in 2006. These transactions were real-time requests for patient eligibility and benefits, formulary and medication history information. 4 4 RxHub Announces 2006 e-Prescribing Results and Highlights Milestones for 2007, St. Paul, MN, February 23, 2007, *http://www.rxhub.com.* Based on CMS data we estimate that approximately 24 million Medicare beneficiaries received Medicare Part D benefits in 2006. (This figure excludes beneficiaries covered under the Retiree Drug Subsidy [RDS] program.) Approximately 825,000,000 claims (prescription drug events) were finalized and accepted for 2006 payment. Based on CMS data, we estimate that approximately 24 million Medicare beneficiaries received Medicare Part D benefits in 2006. This figure reflects those Medicare beneficiaries enrolled in a Medicare Prescription Drug Plan
(PDP)and/or a Medicare Advantage plan with Prescription Drug coverage (MA-PD), for which CMS has prescription drug event data. Approximately 825,000,000 claims (prescription drug events) were finalized and accepted for 2006 payment. The annual percentage increase in the number of Medicare Part D prescriptions is estimated by CMS at 4.6 percent based on industry estimates ( *http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_3665_80415465,00.html* ). So that impact comparisons can be made equally across all years, inflation was removed from the price effects. Conservatively, we calculate the increase in the number of Medicare Part D prescriptions and apply the current estimates of 5 and 18 percent electronic prescribing adoption rates to arrive at the number of Medicare Part D electronic transactions, and cost them out at a range of a low of 6 cents per transaction to a high of 25 cents per transaction. We estimate costs for Medicare Part D plans of between $2 million to $46 million per year. Table 1.—Transaction Costs for Medicare Part D Plans Year 2009 2010 2011 2012 2013 Number of Medicare Rxs 862,950,000 902,645,700 944,167,402 987,599,102 1,033,028,660 Expected % of e-prescriptions 5% 18% 5% 18% 5% 18% 5% 18% 5% 18% E-Rx Transaction Cost at $0.06 $2,588,850 $9,319,860 $2,707,937 $9,748,573 $2,832,502 $10,197,997 $2,962,797 $10,666,070 $3,099,085 $11,156,709 E-Rx Transaction Cost at $0.25 $10,786,875 $38,832,750 $11,283,071 $40,619,056 $11,802,092 $42,487,533 $12,344,498 $44,441,959 $12,912,858 $46,486,289 Medicare Part D plan sponsors may negotiate the cost of e-prescribing transactions as part of the dispensing fees included in their pharmacy contracts, and account for these costs in their annual bids to participate in the Medicare Part D program. In these instances, inclusion of these costs may increase the cost of their Medicare Part D bids. However, we anticipate that these costs would be negated by the savings from an increased rate of conversion from brand name to generic prescriptions realized through utilization of the formulary and benefit transaction, which would more than offset the transaction costs, and solicit comments on this assumption. Medicare Part D plan sponsors will not be affected by the proposals to modify the NCPDP SCRIPT 5.0 foundation standard to adopt NCPDP SCRIPT 8.1 for the transactions listed at 42 CFR 423.160(b)(1) because these transactions are conducted between prescribers and dispensers, and plans are not involved. Medicare Part D plan sponsors will not be significantly affected by the proposal to adopt the NPI as a standard for use in e-prescribing transactions among the plan sponsor, prescriber, and the dispenser because the plans already use the NPI in HIPAA transactions, such as the retail pharmacy drug claim. 4. Vendors Vendors of e-prescribing software will incur costs to bring their products into compliance with these requirements. However, we consider the need to enhance functionality and comply with industry standards to be a normal cost of doing business that will be subsumed into normal version upgrade activities. Vendors may incur somewhat higher costs connected with testing activities but vendors should be able to address this potential workload on a flow basis. We believe these costs to be minimal, and solicit industry and other interested stakeholder comment and input on this issue. C. Benefits The benefits of the proposed adoption of standards for formulary and benefits and medication history transactions take place over a multi-year timeframe. The benefits come in the form of beneficiary cost savings realized by increases in formulary adherence and/or generic versus brand name prescribing by physicians as a result of real-time access to formulary and benefits information, administrative (time and labor cost) savings through reduced call-backs on the part of both physicians and pharmacists, and a reduction of the occurrence of preventable adverse drug events
