CLEAN AIR ACT
COMPLIANCE!
ENFORCEMENT POLICY
COMPENIMUM
1996
Volume 2
B-i - B-29(1)
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SECTION B
GENERAL CLEAN AIR ACT STATIONARY
SOURCE POLICIES AND GUIDANCE
B
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1
SECTION B DOCUMENT 1
Issuance of Administrative Compliance
Orders in Light of Harrison v. PPG
Industries, Inc., LS. 578 (1980)
3126180
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7
UNITED STATES ENVIRONMENTAL. PROTECTION AGENCY
____ I WASI4INGTOP4. D.C. W460
FO CtM(K
MEMORANDUM
SU&3E Ts Issuance of Administrative Compliance Orders in
light of Harrison v. PPG Industries Inc .
PROM: Director
Division of Stationary Source Enforcement
TO: Enforcement Division Directors
Regions I—X
The Supreme Court recently ruled that NSPS applicability
determinations are Ufinal agency actiOnsu and, as such, are
reviewable only in the Court of Appeals for the appropriate
circuit pursuant to Section 307(b) of the Clean Air Act, Harrison
v. PPG Industries, Inc. , ____US , 48 USLW 4585 (1980), (copy
attached). In ho1dT ig that final actions are reviewable solely
in the Court of Appeals, the Court’s decision could have an impact
on more enforcement related activities than just applicability
determinations. The proper venue for the review of final actions
is now settled, but the question of what is a final action for
purposes of Section 307 will undoubtably be the subject of future
litigation. This memorandum addresses the issue as it relateB to
administrative compliance orders under Sections 113(a) and 167 of
the Clean Air Act (hereinafter referred to as immediate compliance
orders).
Sections 113(a)(l) and 113(a) (3), when read in conjunction
with sections 110(i), and 111 (e) and 112(c) respectively, are
designed to provide an administrative means for requiring a source
to immediately comply with specified provisions of the Clean Air
Act. The compliance date established by these orders must be no
longer than 30 days from the effective date of the order. These
orders have been used to require sources to correct relatively
easily remedied violations, such as deficient operation and
maintenance practices, inadequate reporting, or failure to conduct
performance tests. Section 113(a)(3) orders are also used to
require sources to satisfy Agency requests made under Section 114
of the Clean Air Act. Sections 113(a) (5) and 167 are deBigned to
provide an administrative means of stopping the construction or
modification of sources proceeding in violation of the Clean Air
Act.
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The Agency and the Department of Justice have taken the
position that orders issued under Sections 113(a) and 167 are not
final agency actions and, therefore, are not reviewable except as
pertinent in defense of an action taken under Section 113(b) to
enforce the order. Because of the specific notice provision of
Section 113(d) of the Act, the issuance of or approval of Delayed
Compliance Orders under Section 113(d) follow the informal
rulemaking procedures of 5 USC 5530 and are therefore considered
to be final agency actions. This position protects the issuance
of an immediate compliance order from legal challenge until the
Agency brings an action in the district court to enforce the
order. This avoids the problem of pre—enforcement review of
Agency actions which may have the result of hampering further
enforcement activities.
Thus, the Agency and Department are prepared to continue to
argue that immediate compliance orders are not final agency
actions. At least one Court of Appeals has upheld this
position. 1 However, other sources are currently challenging,
. J Lloyd A. , Fry Roofing Co. V. U.S.E.P.A . 554 F.2d 885, (8th
CIr. 1977), 3udicia1 review of abatement order under Section
113(a) (]) on grounds of technological or economic feasibility is
inconsistent with the enforcement mechanism of the Clean Air Act,
and contrary to legislative history).
The following cases have also addressed the issue of pre—
enforcement review under Title I of the Clean Air Actz
a. West Penn Power Co. v. Train , 552 F.2d 302 (3rd Cit.
1975), (DecisIon to enforce NOV is discretionary and hence
unreviewable under the Administrative Procedure Act (APA),
5 USC 701(a)(2); issuance of NOV is not final ag ncy action,
hence unreviewable pursuant to APA, Bince it may or may not be
followed by a compliance order or civil action, S USC 704). t
see, West Penn Power Co. v. Train , 538 P.2d 1020 (3rd Cit.
1976), cert. den . 42UU.S. 947, reh. den . 429 U.S. 873 (DictwD:
holding TWei Penn I not diepositivi f question of
reviewabtiity of compliance order).
b. Union Electric Co. v. E.P.A. , 593 F.2d 299 (8th Cit.
1979), (NOV is proceduraT prerequisite to abatement order and not
reviewable on motion for temporary stay of enforcement).
a. Philadelphia Electric Co. v. Costle , No. 78-4170, (E.D.
Pa. 1978), (NOV reviewable on purely legal issue of effect of 1977
Clean Air Act Amendments on pre—existing consent order, pursuant
to 28 USC 51331).
d. Chrysler Corporation v. E.P.A. , No. IP 77—371-C, (S.D.
Irtd. 1979), (NOV is final agency ac€i n and reviewable on purely
legal issue of applicability of regulations to source, pursuant to
28 USC S1331). Accord, Ashland Oil, Inc. v. McDonald , No. C79—338
CN.D. Ohio, order denying motion o dismiss dated
June 11. 1980).
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and can be expected to challenge, imrn ediate compliance orders by
asserting that they are final actions and seeking the jurisdiction
of a Court of Appeals under the PPG decision. Thus, prior to the
issuance of an immediate compliance order, the Regional Office
should be sensitive to the possibility that a case raising this
issue, and the merits of the order itself, will be initiated t y
th source.
Regardless of how a particu1ar Court of Appeals decides the issue
of whether the immediate compliance order is a final action and
thus reviewable, the mere fact of the challenge can divert Agency
resources from enforcement to the defense of a collateral action.
This may hamper enforcement, especially if a subsequent enforce-
ment action in the district court is stayed pending resolution by
the Court of Appeals.
For this reason, while an order can be effective in
appropriate circumstances, consideration should be given to
alternative courses of action as well. An enforcement action in
the district court, including the filing of a motion for a
preliminary injunction, may be the most appropriate response in
some cases, especially where a source is constructing in violation
of new source requirements. The Department of ustice has
committed to expedite its review of cases involving this type of
violation, and to assist the Agency in insuring that delays in the
filing of such actions are minimized.
A second enforcement tool that has been successfully used is
the show cause conference. Under this procedure, a source is
notified by letter that the Regional Office has evidence
indicating that it is in violation of the Act, and offers the
source an opportunity to meet with the Region in order to
demonstrate why a judicial action should not be pursued against
the source. This serves the purposes of informing the source of
th.e Agency’s position, and initiates a meeting where measures to
remedy the violation can be discussed. If this procedure does
not result in an agreement leading to prompt resolution of the
violation, the Regional Office should proceed with a judicial
enforcement action.
If, after considering the above factors, a Regional Office
determines that an immediate compliance order is appropriate, I
recommend that the Regional Office prepare for the possibility of
a challenge in the Court of Appeals by carefully developing an
administrative record supporting the action. An adequate
tadministrative record will be important not only if the particular
Court of Appeals rules that the order is a final agency action,
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but also if a court postpones a decision on this issue pending
review of the record supporting the order. 2 Thus, prior to the
issuance of the order, the administrative record should contain
evidence of each element of the applicability of the relevant
statutory and regulatory requirements, and of the violation.
Where the record contains some evidence favorable to the source,
the record should also explain that the evidence was considered
and why it was rejected, i.e., what evidence favorable to the
Agency’s position outweighs or refutes the evidence favorable to
the source.
If you have any questions with regard to this issue, please
feel free to contact me at 755-2550 or Edmund J. Gorman of my
staff at 755—2570.
Edward E. Reich
Attachment
2 fl Hooker Chemical Co. V. E.P.A. , No. 79—2194 and Tennec
Chemiãils, Inc. v. Be k , No. 79—2367, the Court of A eals for the
hird Circuit rderred the action to a merits panel to review the
orders.
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SECTION B DOCUMENT 2
Issuance of Section ll3(a) Orders to NSPs Sources for
Failure to Conduct Perfo, a Tests
02/23,81
2
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FEB 23 L981
MF MORAflflrtr1
Su rC’r 2 Issuance of Section 113(a) Orders to VSPS Sources for
Failure to Conduct Performance Tests
FPC)!’l, Director
Division of Stationary Source Enforcement
TO: Louise D. Jacobs
- Director, Enforcement Division
Region VIZ
This office has received copies of the adminjstr tjye orc ers
issued by your office pursuant to Section 113(a) of the Clean Air
Ac t (the Act) to the A. G. Sherwood Construction Co. of Indepenc’—
ence, P ansa (Dec. 22, 1980), and the Beachner Construction Co.,
Inc. of t, Paul, kansas (Nov. 26, 1980), Those orders reciui r
the companies to conduct performance tests within 3fl days of the
effective dates of the orders and to denonstrate compliance with
the applicable New Source Performance Standard (NSPS), or to cease
Operation.
While the use of Section 113(a) orders to rec,ujre performance
tests is an effective enforcement tool, we believe that requiring
as a Sanction for failure to conduct the test should be
iuc icious1y applied. We believe that shutdowns should be rec!uired
only in compelling circwllstances because the burden of shutdown
falls, inpart, on the employees of the company, who are not
culpable in causing the violation. We recommend thi t the Reoionsl
Office take a hard look at the facts and eaujtjes in each case
before ordering shutdown.
• Zn determining whether rec7ujrjnq shutdown is anproprjate
the giona]. Office should be sensitive to potentisily miticiatinr
circtlnstances, In addition to recognj,jna that the burden o’
Shutdown falls in part on innocent employees, the Regional Office
should consider the environmental impact of emissions from th
source, both in terms of their nature and amount, In connectior
with this Consideration, it may be appropriate to make a
preliminary determination of the probable compliance status of the
source with the applicable emission limitation. For example, it
would be appropriate to compare the control ecuipment to be
utilized (albeit, not tested) by the subject Source with contrc l
ecvuipnent and strategies at similar sources which have (or,
perhaps, have not) demonstrated compliance with the emission
limitation,
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4.
We believe that it is also important to analyze the reasons
for the source owner’s failure to perfor n the re uired teat.
A1thouo the N PS regulations do not provide for an extension of
the 180 day froii startup limit for perforrtance teetinQ, some
flexibility may be appropriate in certain circumstances, e.r .,
force inajeure situations. Indeed, the Reqional Office in the past
has recognized the need to provide additional time in which to
conduct the perfornance test. ¶hui, in Prairie States
Conctruction Co. and Fhi11in and uhel, Inc. , the Recion aaceee
to consent decrees rather than issue shutdown orders.
In sufl, because shutdown is the strongest civil sanction
available under the Act, EPA must be able to defend its use by
reference to the factual and enuitable circui gtances in each case.
Fnoaçinq in this an 1ysis enables the Agency to defend more
effectively its actions when charged with discriminatory
applications of policy. -
If you have any questions with respect to this issue, i’leese
do not t esttate to contact me at (rrS) 755 255O, or ? dmuri1 Conan
of tr ’ staff at (PTa) 755—257(.
Fdward F. I eich
bcc: Ed Corrnan
.Myra Cypsec
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SECTION B DOCUMENT 3
Definition of “Continuous Compliance” and Enforcement
of 0 & M Violations
06/21/82
3
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON D.c. 20400 13 £ 3
•‘ u d
JJN2I
P ICE OP
AIR, PdQIt€ AND RAD ATIQN
MEMORANDUM
SUBJECT: Definition of Continuous Compliance”
arid Enforcement of O&M Violation.
FROM: Kathleen M. Bennett
Assistant Administrator Air, Noise and Radiation
‘10: Directors, i: and Waste “-iagement Divisions
Regions I—IV , VI-VIIL and X
Directors. Air Management Divisions
Regions V and IX
The purpose of this memo is to provide you with some general
programmatic guidance as to the meaning of the term “continuous
compliance” and the role of operation and maintenance (O&M)
requirements in assuring that continuous con liance is maintained.
Of course, source specific guidance on O&M measures which can
assure continuous corTliance is an essential part of this program
and thi, memorandum is not intended to substitute for such
guidance. As you know, DSSE has undertaken a nwflber of
initia.ives related to the continuous compliance effort and we
hope to discuss the progress of those efforts with you at the
upcoming workshop at 5ou n ‘mat DSSE will be forwarding to
you an updated s nzr z j cf th.. . “ti.’.’i ies pri’r to the workshop.
However, given the c ; tr’ thg * iti fl being given to
“continuous compliance.” 1 think it would be helpful to have a
co n understanding of what that concept entails.
In th. strict Isgal sense, sources are required to meet,
without interruption, all applicable emission limitations end
other control requirements, unless such limitations specifically
provide otherwise. However, of primary concern to the Agency are
those violations that Could hay, been prevented, through the
installation of proper contr q ’itp ent a c the operation &nd
maintenance of that equipment in accordance with proper
procedures. We believe the concept o continuous compliance is
essentially the avoidance of preventable excess emissions over
time as a result of th. proper design, operation and maintenance
of an air pollution source. This includes avoidance of
preventabL, instances of excess emissions, minimization of
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emission. during such instances, and the expeditious termination
of any instances which do occur.
In determining the appropriate enforcement respons to a
violation, one factor the Regions should consider is w] ether the
source had in place art active program designed to maintain
continuous compliance. Such a program would normally involve one
or more of the following elements: continuous or periodic
self—monitoringof emissions; monitoring of operating parameters
such as scrubber pressure drop. incineri tor combustion temperature
o: :l w atss; intananc’ of a spare parts inventory; maintenance
of spar. control ‘vice modules; and procedures designed to
correct the types of violations that are most likely to occur.
Evaluating a violator’s O&M program is a necessary step in
determining the type and degree of relief that an enforcement
action could be expected to achieve.
cumentation of avoidable departures from proper procedures
as just discussed may b .aed not on .s supporting evidence in
cases involving emission limit violations, but as primary evidence
in cases involv...._ i.,lations of O&M requirements specified in
permits and regulations. As the Agency continues to place more
emphasis on O&M requirements in the context of national standards,
and to encourage States to develop O&M requirements, the
enforcement program mast be adapted to address violations of these
requirements. A violation of specified O&M requirements, even in
the absence of documented emission limit violation., can be an
appropriate trigger for EPA enforcement response.
In conclusion, evaluation of a sources continuing compliance
program would be useful both in determining the appropriate Agency
response to an emission limit violation, and in assessing the
sourc.’. compliance with specified O&M requirements.
If my staff can be of assistance in evaluating specific cases,
please feel free to cell John Menic e 382-2826.
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SECTION S DOCUMENT 4
Guidance on Use of Section 303 of the Clean air Act
09/15/83
4
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UNITED STATES ENV:RONMENTAL PROTECTION AGENCY
WASHINGTON DC 20460
4
SEP t5
MEMORANDUM
SUBJECT: Guidance on Use of Section 303 of the Clean Air Act
FROM: Edward E. Reich, Director Z_-f ’
Stationary Source Compliance ivision
‘Michael S. Alushjn, d. c i4+
Acting Associate Enforcement Counsel for Air
TO: Directors, Air Management Divisions
Regions I, V, and IX
Directors, Air arid Waste Management Divisions
Regions i l-tv, VI-Vili, and X
Regional Counsels
Regions i-X
Attached are two documents regarding procedures to be
followed during emergency situations covered by Section 303 of
the Clean Air Act. One is the final guideline explaining the
statutory requirements of Section 103 and the relief available
in a legal action taken under that section. The second is a
manual outlining the services that can be proviced through. the
contract mechanism of the •Stationary Source Compliance Division
of OANR providing technical support in any emergency episode
that arises, -
After we distributed draft versions of these documents to
you last April, we received some comments and have tried to
incorporate them into the final guidance being distributed today.
Thank you for all the comments we received.
We hope that this guidance will encourage greater use of
Section 303. If you have any questions about these materials,
please contact Mark Antell at 382-2883 concerning the technical
manual or Judy Katz at 382-2843 concerning the legal guidance.
Attachments
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INITIATION OF ADMINISTRATIVE AND CIVIL ACTION
UNDER SECTION 303 OF THE CLEAN AIR ACT
DURING AiR POLLUTION EMERGENCIES
The purpose of this guideline i8 to explain the statutory
requirements and resource needs which must be met in order to
take action under Section 303 of the Clean Air ActjJ in the
event of an air pollution emergency. This guideline LB directed
towards both meteorological episodes (e.g., thermal inversions)
j/Section 303, as amended in 1977 and codified at 42 U.S.C.
Section 7603, reads as follows:
(a) Notwithstanding any other provision of this chapter, the
Administrator, upon receipt of evidence that a pollution source
or or combination of sources (including moving sources) is pre-
senting an imminent and substantial endangerment to the health
of persons, and that the appropriate State or local authorities
have not acted to abate such sources, may bring suit on behalf
of the United States in the appropriate United States District
court to immediately restrain any person causing or contribut-
ing to the alleged pollution to atop the emission of air
pollutants causing or contributing to such pollution or to take
such other actions as may be necessary. If it is not practicable
to assure prompt protection of the health of persons 8Olely by
commencement of such a civil action, •the Administrator may
issue such orders as may be necessary to protect the health of
persons who are, or may be, affected by such pollution source
(or sources). Prior to taking any action under this section,
the Administrator shall consult with the State and local
authorities in order to confirm the correctness of the infor-
mation on which the action proposed to be taken is based arid
to ascertain the action which such authorities are, or will
be, taking. Such order shall be effective for a period of not
more than twenty-four hours unless the Administrator begins an
action under the first sentence of this subsection before the
expiration of such period. Whenever the Administrator brings
such an action within such period 1 such orders shall be
effective for a period of forty-eight hours or such a longer
period as may be authorized by the court pending litigation or
thereafter.
(b) Any person who willfully violates, or fails or refuses to
comply with, any order issued by the Administrator under
8ubsection (a) of this section may, in an action brought in the
appropriate United States District Court to enforce such order,
be fined not more than $5,000 for each day during which such
violation occurs or failure to comply continues.
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involving dangerously high levels of criteria or non-criteria
pollutants, situations in which chronic exposure to air pollution
causes endangerment by cumulative effect, and incidents invqlving
industrial accidents or malfunctions (e.g., breakdown of pollu-
tion control devices) resulting in the release of air pollutants
in hazardous concentrations.
STATUTORY PREQtJISITES
1. An Imminent and Substantial Endangerment to Health
The threshold prerequisite is the existence of “evidence
that a pollution source or combination of sources ( including
moving sources) is presenting an imminent and substantial risk
of harm. It should be emphasized that endangerment means a
risk or threat to ht.an health, and that EPA should not delay
action until actual injury occurs. Such delay would thwart the
express intent of the Clean Air Act to protect the nation’s air
quality in the interest of the public health. Section 303 is a
precautionary provision, aimed at the avoidance of potential
harm. This is best illustrated by the House Report on the
Clean Act Amendments of 1977:
In retaining the words “imminent and substantial
endangerment to the health of persons”, the committee
intends that the authority of this section not be used
where the ri8k of harm is completely speculative in
nature or where the harm threatened is insubstantial.
However,.., the committee -inteRds that this language
be constructed by the courts and the Administrator 80
as to give paramount importance to the objective of
protection of the public health. Administrative and
judicial implementation of this authority must occur
early enou h to prevent the potential hazard from
materializing .
H.R. Rep. No. 95—294, 95th Cong., Sess. 328 (1977) (emphasis added).
There is also some judicial opinion supporting an
interpretation of the endangerment standard as being merely
precautionary, and permitting remedial action prior to the
occurrence of any actual harm. In Ethyl Corporation v.
Environmental Protection Agency , 541 F.2d 1 (D.C. Cir. 1976),
the Court ruled that EPA had properly acted to regulate lead in
gasoline upon finding, under Section 211 of the Clean Air Act,
that lead emissions would “endanger” as requiring only a finding
only a finding that lead emissions presented a “significant
risk” of injury to the public. There were no findings of the
presence of actual harm. In upholding the Agency’s view of the
‘endanger” standard in Section 211, the Court explained:
When one is endangered, harm is threatened ;
no actual injury need ever occur.. A
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statute allowing for regulation in the face
of danger is, necessarily, a precautionary
statute. Regulatory action may be taken
before the threatened harm occurs; indeed,
the very existence of such precautionary
legislation would seem to demand that
regulatory action precede, and, optiomally,
prevent, the perceived threat.
541 F.2d at 13. In Reserve Mining Company v. Environmental
Protection Agency , 514 F.2d 492 (8th Cir. 1975), the Court had
similarly interpreted an endangerment standard in the Federal
Water Pollution Control Act in a case involving asbestos
discharges into Lake Superior. The court stated that “Congress
used the term “endangering” in a precautionary or preventive
sense, and, therefore, evidence of potential harm as well as
actual harm comes within the purview of that term.” 514 F.2d
at 528.
ii important question for purposes of Section 303 of the
Clean Air Act, however, concerns the effect of the modifying
F hrase “imminent and substantial” upon the meaning of
‘endangerment.” In Reserve Mining , the Court stated that the
“term ‘endangering’... connotes a lesser risk of harm than the
phrase ‘imminent and substantial endangerment to the health of
persons.” 514 F.2d at 528. Accord, Ethyl Corporation v.
Enviror.mental Protection Agency , 541 F.2d at 20 n.36. This
fssue is particularly important to EPA’s ability under Section
303 to abate suspected carcinogens, the harm from which might
take many years to manifest itself.
It is our position that in order to adequately safeguard
public health by being in a position to preclude n air pollution
emergency at its inception, the phrase “imminent and substantial
endangerment” must be interpreted to refer to an imminent and
substantial risk of harm, no matter how distant the manifestion
of harm may be. If there exists a non-speculative risk of
harm, the agency may properly act under Section 303. This is
consistent with the legislative history quoted previously, and
with the established definition of “endangerment” as referring
to the risk of harm, not actual harm itself. This is also
consistent with the 1970 Senate Report on Section 303, which
states:
The levels of concentration of air pollution agents or
combination of agents which substantially endanger
health are levels which should never be reached in any
community. Uhen the prediction can reasonably be made
that such elevated levels could be reached even for a
short period of time-- that it is that they are imminent
--an emergency action plan should be implemented...
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S. Rep. No. 91—1196, 91st Cong., 2d Sess. 36 (1970). Thus, EPA
may properly take action to abate air emissions when a substantial
risk of harm is about to arise, This is several steps prior to
the occurrence of any actual harm, but is appropriate in view
of the precautionary nature of Section 303.Z/
This approach is also crucial to the Agency’s ability to
abate emissions which are believed to be but which are yet not
confirmed as dangerous to h nan health. In United States
v. Vertac Chemical Corporation , 4 9 F. Supp. 870 (E.D. Ark.
{980), the Court found the chemical dioxin, widely believed but
not fully proven to be hazardous, to be presenting a “reasonable
medical concern over public health” and to be thereby constituting
an imminent and substantial endangerment to health under Section
7003 of the Resource Conservation and Recovery Act. td. at
885. An Agency response under Section 303 of the Clean Air Act
would be appropriate in the presence of pollutants reasonably
oelieved to be dangerous to h an health. As with regard to any
pollutants sought to be abated under Section 303, EPA oust be
prepared to docwnent the basis of its belief in the danger of
these pollutants. If the Agency can show a “reasonable medical
concern” created by the suspect emissions, it will have met the
“imminent and substantial endangerment” test of Section 303.
Appendix L of the State Implementation Plan regulations
(40 CFR Part 51) outlines a phased emission reduction program
for air pollution emergencies involving criteria pollutants.
In increasing degrees of seriousness, the levels are “alert”,
“warning”, “emergency”, and “significant harm to health.” The
“significant harm to health” levels are levels at which actual
injury occurs and are levels that should never be reached. It is
not consistent with the intent of the Act for the Regional
Offices to wait until the levels of “significant harm to health,”
specified in 40 CFR 51 .16(a), are reached prior to initiating a
Section 303 action. The “emergency” level is intended to be
the level at which action must be taken to avoid reaching levels
of significant harm. Generally speaking, it is at these
designated emergency levels that an imminent and substantia’l
endangerment, i.e., an imminent and substantial risk to public
health, is deemed to exist. The “warning” and “alert” levels
specified in Appendix L are designed to ameliorate situations
before the emergency stage by application of moderate controls.
