Plantwide Definition & Meaning

Plantwide Definition & Meaning

Divide your total expenses for the plant by the total number of units you produce. Using the plantwide overhead rate formula, if expenses come to $10,000 for instance and you produce 2,500 units, $10,000 divided by 2,500 equals four. You are paying, on average, $4 per unit in overhead on a plant-wide basis. “(B) the most stringent emission limitation which is achieved in practice by such class or category of source, whichever is more stringent. “In no event shall the application of this term permit a proposed new or modified source to emit any pollutant in excess of the amount allowable under applicable new source standards of performance.” Our review of the EPA’s varying interpretations of the word “source”—both before and after the 1977 Amendments—convinces us that the agency primarily responsible for administering this important legislation has consistently interpreted it flexibly—not in a sterile textual vacuum, but in the context of implementing policy decisions in a technical and complex arena. The fact that the agency has from time to time changed its interpretation of the term “source” does not, as respondents argue, lead us to conclude that no deference should be accorded the agency’s interpretation of the statute.

Judges are not experts in the field, and are not part of either political branch of the Government. Courts must, in some cases, reconcile competing political interests, but not on the basis of the judges’ personal policy preferences. In contrast, an agency to which Congress has delegated policy-making responsibilities may, within the limits of that delegation, properly rely upon the incumbent administration’s views of wise policy to inform its judgments. While agencies plantwide meaning are not directly accountable to the people, the Chief Executive is, and it is entirely appropriate for this political branch of the Government to make such policy choices—resolving the competing interests which Congress itself either inadvertently did not resolve, or intentionally left to be resolved by the agency charged with the administration of the statute in light of everyday realities. Some of your products will need more quality checking than others.

The LAER requirement is defined in terms that make it even more stringent than the applicable new source performance standard developed under § 111 of the Act, as amended by the 1970 statute. “(ii) ‘Building, structure, facility, or installation’ means all of the pollutant-emitting activities which belong to the same industrial grouping, are located on one or more contiguous or adjacent properties, and are under the control of the same person (or persons under common control) except the activities of any vessel.” 40 CFR §§ 51.18(j)(1)(i) and (ii) (1983). We have long recognized that considerable weight should be accorded to an executive department’s construction of a statutory scheme it is entrusted to administer,14 and the principle of deference to administrative interpretations. Please see /nsr for the latest information on EPA’s New Source Review program. We note that Senator Muskie was not critical of the EPA’s use of the “bubble concept” in one NSPS program prior to the 1977 amendments. “(8) contain emission limitations, schedules of compliance and such other measures as may be necessary to meet the requirements of this section.” 91 Stat.

Basically, however, the language of § 302(j) simply does not compel any given interpretation of the term “source.” The definition of the term “stationary source” in § 111(a)(3) refers to “any building, structure, facility, or installation” which emits air pollution. This definition is applicable only to the NSPS program by the express terms of the statute; the text of the statute does not make this definition applicable to the permit program. Petitioners therefore maintain that there is no statutory language even relevant to ascertaining the meaning of stationary source in the permit program aside from § 302(j), which defines the term “major stationary source.” See supra, at 851. “(6) require permits for the construction and operation of new or modified major stationary sources in accordance with section 173 (relating to permit requirements).” 91 Stat.

  1. Please see /nsr for the latest information on EPA’s New Source Review program.
  2. All of your manufacturing activities depend on the services you are paying for throughout your plant.
  3. We granted certiorari to review that judgment, 461 U.S. 956, 103 S.Ct.

“The Regulations which the Administrator has adopted provide what the agency could allowably view as . . . [an] effective reconciliation of these twofold ends. . . .” United States v. Shimer, 367 U.S., at 383, 81 S.Ct., at 1560. “i. Part D SIPs that include all requirements needed to assure reasonable further progress and attainment by the deadline under section 172 and that are being carried out need not restrict the use of a plantwide bubble, the same as under the PSD proposal. If your company manufactures several products at different locations in your plant, each product has its own overhead expenses. Instead of figuring overhead costs for each product, you can calculate plant-wide expenses. This averages the costs for all products, and gives you an overview of expenses for your entire manufacturing operation. Sometimes called the “predetermined overhead rate,” your plant-wide figure helps you understand your company profitability.

How to Calculate Plant-Wide Overhead Rate

In explaining its conclusion, the EPA first noted that the definitional issue was not squarely addressed in either the statute or its legislative history and therefore that the issue involved an agency “judgment as how to best carry out the Act.” Ibid. It then set forth several reasons for concluding that the plantwide definition was more appropriate. It pointed out that the dual definition “can act as a disincentive to new investment and modernization by discouraging modifications to existing facilities” and “can actually retard progress in air pollution control by discouraging replacement of older, dirtier processes or pieces of equipment with new, cleaner ones.” Ibid. Moreover, the new definition “would simplify EPA’s rules by using the same definition of ‘source’ for PSD, nonattainment new source review and the construction moratorium. This reduces confusion and inconsistency.” Ibid.

But this argument proves nothing because the statute does not prohibit the waiver unless the proposed new unit is indeed subject to the permit program. If it is not, the statute does not impose the LAER requirement at all and there is no need to reach any waiver question. In other words, § 173 of the statute merely deals with the consequences of the definition of the term “source” and does not define the term. The court observed that the relevant part of the amended Clean Air Act “does not explicitly define what Congress envisioned as a ‘stationary source, to which the permit program . . . should apply,” and further stated that the precise issue was not “squarely addressed in the legislative history.” Id., at 273, 685 F.2d, at 723.