(ADEs)among Medicare beneficiaries, reducing resultant health care costs. 1. Formulary and Benefit Standard—Generic Drug Usage We assume that, based on industry estimates, approximately 5 percent to 18 percent of group practices are e-prescribing today, and use that range for our assumptions. The formulary and benefit transaction will allow the prescriber to view formulary drugs, alternative preferred drugs in a given class that may offer savings to the patient, and/or to see in advance what other less costly drugs within a given drug classification and/or generic drugs can be substituted for a given brand name prescription drug. This can result in reducing calls to the plan, and/or reducing the number of callbacks from a pharmacy because a prescribed drug is not on a beneficiary's drug plan formulary. In 2006, 60 percent of Medicare Part D prescriptions in the first two quarters of the program were for generic drugs, and the remaining 40 percent were brand name prescription drugs. During a Medco study of physicians using e-prescribing technology ( *http://medco.mediaroom.com/index.php?s=43&item=100* ), physicians increased their generic substitution rates by over 15 percent. However, we recognize that not all beneficiaries will accept generic prescription drugs and there are some instances, especially when prescribing for mental health conditions, in which the brand name prescription drug has proven through physician experience to be the more effective drug, and therefore the drug of choice. Therefore, we apply a more conservative 7 percent annual increase in generic prescriptions. We again apply the previously used 5 and 18 percent e-prescribing estimate range. Based on industry data, we assume the cost of a brand name prescription drug at $111.02 and the cost of a generic drug at $32.23. 5 5 *http://www.nacds.org/wmspage.cfm?parm1=5507.* National Association of Chain Drug Stores data. While Medicare beneficiaries will be the most direct recipients of the benefit realized by the conversion of brand name to generic prescription drugs, the Medicare program will benefit as well. The Medicare program will save money as it will be paying for an increased number of lower-cost generic prescriptions versus higher-cost, brand-name prescription drugs, as outlined in Table 2, and we solicit comments on both beneficiary and Medicare program savings assumption. We calculate a cost savings of $95 million to $410 million. Table 2.—Savings From Switch From Brand Name to Generic Drugs Via Formulary & Benefit Transaction Information Year 2009 2010 2011 2012 2013 Number of Medicare Rxs 862,950,000 902,645,700 944,167,402 987,599,103 1,033,028,661 Number of Medicare Rxs—BRAND Only 345,180,000 361,058,280 377,666,961 395,039,641 413,211,465 Expected % of E-Prescriptions 5% 18% 5% 18% 5% 18% 5% 18% 5% 18% Number of Medicare E-Prescriptions 17,259,000 62,132,400 18,052,914 64,990,490 18,883,348 67,980,053 19,751,982 71,107,135 20,660,573 74,378,064 Brand to Generic Rx Conversions as a Result of E-Prescribing 1,208,130 4,349,268 1,263,704 4,549,334 1,321,834 4,758,604 1,382,639 4,977,499 1,446,240 5,206,464 Avg. Cost of Brand Name Drug × Total Elec. Generic Medicare Rxs $134,126,593 $482,855,733 $140,296,416 $505,067,097 $146,750,051 $528,300,184 $153,500,553 $552,601,992 $160,561,579 $578,021,684 Avg. Cost of Generic Drug × Total Elec. Generic Medicare Rxs $38,938,030 $140,176,908 $40,729,179 $146,625,045 $42,602,722 $153,369,797 $44,562,447 $160,424,808 $46,612,319 $167,804,349 Estimated Net Cost Savings (Reduction in Brand Drug Rx Payments) $95,188,563 $342,678,826 $99,567,237 $358,442,052 $104,147,329 $374,930,386 $108,938,107 $392,177,184 $113,949,260 $410,217,334 2. Formulary and Benefit Standard—Administrative Savings a. Physician and Physician Office Staff The 2004 Medical Group Management Association
(MGMA)survey entitled, “Analyzing the Cost of Administrative Complexity” ( *http://www.mgma.com/about/default.aspx?id=280* ) estimated the staff and physician time spent, on a per physician full time equivalent