2 This permits the Agency to act to seek abatement of emissions
easonab1y believed to be carcinogenic but for which a harmful
level, and the time for harm from such emissions to become
apparent are both uncertain.
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Undercertain cjrcui stances an imminent and substantial
endangerment to health may exist even though the Appendix L
emergency levels have not been reached. Accordingly, the -
concentrations outlined in Appendix L as the “ev ergency levels”
are only to be considered as a guide in determining when an
imminent and substantial endangerment to health exists. Flexi-
bility La essential and appropriate action must be taken pursuant
to Section 303 whenever it is necessary to prevent the signifi-
cant harm to health levels from being reached. For example, if
review of forecasted meteorological conditions indicate that a
situation is likely to deteriorate so rapidly that any action
started at the emergency level in Appendix L would come too
late to be etrective in preventing the significant harm to
health level from being reached, the Agency should act at such
earlier time as is necessary to allow for enforcement action
to be effective. Moreover, emergency conditions can be present
even if there is no clear prediction that specified endangertnent
levels will be reached. An imminent and substantial endangerment
to health may exist, for example, where pollutant concentrations
lower than estaDlished emergency levels occur or are predicced
to occur for an extended period of time.
With regard to non-criteria pollutants, sources of
information on dangerous concentrations may vary. Among these
are standards established by the Occupational Safety and Health
Administration (OSHA) for exposure to air pollutants inside
the workplace. Although not directly related to ambient air,
these standards might provide a starting point for assessing
.the risk to the public when such pollutants, e.g., various
organics, become airborne in a community. Computerized health
effects data bases, such as Toxline and Chemline, might also be
helpful. (These data bases are run by the National Library of
Medicine and may be accessed through the EPA Headquarters or
regional office libraries.) It will be necessary to gather
scientific and medical data, in addition to meterological
data, in order to find an imminent and substantial endangerment
to public health as a result of emissions of non-criteria
pollutants. The role of experts for this purpose is discussed
below.
2. State or Local Authorities Have Not Acted to Abate Pollution
Source(s) .
A second prequisite to initiating a Section 303 action is
that the Administrator receive evidence “that appropriate $tate
or local authorities have not acted to abate such sources.”
Section 51.16(a) of 40 CFR requires that each State Implementation
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Plan for a Priority I region include a contingency plan which,
as a rninimu , provides for taking any emission control actthns
necessary to prevent ambient air pollutants concentrations of
criteria pollutants from reaching levels which could cause
significant harm to the health of persons. More specifically,
the State Implementation Plans submitted to the Administrator
were: (1) to specify two or more stages of episode crIteria; (2)
to provide for public announcements whenever any specific stage
has been determined to exist; an4 (3) to specify emission
control actions to be taken at each episode stage. (Section
51.16(g) of the Implementation Plan regulations requires that
the State Implementation Plans for Priority II regions include,
as a minimum, requirements (1) and (2);) Although Section
51.16 addresses only SIP contingency plans for criteria
pollutants, the requirement of State or local failure to abate
applies also to conditions involving non-criteria pollutants.
The issue for purposes of implementing Section 303 is at what
point it becomes the duty or the prerogative of EPA to act to -
abate an air pollution emergency.
Prevention and curtailment of an air pollution emergency
-is initially the responsibility of State and local governments.
EPA has secondary responsibility for taking steps to avert
emergency conditions. The Regional Office’s initial duty,
therefore, is to observe State and local abatement efforts
(e.g., monitoring implementation of an emergency episode plan)
and to render assistance should a State or locaLity request it.
•The Regional Office should take aCtion under Section 303 only
if State and local action is either unsuccessful or not forth-
coming, as where a State lacks adequate abatement resources or
simply refuses to attempt to abate the emergency. Under such
circumstances, the Regional Office may ass ne primary responsi-
bility for curtailing the emergency or, preferably, render
technical assistance to the State’s abatement efforts.
The time allowed for Stat and local government to take
adequate action prior to EPA’s assix ing primary responsibility
will obviously depend on the nature of the potential or actual
emergency. The more the endangerment would be increased by
delay, the shorter this lead-time should be. All that is
required by Section 303, however, is that State or local action
be insufficient to abate or preclude the emergency conditions,
and that the appropriate State or local agency be consulted in
order to determine what action it intends to take, and whether
the information upon which EPA intends to act is accurate.
The requirement of consultation should not be viewed as an
obstacle to effective action by EPA. As explained in the
House Report on the 1977 Clean Air Amendments:
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The consultation requirement is in furtherance
of the committee’s intent that the Administrator
not supplant effective State or local emergency
abatement action. However,.,, if State and local
efforts are not forthcoming in timely fashion
to abate the hazardous condition, this proVision
would permit prompt action by the Administrator.
H.R. Rep. 95—294, 95th Cong., lat.Sess. 328 (1977). The
consultation requirement is therefore not a concurrence
requirement, but rather one of notification and corroboration
prior to taking action. The scope of action taken by EPA
should be restricted to what is necessary as a supplement to
any action taken by State or local authorities, as, e.g., where
a State is able to implement only portions of its SIP emergency
episode plan, yet further action is needed to curtail the episode.
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RELIEF AVAILABLE UNDER SECTION 303
The foregoing statutory prerequisites apply to both the
initiation of a civil action to abate an air pollution emergency
and to the issuance of an order by the A iainistrator directly
to the source of the hazardous air emissions, demanding a
curtailment of those emissions. These two forms of relief--the
civil action for an injunction and- the administrative order--
are briefly discussed below.
1. Injunctive Relief
Section 303 permits the Administrator to seek injuncttve
relief in a federal district court “upon receipt of evidence
that a pollution source or combination of sources (including
moving sources) is presenting an imminent and substantial
endangerment to the health of persons, and that the appropriate -
State or local authorities have not acted to abate such sources...”
Pursuant to the Memorandum of Understanding between EPA and the
Department of Justice, codified in Section 305 of the Clean Air
Act, the action would be filed on behalf of the Administrator
by the United States Attorney for the appropriate federal court
district. EPA Regional and Headquarters Offices, however, have
the responsibility of providing all data and evidenciary material
to the Department of Justice.
As wil]. be discussed more fully below, it is essential to
a successful civil action that expert testimony be elicited,
either in the form of affidavits or through expert appearances
at depositions or trial, regarding the risk of harmful effect8
to the health of persons from exposure to the relevant pollutant.
This is especially so in the case of an eme -rgency involving a
non-criteria pollutant, the harmful levels or effects of which
have not already been established by EPA or other agencies. A
diligent effort should be made to obtain evidence, perhap from
citizen complaints or hospital records, that the particular
emission sough ’e to be controlled has in fact already caused
adverse effects to the health of some individuals. Such evidence,
while not essential to a Section 303 action, could be helpful
in substantiating an imminent and substantial endangerment.
Among the experts to be consulted concerning hazardous pollutants
and the presence and extent of any adverse health effects are
physicians, epidemiologists, and toxicologists.
In addition, expert meteorological testimony is needed
in order to assess the magnitude of hazardous pollutant
concentrations and to pinpoint the source of the dangerous
emissions, if not already known (as in an area of numerous
industrial point sources), and to ascertain the expected
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geographical breadth of the emergency, based 4 ipon such parameters
as current and forecasted wind speed, wind direction, atmospheric
stability, temperature, and precipitation. 3 / the meteorological
expert may also be able to predict the duration of an emergency
episode by determining the time which will elapse before changed
meteorological conditions might substantially improve the
dispersion of the hazardous pollutant concentrations.
Also, experts in industrial processes and pollution controls
will be needed in order to explain to a court the nature of the
polluting process and what abatement options are available,
e.g., plant 8hutdown versus reduced production. In any action
for an injunction, a court can be expected to provide no more
relief than is necessary, and place as light a burden as possible
on the emitting source, in providing for effective curtailment
of the air pollution emergency. The industrial expert will
thus play a crucial role in the shaping of judicial relief in a
Section 303 action.
This testimony--medical, scientific, meteorological, and
technical——is essential to prevailing in a Section 303 suit.
The burden of proof will be on the Government, which must show
by a preponderance of the evidence that the defendant is the
source of air pollutants which, by their very nature or because
of existing meteorological conditions, Shave caused harm to
individuals or are pres neing art imminent and substantial risk
of such harm. In order to assure the credibility of this
testimony, sampling personnel should be prepared to testify
to the reliability and quality assurance of the air samples
evaluated by the experts.
The procedure for seeking an injunc tion are set forth in
the Federal Rules of Civil Procedure, Rule 65 (copy attached).
In the event that immediate relief is needed, Rule 65 provides
for temporary injunctive relief in the form of a preliminary
injunction which can be obtained from a federal district court,
after a hearing, in order to reduce further emissions of the
suspect pollutant below emergency levels until a full trial can
be held. The government should be prepared to have its experts
testify in court if preliminary or permanent injunction is sought.
3 Atornospheric stability refers the degree of turbulence in
Ehe atmosphere.
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The following should be kept in mind as elements of proof
necessary to obtaining a preliminary injunction:
1. Absent immediate injunctive relief, irreparable harm will
be caused by the polluting source(s); 2) this harm would
outweigh any harm to the source(8) from the granting of relief
requiring the source(s) to abate emissions; 3) the risk to
public health is sufficient to make success on the merits and
the granting of a permanent injunction likely; and 4) the public
interest necessitates immediate relief. See 7—pt. 2 Moores
Federal Practice para, 65.04 (1980); See also United States
v. Midwest Solvent Recovery, Inc. , 484 F. Supp. 138. 164 (N.D.
md. 1 980)
In addition, Rule 65 provides for injunctive relief in the
form of ten-day temporary restraining order (TRO), which can be
granted without a hearing while a motion for preliminary
injunction is prepared. 4 / Expert testimony in the form of
affidavit should suffice for the purpose of obtaining a TRO.
The proof necessary to obtain a TRO is that immediate
and irreparable injury will occur if injunctive relief is
withheld until the defendant can be given notice and an
opportunity to appear. Rule 65 implies that a hearing on a
motion for preliminary injunction, should take place as soon as
possible after the granting of a TRO. Id., Para. 65.05—65.08; see
also 4 West’s Federal Forms S5297 (197 3,
2. Administrative Order
Prior to the 1977 Clean Air Act Amendments, the only method
of enforcement provided in Section 303 was injunctive relief
from a federal district court upon a showing of imminent and
substantial endangerment from air pollutant emissions. The
1977 Amendments left this authority in place and added a provision
authorizing the Administrator to issue an order to a source to
take steps to curtail its emissions in the event “it is not
practicable to assure prompt protection of the health of persons
solely by commencement of... a civil action.” Within twenty-four
4/ Only once has a TRObeen requested under Section 303. The
incident occurred in 1971, in Birmingham, Ala. After local
efforts to curtail emissions from several sources failed, a TRO
was requested and granted under Section 303, requiring various
process modiftcations and cessations.
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hours of issuing the order however the Administrator must
file a suit for injunctive relief, or the order will expire.
Upon such filing, the court may then extend the life of the
order pending litigation. Violation of the order may be
penalized up to $5,000 per day per violation. This penalty may
be sought in a civil action brought to enforce the order. 5 1
Also in such an action, a source-may challenge the Administrator’s
basis for issuing the order.
This administrative order mechanism was intended by Congress
to enhance EPA’S emergency response capability even beyond that
provided by the TRO process previou8ly discussed. As explained
in the 1977 House Report:
Even more prompt action may be necessary
where pollution levels exceed the never to be
exceeded levels without prior forecast that
this may occur... The committee bill ieflects
the committee’s determination to confer
completely adequate authority to deal promptiy
and effectively with emergency situations
which jeopardize the health of persons. Thus,
the section provides that if it i8 not
practicable to assure prompt protection of health
solely by commencement of a civil action, the
Administrator may issue such orders as may be
necessary for this purpose.
H.R. Rep. No.95—294, 95th Cong., let Sess. 327-28 (1977)
(emphasis added). The administrative order is thus an available
enforcement mechanjsij in those instances where even a TRO might
b.e issued too late to effectively curtail an endangerment to
public health. Such situations might be those involving emissions
that are hazardous even in very limited duration of exposure,
rendering a TRO too late to be fully effective, or situations
which, although potentially quite harmful, are expected to be
of very short duration, such that the emissions would cease
before the TRO could issue (e.g., the demolition of an asbestos—
lined building). In such situations, the time required to
gather the expert evidence in support of a TRO might defeat
efforts to avert adverse public health effects, absent a more
immediate enforcement mechanism.
I This is artalagous to the provision in Section 113(b) of the
lean Air Act for a civil action to enforce, and seek penalties
for violation of, an order issued under Section 113(a) to comply
with emission limitations.
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The administrative order is just such a mechanism. Expert
testimony is not required for issuance of an administrative
order. What is needed, however, is evidence which reasonably
leads the Administrator to believe that certain air emissions
from particular sources are creating an imminent and substantial
endangerment to public health. This evidence might be in the
form of emissions data combined with adverse meteorological
reports and medical, bulletins. Provided the informal consul-
tation requirement has been met, the Administrator may issue
an order calling for abatement of emissions by whatever means
the Administrator determines are necessary under the circum-
stances of the case. Because of the potential adverse economic
impact of such an order upon the source, the order should
require no more than what is clearly necessary to curtailing
hazardous emissions. The fact that the order may only last
twenty-four hours, during which time a TRO application and
civil suit can feasibly be filed, and that the basis of the
order may be challenged by any source subject to it in a pro-
ceeding to enforce the order, are indicative of Congress’
intent that the order be immediately available although not
necessarily supported by the best possible expert credible
evidence.
Note that the administrative order may also be used to
require additional sampling or monitoring by the suspected
source with a view towards abating its emissions, This addi-
tional data can then by utilized in a subsequent civil action,
if such an action is necessary to abatement. Additional sampl-
ing and monitoring may also be required of a source through
the use of Section 114 of the Clean Air Act Act. Section
113(a) (3) permits EPA to issue an order to a source if its
fails to comply with a requirement of 114. Such an order is
not effective until the person to whom i is issued has had an
opportunity to confer with EPA.
Thus, Section 114 provides a mechanism for requiring
source sampling and monitoring with a much lower standard of
proof of violation than that required by Section 303. EPA may
issue an order requiring sampling and monitoring under Section
114 for the purpose “(i) of developing or assisting in the
development of any implementation plan under section 110 or
111(d), any standard of performance under section 111, (ii) of
determining whether any person is in violation of any such
standard or any requirement of such a plan, or (iii) carrying
Dut any provision of this Act...” This is contrasted with the
equirement under section 303 that EPA have evidence that a
source “is presenting an itn ninent and subtantial endangerment
to the health of persons, and that appropriate State or local
auhorjtjes have not acted to abate such sources.” However,
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while the standard for issuing a 114 order is lower, a 114 test-
ing order takes longer to enforce because it v ust be enforced
by the issuance of a 113(a)(3) order after the source has been
offered an opportunity to confer.
Delegations for Issuing Administrative Orders
and Judicial Complaints Under Section 303
I. Administrative Orders
Pursuant to Delegation 7—49, authority to issue adminis-
trative orders under Section 303 rests with the Regional
Administrators and the Assistant Administrator for Air, Noise,
and Radiation. The Regional Administrators must consult with
the Associate Enforcement Counsel for Air before issuing such
orders. The Assistant Administrator for Air, Noise and
Radiation must consult in advance with the Associa te Enforcernent
Counsel for Air and notify any affected Regional Administrator
or their designees before issuing orders. Because speed is of
the essence in issuing administrative orders under Section
303, the Headquarters concurrences can be issued by telephone
and followed up later in writing.
II. Referral of Civil Actions for Injunctive Relief
Pursuant to Delegation 7—22-A, alL referrals to the
Department of Justice of requests for civil actions for emergency
TRO’s must be made by the Special Counsel for Enforcement. The
Special Counsel for Enforcement must notify the Assistant
Administrator for Air, Noise and Radiation and the appropriate
Regional Administrator when a case is referred to the Department
of .Just ice.
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FORMS FOR 3BTAINING INJUNCTIVE RELIEF
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MOTION FOR TE? ORARY RESTRAINING ORDER
The United States of America, by its undersigned attorneys,
by authorization of the Attorney General and acting at the
request of the Administrator of the Environmental Protection
Agency, moves that this Court, in order to prevent irreparable
injury to the United States and its citizens, enter immediately
an order to restrain temporarily the defendatna set for thi n
the compalint from discharging excessive ( poi.lutant ) into the
ambient air pending action by this Court on te complaint filed
this day by the United States in this cause, and in support of
the motion, states:
Defendants are discharging from their plants and/or
installations at ( city, state) , substantial amounts
of ( ol1utant) , into the ambi nt air. Such discharges (in
combLnacjon with adverse weathez conditions) have caused or
are contributing to, concentrations of ( pollutant) , in the
ambient air exceedthgs a level of ( number) ( units ) of
( pollutant . This level presents an imminent and substantial
endangerment to the health of persons. -
The appropriate state and local authorities have diligently
attempted to decrease the level of contamination in the atmo-
sphere. However, defendants continue to discharge ( pollutant
into the ambient atmosphere causing imminent and substantial
endangerment to the health of persons;
The presense of such levels of ( pollutant is a present
and continuing danger to htan health. Unless the discharges
of ( pollutant are immediately restrained, the health of people
in the area will continue to sufler immediate and irreparable
harm.
Plaintiff further moves for said Temporary Restraining
Order to be issued forthwith and without notice, on the ground
that the discharge constitute and imminent and substantial
endangerment to the health of persons.
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Therefore, in view of the immediate danger to public health
that the defendants are contributing to by the release of
( pollutants ) into the ambient air, plaintiff prays that the
Court enter a temporary restraining order immediately.
Respectfully submitted,
Assistant Attorney General
United States Attorney
By ( signature )
Assistant United States Attorney
(signature)
Attorney
Department of Justice
Washington, D.C. 20530
Attorneys for Plaintiff
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TE ORARY RESTRAINING ORDER
This cause came to be heard on the motion of plaine ff,
upon the complaint herein and affidavits attached thereto, for
a temporary restraining order; and, it appearing to the court
therefrom that immediate and irreparable injury, loss and
damage will result to the plaintiff before notice can be given
and the defendant or his attorney can be heard in opposition to
the granting of a temporary restraining order for the reason
that continued levels of pollution by ( pollutant ) will cause
irreparbie damage to the health of persons, it is
ORDERED, that defendants set out in the complaint filed
herein, their agents, servants, employees and attorneys and all
persons in active concert or participation with them are hereby.
restrained from causing or contributing the alledged pollution
and each defendant separately must take the following action:
(List each defendant separately and state what immediate
action that defendant must take).
ORDERED, that this order expire within 10 days after entry,
unless within said time it is for good cause shown extended for
a longer period, and it is further -
ORDERED, that plaintiff’s complaint be set for hearing on
preliminary injunction on ( date ) at ( time ) of that
day or as soon thereafter as counsel can be Eèard, in the United
States District courtroom in the City of ________________, State
of _______________
This order issued at city, state , this day of
( month) , ( year )
Untted States Dtstrtct Judge
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CO MPLAI NT
(for Civil Action)
The United Staccs of America, by its undersigned attorneys and
by authority of the Attorney General alleges that:
1. This isa civil action to enjoin the above names
defendant(s) from discharging any ( pollutant ) into the ambient
atmosphere from their manufacturii g operations in the (city,
state) area. Such discharges contribute to the imminent and
substantial endangerment to the health of persons as determined
by the Administrator of the Environmental Protection Agency.
Authority to bring this action is in the Department of Justice
by 42 Usc 7605.
2. This court has jurisdiction of the subject matter of
this action pursuant to 28 USC 1345.
3. Defendant(s) are corporations doing business in ( city,)
state ) within the ________ District of ( Federal district court) .
4. During normal operation of the defendants’ plants the
defendants discharge ( pLollutant ) into the ambient air.
5. The Administrator of the Environmental Protection
Agency has received evidence that a combination of pollution
sources, including the defendant’s plants, are presenting an
imminent and substantial endangerment to the health of persons
of discharging matter into the ambient air.
6. The appropriate State and local authorities have
diligently attempted to decrease the level of contamination in
the atmosphere. However, the various sources emitting ( pollutant )
in significant quantities, including the defendants plants,
continue to discharge (pollutant)into the ambient atmosphere to
levels that cause significant harm to the health of human beings.
7. The average ( pollutant ) level in the ambient air for
the past forty-eight ( 48) hours is approximately ( number) ( units )
Such levels for such periods of time are harmful to the health
of h nan beings.
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8. The discharges of matter by the defendants should be
eliminated pursuant to Section 303 of the Clean Air act which
provides:
(a) Notwithstanding any other provisions of this Act, the
Administrator upon receipt of evidence that a pollution
source or combination of sources (including moving sources)
is presenting an imminent and substantial endangerment to
the health of persons, and that appropriate State or local
authorities have not acted at abate such sources, may bring
on behalf of the United States in the appropr.iate
United States district court to imiediately restrain
any person causing or contributing to the alleged
pollution to stop the emission of air pollutants
causing or contributing to such pollution or to
take such other action as may be necessary. If
it is not practicable to assure prompt protection
of the health of persons solely by commencenent
of such a civil action, the Administrator may issue
such orders as may be necessary to protect the
health of persons who are, or may be, affected by such
pollution source (or sources). Prior to taking
any action under this section, the Administrator shall
consult with the State and local authorities in order to
confirm the correctness of the Lqformation on which
the action proposed to be taken is based and to
ascertain the action which such authorities
are, or will be, taking. Such order shall be
effective for a period of not more than twenty-four
hours unless the Administrator brings an action
under the first sentence of this subsection before the
expiration of such period. Whenever the Administrator
brings such an action within such period, such
order shall be effective for a period of forty-eight
hours or such longer period as may be authorized
by the court pending litigation or thereafter.
(b) Any person who will fully violated or fails or refuses
to comply with, any order issued by the Administrator under
subsection (a) may, in an action brought in the appropriate
United States district court to enforce such order, be
fined not more than $5,000 for each day during which
such violation occurs or failure to comply continues.
9. The continuous emission of (pollutant) into the ambient air
by the defendants contributes to the present situation which,
if allowed to continue, will cause significant harm to the
health of persons in the city area.
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10. The United States of America and its citizens will -
suffer immediate and irreparable harm to their health unless
the defendants are immediately restrained from discharging
(pollutant) into.
WHEREFORE, THE UNITED STATES PRAYS:
a. That the defendants, their officiers, directors, agents,
servants, employees, attorneys, successors, and assigns, and
each of them cease the discharge of (pollutant) into the ambient
air in a manner prescribed by this Court arid not discharge such
matter thereafter unless pursuant to instruction to do so from
this Court.
b. That costs and disbursements of this action be awarded
to the plaintiff; and
c. That this Court grant such other and further relief as
it seem just and proper.
(no signature necessary)
Assistant Attorney General
(no signature necessary)
United States ACco rney
By ______________________________
Assistant United States Attorney
Attorney, Department of Jusci ce
Washington, D.C. 20530
Attorneys for Plaintiff
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—21-
UNITED STATES ENVIRON 1ENTAL PROTECTION AGENCY
REGION
(Address)
IN ThE MATTER OF - )
( source ) )
) DO KETNO( )
)
PROCEEDINGS PURSUANT TO )
SECTION 303 OF THE CLEAN )
AIR ACT, AS AMENDED, )
42 U.S.C. 57401 et seq. , )
42 U.S.C. 57603 )
)
__________________________________________________________________ )
The Regional Administrator for Region ( ) of the United
States Environmental Protection Agency (EPA) ákes the following
Findings of Fact, reaches the following Conclusion of Law and
Issues the following Order:
FINDINGS OF FACT
1. The Administrator of EPA his delegated the authority vested
in him by Section 303 of the Clean Air Act (the Act) as amended,
42 U.S.C. 57401 et seq., . 42 U.S.C. 57603, to the Regional
Administrator for Region ( ).