How to Determine Overhead and Labor Rate

You have to pay for personnel to do this checking, and in some cases you have to pay production personnel to fix the problem. In other cases, you may have to throw out defective products and write off the cost of making them. Add up all your quality control expenses into one grand total, even if most of the quality problems are with one or two products.

Definition of Plant-wide Overhead Rate

The plantwide overhead rate is a single overhead rate that a company uses to allocate all of its manufacturing overhead costs to products or cost objects. This is a simplified approach to cost allocation that works well in smaller and simpler businesses. “(5) expressly identify and quantify the emissions, if any, of any such pollutant which will be allowed to result from the construction and operation of major new or modified stationary sources for each such area; . . . In addition, respondents argue that the legislative history and policies of the Act foreclose the plantwide definition, and that the EPA’s interpretation is not entitled to deference because it represents a sharp break with prior interpretations of the Act. “(j) Except as otherwise expressly provided, the terms ‘major stationary source’ and ‘major emitting facility’ mean any stationary facility or source of air pollutants which directly emits, or has the potential to emit, one hundred tons per year or more of any air pollutant (including any major emitting facility or source of fugitive emissions of any such pollutant, as determined by rule by the Administrator).” 91 Stat. However, if the company manufactures diverse products, some of which use expensive equipment while some use only inexpensive equipment, or the company wants precise costs for pricing decisions, a plant-wide rate is not appropriate.

We note that the EPA in fact adopted the language of that definition in its regulations under the permit program. “Moreover, Alabama Power and ASARCO taken together suggest that there is a distinction between Clean Air Act programs designed to enhance air quality and those designed only to maintain air quality. . . . The second “main purpose” of the provision—allowing the States “greater flexibility” than the EPA’s interpretative Ruling as well as the reference to the EPA’s authority to amend its Ruling in accordance with the intent of the section, is entirely consistent with the view that Congress did not intend to freeze the definition of “source” contained in the existing regulation into a rigid statutory requirement. Primary standards were defined as those whose attainment and maintenance were necessary to protect the public health, and secondary standards were intended to specify a level of air quality that would protect the public welfare.

Often, some units interact so strongly that they must be treated as one entity. These include energy usage, wages for production and shipping personnel, and materials. Each product will use a different amount of these resources, but you can use a grand total for each direct cost as your plant-wide figure. This is the average direct cost for manufacturing all of your products.

Since the regulations give the States the option to define an individual unit as a source, see 40 CFR § 51.18(j)(1) (1983), petitioners do not dispute that the terms can be read as respondents suggest. “(i) ‘Stationary source’ means any building, structure, facility, or installation which emits or may emit any air pollutant subject to regulation under the Act. “(1) For PSD and complete Part D SIPs, review would apply only to plants, with an unrestricted plant-wide bubble.

Significantly, it was not the agency in 1980, but rather the Court of Appeals that read the statute inflexibly to command a plantwide definition for programs designed to maintain clean air and to forbid such a definition for programs designed to improve air quality. The distinction the court drew may well be a sensible one, but our labored review of the problem has surely disclosed that it is not a distinction that Congress ever articulated itself, or one that the EPA found in the statute before the courts began to review the legislative work product. We conclude that it was the Court of Appeals, rather than Congress or any of the decisionmakers who are authorized by Congress to administer this legislation, that was primarily responsible for the 1980 position taken by the agency. The definition in § 302(j) tells us what the word “major” means—a source must emit at least 100 tons of pollution to qualify but it sheds virtually no light on the meaning of the term “stationary source.” It does equate a source with a facility—a “major emitting facility” and a “major stationary source” are synonymous under § 302(j). The ordinary meaning of the term “facility” is some collection of integrated elements which has been designed and constructed to achieve some purpose. Moreover, it is certainly no affront to common English usage to take a reference to a major facility or a major source to connote an entire plant as opposed to its constituent parts.

Respondents point out if a brand new factory that will emit over 100 tons of pollutants is constructed in a nonattainment area, that plant must obtain a permit pursuant to § 172(b)(6) and in order to do so, it must satisfy the § 173 conditions, including the LAER requirement. Respondents argue if an old plant containing several large emitting units is to be modernized by the replacement of one or more units emitting over 100 tons of pollutant with a new unit emitting less—but still more than 100 tons—the result should be no different simply because “it happens to be built not at a new site, but within a pre-existing plant.” Brief for Respondents 4. A plant-wide overhead rate is often a single rate per hour or a percentage of some cost that is used to allocate or assign a company’s manufacturing overhead costs to the goods produced. “6. New Source Performance Standards (NSPS) will continue to apply to many new or modified facilities and will assure use of the most up-to-date pollution control techniques regardless of the applicability of nonattainment area new source review. Plantwide control is a holistic approach about integrating process design with process control at the level of the whole plant. The objective is to ensure a stable and flexible operation when the plant is affected by various disturbances, including major changes in the production rate and in the quality of raw materials.

In light of its conclusion that the legislative history bearing on the question was “at best contradictory,” it reasoned that “the purposes of the nonattainment program should guide our decision here.” Id., at 276, n. 39.5 Based on two of its precedents concerning the applicability of the bubble concept to certain Clean Air Act programs,6 the court stated that the bubble concept was “mandatory” in programs designed merely to maintain existing air quality, but held that it was “inappropriate” in programs enacted to improve air quality. Since the purpose of the permit program—its “raison d’etre,” in the court’s view—was to improve air quality, the court held that the bubble concept was inapplicable in these cases under its prior precedents. It therefore set aside the regulations embodying the bubble concept as contrary to law. We granted certiorari to review that judgment, 461 U.S. 956, 103 S.Ct.

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