(FTE)basis, interacting with pharmacies on formulary questions and generic substitutions. Physician time on the phone discussing formulary issues was estimated at almost 16 hours a year; another 14 hours were spent per physician per year on generic substitution issues. Staff spent almost 26 hours per FTE physician on formulary issues, and another 24 hours per FTE physician on generic substitution issues. Table 3 shows the administrative savings benefit to physicians and physician office staffs of performing formulary and benefit transactions electronically. CMS estimates the number of physicians in active practice who participated in the Medicare program in 2006 at 1,048,243. 6 Based on the same CMS data from 2003 through 2006, it indicates a percentage rise in the number of physicians participating in the Medicare program of .94 percent per year, so we have applied that percentage increase to arrive at an estimated number of Medicare physicians for 2009 through 2013. We also apply the previous assumption that from 5 to 18 percent of prescribers are e-prescribing today. Per the MGMA survey, we assume a physician labor cost of $100 per hour and an average staff labor cost of $22 per hour per physician FTE. 6 2006 CMS Statistics, U.S. Department of Health and Human Services CMS Pub. No. 03470, July 2006, Table 22. Pilot site experience shows that, among prescribers or their agents who adopted e-prescribing, obtaining prior approvals, responding to refill requests, and resolving pharmacy callbacks were all done more efficiently with e-prescribing than before. Both groups perceived a greater than 50 percent reduction in time to manage refill requests and significant time savings in managing pharmacy call backs. 7 However, we are realistic in our assumption that full implementation would be difficult to achieve, and use an estimate of 25 percent. Our model calculates that physicians and staff would realize savings ranging from $55 million to $206 million at a 25 percent implementation rate. 7 Findings from the Evaluation of E-Prescribing Pilot Sites, *http://www.healthit.ahrg.gov.* Table 3.—Administrative Savings for Physicians and Medical Office Staff Year 2009 2010 2011 2012 2013 # of Medicare Physicians 1,078,081 1,078,081 1,088,215 1,088,215 1,098,444 1,098,444 1,108,769 1,108,769 1,119,191 1,119,191 Expected % of e-rx prescribers 5% 18% 5% 18% 5% 18% 5% 18% 5% 18% Estimated # of Medicare physicians e-prescribing 53,904 194,055 54,411 195,879 54,922 197,720 55,438 199,578 55,960 201,454 Total MD hrs spent on formulary and generic substitution pharmacy calls (30 hrs) × labor cost ($100/hr) $161,712,150 $582,163,740 $163,232,250 $587,636,100 $164,766,600 $593,159,760 $166,315,350 $598,735,260 $167,878,650 $604,363,140 Total staff hrs spent on formulary and generic substitution pharmacy calls (50 hrs) × labor cost ($22/hr) $59,294,455 $213,460,038 $59,851,825 $215,466,570 $60,414,420 $217,491,912 $60,982,295 $219,536,262 $61,555,505 $221,599,818 Total Labor Costs $221,006,605 $795,623,778 $223,084,075 $803,102,670 $225,181,020 $810,651,672 $227,297,645 $818,271,522 $229,434,155 $825,962,958 Total Anticipated Labor Savings (25%) $55,251,651 $198,905,945 $55,771,019 $200,775,668 $56,295,255 $202,662,918 $56,824,411 $204,567,881 $57,358,539 $206,490,740 b. Pharmacists In Table 4, we draw a correlation from the potential administrative savings realized by physicians and staff for pharmacists. If each physician and their office staff save a total of 80 hours a year by using the formulary and benefit transaction and reducing the time spent on the phone with pharmacists, we assume that pharmacists are saving the equivalent amount of time by not making these calls. Since the MGMA survey assumes a pharmacist labor rate of $60 per hour, our model predicts that, at an annualized cost savings, pharmacists would realize an annualized cost benefit savings ranging from a low of $65 million to a high of $242 million at 25 percent implementation. Table 4.—Administrative Savings for Pharmacists Year 2009 2010 2011 2012 2013 # of Medicare Physicians 1,078,081 1,078,081 1,088,215 1,088,215 1,098,444 1,098,444 1,108,769 1,108,769 1,119,191 1,119,191 Expected % of e-prescribers 5% 18% 5% 18% 5% 18% 5% 18% 5% 18% Estimated # of Medicare physicians e-prescribing 53,904 194,055 54,411 195,879 54,922 197,720 55,438 199,578 55,960 201,454 Total MD and staff hrs spent on formulary and generic substitution pharmacy calls (80 hrs) × pharmacist labor cost ($60/hr) $258,739,440 $931,461,984 $261,171,591 $940,217,760 $263,626,613 $949,055,616 $266,104,650 $957,976,416 $268,605,943 $966,981,024 Total Anticipated Labor Savings (25%) $64,684,860 $232,865,496 $65,292,898 $235,054,440 $65,906,653 $237,263,904 $66,526,162 $239,494,104 $67,151,486 $241,745,256 3. Medication History Standard—Reduction of Adverse Drug Events