2. Section 303 of the Act, 42 U.S.C. 57603 provides that, upon
receipt of evidence that a pollution source or combination of
sources is presenting an imminent and substantial endangerment
to the health of persons and that appropriate State or local
authorities have not acted to abate such sources, the Administrator
may issue such orders as may be necessary to protect the health
of persons who are, or may be, affected by such pollution source
or sources.
3. Defendants are discharging from their plants and/or
installations at ( city/state) , substantial amounts of (pollutant),
into the ambient air. Such discharges (in combination with
adverse weather conditions) have caused or are contributing to,
concentrations of ( p ] .lutant)) , in the ambient air exceeding a
level of ( number) (units ) of ( pollutant) , This level presents
an imminent and substan€Ial endangerment to the health of persons.
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4. ( source ) is a source whl.ch is presenting an Lmminent
and substantial endangerient to the health of persons.
5, ( state ) and ( local jurisdiction) ) authorities have not
acted to abate ( list sources) .
OR
( state ) and ( local jurisdiction ) ) authorities have dililently
atcerupted to oecrease the level of contamination in the atnosphere.
However, defendants continue to discharge ( pollutant ) into the
ambient atmosphere causing ii ’ninent and su stantial endangerment
to the health of persons.
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—23—
CONCLUS ION OF LAW
1. The Regional Administrator for Region (_) (The Regional
Administrator, is vested with the authority of the Administrator
under Section 303 of the Act, 42 U.S.C. S7603.
2. (Source(s) have been found by the Regional Administrator
to be presenting an immthent and substantial endangertnent to
the health of persons and to be an appropriate subject for the
issuance of an order under Section 303 of the Act.
ORDER
The Regional Administrator for Region (_) hereby orders
that defendants set out in this order, their agen:8, servants,
employees and attorneys and all persons in active concert or
participation with them are hereby ordered to refrain from
causing or contributing to levels of pollution that will cause
irreparbie damage to the health of persons and each defendant
separately must take the following action:
1. (List each defendant separately and state what immediate
action that defendant must take.)
2. This order shall be effective for a period of riot more than
twenty-four hours unless the Regional Administrator files a
civil action on behalf of the United States in the appropriate
United States district court to immediately restrain any person
causing or contributing to the alleged pollution to stop the
emission of air pollutants causing or contributing to such
pollution or to take such other actions as may be necessary.
3. This Order is effective immediately upon receipt by
defendants. The Regional Administrator for Region ( ) hereby
issues the above-identified Order which shall become effective
as provided therein.
date Regional Administrator
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GUIDANCE ON SECTION 303 OF THE CLEAN AIR ACT
April 1999
I. INTRODUCTION
Section 303 of the Clean Air Act (Act), 42 U.S.C. § 7603,’ authorizes the Administrator
of the Environmental Protection Agency (EPA) to bring an action for injunctive relief to abate
imminent and substantial endangerments to public health, welfare, or the environment caused by
emissions of air pollutants. 2 Section 303 allows EPA to initiate judicial action against, or issue an
administrative order to, any person who is causing or contributing to the pollution to stop the
emissions of the pollutants or to take other action as necessary. As discussed in this guidance,
§303 is a “gap-filling” authority, providing a basis for injunctive relief for a wide range of
endangerment scenarios, regardless of a pollution source’s compliance or noncompliance with
any provision of the Act. It also provides for injunctive relief when an air pollutant(s) is not
otherwise regulated under the Act
On September 15, 1983, EPA issued a guidance document entitled Initiation of
Administrative and Civil Action under Section 303 of the Clean Air Act During Air Pollution
Emergencies. EPA is issuing this updated guidance in light of the 1990 Amendments to the Act
Section 303, as amended in 1990, and codified at 42 U.S C § 7603, reads as follows:
Notwithstanding any other provisions of this chapter, the Administrator, upon receipt of
evidence that a pollution source or combination of sources (including moving sources) is presenting an
imminent and substantial endangerment to public health or welfare, or the environment, may bring suit
on behalf of the United States in the appropriate United States distnct court to immediately restrain any
person causing or contributing to the alleged pollution to stop the emission of air pollutants causing or
contributing to such pollution or to take such other action as may be necessary If it is not practicable to
assure prompt protection of public health or welfare or the environment by commencement of such a
civil action, the Administrator may issue such orders as may be necessary to protect public health or
welfare or the environment Prior to taking any action under this section, the Administrator shall consult
with appropriate State and local authorities and attempt to confirm the accuracy of the information on
which the action proposed to be taken is based. Any order issued by the Administrator under this section
shall be effective upon issuance and shall remain in effect for a period of not more than 60 days, unless
the Administrator brings an action pursuant to the first sentence of this section before the expiration of
that period Whenever the Administrator brings an action within the 60-day period, such order shall
remain in effect for an additional 14 days or for such longer period as may be authorized by the court in
which such action is brought
2 Section 302(g), Definitions, and codified at 42 U S C. §7602(g), reads as follows:
The term “air pollutant” means any air pollution agent or combination of such agents, including
any physical, chemical, biological, radioactive (including source material, special nuclear matenal, and
byproduct material) substance or matter which is emitted into or otherwise enters the ambient air Such
term includes any precursors to the formation of any air pollutant, to the extent the Administrator has
identified such precursor or precursors for the particular purpose for which the term “air pollutant” is
used.
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which modified §303, and to account for more recent case law under similar Federal
environmental statutes which informs EPA’s authority to act under §303 .3 This guidance
supercedes the 1983 guidance. It is intended to be used by EPA as internal guidance only and
does not establish any substantive or procedural rights. EPA reserves the right to act at variance
with this guidance and to change it without public notice.
The 1990 Amendments expanded the scope under which EPA may act pursuant to §303
from “imminent and substantial endangerment to the health of persons” to “imminent and
substantial endangerment to public health or welfare, or the environment.” The Amendments
also eliminated the requirement for state or local inaction as a prerequisite to EPA initiating
action under §303, and lengthened the duration of administrative orders pursuant to §303 from
24 hours to 60 days. In so doing, Congress greatly increased the utility of 303 However, as of
the date of this guidance, EPA has exercised its new authority against a specific source only three
times. 4 As discussed below, EPA does not believe that Congress restricted EPA’s authority to act
under §303 to situations where people are injured or other serious air pollution hazards are
manifest. Rather, Congress also intended for EPA to use the authority to address risks before
they caused harm. This guidance will help EPA carry out its authority as intended under the
Act. 5
In addition to initiating actions under §303, EPA has taken other emergency actions
under statutes that have similar provisions, such as §106 of the Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA) [ “when the President determines that
there may be an imminent and substantial endangerment to the public health or welfare or the
environment”] and §7003 of the Resource Conservation and Recovery Act (RCRA) [ “may
Other statutes include “emergency power” provisions giving appropriate government officials
the right to seek judicial relief, or to take other action to avert imminent and substantial threats to the
environment or public health. In the case of United States v. Reilly Tar & Chemical Corp. , 546 F.
Supp. 1100 (D Minn 1982) suit was brought under RCRA Section 7003. The court considered the
imminent hazard provisions of RCRA, Section 504 of the CWA, Section 106 of CERCLA, Section 303
of the CAA, and the SDWA and noted that the phrase “imminent and substantial endangerment” was
intended to be treated similarly in each statute. EPA believes it is appropriate to interpret identical terms
such as “imminent” and “endangerment” in a consistent manner
See In Re Minerec Mining Chemicals , EPA Docket No. R9-94-34 (Ctean Air Act Emergency
Order, August 26, 1994), and In Re Minerec Mining Chemicals , EPA Docket No. R9-94-34 (First
Amended Clean Air Act Emergency Order, September 28, 1994); In Re: Shallow Water Refinery , EPA
Docket No. V11-97-CAA-l20 (June 12, 1997); and In Re: Trinity America Corporation , EPA Region IV,
October 3, 1997 Prior to 1990, EPA used its §303 authority to address high particulate matter in North
Birmingham, Alabama (1971), and to address an asbestos hazard at a mine in Globe, Arizona (1983).
The Amendments also contain a provision similar to §303 under §11 2(r)(9), which pertains to
accidental releases ola regulated substance as defined by §1 l2(r)(3) The reader is encouraged to read
EPA’s guidance concerning the use of this section, published by EPA in an April 17, 1991 document
entitled Guidance on Using Order Authority under Section 112(r) (9) of the Clean Air Act, as Amended,
and on Coordinated Use with Other Order and Enforcement Authorities, and in Fed g Vol. 56, No.
lO4,p 24394, May30, 1991.
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present an imminent and substantial endangerment to health or the environment”]. This guidance
is consistent with the case law and administrative practice under these other authorities, and the
Amendments of 1990.6 It is also consistent with other published guidelines for taking action
under EPA’s imminent and substantial endangerment authority. 7
II. LEGAL PREREQUISITES TO INITIATING ACTION UNDER SECTION 303
The basic prerequisites to initiating action against a party under §303 are that the
Administrator has received evidence that: (1) a pollution source or combination of sources
(including moving sources) is presenting an imminent and substantial endangerment to public
health or welfare, or the environment; and (2) the party to be restrained is causing or contributing
to such alleged pollution. In addition, §303 requires the Administrator, prior to taking any
action, to consult with appropriate State and local authorities and attempt to confirm the accuracy
of the information on which the action proposed to be taken is based. The following discussion
includes the definitions of key terms, the legislative history and case law, and the resources
available to assist EPA staff as they address these prerequisites.
A. Evidence Indicates that a Pollution Source or Combination of Sources (Including Moving
Sources) is Presenting an Imminent and Substantial Endangerment to Public Health or
Welfare, or the Environment
1. The meaning of “imminent and substantial endangerment”
a. “Endangerment”
EPA interprets “endangerment” under §303 to mean threatened or potential harm , as well
as actual harm. Therefore, EPA need not delay taking action under §303 until actual harm
occurs. Such delay would thwart Congress’ intent that EPA use §303 to protect the nation’s air
6 The legislative history of the 1990 Clean Air Act Amendments indicates that one reason for
amending §303 was to make it similar to other endangerment authonties. The Senate Report on the 1990
Amendments states in relevant part:
These changes are necessary to enable the Administrator to address air pollution
emergencies in an adequate manner, and to conform the Administrator’s emergency
authority under the Act to emergency authorities under other environmental laws. See,
TSCA section 208, CERCLA section 106, RCRA section 7003, and CWA section 504
Similarly, the deletion of the requirement that the Administrator may not bring suit
unless State or local authorities have failed to act conforms the Act to other
environmental laws [ S Rep. No. 101-228, 101st Cong., 1st Sess 370 (1989)]
As discussed herein, key provisions of these authorities are similar. There should be no practical
differences in the scope of EPA’s authority between these similarly-worded statutes
See 47 FR 20664, May 13, 1992; 56 FR 24393, May 30, 1991, and 59 FR 58970-71, November
15, 1994.
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quality. As stated in the House Report on the Clean Air Act Amendments of 1977:
In retaining the words “imminent and substantial endangerment...,” the
committee intends that the authority of this section not be used where the risk of
harm is completely speculative in nature or where the harm threatened is
insubstantial However, ... the committee intends that this language be
constructed by the courts and the Administrator so as to give paramount
importance to the objective of protection of the public health Administrative and
judicial implementation of this authority must occur early enough to prevent the
potential hazard from materializing (emphasis added).
The Senate Report on the 1990 Amendments to §303, which expanded the application of
§303 to public welfare and the environment, expressly states that §303 applies to “threatened”
harm. The Report says:
These amendments to section 303 of the Act, as well as parellel (sic)
amendments to section 113, have several purposes. the (sic) amendments broaden
the Administratror’s (sic) authority to issue emergency orders to abate threats to
welfare and the environment, in addition to the authority to respond to threats to”
the health of persons.”
Broadening section 301 (sic) to include harm to the environment is
important to enable EPA to address emergency threats to ecosystems in instances
where there is no readily demonstrable immediate threat to human health . For
example, toxic emissions might be blowing downwind from a facility into an
undeveloped natural area and threatening to impair that area’s ecosystem. This
amendment will allow EPA to order the plant to take necessary steps to eliminate
the threat to flora and fauna (emphasis added). 9
Courts have interpreted “endangerment” to include threatened or potential harm under
§21 1 of the Act (providing EPA the authority to regulate fuels) and other environmental
statutes )° In Ethyl Corporation v. Environmental Protection Agency,! ! the Court interpreted the
endanger” standard under §211 as requiring only a finding that lead emissions presented a”
significant risk” of injury to the public. In Ethyl , the question was whether EPA was justified in
requiring the reduction of lead in gasoline when there was no finding of the presence of actual
harm from exposure to airborne lead. The Court said:
H R. Rep No 95-294, 95th Cong, 1st Sess. 328 (1977).
S.Rep No 101-228, l0lstCong., lstSess.at370(1989).
‘° See discussion of endangerment in, e g., Dague v City of Burlington , 935 F.2d 1343, 1356 (2d
Cir 1991) (RCRA § 7002); United States v Conservation Chemical Co , 619 F Supp. 162, 192 (W.D.
Mo. 1985) (CERCLA § 106)
“541 F2d I (D.C Cir 1976).
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When one is endangered, harm is threatened no actual iniury need ever occur.. .
statute allowing for regulation in the face of danger is, necessarily, a
precautionary statute. Regulatory action may be taken before the threatened harm
occurs, indeed, the very existence of such precautionary legislation would seem to
demand that regulatory action precede, and, optimally, prevent, the perceived
threat (emphasis added).’ 2
In Reserve Mining Co v. Environmental Protection Agency,’ 3 the court similarly
interpreted the term “endangering” under §1160(g)(1) of the Federal Water Pollution Control
Act’ 4 in a case involving asbestos discharges into Lake Superior. The Court stated that”
Congress used the term ‘endangering’ in a precautionary or preventive sense, and, therefore,
evidence of potential harm as well as actual harm comes within the purview of that term.” 5 In
Reserve , relief was based on “an acceptable but unproved medical theory” that ingestion of
asbestos fibers might cause cancer.’ 6 The Court in Reserve , however, indicated that the term”
endangering” under §1 l60(g)(1) connotes a “lesser risk of harm” than the phrase “imminent and
substantial endangerment.” 7 EPA, therefore, should determine that the threatened or potential
harm is “imminent” and “substantial” before initiating action under §303
b. “Imminent”
EPA believes that an endangerment is “imminent” under §303 where present conditions
indicate a threat of harm to the public health, welfare or the environment, no matter how distant
the manifestation of actual harm may be, as well as where conditions indicate an immediate
threat of harm. As the 1970 Senate Report on §303 states:
The levels of concentration of air pollution agents or combination of
agents which substantially endanger health are levels which should never be
reached in any community. When the prediction can reasonably be made that
such elevated levels could be reached even for a short period of time--that is that
they are imminent--an emergency action plan should be implemented. . (emphasis
added).’ 8
i2 Ethyl , 541 F 2d at 13 (D.C Cir. 1976)
‘ 514 F 2d at 492 (8th Cir 1975)
‘ The 1972 amendments to the Federal Water Pollution Control Act, known as the Clean Water
Act, added §504, the present imminent and substantial endangerment standard for water pollution
control
‘ Reserve , 514 F2d at 528 (8” Cir 1975)..
Id., at 529
at 528
“'S Rep No. 91-1196, 91st Cong., 2d Sess 36(1970)
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Courts have interpreted the term “imminent” under other environmental statutes to
include situations where present conditions indicate there may be a risk to health or the
environment,’ 9 even though the harm may not be realized for years. 2 ° It is not necessary for the
endangerment to be immediate or tantamount to an “emergency” to be imminent and warrant
relief. 2 ’ The Court in Dague v. City of Burlington , for example, found an imminent
endangerment in a RCRA case involving a municipal landfill that was leaking approximately
10% of its leachate containing low levels of lead into an adjacent cattail marsh. Lead in test
wells surrounding the landfill was generally below the maximum contaminant level for drinking
water, and no actual harm was shown to the marsh. There was evidence, however, that the
leachate from the landfill was toxic to freshwater aquatic life, including at least one vertebrate in
the food chain, and an expert testified that, in a system such as the cattail marsh where there is a
high tolerance for toxic chemicals, signs of stress may appear only after a latent stage of
deterioration. 22 The Court concluded that there was an imminent endangerment to the cattail
marsh even though the harm would not become apparent until some time in the future
Thus, it is the risk of harm that must be “imminent.” The actual harm itself may not
eventuate or be fully manifest for a period of many years, if at all. 23 Moreover, even where the
conditions giving rise to the risk have been present for some time, EPA is not precluded from
addressing them as an imminent endangerment. 24 Contaminants that lead to chronic health
effects, as well as acute health effects, may be considered to cause imminent endangerment. 25
EPA, therefore, may properly take action to abate air emissions under §303 even though
the harm itself may not be immediate, and the amount of time for harm from such emissions to
become apparent is uncertain. This permits the Agency, for example, to act to seek abatement of
emissions reasonably believed to be carcinogenic, even though it is uncertain how long it would
take for the emissions to result in actual harm to individuals.
c. “Substantial”
Courts have found an endangerment to be “substantial” under other environmental
“ See, g., Dague , 935 F 2d at 1356.
20 , g .., United States v Valentine , 856 F Supp 621, 626 (D Wyo. 1994), Conservation
Chemical , 619 F Supp at 194.
21 See, g_, Valentine , 856 F Supp. at 626 (citing United States v Waste Industries, Inc. , 734
F.2d 159 (4th Cir 1984), but see, Outboard Marine Corporation v Thomas , 773 F.2d 883 (7th Cir. 1985)
(“This grant of power [ under CERCLA § 106], however, applies only in emergency situations.”)
22 Dague v City of Burlington , 732 F Supp. 458, 463-64; 468-69 (D Vt. 1989)
23 See, g, Conservation Chemical , 619 F. Supp at 193-194
24 See In Re FCX, Inc , 96 B.R 49, 55 (Bkrtcy., E D.N.C 1989), interpreting CERCLA §106 C”
even when there is an inordinate delay [ by EPA], the court must find an immediate danger to public
health if in fact one exists’)
25 Conservation Chemical , 619 F Supp. at 194.
26 See, g, Conservation Chemical Co. , 619 F. Supp at 194
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statutes where there is a reasonable cause for concern that health or the environment is at risk. 26
It is not necessary to quantify the endangerment for it to be considered substantial. For example,
proof that a certain number of people will be exposed or that a certain number of deaths will
occur is not required. 27 A number of factors, such as the quantities of the hazardous substances
involved, the nature and degree of their hazards, or the potential for human or environmental
exposure, may be considered in determining whether there is a reasonable cause for concern. In
any given case, one or two factors may be so predominant as to be determinative of the issue. 28
For example, the Court in United States v. Conservation Chemical Co found a “substantial”
endangerment under CERCLA § 106, where numerous hazardous substances from chemical
wastes were present and being released into the environment from a site, and there was a risk that
humans or wildlife might venture Onto the site and come into contact with the substances. 29 The
Court in United States v. Vertac Chemical Corporation found the chemical dioxin to be
presenting a “reasonable medical concern over public health,” and thereby to be constituting an
imminent and substantial endangerment to health under RCRA §7003, where the chemical was
widely believed, but not fully proven, to be hazardous. 3 ° EPA interprets these decisions to mean
that an endangerment is “substantial’ under §303 where there is a reasonable cause for concern
for public health, welfare or the environment if remedial action is not taken.
Thus, §303 provides authority to address threats to public health, welfare or the
environment in a variety of circumstances, and is not limited to situations involving pollution
concentrations associated with “emergency” levels or severe effects. 3 i Section 303 should not be
used where the risk of harm is completely speculative or where the threatened harm is
insubstantial. 32 If, however, the Agency can show that the suspect emissions are creating a
non-speculative “reasonable concern” that public health, welfare or the environment is at risk of
harm, action under §303 is appropriate.
d. “Is presenting”
The prefatory language in §303 differs from that of RCRA §7003 and CERCLA § 106.
While §303 provides that EPA may act when a pollution source or combination of sources “is
presenting” an imminent and substantial endangerment, RCRA §7003 and CERCLA §106
authorize EPA to act when conditions “may present,”or “there may be,”respectively, an imminent
26 See, g, Conservation Chemical Co. , 619 F Supp at 194.
27 1d
28 1 at 194-195.
29 Id., at 195
30 489F Supp 870, 885 (ED Ark 1980).
‘ See 59 FR 58958, 58970 (November 15, 1994) discussing the authority to use §303 to address
situations where health-based, ambient air target or trigger levels are exceeded
32 See 1-1 R Rep No. 95-294, 95th Cong, 1st Sess 328 (1977).
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and substantial endangerment. In Dague and other decisions, the phrase “may present” has been
interpreted as “expansive language” indicating the Congressional intent “to confer upon the
courts the authority to grant affirmative equitable relief to the extent necessary to eliminate any
risk posed by toxic wastes.” 33 Given the legislative history of this provision, as discussed earlier,
it appears that Congress did not intend to create less protection for the public or the environment
than under other environmental statutes, and therefore may not have intended any difference in
meaning from the slight difference in text. At worst, one could argue that the difference in
language may mean that the emissions that would pose the threat be either ongoing or reasonably
predicted, as distinct from theoretically potential emissions. EPA does not believe that this
difference in prefatory language or the judicial interpretation of “may present” undermines the
application to §303 of established case law interpreting the phrase “imminent and substantial
endangerment” under other statutes.
In either event, the “is presenting” requirement is clearly met when there are ongoing
emissions that endanger public health, welfare, or the environment. The “is presenting”
requirement can also be satisfied when the source is intermittent. For example, a source might
operate a process that periodically emits a highly toxic air pollutant. It is not necessary for EPA
to wait for the emissions to occur before issuing a §303 order to abate the endangerment. An
endangerment can be present even if it is not on a continuous basis.
2. The meaning of “public health or welfare, or the environment”
As discussed above, the 1990 Amendments expanded the standard under §303 from”
imminent and substantial endangerment to the health of persons” to “imminent and substantial
endangerment to public health or welfare, or the environment.” The use of the word “or”
indicates that an endangerment to either public health, welfare, or the environment alone, will
warrant relief under §3Ø3 34
The Senate Report on the 1990 Amendments states that broadening §303 to apply to
harm to the environment “is important to enable EPA to address emergency threats to ecosystems
in instances where there is no readily demonstrable immediate threat to human health “ The
Report further states that, for example, where a facility is emitting pollutants that are threatening
to impair an area’s ecosystem, §303 will allow EPA to order the facility “to take necessary steps
to eliminate the threat to flora and fauna.” Congress, therefore, clearly intended the word”
environment” to include plant and animal life and ecosystems generally, in the absence of
threatened harm to human health Additionally, case law under RCRA defines “environment” to
encompass the air, soil and water, including groundwater. 36
B Dague v City of Burlington , 935 F.2d at 1355 (citing United States v Price , 688 F.2d
204,2113 (3rd Cir. 1982)
Conservation Chemical , 619 F Supp at 192
35 S Rep No 101-228, l0lstCong, lstSess 370(1989).
36 Lincoln Properties , 23 Envtl L Rep at 2067 1-72.
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The Senate Report does not address the expansion of 303 to welfare. The term “welfare”
is defined in the Act, however. Section 302(h) states:
All language referring to effects on welfare includes, but is not limited to, effects
on soils, water, crops, vegetation, manmade materials, animals, wildlife, weather,
visibility, and climate, damage to and deterioration of property, and hazards to
transportation, as well as effects on economic values and on personal comfort and
well-being, whether caused by transformation, conversion or combination with
other air pollutants.
This statutory definition of “welfare” is broader than, and encompasses the elements of,
environment”as defined above. The court in Conservation Chemical also found under CERCLA
that “ [ t]he term ‘public welfare’ is exceptionally broad, and encompasses ‘health arid safety,
recreational, aesthetic, environmental and economic interests.” 37 The court stated further that”
[ t]he expansive scope of the terms ‘public welfare’ and ‘environment’ mandates the conclusion
that Congress intended injunctive relief to issue whenever any aspect of the nation’s interest in a
clean environment may be endangered imminently and substantially by a release.” 38 EPA’s
authority under §303, therefore, may be used to abate imminent and substantial endangerments
affecting a broad spectrum of concerns
B. Any Person Causing or Contributing to the Alleged Pollution
1. The meaning of”any person”
Section 303 provides that the Administrator may take action to restrain “any person”
causing or contributing to pollution from a source or combination of sources that is presenting an
imminent and substantial endangerment to public health or welfare, or the environment. Section
302(e) of the Act defines , ‘person” to include “an individual, corporation, partnership, association,
State, municipality, political subdivision of a State, and any agency, department, or
instrumentality of the United States and any officer, agent, or employee thereof.” Thus, any
entity specified in §302(e) that is causing or contributing to the alleged pollution may be subject
to §303. Such a person could include, for example, corporate officers, the individuals who own
or operate a polluting source, the lease holders or contractors of same, or the corporate entity
itself. As discussed in the following section, this could also include past owners of a facility who
caused or contributed to a present endangerment. 39
2. The meaning of “causing or contributing to” the alleged pollution
Conservation Chemical , 619 F. Supp. at 192.
38 Id.
EPA notes that in practice, §303 orders are usually issued to organizations, not individuals.
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Section 303 may apply whenever there is evidence that “a pollution source or
combination of sources” is presenting an imminent and substantial endangerment, and EPA may
bring action to restrain “any person causing or contributing to the alleged pollution to stop the
emission of air pollutants causing or contributing to such pollution” (emphasis added).
Causation, in the air pollution context, is rooted in common law. In past decisions, the
courts have recognized that air pollutants can be distributed over a large geographical area and
pollution injuries may be the result of cumulative effects of several emissions from different
sources. 40 This can sometimes make it difficult for a plaintiff to prove that a particular defendant
was the source of the pollution that caused the injury In a typical common law negligence
action, the plaintiff must show that it was an action or inaction of the defendant which caused
the injury. This is causation-in-fact. However, the courts have recognized that it is often
difficult to show causation-in-fact in tort cases involving toxic agents and have relaxed the
requirement that the plaintiff must show cause in fact. Courts will usually find a defendant liable
if defendant’s conduct was a substantial factor in causing the alleged endangerment. Plaintiffs
are also aided by the theory ofjoint and several liability which has been applied to independent
discharges of air pollutants where the effects of each plant’s pollution was impossible to
determine. 4 ’ EPA believes that the Agency may proceed with a §303 action when the person’s
conduct is a substantial factor in causing the alleged harm.
EPA may take action against any person who is contributing to the emissions of the air
pollutants creating an endangerment, regardless of the extent of that person’s overall contribution
to the problem. For example, on November 18, 1971, the District Court for the Northern District
of Alabama issued a temporary restraining order under §303 curtailing operations at 27
steel-making facilities near Birmingham, Alabama. 42 The average particulate matter levels in the
preceding 48 hours was found to be 725 micrograms per cubic meter, levels which were
considered harmful to human health. EPA’s complaint did not allege the specific contribution of
each facility to the overall particulate matter levels. It simply stated that “the Administrator of
the Environmental Protection Agency has received evidence that a combination ofpollution
sources, including the defendant c plants, are presenting an imminent and substantial
endangerment to the health of persons by discharging particulate matter into the air” [ emphasis
added].
EPA interprets the phrase “contributing to” under §303 to mean, as it was exercised in the
40 Reitze, Arnold, Overview arid critique . a century of air pollution control lawS what worked,
what5cfwled, what might work. 21 Envtl Law 1549 (1991)
‘ Michie v. Great Lakes Steel , 495 F 2d 213 (6th Cir.), cert. denied, 419 U.S. 997 (1974)
42 United States v U S Steel , No 7 1-104 (N.D Al, Nov 18, 1971) Meteorological conditions
improved on November 19, 1971, and the order was vacated
‘ United States v Aceto Agricultural Chemical Corp , 872 F 2d 1373, 1384 (8th Cir 1989)
Also, see Zands v Nelson , 779 F Supp 1254, 1264 (SD Cal 1991) (The Court held that a person who
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above-referenced action and as judicially interpreted under RCRA, “to have a share in any act or
effect “eu It is not necessary for the person to be directly controlling the activities that are
creating an imminent and substantial endangerment to issue an order or take other action under
§303 ‘ Nor is it necessary that a person be responsible for a specific share of the effect. A
combination of air pollution sources may present imminent and substantial endangerment even
though the emissions from a single source, if considered alone, may be of lesser concern. In
some cases, it may be necessary to address an individual source under §303 even though the
action would not completely eliminate the pollutant(s) of concern.
It may also not be necessary for the person to own the polluting source. The United
States sought an injunction against the owners of a site under CERCLA § 106, RCRA §7003, and
CAA §303 to address endangerment from asbestos contamination. The defendants owned or
operated an asbestos mill at the site until 1974. Prior to closing the mill, the owners used
asbestos-containing mill tailings to grade the property for mobile home plots, and offered the lots
for sale in 1973. Fifty lots were sold at a site of some 17 acres. The Court found that, under
§303, the residential subdivision and a second, nearby mill that was still in operation were”
pollution sources or a combination of sources” and that the past owners of the site “caused or are
contributing to such pollution.” The Court ordered the defendants, who included individuals and
corporations that formerly owned the subdivided site, to abate the releases and threatened
releases of asbestos in the area. 45
Thus, EPA believes that under §303, that the Agency may take action to restrain any
person(s) whose actions (or inactions) are responsible for creating emissions of air pollutants
which are presenting the endangerment. This action may be taken even if such person(s) no
longer own the pollution source.
C. The Administrator shall consult with appropriate State and local authorities and attempt
to confirm the accuracy of the information on which the action proposed to be taken is
based
Section 303 requires EPA to consult with the State and local authorities before taking any
action under that section and attempt to confirm the accuracy of the information on which the
action proposed to be taken is based. The legislative history states that this consultation is
required “to protect State interests and to prevent duplication of effort.” 46
Prior to 1990, one of the prerequisites for taking action under §303 was that “the
operated equipment during the time that solid waste leaked from that equipment to be a “contributor”)
Id, at 1383 (The Court held that a person contributed to the handling and disposal of
pesticide-related wastes because that person had (1) contracted with a company that formulates
commercial grade pesticides through a process that inherently involves the generation of wastes, and (2)
maintained ownership of those pesticides throughout the process).
‘ U S v Metate Asbestos Corp. , 584 F Supp. 1143 (DC. Az. 1984)
46 S Rep. No 101-228, 101” Congress, 1” Sess ,at 370
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appropriate State or local authorities have not acted to abate such sources” ( 303, as amended in
1977 and codified in 42 U.S.C. 7603). In removing this prerequisite from §303, Congress
removed a requirement that had the potential to delay Federal action. 47 However, the present
consultation requirement should not be viewed as an obstacle to effective action by EPA. It is
not a concurrence requirement, but rather one of notification and corroboration prior to taking
action. In consulting with the appropriate State or local authority, EPA should determine
whether the information upon which EPA intends to act is accurate. In assessing the scope of
action to be taken under §303, EPA may take into consideration any action taken by State or
local authorities. However, the existence of state or local action does not bar EPA from
proceeding under §303.
III. WHEN AND HOW TO APPLY SECTION 303
A. General Applicability
Action under §303 is appropriate when there is a reasonable cause for concern that public
health, welfare, or the environment is endangered. The degree of endangerment or actual harm
warranting action under §303 is a fact-specific evaluation that may be based on witness
statements, medical reports, expert opinion, or other evidence. However, in no case is a formal
risk assessment required. As discussed above, §303 is a precautionary authority, intended to be
used without delay “upon receipt of evidence” that an endangerment exists. The courts have
recognized that scientific proof of an endangerment does not always exist and have ruled in favor
of the Agency when evidence created a sufficient inference of substantial risk or actual harm. 48
EPA may rely on scientific studies, expert opinion, the conclusions drawn during the
promulgation of National Ambient Air Quality Standards and other rules, the findings of other
governmental agencies such as the Agency for Toxic Substances and Disease Registry (ATSDR)
or state environmental or public health agencies and other credible evidence. 49 For example, if
ATSDR issues a health consultation describing a public health threat posed by a particular
facility, the issuance of that document is sufficient for a §303 action. EPA should also utilize
witness statements such as affidavits from former or current employees or residents if the
‘ ‘ For further discussion on the effect of this pre-1990 provision, see pages 5,6, and 7 of the
EPA guidance document entitled Initiation ofAdministrative and Civil Action Under Section 303 of the
Clean AirAct During Air Pollution Emergencies, September 15, 1983.
48 In United States v. Vertac , 489 F Supp., 870, (ED. AR, 1980), the court ruled that the public
was endangered by the release of dioxin, which at the time was considered toxic under acceptable but
unproven medical theory. In Valentine , the court ruled that scientific proof of harm was not required
rejecting an argument that EPA’s failure to perform post-mortem analyses on each dead animal found at
the site precluded inference as to the cause of death
EPA discussed the possibility of establishing ambient thresholds that, if exceeded, would
clearly trigger the ability to use §303 authority. See, e.g., 59 FR 58958 (November 1994), 60 FR 12492
(March 7, 1995), and 62 FR 210 (January 2, 1997). This would merely establish clearly-recognized
thresholds, and would not preclude the use of 303 for lower ambient pollutant levels.
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pollution source is located near a residential area Statements from credible witnesses that can be
corroborated by ambient measurements or other information could provide a sufficient basis for
the issuance of the §303 order
Section 303 applies to a broad range of endangerment scenarios. It applies regardless of
whether a pollutant is regulated, or how it is regulated. 5 ° For example, endangerment from a
power plant’s emissions of sulfur dioxide could be addressed, even if the plant is in complianbe
with its regulatory emissions limits, or a hazardous air pollutant could be addressed, even if there
are no applicable regulations controlling the emissions. Section 303 can also apply to mixtures
of pollutants, even if a specific individual pollutant cannot be clearly associated with a potential
or observed effect 5 1 For example, emissions of hydrogen sulfide, a gas that does not normally
affect individuals with asthma, can oxidize into sulfur dioxide which aggravates the disease even
at relatively low concentrations Section 303 may also be used in combination with §114 to
require information from a source when, for example, the Agency is unable to characterize the
type and level of pollutants, or engineering information is needed to consider the appropriate
injunctive relief.
In addition to public health and environmental harm, it should be stressed that the section
can also be used when there is an endangerment to the public welfare. As discussed above, the
Act defines welfare broadly.
Action under §303 may also be taken notwithstanding the length of time an
endangerment has persisted For example, action may be taken to address unacceptable
emissions from a facility, even if that facility has been in operation for decades. A case in point
is EPA’s 1971 action to address particulate matter pollution from 27 steel mills in Alabama. The
steel mills had been in operation for many years before action was taken. It was EPA’s receipt of
evidence ( 303), i.e , the particulate matter data., that provided a reasonable cause for concern and
allowed EPA to initiate the action. Conversely, EPA may also take action after harm has
occurred to prevent a future recurrence. For example, EPA’s action against Minerec Mining
Company occurred after releases of hydrogen sulfide had sent people to the hospital. The action
was a precautionary measure, intended to prevent further harm.
Taken as a whole, EPA may use its authority under §303 to address a broad spectrum of
non-speculative adverse impacts, or diverse combinations of impacts, of air pollution. EPA may
consider one or more of the following general factors (this list is not exhaustive)
50 An administrative order or civil action may be taken “notwithstanding any other provision” of
the Act CAA Section 303
SI Section 303 applies to emissions of”air pollutants,” which is defined in §302 as” any air
pollution agent or combination of such agents. [ including] ..any precursors to the formation of any air
pollutant”
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o Toxicity and concentration of pollutant(s).
o Effects of mixtures of pollutants.
o Exposure pathway.
o Population sensitivity.
o Potential for acute exposure.
o Potential for chronic exposure
o Prevailing meteorological conditions and effect on potential exposure.
o Likelihood of endangerment, even if effects are not observed.
o Bioaccumulation of pollutant
o Visual signs of stress on vegetation.
o Sensitivity of birds, fish, and wildlife to pollutant.
o Effects on the public welfare, such as visibility impairment, crop damage, accumulation
of toxic metals in soil, loss of fishery resource from a toxic pollutant, deterioration of
property values, corrosion of structures, etc..
Examples of imminent and substantial endangerments under §303 could include, but are
not limited to
o A carcinogenic air pollutant from an industrial facility is found at concentrations of
concern for chronic human exposure.
o Sulfur dioxide emissions from a source or combination of sources that could, under
certain meteorological conditions common to the area, aggravate asthma in sensitive
populations.
o A toxic metal is emitted to the air, threatening the flora and fauna of a nearby natural
area.
o Pollution from a source results in damage to and deterioration of property.
o Insecticide spray often drifts into a nearby residential area
o A facility that is exempt from state implementation plan requirements emits high
concentrations of particulate matter.
o Pollution from a “grand-fathered” oil refinery adversely affects down-wind residential
areas.
Other authorities under the Act could also be applied in the above situations. The
decision to use §303 should be based primarily on whether such other authorities will address an
imminent and substantial endangerment in a timely manner. 52 Section 303 may also be necessary
when there are practical impediments to the use of other authorities in specific situations. For
52 The House Report on § 108(k) of the Air Quality Act of 1967, the predecessor of 303, states
that the provision “is not intended as a substitute procedure for chronic or generally recurring pollution
problems, which should be dealt with under the other provisions of the act “ H R. Rep No 728, 90”
Cong, I ” Sess 119 (1967) In Reilly Tar & Chemical , the court noted that while Congress did not
intent for EPA to use emergency powers authorities as a substitute for other statutory authorities, the”
broad range of response authorities provided by Congress . suggests that it intended to provide EPA
flexibility in choosing the appropriate statutory response
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example, §303 may be appropriate when a revision to a State Implementation Plan would take
too long to address an endangerment, or emissions of HAPs present an endangerment even
though the facility is in compliance with emissions requirements. Section 303 may also be
appropriate when there are no regulatory requirements that are currently applicable to a particular
source. The following discussion addresses some of these considerations.
B. Criteria Air Pollutants
Section 109 of the Clean Air Act directs EPA to promulgate regulations setting National
Ambient Air Quality Standards (NAAQS) for six criteria air pollutants. These standards are
intended to protect public health [ the primary standards], and public welfare [ the secondary
standards]. EPA periodically reviews the effects of criteria air pollutants and may from time to
time promulgate revised standards. Such revisions undergo notice and comment rulemaking.
The final Federal Register notice is EPA’s formal position on the effects of the relevant criteria
pollutant. In addition to the notice, there may be information in the rulemaking docket which
may be relevant to a specific situation
In addition, Subpart H and Appendix L of the State Implementation Plan regulations at 40
CFR Part 5 1 outline a phased emissions reduction program for air pollution “emergencies”
involving criteria pollutants and the health of persons. This “emergency episodes program” was
designed to supplement the NAAQS by providing additional protection in situations not
effectively addressed by them. The episode criteria and associated abatement actions are
preventative measures designed to ensure that certain pollution concentrations -- “significant
harm levels” -- never occur. Specific action levels are prescribed for sulfur dioxide, particulate
matter, carbon monoxide, ozone, and nitrogen dioxide. In increasing degrees of seriousness, the
levels are ‘alert,” “warning,” and “emergency” The “warning” and “alert” levels are designed to
ameliorate situations before the emergency state by application of moderate controls. The
emergency levels are those at which “significant harm to health” is expected to occur if action is
not taken to prevent air quality from deteriorating further. While the “emergency” level can be
clearly construed to present an imminent and substantial risk to public health, abatement
measures may be required at lower levels to prevent air quality from deteriorating further, or to
avoid less serious health effects that can occur at those levels. Moreover, the emergency
episodes program might not provide an effective response for sensitive populations, such as
children, the elderly, or people with asthma. 53 Also, these levels are not intended to protect
public welfare or the environment. Flexibility is essential and appropriate action should be taken
pursuant to §303 whenever necessary to prevent the significant harm levels from being reached.
C. Hazardous Air Pollutants
On January 2, 1997, EPA published a proposed “intervention level program” under the
authority of §303 to address high 5-minute sulfur dioxide peak levels in certain areas of the country. The
intent is to provide protection in addition to the ambient standards for asthmatic individuals [ 62 FR 210 -
222]
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Section 112 of the Act requires EPA to establish regulatory standards for emissions from
stationary sources that emit one or more of the hazardous air pollutants (I-LAPs) listed in the Act.
The EPA Office of Air Quality Planning and Standards (OAQPS) promulgates technology-based
(as opposed to risk-based) “maximum achievable control technology” (MACT) standards and
generally available control technology’ (GACT) standards governing HAPs under §112(d). In
addition, Congress provided for a means of future oversight to ensure that the desired protection
from hazardous air pollutants was indeed occurring. Under §112 (f), Congress required EPA to
promulgate more stringent risk-based standards within 8 years after promulgation of MACT
standards if promulgation of such standards is necessary to provide an ample margin of safety to
protect public health, or to prevent an adverse environmental effect.
OAQPS develops methodologies and procedures for determining residual risks to health
and the environment. However, since this process might not lead to additional risk-based
standards until 8 years after promulgation of a MACT standard, an imminent and substantial
endangerment could arise even if a facility was in compliance with the current MACT or GACT
standards. Section 303 would be an appropriate authority for addressing such risks.
In addition to the MACT standards, there are also efforts to address HAPs for specific
objectives, such as the Urban Area Source Program and the Great Waters Program. As of this
writing, there is a comprehensive effort underway to assess the risks posed by HAPs to urban
populations. OAQPS should be consulted about the risk posed by HAPs and to determine the
status of MACT, GACT, or risk-based standards before a §303 action is undertaken.
It should be noted that the criteria pollutants and HAPs listed in the Act or EPA
regulations are not the only air pollutants for which action under §303 may be appropriate. As
noted above, §302 defines “air pollutant” broadly. For example, a chemical that is used as a
pesticide may also be an air pollutant, and a circumstance could arise where the pollutant
presents an imminent and substantial endangerment. There may also be chemicals emanating
from industrial or other sources that are not listed under §112 which pose a cause for concern.
Under Congressional mandate, ATSDR produces Toxicological Profiles for a large
number of pollutants, including HAPs. Draft profiles undergo public comment and review
before final profiles are issued. The profiles typically include a comprehensive analysis of the
health effects from inhalation, oral intake, and dermal exposure, the mechanisms of action;
interactions with other chemicals; identity of susceptible populations; adequacy of the data, and
other information that may be pertinent to action under §303. Toxicological profiles are available
from the National Technical Information Service (contact: 800-552-6847).
The Occupational Safety Health Administration (OSHA) establishes standards for
exposure to air pollutants inside the workplace. Although not directly related to ambient air,
these standards provide one point for assessing the risk to the public when such pollutants, e.g,
various organics, become airborne in a community. Computerized health effects data bases, such
as Toxline and Chemline, may also be useful. These data bases are run by the National Library
of Medicine and may be accessed through the EPA Headquarters or regional office libraries.
IV. RELIEF AVAILABLE UNDER SECTION 303
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Section 303 authorizes EPA to “bring suit in the appropriate district court” to seek certain
relief It also authorizes the Agency to issue administrative orders in the event that “it is not
practicable to assure prompt protection...by commencement of such civil action... .“ If the
circumstances at a site require immediate action, an administrative order can be issued as soon as
EPA has evidence satisf ’ing the statutory criteria However, under §303, these orders “remain in
effect for a period of not more than 60 days” unless EPA brings Suit in district court prior to the
expiration of an administrative order, after which time the order remains in effect for an
additional 14 days or longer as may be authorized by the court. EPA coordinates closely with the
U.S. Department of Justice when issuing administrative orders. Such coordination ensures that
judicial action can follow in a timely manner if injunctive relief is required for more than 60
days.
The scope and nature of an investigation should be governed by the specific facts of the
matter and the underlying policy for the inclusion of 303 authority, that is, protection of the
public or the environment before any harm can occur. EPA presumes that, in reviewing a
decision to act, the courts will consider whether the agency acted rationally given the facts
available to it, and that the action was proportional to the endangerment presented. Thus, where
an acute risk is present and may occur at any time, EPA anticipates that a decision will be needed
quicker, and perhaps with less information, than in cases where the risk of harm is less acute or is
not likely to occur until some certain future time.
While EPA and other authorities are mindful of the potential adverse economic and other
impacts of a §303 order, the nature of this provision is such that where public health is at stake, it
may not be appropriate to delay issuance of an order while definitive information is developed on
such matters, or to wait until the cause, source, and extent of the risk is fully understood. Rather,
it may be appropriate in some instances to use §303 to provide sufficient protection to the public
or the environment while more information is developed and a permanent solution arises.
A. Judicial Action
1. Referral of a judicial action to the Department of Justice
Any judicial action under §303 would be brought by the United States Department of
Justice (DOJ) and requires referral of the action to DOJ. The form and length of a judicial
referral often vary depending upon the need for expeditious intervention by the district court.
For example, a “letter referral” that sets forth the critical information in a concise manner may be
appropriate in emergency situations. EPA should also seek DOJ involvement during the
information gathering and investigative process. DOJ’s involvement prior to formal referral
should facilitate the use of “letter referral” process or accommodate abbreviated judicial referrals.
Once an action is filed in district court, DOJ will take the lead in litigating the case in
accordance with EPA policies and the EPA1DOJ Memorandum of Understanding, and in
coordination with appropriate EPA participants.
As previously stated, administrative orders issued pursuant to §303 have a maximum 60-
or 74-day duration dependent upon whether EPA is seeking subsequent judicial action. If EPA
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and DOJ are unable to seek judicial relief upon immediate conclusion of the statutory time frame,
EPA should obtain a tolling agreement or other similar written document from the pollution
source to toll the 60 day clock The written agreement should also include a notification
provision requiring the source to notify EPA of any operational changes For example, if a §303
order curtails operations at a manufacturing facility, EPA should obtain a tolling agreement
extending the duration of the order and requesting that the pollution source provide notice to
EPA if it intends to resume full production.
2. Judicial relief available
Section 303 authorizes the courts to issue injunctions restraining activities that may
present an imminent and substantial endangerment or to take any action “as may be necessary.”
This implies that the judicial relief requested should be limited to that which is necessary to
address the endangerment. While exercising its discretion to issue an injunction, a court may
order either a specific action or a restraint from acting In addition, it may use its discretion to
order all or part of the relief requested or to order other relief that it deems appropriate The
means by which a court will order specific actions or restraints on action may include temporary
restraining orders, preliminary injunctions, and permanent injunctions. A temporary restraining
order is an order issued by a judge that prohibits specified activity or otherwise maintains the
status quo until the court can hold a hearing on the issue. A preliminary injunction is a judicial
order requiring a person to take or refrain from a specified action until the court can hold a trial
on the issue. A permanent injunction is a final judicial order, which is reached after a trial on the
merits, that requires a person to take or refrain from a specified action.
B. Administrative Orders
Section 303 confers upon EPA the authority to issue orders administratively without the
need for civil judicial action. These administrative orders may not be subject to pre-enforcement
judicial review. An order can include gjjy action as may be necessary to protect public health,
welfare, or the environment. For example, an order may require specific tasks such as installing
pollution control equipment, reducing production, modifying or shutting down process
operations causing the pollution, or closing the facility. When the conditions at the site are not
sufficiently defined to allow a concise description of the action required, an order may require
the source to immediately abate the emissions and undertake any analysis and follow-up action
that may be required to ensure that endangerment will not recur. 55 An order may also require the
respondent(s) to meet emissions performance standards or limits, rather than dictating the
specific remediation to be performed. Other actions may also be ordered as necessary.
Administrative orders issued under §303 are enforceable by the Administrator under the §113
Clean Air Act Amendments of 1990, Chafee-Baucus Statement of Senate Managers,
reprinted in Cong Rec. 516953, October 27, 1990.