(ADEs)Automating the transmission of medication history information will simplify medication reconciliation through transitions in care and, in so doing, provide a safer and more effective health care system. Consumers will benefit from a safer medication delivery system, and greater convenience. Although outpatient ADEs are difficult to estimate, current literature estimates that, as of 2005, there were 530,000 preventable ADEs for Medicare beneficiaries. 8 Moreover, the estimated cost per ADE ranges from $2,000 9 to upwards of $6,000 10 depending on the care setting. We chose to compute the benefits of medication history based on ADEs as a percentage of the total Medicare population. Based on CMS data from 1999 through 2006, the total Medicare population increased on average 1.13 percent per year. 11 We calculated that of the total Medicare population, ADEs occur in about 1.24 percent of that population each year. 8 Field TS, Gilman BH, Subramanian S, Fuller JC, Bates DW, Gurwitz JH. 2005. The costs associated with adverse drug events among older adults in the ambulatory setting. Medical Care 43(12):1171.1176. 9 Field TS, Gilman BH, Subramanian S, Fuller JC, Bates DW, Gurwitz JH. 2005. The costs associated with adverse drug events among older adults in the ambulatory setting. Medical Care 43(12):1171.1176. 10 Institute of Medicine of the National Academies. Preventing Medication Errors. July, 2006. Field TS, Gilman BH, Subramanian S, Fuller JC, Bates DW, Gurwitz JH. 2005. The costs associated with adverse drug events among older adults in the ambulatory setting. Medical Care 43(12):1171.1176. 11 2006 CMS Statistics, U.S. Department of Health and Human Services CMS Pub. No. 03470, July 2006, Table 1. Brigham and Women's Hospital discovered in their analysis of ADEs, conducted as part of the CMS e-prescribing pilot project, that e-prescribing could reduce the risk of ADEs by approximately 50 percent. 12 As medication history is a transaction that most directly impacts ADEs (versus formulary and benefit, codified SIG, etc.), we assume that the reduction in the risk of ADEs can be attributed mostly to the use of medication history rather than to e-prescribing in general. The pilot project demonstrated that 50 percent of preventable ADEs could be eliminated via e-prescribing, and possibly more as prescriber familiarity with the medication history function and full clinical decision support tools become available in all e-prescribing software. We also recognize that the Brigham and Women's Hospital ADE analysis brings with it a degree of uncertainty, as it was a by-product of the pilot project itself, and may not accurately represent the experiences of all entities (that is, small rural settings). Given that, we conservatively assume that the number of ambulatory ADEs associated with Medicare Part D beneficiaries could be reduced by 25 percent for the proportion of patients for whom prescriptions are written electronically; we use the same uptake e-prescribing estimates (5 to 18 percent) as earlier for e-prescribing adoption. Table 5 summarizes potential savings to the public based on these assumptions. 12 Findings from the Evaluation of E-Prescribing Pilot Sites, *http://www.healthit.ahrq.gov.* Table 5.—Potential Savings to Public Due to Reduction in Preventable Adverse Drug Events