See Trinity America Gorporation, d/b/a Trinity Foam of carolina, and Trinity Fibers of
Carolina, mc, OrderPur.suantio Sections 114 and3O3 of f/ic Clean A,rAct, EPA Region IV, October 3,
1997.
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provisions for administrative, civil judicial, and criminal penalties.
1. Record and content of administrative orders
EPA will establish an administrative record during the investigative phase to support the
issuance of a §303 order. In exigent circumstances this record need not be extensive, but should
be sufficient for a reviewing body to discern the reason for the action taken. Where time is of the
essence, it may be appropriate to draft a short memorandum at the time of the action and follow
that memorandum with a more detailed statement as time permits. The record should contain all
of the evidence EPA relied on in determining whether there is an imminent and substantial
endangerment, including (but not limited to) eye witness accounts, medical reports, scientific
findings concerning exposure effects, and other evidence as described above.
An Administrative Order under §303 should include the following elements.
• A statement of iurisdiction -- This statement should set forth EPA’s authority under §303
to issue the order and cite the delegation of this authority to the Agency official signing
the order.
• Findings of fact -- These should include the facts that demonstrate that the legal
requirements for issuing a §303 order have been met and that the actions ordered are
necessary to protect public health, welfare, or the environment.
• Conclusions of law -- This section will include conclusions that the legal requirements for
a §303 order have been met. In orders issued to more than one person, the order may
include a statement that each respondent is required to carry out each obligation of the
order and that failure of one or more respondents to comply does not affect the obligation
of the other(s) to perform.
• Order -- The order should identify the actions to be performed and when they are to be
completed.
• Enforcement -- The order should identify the potential sanctions for non-compliance.
This is not required but may encourage the respondent(s) to comply.
2. Standard and scope of review of administrative orders
As discussed above, EPA believes that administrative orders are not subject to
pre-enforcement judicial review However, if review is granted in the context of an enforcement
action, courts will overturn an agency order if it is deemed “arbitrary and capricious.” The
arbitrary and capricious standard gives administrative agencies broad discretion in deciding how
to administer the law.
In addition, courts will generally examine whether proper procedures were followed, and
will also consider due process concerns. Due process does not necessarily mandate an
evidentiary hearing prior to issuance or enforcement of the order Rather, the requirement is
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flexible and requires that respondents have an opportunity to comment on the evidence “at a
meaningful time, in a meaningful manner.” 56 Although there does not appear to be a clear
standard for how much process is enough, EPA should provide the respondent an opportunity to
comment on the order, and to confer with the Agency regarding compliance with the order,
unless there is reasonable cause for concern that procedural delays could result in harm.
56 Mailiews i’ E1d -idge, 424 U.S. 319, 333 (1976); United States v Seymour Recycling Corp,
679 F Supp 859, 864 (S D md 1987) (citation omitted)
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SECTION B DOCUMENT 5
Compliance Strategy for StationarY Sources of Air
Pollution
11(14/83
5
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M 9
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, D.C. 20460
November 14; 1983
OFFICE OF
AIR, NOISE AND RADIATION
SUBJECT: Compliance Strategy for Stationary Sources of
Air Pollution
FROM: A. Cannon, Acting Assistant Administrator
,k7 for Air and Radiation
TO: Alvin Aim, Deputy Administrator
Attached for your consideration is the final compliance
strategy for stationary sources of air pollution. This
document was developed by OAR’s Stationary Source Compliance
Division, working closely with the Office of Enforcement
Counsel and with review and input by other Headquarters
offices, Regional Offices, and selected State officials.
The strategy brings together in one document all of the
major thrusts of the stationary source compliance program,
with continued emphasis on resolution of those violating
sources meeting the definition of a “significant violator’ t .
I believe there is a general Consensus that the present
program is sound and should continue to serve us well in the
future. However, the strategy suggests three major changes
for the immediate future: more flexibility for States in
carrying out their inspection programs, increased use of
Continuous emission monitoring and similar techniques in
theAgency’s regulatory and enforcement programs, and
increased focus on sources violating volatile organic com-
pound (VOC) provisions in SIPs to reduce both ozone levels
and air toxicants.
The major point of disagreement arising during the
preparation of the strategy was the proposed revision to the
inspection guidance to States. Present guidance requires
annual inspection of major (Class Al) sources and biennial
inspection of certain smaller sources (Class Al sources).
The draft strategy suggested allowing States to develop
alternative inspection priority schemes whereby the resources
otherwise required to inspect Class Al sources could be
redirected to inspection of any combination of Class Al
Class Al, and other regulated sources, as air quality needs
warranted. Regional Offices were substantially divided
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on the extent to which present guidance should be revised.
After a careful consideration of all the comments, we believe
that the revision contained in the strategy strikes a reasonable
balaricel,etween EPAtS need for a nationally consistent dat a
base to monitor and evaluate the effectiveness of the program
and the needs of State and local agencies to make optima]. use
of limited resources to address their most serious air quality
problems.
The strategy identifies our plans to provide supplementary
detailed guidance for selected subjects to enhance the long-
term effectivene8s of the strategy. Attached is an identification
of guidance documents to be produced and anticipated completion
dates. -
As agreed in our October 12 briefing for you, the major
subject area needing further exploration is the problem of
assuring continuous compliance by air sources. The strategy
already identifies certain approaches worth pursuing (e.&.,
greater use of continuous emission monitoring and better
targeting of inspections) but we intend to do a separate, -
more extensive continuous compliance 8trategy as a follow-up
to the general strategy. Because of the complexity of this
issue, the Continuous compliance strategy cannot hope to
present “the answer” to the problem but will provide a compre-
hensive program for developing answers. We are targeting
to complete the continuous compliance strategy by February 27,
1984, and we are proceeding to add a commitment along these
lines to the Action Tracking System.
I thank you for your support in the development of this
strategy and look forward to your support in its implementation,
Attachments
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IDENTIFICATION OF ADDITIONAL GUIDANCE TO BE PREPARED
(1) enforcement of VOC standards - guidance on improving the
VOC inventory projected for completion by January 30,
1984. Additional guidance as needed.
(2) use of unannounced inspections by EPA - projected for
completion by September 30, 1984.
(3) use of continuous emissions monitoring excess emissions
data in the compliance program - projected for completion
by July 31, 1984.
(4) enforcement of asbestos demolition standards - projected
for completion by July 31 , 1984.
(5) enforcement of PSD requirements - projected for completion
by November 30, 1983.
(6) enforcement of benzene, arsenic, and radionuclides
NESHAPs - as necessary prior to promulgation.
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SECTION B DOCUMENT 6
Decision in United States v. Kaiser Steel Corp., No. CV-
82-2623-IH (C.D. Cal. Feb. 8, 1984)
NOTE: Contains interim guidance on application of
Method 9 to enforce SIP opacity standards.
03/27/84
6
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4i9
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
r WASHINGTON. D.C. 20460
1-,
4 L PRO
O rE o
MAR 2 7 I ORc M T
COMPtIAt E MOP uTORII G
MEMORANDUM
SUBJECT: Decision in United States v. Kaiser Steel
Corporation , No. CV—82—2623 IH,(C.D. Cal.
Jan. 26, 1984) / /
FROM: Michael S. Alushin
Associate Enforcement Counsel
Air Enforcement Division
Edward E. Reich, Director
Stationary Source Compliance Division
TO: Regional Counsels, Regions I—X
Directors, Air Management Divisions,
Regions I, III, V and IX
Directors, Air and Waste Management Divisions
Regions II, IV, VI—Vill and X
The purpose of this memorandum is to apprise you of the
recent decision in the Kaiser case. This decision r ay affect
the case development of other opacity cases where the facts are
similar. This memorandum also contains suggested guidance to
deal with similar fact patterns.
On January 26, 1984. Judge Hill of the U.S. District Court
for the Central District of California ruled from the Bench to
assess a civil penalty of $825,000 against Kaiser Steel Corpora-
tion and impose injunctive relief requiring the Corporation’s
one remaining blast furnace to achieve and demonstrate compli-
ance with the applicable requirements if and when operations are
resumed. The United States as the prevailing party will also
receive the ordinary COStS of litigating this case provided for
under Rule 54 of the Federal Rules of Civil Procedure. A copy
of the Judgment entered on February 8, 1984 and relevant portions
of the transcrLpt are attached.
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The complaint in this action was filed on flay 26, 1982 and
alleged violations of the California State Implementation Plan
requirement for visible emissions at Kaiser’s blast furnace cast
houses located in Fontana, California.l/ The Judge assessed a
civil penalty of $825,000 for 33 individual violations by Kaiser
of the California sip. In assessing the maximum civil penalty
under the Clean Air Act the Judge found that “ [ a] 11 in all, the
evidence indicates to me cavalier conduct on the part of defen-
dant for which it must pay the price.”
Summary of Decision
- The government argued that the appropriate manner in which
to prove a violation of Rule 50—A was to aggregate 2 / the 15 second
readings to deterrnine if opacities of equal to or greater than
20% were present for more than 3 minutes in an hour. In so
arguing it was the government’s contention that 40 CFR 52 .12(c),
1/ Rule 50—A, the visible emission Standard to which Kaiser was
subject in this case, is a time exemption standard that prohibits
emissions of 20% or greater opacity for more than 3 minutes in any
hour. No test method was prescribed for in the California sip.
2/ The terms “aggregate” or “aggregation” as used in this memorandum
refer to a way of analyzing opacity readings made at the plant to
determine compliance with the time exemption standard. Momentary
visible emission readings are made and recorded at 15 second inter-
vals by a trained field observer. The first step of data analysis
is to identify all readings that exceed the allowable opacity limit
(i.e., Rule 50—A, opacity equal to or greater than 20% occuring
within an hour). The second step is to count the number of
individual readings that exceed the allowable opacity limitation
in the SIP. The third step is to multiply the number of readings
that exceed the allowable opacity limit by l5—seconds, the time
period representing each reading, (i.e., 13 readings exceed
standard x l5—seconds = 3 minutes, 15 seconds). The last step is
to compare the amount of time in which the actual opacities
exceeded the allowable standard and the time exemption period in
the SIP. Under the time exemption period in the Kaiser case
(i.e., 3 minutes in any hour), the casthouses were alleged to be
in violation if opacity of equal to or greater than 20% exceeded
the time exemption period of 3 minutes in any hour.
The term “averaging” is used in this memorandum in reference to
the data analysis procedures prescribed in Method 9 Section 2.5
(40 CFR Part 60, Appendix A, Method 9 — Visual Determination of
the opacity of Emissions From Stationary Sources). Opacity is
determined by an average of 24 consecutive observations recorded
t 15—second intervals. The average is computed by summing the
opacity of the 24 observations anddividing by 24.
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portion of the regulations applicable for federal enforcement
of SIPs without test methods, required the use of only the “ ppro—
priate ” procedures within a Part 60 test method. The government
further argued that, in this case, only the certification and fieid
procedures of Method 9 were “appropriate” because the data analysis
procedure in Method 9 of six minute averaging was incompatible
with a time exemption standard of Rule 50—A which limited opacity
levels to less than 20% except for three minutes in an hour.
Judge Hill strictly construed the provisions of the regulation
at 40 CFR 52.12(c). He found that 40 CFR 52.12 directed EPA to use
a test method in Part 60 when no method was included in the SIP,
and in this case that meant Method 9. He concluded that all pro—
ce dures of Method 9,3/ including the data analysis requirements,
must be complied with in order to establish a violation under this
test method. The-Judge noted that this case was d...different
from Dormer Hanna , where the government did not bring itself and
agreed that it didn’t bring itself within the literal require—
rnents of Method 9, asserting instead a power to disregard Method
9 and prove violations in some other way.” Given his construction
of Method 9, he found that a violation of Rule 50—A could be esta-
blished only if all procedures of Method 9 were followed.
The Judge ruled that the emissions at the Kaiser blast furnace
casthouse were continuous because they lasted for more than six
rr “ttes in duration. The Judge also ruled that the Preamble to the
Ft.- eral Register publication which in part discussed the inapplica-
bility of Method 9 to intermittent emissions with a time exemption
standard was not binding on the government as an authoritative
interpretation of existing law and regulations, but even if it
were it would not be persuasive here because the Kaiser emissions
were continuous in duration. 4 !
The government recomputed its visible emission observation
sheets using six minute averaging and was able to show that 33 of
the 41 Method 9 observations were greater than 27.5% opacity.
3, Method 9 is chiefly composed of 3 main sections — certification
proceedures for visible emission observers, field procedures for
viewing emissions and the data reduction or averaging procedures.
4/ The 1974 preamble to Method 9 states: “EPA recognizes that
certain types of opacity violations that are intermittent in
nature require a different approach in applying the opacity
standards then this revision to Method 9.”
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Judge Hill rejected the government’s arguments that the potential
maximum positive error of 7.5% should not be automatically sub—
stracted from the opacity readings, given that Method 9 specifi—
cally states that the accuracy of the method must be. taken into
account when determining possible violations of appliable Opacity
standards and the potential maximum positive error is the only
accuracy benchmark listed.
The Judge further concluded, based on his prior rulings of
strictly construing 40 CFR 52.12(c) and Method 9, that admissions
by Kaiser and expert testimony about inability to comply were
ncompetent evidence 5 / for purposes of proving a violation, but
could be used as corroborative evidence of an alleged violation
otherwise provabi eunder Method 9. Expert testimony and admis-
sions, according to Judge Hill, could not be used to prove that
Kaiser continuously violated the SI?.
The defendant raised the affirmative defense of technological
and economic infeasibility. The government successfully argued
based on the precedent of the Friends of the Earth v. Potomac
Electric Power Co. , 419 F. Supp. 528 (D.D.C. 1976) and the Supreme
Court decision in Union Electric Co. v. EPA , 427 U.S. 246 (1976)
that these were not total defenses to a civil action brought under
the Clean Air Act. The Judge made an alternative holding and
nding that even if these were total defenses the burden is on
defendant and it had not carried the burden by a preponderance
of evidence.
In considering the penalty portion of the case the Judge
ruled that each blast furnace casthouse was a separate source of
emissions each subject to a maximum of $25,000 per day of viola-
tion. He based his rulings on the language of Rule 50—A which
applies to “...any single source...” and Section ].13(b)(2) which
authorizes a civil penalty for any person who violates “...any
requirement of an implementation plan... . “
The government requested costs of lLigation pursua t to
Section 113(b). Judge Hill found this provision of the statute
to be absolutely unintelligible as a basis for awarding costs to
the government “i would not and I could not, use such an irra-
tional and unintelligible sentence as the basis for sanctioning
or punishing anybody.”
5/ “Incompetent evidence” refers to the legal relevance of the
evidence in terms of admissability.
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Interim Guidance Procedure
This guidance on the use of Method 9 should be followed for
those cases involving the enforcement of a visible emission time
exemption standard in a SIP which does not contain a-specific
test method and where, for federal enforcement purposes, Method 9
is used based on the direction of 40 CFR 52.12(c). This guidance
is not intended to suggest that the government should abandon the
positions argued in the Kaiser case. Its purpose is to preserve
the ability to prevail on alternative grounds should a judge in
another case follow the same analysis as Judge Hill. A technical
guideline on alternative opacity data reduction procedures for
use with time exemption opacity rules is being developed by the
Office of Air and Radiation and when published will supercede
this interim guidance.
Visib e emission observers should not reduce the data they
collect in the field. They should forward the standard visible
emission observation sheets to the appropriate officials in the
Region. An observer should be instructed to record opacities for
at least one hour, or in the alternative, to record opacities for
a complete cycle of the emissive operation being observed, such
as a casting operation at a blast furnace casthouse.
The attorneys and technical personnel reviewing the visible
— issiort observation sheets should first aggregate all the 15
.. — cond opacity readings that equal or exceed the allowable levels
to determine compliance with the time exemption period in the SIP.
Where the 15 second opacity readings show a violation when aggre-
gated, all 6 minute blocks of 24 consecutive observations con-
taining such readings should be averaged as prescribed under
Method 9. The strongest case possible for sustaining a viola-
tion, given the Canner Hanna and Kaiser decisions, would be when
both the aggregation and averaging of the data show a violation.
This period would consist of any 24 consecutive observations that
contain opacities, when averaged or aggregated, would exceed the
opacity level in the standard. A set of observations may contain
rie or more data gaps or interferences for which no opacity is
recorded. In the Kaiser case the attorneys gave a 0% opacity
value to those 15—second opacity blocks that had no opacity
record because of interference obstructing a clear line of sight.
Using a 0% opacity in the averaging of the set of observations is
very supportable given that the bias is in favor of the source
being observed. Additionally the data gap could be filled by a
statistical procedure such as regrouping of data or substitution
of a derived value (outlier test), but such proof may reqoire the
use of an expert or lay expert in statistics to testify about the
validity of such practices.
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— —
Tne R g1onai legal anc :ecnricaL per3onnei s c o be a are
f the potential evidentiary proo.ems associated it 1i 1’ 3t n;
an opacity case with facts like the Kaiser case when opacity
read:ncs do nct show a v:clat:cn of tria a pl cabie stancard by
both the averaging and agcregatin; data reduction tecnn cues.
For this reason, we recommend tnat tne egion rev e ’ tne v’s:bia
emission ooservations of each case oresentina a factual sit a—
t on similar to Kaiser to determine wnether the violation can
be proved by both the aggregating and averaging data reduction
procedures.
Attorneys in opacity cases should not concede the issue of
wnether 7.5% error should be subtracted from eacn 6 minute aver-
age. The attorneys, if the facts warrant such action, should
provide in the form of an exh bit to be followed by testi onv
of an ooacitv expert the a-ialvaia of t e Metnoc 9 data base,
anus de onstrat n cc c range of ozen: a max :nu . pcsi:: ;e and
necat ve er:ors. 6 /
The Agency is currently working to evaluate the need for
test methods for time exemption standards, but in the interim
it is essential that a vigorous enforcement effort continue to
ensure compliance with visible emission standaçds. This memo
is not intended to set out a complete guideline or prov:de
• ‘ oe :’a. o_e ors : sc t a:ser
5Lcfl Out ratr.er to Drinc sone of one ncre pert nen: Oi E to
he attent:on of other EPA staff :v;clved sar :ar cases.
If you have any questions recarding tne Kaiser case or
this interim guidance, please contact Richard Ostrov of the Air
nforce ent Division of the Off:ca of fo:ca e t a d Ccl :—
ance Yon:tcr: at 3S—23 3.
6 The government’s expert witness on o acity, in the Kaiser
case, testified based on his work with the Method 9 data base,
that at a 99% confidence level the positive bias of a 6 minute
average was 7.5%, a’ published, but the negative bias was even
greater (13%). Further, he stated that at the 95% confidence
level the positive bias was 5%, as pubi shed, but again the
negat:ve bias was, at 9.4%, greater. Finally, he test f :ed
that tne confidence level at 51%, or at a c:v:l standard of
proof, was —.6%. In other wcrds, the expert witness testified
that there is a net negative bias inherent in Method 9. The
type of testing presented by the expert along with an exhibit
demonstrating tne aivaiS is perneps the cest way o present:;
th a fact a! 1ZS .
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SECTION B DOCUMENT 7
Guidance on Complying with the Notification
Requirements in Section 113(a)(1) and l13(a)(4) of the
Clean Air Act
06/28/85
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S’i,
,.,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 2O4 O n 4 ’
$p • 12
D42 81
OFACE OF E’FORCF%IF\1
A P. 0 CO P1 1 F
MQ%ITORI%G
MEMORANDUM
SUBJECT: Guidance on Complying with the Notification
Requirements on Section 113(a)(1) and 1l3(a)(4)
of the Clean Air Ac /)
FPOM: Courtney M. Price — I Y A _
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Regional Counsels
Regions I—X
Air Management Division Directors
Regions I, III, V, IX
Air & Waste Management Division Directors
Regions II and VI
Air, Pesticides & Toxics Management Division Director
Region IV
Air & Toxics Division Directors
Regions VII, VIII and X
This memorandum provides you with guidance on implementing
the notification provisions contained in Sections 113(a)(1) and
113(a)(4) of the Clean Air Act. It is intended to emphasize the
requirement of Section ]13(a)(4) to issue, in the case of corpo-
rations, a copy of the notification to the ‘appropriate corporate
off icers. ’ The guidance recommends procedures for issuing notices
of violation under Section 113(a)(l) and for implementing the
copying provision in Section 113(a)(4).
The notice provisions in Section 113 are general in nature,
giving EPA a great deal of latitude. This guidance is, therefore,
not intended to set inflexible standards, but rather to suggest
practices that might encourage expeditious resolution of viola-
tions and to suggest practices that might avoid challenges to
enforcement actions based on alleged notice deficiencies.
Thus, although the recommendations are based upon ananalysis
of existing law in this area, the specific procedures suggested
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are not necessarily compelled by the Act or judicial decisions.
By recommending specific procedures this guidance is not meant
to imply the existence of jurisdictional or due process limita-
tions Ofl EPA’S enforcement authority. This guidance does not
address issues regarding EPA’S enforcement discretion once an
NOV has been issued.
Sununa ry
This guidance recommends that the notification requirements
of Section 113(a)(l) be met by the issuance of a written notice
of violation (NOV), and that the NOV be sent to the highest
ranking officer or employee at the violating facility known to
EPA. It recommends that the notice copying requirement of Section
113(a)(4) be met by sending copies of the NOV to specified corpo-
rate officers, or in the case of a foreign corporation (i.e.,
one not incorporated in the state), by sending the notice to the
registered agent of record and preferably also to appropriate
officers in the corporate headquarters, The guidance clarifies
that issuance of an NOV should not be delayed because of difficul-
ties in implementing the Section 113(a)(4) copying procedures.
The guidance recommends that the NOV specify the State implemen-
tation plan (SIP) provision(s) violated, advise the source of
the opportunity to confer with EPA, describe the emission points
in violation, and indicate by a cc. notation that copies of
the NOV were sent to the State, and, in the case of a corporation,
to appropriate officers.
I. Effect of the Notice
A. Section 113(a)(l) Notice
Section 113(a)(].) of the Clean Air Act (CAA or the Act),
42 U.S.C. S7410(a)(l), requires EPA to notify any person found
by the Admir istrator to be in violation of a SIP. Specifically,
Section 113(a)(l) provides:
Whenever, on the basis of any information available
to him, the Administrator finds that any person is
in violation of any requirement of an applicable
implementation plan, the Administrator shall notify
the person in violation of the plan and the State in
which the plan applies of such finding. [ emphasis addedj
EPA has interpreted the mandatory requirement to give notice
as triggered only after a discretionary finding has been made by
the Administrator that a violation exists. The courts have upheld
the Agency’s interpretation, City of Seabrook v. Costle , 659
P.2d 1371, 1374 (5th Cir. 1981) [ obligation to make a finding not
mandatory); see, Wisconsin Environmental Decade, Inc . v. Wisconsin
Power and Light Co. , 395 F.Supp. 313, 317—320 (W.D. Wis. 1975);
West Penn Power Co . v. Train , 522 F.2d 302 (3d Cir. 1975); United
—2-
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States v. Lehigh Portland Cement Co. , C.A. No. 84—30 30, slip
opinion at 6 n.4 (N.D. Iowa December 12, 1984) [ Order Denying
Defendant’s Motion to Dismiss] (Attachment 1); United States v.
Chevron , C.A. No. EP—80—CA—265, slip opinon at 3 (W.D. Tex.
June 10, 1983) (Order Denying Defendant’s Motion to Dismiss or
for Abstention] (Attachment 2).
Notification under Section 113(a)(1) is referenced in Sec—
tiort 113(b)(2), which provides in relevant part that:
The Administrator shall in the case of any person
which is the owner or operator of a major stationary
source, and may, in the case of any other person,
coimnence a civil action . . . whenever such person ——
• . .
(2) violates any requirement of an applicable imple-
mentation plan • . . (B) more than 30 days after
having been notified by the Administrator under sub-
section (a)(1 ) that such person is violating such
requirement(.J (emphasis added]
Notice is also referenced in Sections 113(a) and 113(d)
(relating to the issuance of administrative orders), and Section
ll3(c)(l)(A) (relating to the initiation of a criminal action).
Issuance of a notice and the lapse of 30 days is not, however,
always required prior to the initiation of an action to address
SIP violations. See 42 U.S.C. S7603 (Emergency Powers); see
also , 42 U.S.C. 57413(b)(3) (Section 112(e) (NESHAPs) and Section
111(e) (NSPS) violations].
B. Section 113(a)(4) Notice
Section 113(a)(4) of the Clean Air Act, 42 U.S.C. S7413(a)(4),
requires in the case of a corporate violator that copies of the
Section 113(a)(l) notice ‘be issued to appropriate corporate
off icers. ’ The issue of whether the 113(a)(4) notice copying
requirement is a jurisdictional prerequisite to a Section 113(b)(2)
civil action was raised by the defendant in United States v.
Lehigh Portland Cement Co., supra (Attachment 1). In Lehigh the
defendant sought a dismissal arguing that EPA’S NOV was insufficient
in that it wa served only on the plant manager who, defendant
argued, is not an ‘appropriate corporate off icer ’ within the
meaning of Section 113(a)(4). In support of its argument defen-
dant cited 40 C.F.R S122.22, ‘Signatories to CWA NPDES Permit
Applications,’ which defines the term ‘responsible corporate
off icers ’ in part as a president, secretary or treasurer.
The Court in Lehigh found the CWA regulation inapposite, and
denied defendant’s Motion to Dismiss holding that a plant manager
is an appropriate corporate officer within the meaning of Section
113(a)(4). In addition the Court stated in dicta that the
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Section ll3(a)(4) notice copying requirement was not a jurisdic.
tiona]. prerequisite to a civil action pursuant to Section 113(b)(2).
II, Recoended NOV Procedures
A. Written Notice
There is case law supporting the position that the
Section 113(a)(].) notice requirement can be met where a Source
has received substantial or constructive notice from EPA of-a
violation. Nevertheless, as a general practice the Regions
should issue written notices. Moreover, when read together,
Sections 113(a)(],) and 113(a)(4) imply that the notification
should be issued in writing in the case of corporate Sources in
order to comply with the copying requirement in Section 113(a)(4) .l/
While substantial or constructive notice may be sufficient, writ-
ten notice clearly establishes the authority to proceed adminis-
tratively and provides evidence of when the 30—day period provided
for in Sections 113(a)(] .) and 113(b)(2) begins to run. This gui-
dance, therefore, recoim ends that all notices be given in writing
in the form of an NOV.
B. Contents of the NOV
The Act requires the Administrator to notify the violator
and the State of a finding of violation of any requirement of a
SIP. What a finding consists of and what degree of specificity
might be required in the notice is unclear, 3/ but the the lan-
guage of the Act suggests that at a minimum EPA should identify
J Written notice of a violation is not explicitly required by
Section 113(a)(1). Cf. , Sections 126(a)(],) (Interstate pollution
abatementj, l6l(b)(1)T ) (State notice to redesignate PSD areas],
EPA has promulgated regulations at 40 C.F.R S54.3(b), that
specify in detail the contents required for citizen suit notices.
Specifically, the regulations require that the notice include:
sufficient information to permit the recipient (i.e.,
the Administrator, the State and the alleged violator]
to identify the specific standard, limitation, or
order which has allegedly been violated, the activity
alleged to be in violation, the person or persons
reepongjbjle for the alleged violation, the location
of the alleged violation, the date or dates of such
violation, and the full name and address of the person
giving the notice.
It is recommended that this provision be used as guidance in
drafting NOVS. This degree of detail is, however, not required
for EPA notices, but applies only to citizen suit notices, This
—4—
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the violated provision(s) of the SIP. The legislative history
on Section 113(a)(l) is no more specific.
Some indication of what should be Contained in an NOV can be
gleaned from the -purpose of the Section 113 notice requirement.
The Third Circuit Court of Appeals discussing this issue stated
that the notice requirement is intended to ntake the recipient
aware that the ‘definitive’ regulations are not being met and to
trigger the statutory mechanism for informal accommodation which
precedes any formal enforcement measures. West Penn Power Co .
v. Train , 522 D.2d 302, 311 (3d Cit. 1975). Thus, in addition to
citing the SIP provision violated, the NOV should afford the
source an opportunity to confer if an administrative order
is contemplated .3
In addition, it Is recommended that the notice describe the
emission points in violation of the SIP standard. Such informa—
tion might assist the source in responding to the NOV and coming
into compliance expeditiously. The notice need not, however,
describe the violation with specificity. Requiring a complex
(footnote 2 continued)
is due to the unique purp ses citizen suit notices are intended
to serve. Specifically, Congress intended the citizen suit
provision of the Clean Air Act to provide a limited waiver of
sovereign immunity. Moreover, since citizen suits might force
EPA to act, the notice requirement was intended to be strictly
construed in order to ensure the opportunity of Agency resolution
prior to the commencement of litigation. NRDC v. Train , 510 F.2d
692 700, 724 (D.C. Cir. 1974), as modified (1975); People of the
State of Calfornia v. Dept. of E e Navy , 431 F.Supp. 1271, 1278
(M.D. Cal. 1977); City of Highland Park v. Train , 519 P.2d 681,
690 (7th Cir. 1975); NRDC v. Callaway , 524 F.2d 79, 84 n.4 (2d
Cit. 1975).
3/ The Act does not require that an opportunity to confer be
iven before the Agency can initiate an enforcement action pursuant
to Section 113(b)(2). An opportunity to confer is only required
under Section 113(a)(4) before an administrative order can take
effect. A statement in the NOV offering an opportunity to confer
fulfills the Section 113(a)(4) prerequisite, even if the admini— *
stratjve order is not issued until after a conference takes
place. Nor is the opportunity to confer restricted to the 30—
day period after the notice has been given. Holding the confe-
rence earlier rather than later is, however, to the advantage of
EPA since such meetings often facilitate EPA’S ability to obtain
information as well as early resolution of the violation. Some
Regions include a statement in their NOV5 limiting the opportunity
to confer to a specified number of days, e.g. 10 days of receipt
of the NOV.
5—
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notice would only cause delays in enforcement in contravention
of the Congressional intent to expedite enforcernent. 4 /
Finally, in the case of corporate violators, the notice
should name the corporate officers who are sent copies of the
NOV. This might promote expeditious correction of the violations.
It would also help document compliance with Section 113(a)(4).
( See discussion below.)
C. Persons Who Should Receive the Notice -
Section 113(a)(l) requires that notice be given to any
apersonw found to be in violation of a SIP. The term person is
defined broadly in Section 302(e) of the CAA as including uan
individual, corporation, partnership, association, State, munici-
pality, political subdivision of a State, and any agency,
department, or instrumentality of the United States and any
officer, agent or employee thereof . 42 U.S.C. ç7602(e) [ empha-
sis added).
The wording of the Act, therefore, implies that a Section
113(a)(l) notice is technically sufficient if it is given to any
known officer, agent or employee of the source. See, U.S . v.
Lehigh Portland Cement Co.., supra (Attachment 1). This is impor-
tant since, as a practical matter, it may be difficult for EPA
to identify the senior executive officer of a source with speci-
ficity. It is recommended, however, that NOVa be issued to the
highest ranking officer, agent, or employee at the violating
facility known to EPA. This will increase the likelihood of the
violation being corrected by the source expeditiously.
4, By analogy to the citizen suit notice provision it appears
that the courts take a pragmatic approach in ascertaining the
sufficiency of a notice. Baughman v. Bradford Coal Co. , 471
F.Supp. 488, 490 (W.D. Pa. 1977), aff’d 592 F.2d 215; people of
the State of California v. Dept. of the Navy, supra; see Metro-
politan Washington Coalition or Clean Air v. Distric f Columbia ,
373 F.2d 1089 (D.C. Cir. 1975), revd on other grounds 511 F.2d
809 (D.C. Cir. 1975); Susguehanna Valley Alliance v. Three Mile
Island , 619 F.2d 231 (3d Cor. 1980), cert . denied 449 U.S. 1096
(1981); NRDC v. Callaway, supra; but see City ?Nt hland Park
V. Train, supra; Massachusetts v. U.S. Veterans Administration ,
541 F.2d 119 (let Cir. 1976). The Court in South Carolina Wild-
life Federation v. Alexander , 457 F.Supp. 118 (D.S.C. 1978),
indicated that deficiencies in the notice that did not interfere
with the purposes of the notice requirement would not bar a
citizen suit. 457 F.Supp. at 123. SimIlarly, in People of the
State of California v. Department of the Navy , 431 F.SUPP. at
1278, the Court upheld a deficient citizen suit notice since the
recipients were effectively informed of the violations alleged,
the standards violated, the locations of the violations, atc.
—6—
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Similarily, although the requirement in Section 113(a)(4) to
issue copies of the notice to appropriate corporate officers is
not a jurisdictional prerequisite to a civil action, care should
be taken to comp]y with this requirement. Regions should be able
to identify the corporate officers through formal (e.g. Section
114) or informal contacts with the source, by contacting the
State environmental agency, by checking corporate directories, or
by calling or writing to the State office responsible for carpo-
rate registrations. (The State corporate registration office is
typically identified in the State corporate code.) In cases in-
volving domestic corporations Regions are urged to send copies
of the NOV to the corporate president, to any vice—president
identified as responsible for environmental matters, to the
general counsel of the corporation, and, in cases where the
plant manager is the highest corporate officer, to the registered
agent. In the case of a foreign corporation (i.e. one not incor-
porated in the State), a copy of the NOV should be sent to the
registered agent of record at the State corporate registration
office, and to any other corporate officers you can identify as
suggested above. The original NOV should show a ‘cc.’ for all
persons copied.
Although the Court in United States v. Lehigh Portland Cement
Co., supra , held that the notice copying requirement in Section
113(a)(4) was satisfied in that case by giving the NOV to the-
plant manager, following the additional steps reco ended above
may assist in expediting a corporation’s response to the NOV.
For the same reason the copies of the NOV should ideally be
issued to the corporate officers at the same time the NOV is
given to the source. Regions should not, however, delay issuing
the NOV if you cannot readily identify the appropriate corporate
officers.
D. How to send the Notice
Section 113(a)(l) provides that, once the Administrator makes
a finding that a violation exists, EPA shall give notice to the
person in violation of the plan and to tile state. In addition,
Section 113(a)(4) requires the Administrator to issue copies of
the notice to appropriate corporate officers. The Act does not,
however, specify a procedure for issuing the notice. 5 ! Neverthe-
less, we recoi nend that NOV5 be sent by Certified Mall Return
,f Compare Section 113(a)(2) of the Act which requires ‘public’
notice when the Administrator makes a finding that a State has
failed to effectively enforce a SIP. Similarily Section 115(a)
requires that the Administrator give States ‘formal’ notices of
SIP deficiencies to correct international air pollution. The
absence of a public or formal notice requirement in Sections
113(a)(1) and 113(a)(4) of the Act is, therefore, apparently not
the result of omission. Nor is personal service of process such
—7—
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Receipt Requested, to help establish evidence that the notice
was given.
III. Conclusion -
Please call Rachel Ropp (FTS) 382-2859 for any explanations
of this guidance, to discuss issues raised, or if you want addi-
tional information or examples. -
Attachments
(footnote 5 continued)
as is provided for in Rule 4, Ped.R.Civ.P., required for a notice
to comply with Sections 113(a)(l) and 113(a)(4) of the Act. Rule
4 service of the complaint would be required in any event if the
Agency initiated a civil action.
—8—
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ATTACHMENT I
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F I]e e/ eB0
IN THE UNITED STATES DISTRICT cotM R i*piog I4DOTftS OffiCE
- FOR THE NORTHERN DISTRICT OF IOW 0 D 1T1IC1 01 IOWA
CENTRAL DIVISION -
DEC 121984
w j x.as
UNITED STATES OF AMERICA, ) ____________
DIPjF!
Plaintiff, ) NO. C 84—3 0
)
vs. ) ORDER
LEHIGH PORTLAND CEMENT ) RECE’IV
COMPANY, )
)
Defendant. ) EC121SM
This matter comes before the Court on defendant’ s mo 4o
dismiss. A hearing was held on August 9, 1984, in Fort Dodge,
Iowa. After carefully considering the briefs and arguments of
both parties, this Court denies defendant’s motion to dismiss.
This action involves the implementation of the Clean Air Act.
Under this Act, a state is to adopt a State Implementation Plan
(sIP) which would require the state to satisfy the Act’s National
Ambient Air Quality Standards (NAAQS). The Act provides for both
federal and state enforcement of the SIPs. This action arises
from the federal enforcement of the Iowa SIP.
Defendant is a cement manufacturing company with its
corporate headquarters in Allentown, Pennsylvania. One of its
thirteen plants ii located in Mason City, Iowa and is the plant
which is the subject of this suit. On March 16, 1983, plaintiff
notified the Iowa Department of Environmental Quality and the
plant manager of defendant’s Mason City plant of violations of SIP
fugitive dust regulations. Plaintiff brought this action on
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April 4, 1984. Previous to plaintiff’s notice, the Iowa
Department of Environmental Quality had given notice to defend-
of SIP fugitiv, dust regulations violations and on March 5, 1,
the Department and defendant entered into a consent order
concerning the violations. - -
Defendant’s motion to dismiss is directed at plaintiff’s
first claim for relief (i V13—l7 of plaintiff’s Complaint), which
allege fugitive dust violations. Defendant stated in a letter to
this Court dated August 27, 1984 that it does not contend that
plaintiff’s second claim for relief (111118—19 of its Complaint),
which alleges violation of new source performance standards, is
subject to dismissal.
In its motion to dismiss, defendant presents three arguments.
First, defendant claims that the copy of a notice of violation to
appropriate corporate officers, required by 42 U.S.C. c7413(a
is a condition precedent to the bringing of an action imder 42
U.S.C. 7413(b)(2), and the notice given by plaintiff was
defective and constituted insufficient process and insufficient
service of process on defendant. Second, defendant claims that
the doctrine of abstention applies, and the Court therefore lacks
jurisdiction. Finally, defendant argues that the Iowa Department
of Environmental Quality’s consent order precludes plaintiff from
bringing this action because of issue and claim preclusion.
Defendant also originally argued that plaintiff lacked standing to
bring this action, but conceded this argument at the hearing.
2
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I.
In support of its argument that plaintiff failed to give
defendant adequate notice, defendant relies on 42 U.S.C.
§7413(a)(4), which states that when there is a corporate violator,
a copy of the notice of violation shall be issued to appropriate
corporate officers. Defendant argues that because only defendant’
Mason City plant manager received notice, and the plant manager is
not a corporate officer, plaintiff failed to sufficiently serve
defendant notice. In support of its argument, defendant also
cites a regulation of plaintiff’s 1 that defines “responsible
corporate officers” as including only president, vice -president,
secretary and treasurer, and prior case law, which has found the
failure to give notice of violation a jurisdictional defect in
private citizen actions brought under the Clean Air Act.
In response to defendant’s argument, plaintiff first states
that it complied with the statute by giving notice to the plant
manager because there is only a requirement for the EPA to “notif T
the person in violation” whic h is found in §7413(a), 2 and “person”
140 C.F.R. §122.22.
242 U.S.C. §7413(a)(l) states: “Whenever, on the basis of
any information available to him, the Administrator finds that any
person is in violation of any requirement of an applicable iraple—
inentation plan, the Administrator shall notify the person in
violation of the plan and the State in which the pl applies of
such finding. If such violation extends beyond the 30th day after
the date of the Administrator’s notification, the A inistrator
may issue an order requiring such person to comply with the
requirements of such plan or he may bring a civil action in
accordance with subsection (b).
3
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may be any officer, agent, or employee thereof. 3 According to
plaintiff, subparagraph (a)(4), the section that states a cops
the notice of violation shall be issued to a corporate office a
not jurisdictional because 57413(b), which sets out the enforcement
procedures, states that the EPA may bring suit against a “person”
more than thirty days after being notified wader (a)(l) and makes
no mention of (a)(4). Secondly, plaintiff claims that even if
(a)(4) is a jurisdictional requirement, it has met the requirement
of issuing notice to appropriate corporate officers when it gave
notice to the Mason City plant manager because the ordinary
meaning of a corporate officer includes a plant manager. Thirdly,
plaintiff argues that if the Court does not accept the position
that a plant manager is a corporate officer, plaintiff satisfied
the (a)(4) requirement by issuing a notice of violation to the
defendant’ s corporate headquarters in Pennsylvania on August
1984 (twelve days after this Court held a hearing on this matter),
since no prejudice resulted. Finally, plaintiff argues that the —
cases defendant relies upon in arguing that there was a defective
notice are inapplicable because they deal with a different section
which involves citizen’s suits in which no notice of any kind was
given.
It isevident from the arguments presented by both parties
that several questions arise when considering the sufficiency of
the notice to the defendant. A major question is whether a plant
manager is an “appropriate corporate officer” wider 57413(a) (4).
42 U.S.C. 57602(e).
4
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If this Court were to find that a plant manager is an “appropriate
cbrporate officer,” plaintiff would have satisfied the notice
requirements of 37413, since defendant’ a plant manager did receive
a notice of violation. In determining this question, the Court
could find no statutory language nor legislative history which
excluded a plant manager from the category of “appropriate
corporate officers.” The Court further notes that the general
definition of a (corporate) officer would include a plant manager
because an officer is one who holds an office of authority or
trust. Websters New Collegiate Dictionary (1979). As the head of
the Mason City plant, defendant’s manager certainly held a
position of authority or trust. With regard to the EPA regulation.
which definition of “responsible corporate officer”- fails to
include plant managers, this Court is unpersueded such a
definition applies here or should exclude a plant manager. First,
it was not formulated by Congress but rather by the EPA to be
applied to the National Pollutant Discharge Elimination System —
Program pursuant to the Clean Water Act, which is unrelated to the
statutory section in question here. Moreover, its definition is
more limited because it defines “responsible” corporate officers
as opposed to “appropriate” corporate officers. Although the
Court thinks that plaintiff might have been more cautious in
issuing a copy of the notice to the “appropriate corporate
officers,” its service of notice to defendant’s Mason City plant
manager was sufficient because t je plant manager was an “appropriat
corporate officer.” By finding that plaintiff issued a copy of
the notice of violation to en “appropriate corporate officer,”
5
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there is no need to determine the other questions raised by t’&e
parties relating to the sufficiency of notice, because they a
premised on the assumption that the Mason City plant manager as
not a corporate officer. 4
II.
In its argument that the Court should abstain from hearing
this case, the defendant finds the factual situation before this.
Court to be similar to that of other cases in which courts have
abstained. In rejecting defendant’s claim, plaintiff relies on
the applicable statutory sections, the statute’s legislative
history, and case law..
In its reading of the statute, which gives both federal and
state courts jurisdiction to enforce provisions of a state SIP
this Court finds no limitation on the EPA (or any other federa.
government agencies) in bringing an action when there is or was
already a parallel state proceeding. This Court notes as
indicative of Congress’ intent to avoid any bars on federal
agencies in bringing an action the repeal of a statutory’ section
4 Although this Court does not need to decide if the
§74l3(a)(4) requirement of issuing a copy of a notice of violation
to the appropriate corporate officers is a jurisdictiqn jl require-
ment, it notes that in United States v. Chevron , No. P-8O-CA-265
(W.D.Tez. June 10, 1983), the Court found that the oriiy requirement
for bringing an action under §7413 were (1) notice to the alleged
violator, and (2) a lapse of thirty days. Accordingly, under
Chevron , which appears to be the only case to address the §74l
jurisdictional requirements, the (a)(4) requirement is not
jurisdictional.
6
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which stated that federal enforcement was perm’.tted only when
violatjon.s resulted from a state’g failure to take responsible
grounds to ez forae its standard_s. Air Quality Act of 1967,
81 Stat. 453, 493. The case law also supports plaintiff ’ 5
position. In United States v. Chevron , No. D4-80-CA 255
(W.D.TeX. June 10, 198 ), the District Court o’ the Weste
District of Texas ruled against defendant • 5 moti n to abstain from
hearing the case due to the pendency in state coirt of a prior
lawsuit involving similar issues. The Court fouiid that since
there did not exist a situation where (1) a constttutjonal issue
might be mooted or placed in a different posture ty a state court
decision as to the applicable state law, (2) a federal court’s
exercise of jurisdiction would substantially interf’re with the
state’s effort to enforce a system of purely state regulation, or
(3) a federal court is asked to refrain from state ermina ].
Proceedings, nuisance actions antecedent to criminal p ceedings
or state suits to collect taxes, the court would not abs sin. —
This Court, when considering the above factors, cannot f nd that
it should abstain either.
Moreover, this Court finds the case which the defer, lant
relies upon, United States v. Cargil]., Inc. , 508 F.! ipp. 734
a
(D.De]. 1981), to be distjnguj ab1e. In Cargil]. , the .PA sued
under the Clean Water Act to have a corporation enjoin d from
further violatj of a wastewater discharge permit ar £ to impose
civil penalties for past violations. The defendant roved to have
the court dismiss, abate or stay the action or to abstain from
asswning jurisdiction over the action because of a still pending
7
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suit filed by the State Department of Natural Resources and
Environmental Control in the s’ats court seeking identical relief.
The district court found that .he doctrine of abstention did,
apply. However, it did allow br a stay. The court, which g. e
several reasons for the stay, n ted the most important reason to
be that the federal action had aused the defendant to halt
construction efforts to prevent water pollution, the principal
goal of the Clean Water Act. Sii•ce the district court in Cargill
found that the abstention did no’ apply, the case does not support
defendant’s position in arguing that this Court should abstain.
Furthermore, in terms of granting a stay, this Court agrees with
plaintiff that the most important eason for such a stay under
Cargill , the prevention of pollutici, would not be thwarted by
this action, since the EPA seeks to augment and not disrupt
defendant’s fugitive dust control mac sures.
III.
In arguing that the doctrines øf is ie and claim preclusion
apply, defendant states that it had begur negotiations with the
State prior to receiying any notice from the EPA and the consent
order between the defendant and the Stat 3 was only entered into
after the-EPA was given notice of an op)ortunity to request a
public hearing or make a public comnten ’. According to defendant,
since the EPA had this chance to argu’ for compliance with its ow
regulations, the doctrines of issue arid claim preclusion apply,
and plaintiff is therefore barred f’m bringing this action,
8
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which, if allowed, might unfairly lead to double penalties being
imposed on defende.t.
This Court finds defendant’s argument to be similar to its
argument concernin j abstention in that it is another attempt to
bar this federal action. As a result, many of the reasons given
by the Court in re;ecting defendant’s argument for abstention are
also applicable here. Again, this Court can find no statutory
support for defendar.t’s position in a statute that clearly
contemplates enforce nent on the federal level as well as the state
level. This Court a .so finds the major cases defendant cites
distinguishable from the case before us. In United States v. ITT
Rayonier, Inc. , where the Ninth Circuit Court of Appeals ruled
that the EPA was barrel un4er the doctrines of issue and claim
preclusion from bringir; an enforcement action pursuant to the
Clean Water Act, the preFious action ended with a decision
rendered by a state supra e court. In the case before this Court,
however, there was no prev ua state court action, but rather a
consent decree issued by a s ate agency. Moreover, since no
penalties were assessed by t:e state, defendant is not subject to
double penalties.
IT IS THEREFORE ORDERE that defendant’s motion for dismissal
be denie4,
DecemberJ , 1984.
Donald E. O’Brien, Judge
UNITED STATES DISTRICT COURT
9
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ATTACHEMENT II
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4 THE UNITED STATES DIS . T COURT EP 2
FOR THE WESTERN DISTRICT OF TEXAS . ‘
CHA ICS W. VJ GNtF
UNITED STATES OF AMERICA, ) By
Plaintiff, )
v. ) EP-8 0-CA- .265
) ...
CHEVRON U.S.A., INC... ) .