(ADEs)Year 2009 2010 2011 2012 2013 Total Medicare Population Estimates 44,577,662 44,577,662 45,081,390 45,081,390 45,590,809 45,590,809 46,105,985 46,105,985 46,626,983 46,626,983 Potential Avoidable ADEs via E-Rx 552,763 552,763 559,009 559,009 565,326 565,326 571,714 571,714 578,175 578,175 % of E-Rx Adoption 5% 18% 5% 18% 5% 18% 5% 18% 5% 18% Avoided ADEs 27,638 99,497 27,950 100,622 28,266 101,759 28,586 102,909 28,909 104,071 Avoided ADEs Estimate (×25%) 6,910 24,874 6,988 25,155 7,067 25,440 7,146 25,727 7,227 26,018 Cost Avoided Estimate (25%×$2k) $13,819,075 $49,748,671 $13,975,231 $50,310,831 $14,133,151 $50,879,343 $14,292,855 $51,454,280 $14,454,365 $52,035,713 Cost Avoided Estimate (25%×$6k) $41,457,226 $149,246,012 $41,925,692 $150,932,492 $42,399,453 $152,638,029 $42,878,566 $154,362,839 $43,363,094 $156,107,139 Table 5 shows that the introduction of e-prescribing can potentially realize a cost savings of $13 million to $156 million from avoided ADEs. We solicit industry and other interested stakeholder comment and input on this issue. Besides lower rates of ADEs, the public will also realize other benefits related to the medication history function of e-prescribing. Through improved collaboration and communication between physicians and plans, patients will be more likely to have greater access to information which will encourage them to become more involved in their own treatment, which studies show decreases the probability of experiencing an ADE-related error. 8 C. Total Impact This analysis has focused on the costs and benefits of two new e-prescribing standards, and the adoption of NCPDP SCRIPT 8.1 in place of version 5.0. We conclude that the cost of implementing these proposals is minimal, with quantifiable benefits reaped by pharmacies, providers, and beneficiaries. Over time, we expect that these groups will see average benefits in a range from $218.0 million to $863.9 million from the utilization of formulary and benefit and medication history transactions and the promulgation of these standards (Table 6). D. Alternatives Considered In developing this proposed rule, we considered a range of alternatives. While required by statute to issue a regulation, we were not required to issue standards for specific functionality if appropriate standards were not available. We considered not issuing an additional rule, and allowing the foundation standards to become the complete set. Since we had successful results from the pilot project, and the value added by the proposed additional standards is substantial, we chose to proceed. Given the existing foundation standards, our failure to proceed would not have averted many costs, but the lack of a medication history standard, for example, would have limited benefits, particularly for consumers. We considered proposing the prior authorization and RxNorm standards for adoption, and elected not to do so. In both cases, the decision was based on the results of the pilot project. We expect that both standards, in their current forms and given the current state of the industry, would impose substantial additional costs while delivering marginal additional benefits. In the case of prior authorization, much of the additional cost is likely to be on the health plan side. We expect that software vendors will explore adding this functionality to provider-based systems and that health plans will adopt it as doing so becomes feasible. In the case of the RxFill standard, we did not get a clear indication from the pilot project as to its added value. We considered not proposing adoption of the NPI as a standard for Medicare Part D e-prescribing transactions, but, given the need for an identifier in e-prescribing transactions and the fact that large portions of the health care industry are required to use NPI as a HIPAA standard, we felt that adoption at this time was feasible and desirable. Table 6.—Cost/Benefits for the Adoption of Standards for Medication History and Formulary and Benefits, 2009-2013 [$ Millions] 2009 2010 2011 2012 2013 Total BENEFITS: Expected % of E-Prescribing Adoption 5% 18% 5% 18% 5% 18% 5% 18% 5% 18% 5% 18% Generic versus Brand Name Drugs $95.1 $342.6 $99.5 $358.4 $104.1 $374.9 $108.9 $392.1 $113.9 $410.2 $521.5 $1,878.2 Administrative—Physician/Office Staff $55.2 $198.9 $55.7 $200.7 $56.2 $202.6 $56.8 $204.5 $57.3 $206.4 $281.2 $1,013.1 Administrative—Pharmacies $64.6 $232.8 $65.2 $235.0 $65.9 $237.2 $66.5 $239.4 $67.1 $241.7 $329.3 $1,186.1 Reduction in ADEs $13.8 $49.7 $13.9 $50.3 $14.1 $50.8 $14.2 $51.4 $14.4 $52.0 $70.4 $254.2 Total Benefits $228.7 $824.0 $234.3 $844.4 $240.3 $865.5 $246.4 $887.4 $252.7 $910.3 $1,202.4 $4,331.6 *COSTS: Transaction Costs $10.7 $38.8 $11.2 $40.6 $11.8 $42.4 $12.3 $44.4 $12.9 $46.4 $58.9 $212.6 NET BENEFITS $218.0 $785.2 $223.1 $803.8 $228.5 $823.1 $234.1 $843.0 $239.8 $863.9 $1,143.5 $4,119.0 * These costs reflect only transaction