Defendant. ) .. -
ORDER DENYINC DEFENDANT’S MOT1O 4 TO DISMISS COPt I T
This is a civil action for injunctive relief and civil
penalties pursuant to Section 113(b) of the Federal Clean Air
Act, 42 U.S.C. 5 7413(e). The suit w s filed by Attorneys
of the United States Department of Justice .n the naie of
the United States of America as Plaintiff. Defer.d:nt now
moves to dismiss the complaint, contending that only t e
Administrator of the Environmental Protection Agency is
euthorized by the statute to bring this action.
The language of Section 7413(h) literally provides that
the drninistrator shall cou ence a civil action for injunctive
rel:ef or civil penalties when the law or regulations have
bees violated. The Plaintiff contends thatthe United States,
ac’ing through its Department of Justice, and in cooperation
with th Administrator of the Environmental Protection Agency,
i, also authorized to bring a ci.vil action. The parties have
:ited only three cases dea1in with this question, and they
are divided in result. In United States v. Associated Electric
Coo eracives. inc. , 503 F.Supp. 92 (E.D. 1o. 1980), the case
1/c-
-------
relied upon by the Defendant, the court held that the statute
did not empower the Attorney General to bring a civil action
on behalf o.f or in the name of the United States. The othe
two cases)upon which the Plaintiff relies, held that the
United States may bring an a t on under 42 U.S.C. § 7413(b).
United States v. Packaging Coroorat on of Mierica , ? o G81-289
CA 7 (W.D. Mich. 1932) (unreported opinion); United States v.
Texaco , 16 ERC 1142 (Ni). Ill. 19S0).
Section 7605 mandates that the Administrator of the
Environmental Protection Agency and the Attorney General work
together in the enforcement of the C1c n Air Act. It appears
to adopt and ratif a Memorandurn of Understanding between the
Attorney General and the Environmental Protection Agency,
dated June 13, 1977, which provides in substance that the
‘ Department of Justice will control civil litigation brought
enforce the provisions of the Act. The Affidavit of Courtney
Price, Special Counsel for Enforcement of the Envjron ier.tal
Protection Agency, establishes that the Adininistrator of the
Environmental Protection Agency requested the Department of
Juscice to file the co iplaint in the instant case, and that
the two agencies have cooperated at all stages of the pro-
ceeding. It is, therefore, unlikely that the interests of the
Environmental Protection Agency will be compromised by any
action taken by the Department of Justice, a fear expressed by
the District Court in United States v. Associated Electrical
Cooperatives’. Inc., supra . at 94. Furthermore, the Defendant
-------
has failed to show any p.r.judice arising from the filing of
the suit in the name of-the United States of America rather tha
the Administrator of the Environmental Protection Agency.
The United States is generally entitled to maintain action
to effectuate its prog arns and politics even in the absence of
specific Statutory authority or pecuniary interest. in re Debs
158 U.S. 564, 586 (1894); United States v. LeMav , 322 F.2d 100,
103 •(5th Cir. 1963); United States v. Ar1ir ton County. Va. ,
326 F.2d 929, 932 (4th Ci x. 1964). i othing in Section 7.413(b)
explicitly precludes the United Stace from bringing this suit
in its own name to enforce the Clean Air Ace. The Defendant’s
motion to dismiss the complaint should be denied.
It is therefore ORDERED that the Defendant’s motion to
dismiss the complaint in the above-styled and ntbered cause
be, and it is hereby, DENIED.
SIGNED AND ENTEP 1 .ED thi yofSeptemer 1983
‘3
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8
SECTION B DOCUMENT 8
Enforcement Policy Respecting Sources Complying with
Clean Air Act Requireme by Shutdown
11/17/85
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UNITED STATES EN% )NMENTAL PROTECTION AGENCY
. WASHINGTON, D.C. 20460
4.
NOV27 85
OFFICE OF E\FORCP.IE\
‘ .D CO IPLI
MO’. ITOR I ’ . C
MEMORANDUM
SUBJECT: Enforcement Policy Respecting Sources Complying
With Clean Air Act equirements By hutdown
FROM: Courtney M. Price
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Air and Waste Management Division Directors
Regions II, VI, VII, and VIII
Air Management Division Directors
Region I, III, V, and IX
Air, Pesticides, and Toxics Management
Division Directors
Regions IV and X
Regional Counsels
Regions I—X
Attached is a memorandum providing guidance for your use
in addressing sources that intend to comply with Clean Air Act
requirements by shutting down. The relationship of this policy
statement to previous policy statements on the same subject is
as follows.
On June 18, 1979, the Administrator established an enforce-
ment policy under the Clean Air and Clean Water Acts respecting
sources intending to come into compliance by shutting down.
(See Administrator’s Memorandum of June 18, 1979, TM Limited Life
Facilities——Policy Statement.”) On September 20, 1982 and
Janua ry 12, 1983, EPA affirmed that the uLimited Life Facili-
ties” policy would apply beyond the end of 1982 under the Clean
Air Act for r oncomplying sources in primary nonattainment areas
where attainment was to have been achieved by the end of 1982.
(See the Administrator’s Memorandum of September 20, 1982,
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—2—
“Enforcement A ction Against Stationary ir Sources Which Will
Not Be In Compliance by December 31, 1982,” and the January 12,
1983 Memorandum, “Guidance on Implementation of the 1982 Dead-
line Enforcement Policy Issued September 20, 1982,” issued
jointly by the Associate Administrator and General Counsel
and the Assistant Administrator for Air, Noise and Radiation.
For C 4 lean Air Act sources, the present policy, “Clean
Air Act Enforcement Policy Respecting Sources Complying By
Shutdown, supersedes the enforcement policy issued by the
Administrator on June 18, 1979 entitled “Limited Life Facili-
ties—Policy Statement.” A memorandum amending relevant por-
tions of the September 20, 1982 and January 12, 1983 memo-
randa to make them consistent with today’s policy statement
is being issued along with this memorandum.
Attachment
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ENFORCEMENT POLICY RESPECTING SOURCES C 1 PLYING
WITH CLEAN AIR ACT REQUIREMENTS BY SHUTDOWN —
NOTE: THE POLICIES ESTABLISHED IN THIS DOCUMENT ARE INTENDED
SOLELY FOR THE GUIDANCE OF GOVERNMENT PERSONNEL AND ARE NOT IN-
TENDED TO CREATE ANY RIGHTS. SUBSTANTIVE OR PROCEDURAL, ENFORCE-
ABLE BY A PARTY IN LITIGATION WITH THE UNITED STATES. THE -
AGENCY RESERVES THE RIGHT TO ACT AT VARIANCE WITH THESE POLICIES
AND TO CHANGE THEM AT ANY TIME WITHOUT PUBLIC NOTICE.
I. Applicability
This policy applies to all sources which are in violation
of Clean Air Act SIP, NSPS, or NESHAP’s requirements, where
the owner intends to achieve compliance by shutting down the
source rather than by installing controls. 1 The policy applies
to sources in all air quality regions, regardless of attainment
status.
II. Enforcement Policy For Sources Complying by Shutdown
Section 113 of the Clean Air Act authorizes EPA to seek
injunctions against sources in violation of Clean Air Act re— -
quirements. When applying to the court for a compliance schedule
or when negotiating one with a defendant, EPA has consistently
interpreted the Act as requiring compliance as expeditiously as
practicable.
In cases where the owner intends to achieve compliance by
shutting down the source, the question arises as to what con-
stitutes art expeditious compliance schedule. EPA believes that
there are two fundamental types of shutdown situations, with
a different treatment being appropriate for each.
A. NESHAP Sources, NSPS Sources, and SIP Sources Not Being Replaced
Where a source is violating NESHAP or NSPS requirements,
or is violating sIP requirements and is not to be expeditiously
replaced (as discussed below), EPA believes that the Clean
1 As used herein, the phrase “install controls” includes:
(1) the replacement, or upgrading, of inadequate previously—
installed controls; and (2) process changes involving signif-
icant developmental costs. An example of the latter class of
cases would be product reformulation in the case of VOC
sources. Where developmental costs can be recouped at other
sources owned by the source owner, Section II.B will not be
applicable, however.
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—2—
Air Act requires an expeditious shutdown of the violating source.
Allowing sources violating NESHAP, NSPS, PSD or NSR require-
ments to operate more than a minimal amount of time without
controls would subvert the environmental purposes behind the
Act’s requirements pertaining to such sources. Moreover,
allowing such sources or ‘any other SIP sources which will not be
controlled more than a minimal period c uncontrolled operation
would merely afford the owner an opportunity to maximize prof—its
at the expense of the environment. -
How expeditiously sources falling into the above categories
must shut down is to be determined on a case—by—case basis. The
most important factors to be considered are legal restraints on
closing, such as union agreements and bankruptcy court orders.
As necesary in appropriate cases, EPA should apply to the
relevant legal authorities for removal of any such constraints.
In NESHAPs cases or in any other cases involving a significant
public health risk, violating sources must be shut down as quick-
ly as possible.
For sources subject to this Subsection (II.A), the period
within which expeditious shutdown must occur runs from the time
at which it is determined that the owner intends to comply by
shutdown. EPA should apply to the appropriate court for injunc-
tive relief if an acceptable expeditious shutdown schedule canr ot
be speedily negotiated. Any negotiated schedule should be memo-
rialized in a judicially enforceable consent agreement and lodged
with the appropriate court.
B. Possible Extensions for Noncomplying SIP Sources Which Will
Be Replaced
If the owner intends to replace a source violating a SIP
requirement by transferring the production to some other facility
in the same geographical area 2 , and the replacement source is not
yet constructed and/or operable, EPA may exercise its enforcement
discretion to delay shutdown of the violating source until the
replacement facility is constructed and operable. The factors
that EPA will take into account in determining whether to exercise
such discretion will include:
1. The attainment status of the air quality region in which
the source is located, including whether the region’s
deadline for achieving the NAAQS has passed,
2 1f the replacement source were not located in the same area
as the violating source, the benefits of the extended shutdown
schedule would be reaped by some community other than the one
carrying the environmental burden of the extended period of
noncomplying operation.
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—3—
2. The impact of the violating sourc&s excess emissions
on the air quality of the region,
3. The time elapsed since the source was required to have
achieved compliance, and the efforts which the source
owner has made to achieve compliance,
4. The impact on workers and the company-of any disruption
in production which might be occasioned by a shutdown
prior to the replacement source’s being operable, and
5. The owner’s record of compliance with all environmental
regulations at the affected facility, and at other
facilities owned by the same owner.
6. Shutdown of the violating source need not consist of
physically destroying or dismantling the source. How-
ever, in cases where the source owner does not wish to
destroy or dismantle the sourcé, a responsible official
of the source owner must submit an affiuavit specifying
that the owner does not, at the time the affidavit is
given, intend to resume operating the source within at
least three years following shutdown.
The replacement facility need not be a one—for—one replica-
tion of the violating facility but it must involve some substan-
tial construction necessary to permit the transfer of production
to the replacement facility. The replacement facility need not
emit the same pollutant as the violating source. The replacement
facility may include a pre—existing source, provided some sub-
stantial construction is necessary to make the transfer of pro-
duction feasible. Finally, for the purposes of this paragraph,
the installation or upgrading of controls at the replacement
facility may constitute construction provided the installation
or upgrading is necessary for the replacement facility to achieve
or maintain compliance after the production is transferred.
In cases where EPA decides to exercise its enf rcement
discretion to delay shutdown until the replacement of the viola-
ting source, the owner must enter into a judicially enforceable
consent decree providing as follows:
1. The consent decree must require shutdown of the viola—.
ting source by a date certain. This date must be no
later than the earliest date by which the replacement
facility can be constructed and rendered operable on an
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—4—
expeditious schedule, as measured from the time when
it is determined that the owner of the source intends
to achieve compliance by shutdown.
2. The decree mu t require the posting of a surety bond
or equivalent mechanism providing for an automatic
forfeiture in the event shutdown does not occur by
the agreed—upon date. The bond should be in an amouRt
representing the cost of installing adequate controls
on the violating source.
3. Notwithstanding the provision of a bond, the decree
mustcontain a clause reserving the government’s right
to seek other relief in the event the source fails to be
timely shut down.
4. The decree must contain a stipulated penalty provision
setting a daily penalty for any operation of the viola-
ting source beyond the shutdown date. The amount of
this penalty should be sufficient to, at a minimum,
recapture any economic benefit attributable to the
noncomp lying operation, above and beyond the capital
cost of controls forfeitable pursuant to the bond re-
quired by Subparagraph 2 above.
5. The consent decree must provide that the violating
source will be either demolished or dismantled, or
that, upon any reactivation for a business reason aris-
ing after the shutdown, the source would constitute a
new source under applicable federal regulations including,
where applicable, new source review regulations.
6. All agreements regarding shutdown must be made binding
on all successors—in—interest to the owner.
7. The consent decree must require a schedule of construc-
tion for the replacement facility with appropriate inter-
im dates and stipulated penalties for any violations of
the construction schedule.
8. The decree must require the owner to demonstrate and
maintain compliance with all emission standards applic-
able to all emission points at the replacement facility
which are associated with the transferred production.
The compliance demonstration should, if feasible, occur
prior to the transfer of production. An exception can
be made in cases where a brief shakedown period is
required, or where conditions prior to the transfer of
production would not constitute representative operating
conditions. The decree should provide that compliance
shall be maintained at the replacement facility until
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—5—
the termination of the decree, if that date occurs later
than the date of the required compliance demonstration.
9. The decree should provide that the company shall comply
with the terms and conditions of any state, local, or
federal permits applicable to the sources associated
with the transferred production at the replacement
facility.
10. The decree must require implementation of appropriate
interim measures at the violating facility to minimize
the impact of continued noncomplying operation on the
environment. If the violating source is uncontrolled,
the decree must require implementation of whatever
operation and maintenance practices are appropriate.
If the source already has controls, the decree must at
a minimum require the best practicable operation and
maintenance of those controls until the time of shutdown. 3
In cases where an appropriate limit can be set, the
decree must require compliance with interim emissions
limits, as a tool for ensuring compliance with interim
operation and maintenance procedures, and must provide
for stipulated penalties for violations of such interim
emission limits.
11. The decree must contain reporting requirements regarding
such matters as increments of progress in compliance
schedules, implementation of interim control measures,
and compliance with interim emissions levels.
12. The decree must provide, in accordance with the applic-
able civil penalty policy, for the payment of a civil
penalty respecting the violations at the violating
source, and respecting any violations at the replacement
source. The penalty must cover the period beginning at
the date of the earliest provable violation to the date
that compliance will be achieved. The end of this
period for the violating source being closed down will
be the date of shutdown. The end date with respect to
any noncomply .rig replacement source is the date that a
successful compliance demonstration is conducted.
13. The termination clause of the decree must provide
that the jurisdiction of the court will continue until
the later of the shutdown of the violating facility
or the compliance demonstration at the replacement
facility.
3 mere have been occasions when control equipment was avail-
able on a rental basis. In any such cases, use of the rental
equipment should be required.
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—6—
C. Avoiding Abuse of This Policy
Experience has shown that some source owners may seek to
obtain shutdown schedules longer than otherwise allowed under
this policy by delaying to acknowledge that shutdown is contein—
plated for a source which has become the subject of an enforce-
ment action. In order to avoid such abuse of the shutdown
policy, the following procedures should be employed:
1. At the time of EPA’s initial contact with the source
owner subsequent to issuance of an N.O.V., EPA should
routinely advise the source owner of the policy re-
specting sources complying by shutdown.
2. If the owner acknowledges in a timely fashion that
shutdown is a possibility for the source, but indi-
cates that the shutdown decision has not been finalized,
EPA may, in appropriate cases, exercise its discretion
to afford the owner a brief period to complete any
decision—making regarding whether the source will
be shut down and, if so, whether it will be replaced
within the meaning of Section II.B. The amount of time
afforded should be the absolute minimum procedurally
necessary for authorized officials of the source’s
owner to make the relevant decisions.
III. Effective Date
This policy applies to all cases referred to Headquarters
or, in the case of direct referrals, to DOJ, subsequent to
December 15, 1985.
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SECTION B DOCUMENT 9
Issues #3(e) & #5 of the VOC Issue Resolution Process:
Establishing Proof of VOC Emissions Violations and 9
Bubbles in Consent Decrees Resolving Civil Actions
Under §113(b) of the Clean Air Act
01/17/86
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- -
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
‘ t aaO
JAN 171986
OFFICE OF E FORCE 1Evr
A’.O COMPUA .CE
MONFTOR .G
MEMORANDUM
SUBJECT: Issues #3(e) and #5 of the VOC Issue Resolution
Process: Establishing Proof of VOC Emissions
Violations, and Bubbles in Consent Decrees
Resolving Civil Actions Under Section 113(b)
of the Clean Air A
1 -
FROM: Courtney M. Price “ ‘
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Regional Counsels
Regions I-X
Air Management Disrision Directors
Region I, III, V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxic Management Division
Directors,
Region IV and VI
Air and Toxics Division Directors
Regions VII, VIII and X
In the attached memoranda, i am answering two questions
that you identified as important issues -in our Clean Air Act
enforcement effort to reduce emissions of volatile organic
compounds ( “Voc ”). Specifically, this guidance responds to
issues #3(e), and #5 of the nineteen issues listed in a
May 20, 1985 memorandum titled “Results of May 3 VOC
meeting.”
The issues addressed by this guidance concern how to
establish proof of voc emission violations (issue #3(e)) and
the relationship between pending or potential bubble appli-
cations and consent decrees (issue 5). The main theme of
the guidance on issue #3(e) is to encourage the use of Section
114 of the Clean Air Act to obtain information where data is
not otherwise available to prove violations under the appli-
cable test method. The principle point of the guidance on
issue #5 is to emphasize that the current SIP governs until
any rr Th ents are fedc 11y effectivc
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—2—
This guidance is part of an Agency—wide effort to address
VOC enforcement issues and should be considered in conjunction
with the responses to the other VOC issues, which will be dis-
tributed by the responsible EPA offices as they are developed.
One major comment regarding issue 3(e) was repeated by
several comentors during the second round of review and is
worth mentioning briefly here. The conunents suggested that
rather than attempting to fix recordkeeping problems through
§114 requests, EPA should work towards incorporating better
recordkeeping requirements in the state implementation plans.
For example, EPA could issue SIP deficiency notices where
the SIP does not provide for recordkeeping requirements
adequate to determine if the source is in compliance with
the SIP.
Our response to issue 3(e) is designed to deal with
those interim problems concerning recordkeeping which arise
prior to the resolution of the more fundamental concern of
poorly drafted SIP recordkeeping requirements. The issue
of how to improve the SIP’s is being addressed by the Control
Programs Development Division. The attached guidance is
intended to advise you of the tools available to obtain
better evidence of violations, and my office’s policy con-
cerning the use of those tools, until such time as they may
become unnecessary because of corrective SIP revisions.
I appreciate the efforts of the Regions in commenting
on the various drafts of the two following documents and
hope that you find them helpful in resolving some of the
issues concerning VOC enforcement.
Attachments
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ISSUE NUMBER 3(e) : How are VOC emissions to be Calculated
over a chosen i eraging time when a company is not required
to, or does not, maintain records directly pertinent to that
unit of time?
RESPONSE : This issue is presented when the period for asses-
sing compliance under the SIP with the VOC emission limitation
(e.g., a source must meet a percent VOC limitation over a 24
hour period or instantaneously) does not correspond to the
records maintained by the source (e.g., records of VOC usage
are kept by the source only on a monthly basis). The issue
is also presented in other contexts. For example, a SIP may
require line—by—line compliance while the source records are
maintained only on a plant wide basis. The issue is important
because compliance determinations for many types of VOC sources
rely upon the records of VOC usage kept by the individual
company.
Where the SIP itself requires records to be maintained
that correspond to the SIP emission limitations, corrective
action can be taken under Section 113 of the Clean Air Act
to require the source to keep the proper records. This action
can consist of the issuance of an administrative order under
Section 113(a), or the initiation of a judicial action under
113(b). The remainder of this memorandum addresses the situa-
tion where the SIP does not contain such a record keeping
requirement.
There are four recommended techniques available to
determine source compliance with VOC SIP emission limitations
in the absence of a SIP record keeping requirement for source
records which correspond to the SIP emission limitations.
These four different techniques are primarily useful in four
different contexts.
The first technique Consists of the use of mathematical
algorithms. A description of two different types of available
algorithms is attached (attachment 1). Both apply various
mathematical computations to monthly or yearly data to pro-
duce a figure representing the minimum number of days that
a source had to be out of compliance with the SIP emission
limit. This calculation is statistically based and does not
identify the particular days that a source was in violation.
Use of the algorithms may be helpful in settlement discus-
sions with the source and in determining a settlement penalty.
Use of the results of the algorithms in a different
context, to prove violations at a trial or hearing, presents
several issues. Defendants can be expected to argue that the
Government may prove violations only through the use of the
appropriate test method, which would be the method specified
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—2—
in the federally—approved SIP, or if there is none, the
appropriate EPA test method in 40 CFR Part 60 (see 40 CFR
§52.12(c)). To overcome this point, the Government would
have to argue that violations can also be proven through
expert opinion testimony under the Federal Rules of Evidence,
Rule 702 (Testimony by Experts), 703 (Basis of Opinion
Testimony by Experts), and 704 (Opinion on Ultimate Issue).
In order to use the results of the algorithms as evidence -
of violations at a trial, the Government shouJ.d be prepared
to prove the statistical validity of the algorithms through
expert testimony, and to show through the opinion of an
expert, based upon the results of the algorithms, that the
source had to be in violation for a given number of days.
The Government would not be able to prove precisely which
days a company was out of compliance nor which lines (or
how many lines) were out of compliance. The Government
would be able to show, based on the source’s total VOC
output and the restrictions provided in SIP, that at least
one of the lines at the source was out of compliance for a
certain minimum period of time. Sole reliance or algorithms
has the negative effect of calculating violations on an
averaging basis in what may be the absence of any SIP
provision authorizing averaging.
Because of these potential issues of proof and the
effect of averaging out some violations by using algorithm ,
steps should be taken to obtain the data necessary to calcu-
late emissions under the applicable test method. Thus, the
second recommended technique to determine source VOC compli-
ance is to use Section 114 of the Clean Air Act to request
currently existing source records which can be used to
develop the data necessary to make compliance determinations
under the applicable test method. Items such as sales slips,
invoices, production records, solvent orders, etc., may be
available and useful in developing the necessary data for
the test method calculations. Once a case has been filed
discovery can also be used to supplement the information
obtained under Section 114.
The third recommended technique to determine source VOC
current and future compliance is the issuance of a request
under Section 114 requiring the source to prospectively keep
the necessary records. This technique is the most straight-
forward of the three and the one that should generally be
pursued. It may be the only option in the case where sources
have not kept records in a form which can be used directly
or indirectly, to determine compliance under the applicable
test method. it may also be the only realistic option where
the use of existing records to develop the necessary data for
the test method calculations would be unduly time-consuming
and burdensome for the Agency.
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Under the authority of Section 114. EPA may require a
source to establish and maintain records reasonably required
to determine compliance with the SIP (Section 114(a)(j)(A)
and (B)). By issuing such a request, EPA would impose an
obligation on a source to keep and maintain those records
which are necessary to calculate Compliance determinations
unler the applicable test method. The requested record
keeping should be in a format consistent with the SIP emi-a—
sion requirements. Thus, if the SIP requires Compliance on
a line—by-line basis and on a 24 hour average, the records
should be kept on the basis of individual lines using no
more than 24 hour averaging. Also, the required measurements
as to VOC content should be consistent with applicable EPA
test methods. For example, EPA should require in the
Section 114 request that data on the VOC content of a
particular coating or ink is produced through a measuring
process identical to EPA’s method 24 or 24 A in 40 C.F.R.
§60 App. A.