costs as outlined in Table 1, and do not take into account the potential costs of systems and/or software upgrades, etc., for which stakeholder/industry information and input is being solicited. E. Accounting Statement As required by OMB Circular A-4 (available at *http://www.whitehouse.gov/omb/circulars/a004/a-4.pdf* ), in Table 7 below, we have prepared an accounting statement showing the classification of the expenditures associated with the provisions of this proposed rule. This table provides our best estimate of the costs and benefits associated with the adoption of the two new e-prescribing standards, and the adoption of NCPDP SCRIPT 8.1 in place of version 5.0. Costs will be incurred by plans/PBMs paying transaction charges to networks. Generic versus brand name drug benefits will accrue from physicians to beneficiaries; administrative savings to physicians, physician offices and pharmacists; from pharmacists to physicians and physician offices; and from physicians to beneficiaries in the reduction in the number of ADEs. Table 7.—Accounting Statement: Annualized Monetized Transaction Costs and Benefits [$ Millions/year] 5% Expected annual E-Rx adoption rate 18% Expected annual E-RX adoption rate COSTS: Transaction costs $58.9 $212.6 Annualized monetized costs: 7% Discount rate 11.7 42.2 3% Discount rate 11.7 42.3 0% Discount rate 11.8 42.5 Paid by plans/PBMs to networks. BENEFITS: Generic versus brand name drugs, administrative for physicians and pharmacists, reduction in ADEs 1,202.4 4,331.6 Annualized monetized benefits: 7% Discount rate 239.6 862.9 3% Discount rate 240.1 864.8 0% Discount rate 240.4 866.3 Generated physicians to pharmacists, pharmacists to physicians, and physicians to beneficiaries. NET BENEFIT 1,143.5 4,119.0 List of Subjects in 42 CFR Part 423 Administrative practice and procedure, Emergency medical services, Health facilities, Health maintenance organizations (HMO), Health professions, Incorporation by reference, Medicare, Penalties, Privacy, Reporting and recordkeeping requirements. For the reasons set forth in the preamble in this proposed regulation, the Centers for Medicare & Medicaid Services proposes to amend 42 CFR part 423 as follows: PART 423—VOLUNTARY MEDICARE PRESCRIPTION DRUG BENEFIT 1. The authority citation for part 423 continues to read as follows: Authority: Secs. 1102, 1860D-1 through 1860D-42, and 1871 of the Social Security Act (42 U.S.C. 1302, 1395W-101 through 1395W-152, and 1395hh). 2. Section 423.160 is amended by— A. Revising paragraph (b)(1). B. Adding new paragraphs (b)(3), (b)(4), and (b)(5). C. Revising paragraph (c). The revisions and additions read as follows: § 423.160 Standards for electronic prescribing.
(b)*Standards* —(1) *Prescription.* The National Council for the Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide Version 8, Release 1 (Version 8.1), October 2005 to provide for the communication of a prescription or prescription-related information between prescribers and dispensers, for the following:
(i)Get message transaction.
(ii)Status response transaction.
(iii)Error response transaction.
(iv)New prescription transaction.
(v)Prescription change request transaction.
(vi)Prescription change response transaction.
(vii)Refill prescription request transaction.
(viii)Refill prescription response transaction.
(ix)Verification transaction.
(x)Password change transaction.
(xi)Cancel prescription request transaction.
(xii)Cancel prescription response transaction.
(3)*Medication history.* The National Council for Prescription Drug Programs (NCPDP) Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1 (Version 8.1), October 2005 to provide for the communication of Medicare Part D medication history information among Medicare Part D sponsors, prescribers, and dispensers.
(4)*Formulary and benefits.* The National Council for Prescription Drug Programs (NCPDP) Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0 (Version 1.0), October 2005 for transmitting formulary and benefit information between prescribers and Medicare Part D sponsors.
(5)*Provider identifier.* The National Provider Identifier (NPI), as defined at 45 CFR 162.406, to identify a health care provider in Medicare Part D e-prescribing or prescription-related transactions conducted among Medicare Part D plan sponsors, prescribers, and dispensers when a health care provider's identifier is required.
(c)*Incorporation by reference.* The Director of the Federal Register approves, in accordance with 5 U.S.C. 552(a) and 1 CFR part 51, the incorporation by reference of certain publications into this section. You may inspect copies of these publications at the headquarters of the Centers for Medicare & Medicaid Services (CMS), 7500 Security Boulevard, Baltimore, Maryland 21244, Monday through Friday from 8:30 a.m. to 4 p.m. or at the National Archives and Records Administration (NARA). For more information on the availability of this material at NARA, call 202-741-6030, or go to *http://www.archives.gov/federal_register/code_of_federal_ regulations/ibr_locations.html.* The publications approved for incorporation by reference and their original sources are as follows:
(1)National Council for Prescription Drug Programs, Incorporated, 9240 E. Raintree Drive, Scottsdale, AZ 85260-7518; Telephone
(480)477-1000; and FAX
(480)767-1042 or *http://www.ncpdp.org.*
(i)National Council for Prescription Drug Programs Prescriber/Pharmacist Interface SCRIPT Standard, Implementation Guide, Version 8, Release 1, October 2005, excluding the Prescription Fill Status Notification Transactions (and its three business cases; Prescription Fill Status Notification Transaction—Filled, Prescription Fill Status Notification Transaction—Not Filled, and Prescription Fill Status Notification Transaction—Partial Fill).
(ii)The National Council for Prescription Drug Programs Formulary and Benefits Standard, Implementation Guide, Version 1, Release 0, October 2005.
(iii)National Council for Prescription Drug Programs Telecommunication Standard Specification, Version 5, Release 1 (Version 5.1), September 1999 and equivalent National Council for the Prescription Drug Program (NCPDP) Batch Standard Batch Implementation Guide, Version 1, Release 1 (Version 1.1), January 2000 supporting Telecommunications Standard Implementation Guide, Version 5, Release 1 (Version 5.1) for the NCPDP Data Record in the Detail Data Record.
(2)Accredited Standards Committee, 7600 Leesburg Pike, Suite 430, Falls Church, VA 22043; Telephone
(301)970-4488; and fax:
(703)970-4488 or *http://www.x12.org.*
(i)Accredited Standards Committee
(ASC)X12N 270/271-Health Care Eligibility Benefit Inquiry and Response, Version 4010, May 2000, Washington Publishing Company, 004010X092 and Addenda to Health Care Eligibility Benefit Inquiry and Response, Version 4010A1, October 2002, Washington Publishing Company, 004010X092A1.
(ii)[Reserved]. (Catalog of Federal Domestic Assistance Program No. 93.773, Medicare—Hospital Insurance; and Program No. 93.774, Medicare—Supplementary Medical Insurance Program) Dated: July 19, 2007. Leslie V. Norwalk, Acting Administrator, Centers for Medicare & Medicaid Services. Approved: September 20, 2007. Michael O. Leavitt, Secretary. [FR Doc. 07-5681 Filed 11-13-07; 10:00 am]
Connectionstraces to 37
Traces to 37 documents
CFR
22 references not yet in our index
  • 40 CFR 60
  • 40 CFR 65
  • 40 CFR 63
  • 40 CFR 60.482
  • 40 CFR 279
  • 40 CFR 2
  • 40 CFR 9
  • Pub. L. 104-4
  • Pub. L. 104-113
  • 40 CFR 65.1
  • 40 CFR 262
  • 40 CFR 261
  • 42 CFR 423
  • Pub. L. 108-173
  • 42 CFR 423.160(a)(3)(iii)
  • 42 CFR 423.160(b)(1)
  • 5 CFR 1320.3(b)(2)
  • Pub. L. 96-354
  • 321 U.S. 144
  • 538 U.S. 644
  • 45 CFR 162.406
  • 1 CFR 51
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cites case law
Notices
Final rule
C.F.R.§ 60.489
C.F.R.§ 60.480
Fed. Reg.Notices
Fed. Reg.Proposed Rules
Fed. Reg.Notices
Fed. Reg.Notices
Fed. Reg.Notices
Fed. Reg.Notices
C.F.R.§ 60.482-2
SCOTUS321 U.S. 144
SCOTUS538 U.S. 644
Cite40 CFR 60
Cites 59 · showing 12Cited by 0 across 0 sources
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