As a fourth technique, Section 114 may also be used to
require a source to sample emissions in accordance with the
methods prescribed by EPA (Section l14(a)(l)(D)). Thus,
Section 114 may be used to require a source to conduct an
emissions test in accordance with the applicable test
methods. This type of Section 1.14 request would probably
be the most appropriate where compliance determinations are
made on the basis of emissions testing as opposed to an
analysis of the VOC content of the individual coatings
used. In certain situations where it is unclear whether
the coating or ink supplier is using proper test methods,
EPA may want to require the user of those coatings to run
tests for VOC content using EPA’s approved test methods.
In conclusion, algorithms exist and are available to
estimate the minimum number of days a company was out of
compliance with sIp voc emission limitations in the absence
of company records which are necessary to make compliance
determinations under the applicable test method. The results
of the algorjth are primarily useful for purposes of settle-
ment discussions or for identifying sources which should be
required to submit information under §1.14. While this guid-
ance does not preclude using algorithms and expert Opinion
testimony to prove violations at a trial, the Government
should be prepared to prove at least some days of violation
through the applicable test method in the event that expert
Opinion evidence is rejected by the judge. The records
necessary to develop this proof under the applicable test
method can be sought through a Section 114 request for
information where the company has data which can be used
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to develop the necessary records. Such records can also
be developed on a prospective basis through a requirement
imposed under the authority of Section 114 requiring the
source to maintain the necessary records. Finally, Section
114 can also be used to require source testing of emissions.
Future litigation reports based upon VOC SIP emission
limitation violations should, if at all possible, either
contain proof of violations using the applicable test method
covering at least part of the period of time the source is
alleged to be in violation of the emission limitation or
should contain a cause of action based upon a source’s failure
to comply with a previous request issued under Section 114
for source records or testing. Prior to the referral of a
report, the authority granted EPA under Section 114 should
be used, where necessary, to obtain the data needed to esta-
blish some days of violation under the applicable test method.
Through the use of Section 114, the Government should either
have the evidence needed to prove specific violations, or,
if a source fails to comply with the Section 114 request, a
basis to proceed under Section 113(b)(4) for violation of
Section 114. Litigation reports relying solely upon
algorithms to evidence violations are appropriate only if,
after diligent effort to obtain more detailed data, stati-
stical proof through the use of algorithms remains the only
available technique.
If you have any questions concerning this guidance,
please contact Burton Gray at FTS 382—2868.
_ 2
Courtney)M. Price
Assistant Administrator
JAN I 7 ‘
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ISSUE NUMBER 5 : How Can EPA Include A Bubble In The Context
Of A Consent Decree?
RESPONSE : EPA cannot endorse a consent decree which contains
a schedule for compliance with a bubble until. EPA has promul-
gated final approval of the particular bubble as a SIP revi-
sion (or until the bubble has been approved by the Stats if
the bubble is granted under a generic bubble provision).
This position is supported by existing Agency policy (“Guidance
for Drafting Judicial Consent Decrees” issued on October 19,
1983), Section 1.13 of the Clean Air Act and case law.
A consent decree must require final compliance with
the currently applicable SIP. The Agency’s “Guidance For
Drafting Judicial Consent Decrees,” states that consent
decrees must require final compliance with applicable sta-
tutes or regulations. Other than interim standards, a
decree should not set a standard less stringent than that
required by applicable law or regulation, because a decree
is not a Substitute for regulatory or statutory change.
(See page 11 of the Guidance.)
Section l13(b)(2) of the Act, 42 U.S.C. 7413(b)(2),
provides EPA with the authority to initiate civil actions
to obtain injunctive relief to correct source violations
of the SIP. A settlement of such an action must include a
requirement to comply with the SIP provisions that formed
the basis of the request for injunctive relief. The settle-
ment cannot require final compliance with a provision not
yet a part of the federally approved SIP.
Case law also supports the proposition that the SIP may
only be changed through certain specific procedures and that
absent those procedures, no change can be effected to the
original SIP emission levels. Train v. Natural Resources
Defense Council , 421 U.S. 60 (1975). The SIP, as approved
through a formal mechanism by EPA, sets the official emission
limits and remains the federally enforceable limit until
changed. Ohio Environmental Council v. U.S. District Court,
Southern District of Ohio, Eastern Division , 565 F.2d 393
( 6th Cir. 1977) .
A decree may contain a general provision recognizing
that either party may petition the court to modify the decree
if the relevant regulation is modified, as would be the case
with a bubble. The following language is an example of such
a reopener clause where EPA approval of the individual bubble
is required.
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If EPA promulgates final approval of a revision to the
applicable regulations under the State Implementation
Plan, either party may, after the effective date of the
revision, petition the Court for a modification of this
decree.
If a federally approved generic procedure is applicable, the
reopener clause should be modified to reflect the particular
generic procedures.
If a SIP revision that affects a decree’s compliance
schedule is finally approved, decree language, as indicated
above, may permit the source to petition the court for a
modification of the schedule. A source is relieved from its
obligation to meet the existing schedule only upon final ap-
proval by EPA, or by the state if under a federally approved
generic bubble regulation, of the SIP revision and only upon
a modification of the decree. The consent dec,ree may not
contain a clause which would automatically incorporate any
future bubble.
It is important to note in the above context that consent
decree compliance schedules must be as expeditious as practi-
cable in terms of implementing a control strategy to achieve
compliance with the existing SIP and may not add in extra
time to provide for final EPA action on a request for a SIP
revision. The “Guidance for Drafting Judicia3. Consent Decrees”
states on page 12 that, “The decree should specify timetables
or schedules for achieving compliance requiring the greatest
degree of remedial action as quickly as possible.” The con-
cept of expeditiousness was taken from §u3(d)(l) (applicable
to compliance schedules in Delayed Compliance Orders) which
was added to the Clean Air Act by the Amendments of 1977.
The principle was incorporated into Agency guidance issued
shortly after the 1977 amendments pertaining to compliance
schedules in judicial consent decrees, e.g., “Enforcement
Against Major Source Violators of Air and Water Acts” — April
11, 1978 (see pg. 4), and “Section 113(d) (12) of the Clean
Air Act” — August 9, 1973 (see pg. 2).
If you have any questions concerning this guidance please
contact Burton Gray of AED at FTS 382-2868.
t .—-‘ ---.
-1 4 )
Courtney M. Price
Assistant Administrator
- 3
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SECTION B DOCUMENT 10
Responses to Two VOC Questions Raised by the 10
Regional Offices
01131186
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•
/ LNITED STATES ENVIRONMENTAL PROTECTION ACE CY
WASH GTON, D.C. 2
(//c:1
JN431
OcFlC! OF
AJ* AMD P.ADIAIIOM
MEMORAN DUM
SUBJECT: Responses to Two VOC Questions Raised by the
Regional Offices
FROM: Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
TO: Air Management Division Directors
Regions I, lit. V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors
Region IV a d VI
Air and ToxicsJ)ivision Directors
Regions VII, VIII and X
Attached to this memorandum are responses to two issues
identified by the Regional Offices and DOJ through the VOC
Compliance Workgroup. As you may know, nineteen VOC issues
were being presented as current impediments to Regional and
State efforts in returning VOC violators to compliance. in
the process of preparing these responses, it became evident
that they could not all be issued under one cover. some
required briefings for the AA for OAR and OECM while others,
like the attached two, dealt with internal, essentially
administrative issues and this justified a response from
SSCDS
On June 27, 1985, the first draft of the attached two
responses, as well as draft responses to many of the other
nineteen issues, were circulated for comment. On August 21
and 22, 1985 various Regional and Headquarters representatives
met to discuss these first drafts. A second draft of these
issues was circulated on December 12. The attached responses
incorporates the various comments received.
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—2—
I appreciate your efforts in commenting on the various
drafts of these two issues, as well as the others. With this
memorandum and OECM’s memorandum of January 17, 1986 entitled
lssues *3(e) and #5 of the VOC Issue Resolution Process:
Establishing Proof of VOC Emissions Violations, and Bubbles
in Consent Decrees Resolving Civil Actions under Section 113(b)
of the Clean Air Act, four issues have now been addressed.
We expect an addit&ional five issues to be addressed by final
guidance within the next two weeks and are working to expedite
the remaining responses.
If you have any questions, please call Steve Hitte at
382—2829.
Edward E. Reich
Attachments
cc: VOC Compliance Workgroup
Regional Counsels, Regions t—X
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Issue : At the present time all Class Al and A2 Voc sources
in the New York City (NYC) Metropolitan AQCR have
been identified and verified, and those which are
out of compliance have been placed on the signifi-
cant violator list. Region II would like to have
all Class B voc sources which have an ER? > 50 TPY
and are out of compliance, placed on the significant
violator list. By doing this the Region would be
able to more accurately reflect its continuing
enforcement effort in the NYC Metropolitan area,
currently non—attainment for VOCs.
Response :
As noted in the Agency Operating Guidance for FY 1986—1987,
SSCD will be developing a strategy that addresses Class B VOC
violators in ozone non—attainment areas where control of such
sources is essential to attainment. This strategy will
become operational in FY 1987 (see attached for initial think-
ing on the elements of this strategy). One issue to be
considered is the possibility of expanding the significant
violator definition in FY 1987 to include selected Class B
sources.
çzr ,eA
Edwar C. Reich, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
JAN 3
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G. Class B VOC Sources
Develop general and area—specific strategies for dealing with
Class B VOC sources. Elements of the strategies would have
to include:
(1) identification of which source categories with
substantial numbers of Class B sources are significant
contributors to nonattainment in the areas of concern
(2) analysis of relative amounts of reductions likely to
be obtainable from such source categories, to determine
the most cost-cf fective areas of focus, nationally
and in each geographic area
(3) identification of the status of regulation of such
source categories in areas where they are important
and additional regulatory actions possible
(4) inventorying Class B sources (or at least the larger
Class B sources) in the source categories of concern
to each area
(5) determining compliance status or Class B sources of
concern in each area
(6) initiation of appropriate enforcement actions to
resolve violations
From a national perspective, strategy development would have
to consider:
(1) compliance determination approaches for large numbers
of small sources
(2) expansion of “t and. a” and significant violator concepts
to selected Class B VOC sources
(3) mechanisms for obtaining compliance less resource—
intensive than traditional approaches
(4) penalty policies and methods of assessment
(5) public and industry education programs to enhance
voluntary compliance
(6) mechanisms for handling compliance data and any
necessary modifications to CDS guidance
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—2
To begin to address the Class B VOC problem:
(1) SSCD ha. co nitted to develop during F? 1986 a strategy
(or strategies) for dealing with Class B VOC sources in
areas where their control is important for attainment
(2) The FY 1986 grants allocation targets $1 million for States
to develop and refine Class B VOC inventories
(3) The draft F? 1987 budget contemplates expanded efforts to
address Class B sources, as well as implementation of a
Reasonable Efforts P-ogram
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Issue : it has become apparent that EPk is taking a tougher
enforcement stance on the round II CTG’s than was
evident in round I. Notice of this change came
through the August 17, 1984 Lillquist letter which
was an attachment to the October 2, 1984 memorandum
on coordinating key issues in VOC cases from M chea1
Alushin, Associate Enforcement Counsel. Although
Region III generally supports this change in policy,
we are extremely concerned about the method andtim—
irig of disseminating this policy.
This tougher stance on compliance represents a signi—
icarit shift in policy. The novel distribution
approach of attaching it to a memorandum which
appears to have been intended for limited distribu-
tion lea”es much to he desired. States have been
negotiating schedules over the past year which
reflect EPA ’s more laissezfajre enforcement posture
taken on the round I CTG’s. This change in policy is
coming to them (and us) about one year late. As a
result, it will disrupt the processing of orders
and SIP’s negotiated by States under our previous
enforcement posture and strain EPA/State relations.
Region III suggests that Headquarters reassess its
method of policy distribution. If EPA is to ensure
the timeliness and appropriateness of State enforce-
ment activities, we must inform the States of the
rules of the game in a timely and appropriate manner.
Response :
Traditionally, it is SSCD’s approach to issue guidance or
policy documents to the Regional Offices with ongoing staff
support to respond to questions or provide clarification.
Subsequently, it is incumbent upon the Regional Office to
disseminate this information to its States in any manner it
choses.
In the VOC area, a Regional—qeadquarters compliance
workgroup was established to be a focal point for VOC issues
and subsequent policy r guidance. SSCD chairs this workgroup
and has distributed numerous VOC articles and policy memoranda
through the workgroup members. The August 17, 1984 Lillquist
letter cited in the issue was distributed to the Air Rranch
Chiefs on August 29, 1984, with copies to the Workgroup members
(see attached).
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—2—
In order to assu that all SSCD policy and guidance
memoranda are being seen by the Regional Office staff, SSCD
will institute a process of listing quarterly all policy and
guidance memorandum that have been issued. This list will be
sent to the Air Branch or Compliance Branch Chiefs. Where a
memorandum on this list has not been seen by the Region, a
request can be made for a copy. It will be incumbent upon the
Region to assure that appropriate memoranda are distributed
to the States and locals, The process of providing this -
listing will commence at the end of the first quarter FY 1986.
c c C , eA
Edward E. Reich, Director
Stationary Source Compliance Division
Office of Air Quality Planning arid Standards
II -
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SECTION 3 DOCUMENT 11
Responses to Four VOC Issued Raised by the Regional
Offices and DOJ
02/28/86 11
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IA-ø
sT 41 / /
‘Vt
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
OFFICE OF
DEC 06 Q93 GENERAL COUNSEL
MEMORANDUM
SUBJECT: Opinion of the General Counsel on
Discretionary Sanctions under Section 110(m)
of the Clean Air Act
FROM: Alan W. Eckert4 ,,
Associate General Counsel
Air and Radiation Division (2344)
TO: Regional Counsels, Regions I-X
Enclosed for your information is a copy of a Legal Opinion
issued by the General Counsel on November 23, 1993. It
concludes: (1) that EPA has independent authority under section
110(m) of the Clean Air Act to impose discretionary sanctions on
states prior to the 18-month period specified in section 179(a);
and (2) that EPA may propose the imposition of sanctions under
section 110(m) prior to the time a final finding has been made
pursuant to section 179(a). The Opinion also responds to an
opinion issued by the Comptroller General reaching contrary
conclusions on these two issues.
If you have any questions concerning this opinion, please
call me (202—260—7606), Rich Ossias (703—235—5327), or Jan
Tierney (703—235—5334)
Enclosure
Printed on Recycled Paper
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to S T 4
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C 20460
\
; v 2 3 1993 OFFICE OF
GENERAL COUNSEL
MEMORANDUM
SUBJECT : Response to Comptroller General’s Opinion of
October 21, 1993, Concerning the Imposition of
Sanctions Under Section 110(m) of the Clean Air
Act
FROM : Jean C. Nelson
General Counsel
TO: The Administrator
In response to a letter from House Energy and Commerce
Committee Chairman Dingell forwarding an Opinion of the
Comptroller General, you asked that we reexamine the issues
discussed in the Opinion. This memorandum responds to your
request. Based on the analysis set forth below, we conclude (i)
that EPA has the legal authority under section 110(m) to impose
sanctions prior to the expiration of the 18—month period provided
under section 179(a), and (ii) that EPA may propose discretionary
sanctions under section 110(m) prior to the time a final finding
has been issued.
QUESTIONS PRESENTED
A. May EPA impose sanctions under section 110(m) prior to the
expiration of the 18—month period provided in section
179(a)?
B. May EPA propose the imposition of sanctions under section
110(m) prior to the time EPA has made a final finding
pursuant to section l79( )(1)(4)?
BRIEF ANSWERS
A. Yes. The plain language of section 110(m) gives EPA
authority to impose sanctions prior to the expiration of the
18-month period provided in section 179(a). The parallel
structure of other comparable sanctions provisions in the
statute confirms that Congress intended this reading. The
legislative history does not provide express support for
this interpretation, but also does not directly contradict
Printed on Recycled Paper
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it. Given the plain language of section 110(m) and the ease with
which section 179(a) can be read in harmony with it, we must
conclude that this interpretation reflects Congressional intent.
Even if this intent were not clear, this interpretation is
permissible because it reflects a reasonable accommodation with
the language of section 110(m), the comparable structure of
sanctions in analogous sections, and the purp se of these
provisions.
B. Yes. EPA may propose sanctions under section 110(m)
prior to the time EPA makes a final finding under
section 179(a) because the Administrative Procedure
Act, the Clean Air Act and EPA’s internal procedures do
not preclude such action and because the information
necessary for the public to analyze and assess EPA’S
proposal may be sufficiently noticed for comment in the
proposed action.
I. BACKGROUND
A. Events Leading Up to this Opinion
By letter dated May 20, 1993, Martin E. Sloan, Assistant
General Counsel with the General Accounting Office (the “GAO”),
requested an explanation of EPA’s position on two issues. First,
GAO asked for an explanation of the relationship between the 18-
month period prior to the mandatory imposition of sanctions under
section 179(a) of the Clean Air Act, as amended in 1990, (“CAA,”
or “the Act”) and the provision of section 110(m) of the Act
authorizing the Agency to impose such sanctions “at any time (or
at any time after)” EPA makes one of the findings listed in
section 179(a) of the Act. Second, GAO requested an explanation
of the legal basis for proposing sanctions pursuant to section
110(m) prior to the time that the Agency has made a final finding
pursuant to section 179(a) triggering the sanctions authorities
of sections 110(m) and 179(a). Mr. Sloan’s request was made in
order for GAO to respond to a congressional inquiry regarding
these two subjects.
On August 6, 1993, Alan W. Eckert, Associate General Counsel
for Air and Radiation, responded to the GAO request, stating
(i) that sections 110(m) and 179 establish two separate means for
the imposition of sanctions, one mandatory and the other
discretionary, and (ii) that EPA may propose sanctions under
section 110(m) prior to a final finding of deficiency because EPA
can properly take comment on all relevant issues regarding the
deficiency and the proposed imposition of sanctions before making
a final finding (the “Eckert Letter”).
2
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In an opinion dated October 21, 1993, the Comptroller
General responded to the Congressional inquiry, disagreeing with
EPA’s position on both issues as expressed in the Eckert Letter
(the “GAO Opinion”). Chairman Dingell forwarded the opinion to
EPA with the request that it be included in the docket of EPA’s
proposed rulemaking under section 110(m) of the Act establishing
criteria to determine when a political subdivision is principally
responsible for the deficiency on which section 110(m) sanctions
are based. 57 Fed. Reg. 44,534 (Sept. 28, 1992).
The immediate occasion for the Chairman’s request, and the
GAO opinion, was a letter signed on April 13, 1993, by you and
Secretary of Transportation Frederick Peña notifying California
Governor Pete Wilson that EPA would impose sanctions against the
State of California if the state failed to enact legislation
necessary to create an enhanced vehicle inspection and
maintenance program as part of the state’s SIP. Furthermore,
Governor Wilson was notified that EPA planned to impose sanctions
before the expiration of the 18-month period contemplated in
section 179(a).
B. Standard of Review
A court reviewing an agency’s action must “hold unlawful and
set aside agency action, findings, and conclusions found to be
(A) arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law; ... (C) in excess of
statutory jurisdiction, authority, or limitations, or short of
statutory right; [ or) (D) without observance of procedures
required by law.” 5 U.S.C. § 706.
The relevant standard for review of EPA’s interpretation of
the Act was set forth by the Supreme Court in Chevron U.S.A.,
Inc. v. Natural Resources Defense Council. Inc. , 467 U.S. 837,
842-43 (1984). Under the Chevron analysis, a court reviewing the
construction of a statute by the agency empowered to administer
that statute looks first to whether “Congress has directly spoken
to the precise question at issue.” Id. In assessing the question
of intent, a court must look primarily to the particular
statutory language at issue and the language and design of the
statute as a whole and, if necessary, to the legislative history
surrounding the statute. Natural Resources Defense Council, Inc.
v. U.S. Environmental Protection Agency , 822 F.2d 104, 111 (D.C.
Cir. 1987). If the statutory language is clear on its face, it
is normally unnecessary to resort to legislative history because
reliance on legislative history is “fraught with difficulty” and
“much to be avoided.” Id. at 113; see Burlington Northern R. R.
Co. v. Oklahoma Tax Conun’n , 481 U.S. 454, 461 (1987). If
Congress has spoken directly to the issue, i.e. , if Congress’s
intent is clear, then “that is the end of the matter; for the
3
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court as well as the agency must give effect to the unanthiguously
expressed intent of Congress.” Chevron , 467 U.S. at 842-43.
In the event of an ambiguous statute, however, the Chevron
court recognized that the agency must still formulate rules to
implement the statute. When asked to review an agency’s
interpretation of a statute where Congressional intent is not
clear, the Chevron court reasoned that:
the court does not simply impose its own construction
of the statute, as would be necessary in the absence of
an administrative interpretation. Rather, if the
statute is silent or ambiguous with respect to the
specific issue, the question for the court is whether
the agency’s answer is based on a permissible
construction of the statute.
The court stated explicitly that the agency’s interpretation
need not be the only one possible, or the one that the court
might prefer. Thus, a court is not to “substitute its own
construction” for a “reasonable interpretation” made by the
agency. Subsequent courts have recognized that there can be
a “range” of permissible interpretations and that an implementing -
agency’s interpretation need only be within that range. Office
of Consumer’s Counsel, State of Ohio v. Federal Energy Regulatory
Comm’n , 783 F.2d 206, 218 (D.C. Cir. 1986). More recently, the
Supreme Court has held that a given agency interpretation in a
regulation was permissible because it “reflects a plausible
construction of the statute’s plain language and does not
otherwise conflict with Congress’s expressed intent.” Rust V.
Sullivan , 111 S. Ct. 1759, 1762 (1991) (emphasis added). In
addition, the Chevron court reiterated the long-held principle of
judicial deference to administrative interpretations regarding
the meaning or reach of a statute. 467 U.S. at 844. In short,
an agency’s reasonable interpretation of an ambiguous statute is
to receive judicial deference and should be upheld unless
contrary to Congressional intent as discernible from the statute
or its legislative history.
In addition, when taking rulemaking action under a statutory
grant of authority, an agency must comply with the relevant
procedural requirements. In reviewing whether an agency has
complied with the relevant procedural requirements, the court
will examine whether the agency followed the requirements of the
Administrative Procedure Act (the “APA”), other relevant statutes
and the agency’s own internal procedures. See Vermont Yankee
Nuclear Power Corp. v. Natural Resources Defense Council, Inc. ,
435 U.s. 519, 547 (1978) (The adequacy of the record in a
proceeding is based on “whether the agency has followed the
statutory mandate of the Administrative Procedure Act or other
relevant statutes”); Oglala Sioux Tribe of Indians v. Andrus , 603
F.2d 707, 713 (8th Cir. 1979) (During the course of procedural
4
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review of an administrative action, the reviewing court must
determine whether the agency followed the procedural requirements
of the APA and also whether its actions conformed to its own
internal procedures). Therefore, in determining whether EPA
followed the correct procedures in proposing and imposing a
sanction, a reviewing court would need to examine the
requirements of the APA, the Clean Air Act and any relevant
internal procedures of the Agency.
C. Statutory Text
The Act contains two provisions regarding the imposition of
sanctions under Title I. Congress added both provisions in the
Clean Air Act Amendments of 1990, Pub. L. 101—549, 104 Stat. 2399
(codified as amended at 42 U.S.C. SS 7401—7671 (1991)).
Section 110(m) provides:
The Administrator may apply any of the sanctions listed
in section 179(b) at any time (or at any time after)
the Administrator makes a finding, disapproval, or
determination under paragraphs (1) through (4),
respectively, of section 179(a) in relation to any plan
or plan item (as that term is defined by the
Administrator) required under this Act, with respect to
any portion of the State the Administrator determines
reasonable and appropriate, for the purpose of ensuring
that the requirements of this Act relating to such plan
or plan item are met. The Administrator shall, by
rule, establish criteria for exercising his authority
under the previous sentence with respect to any
deficiency referred to in section 179(a) to ensure
that, during the 24-month period following the finding,
disapproval, or determination referred to in section
179(a), such sanctions are not applied on a statewide
basis where one or more political subdivisions covered
by the applicable implementation plan are principally
responsible for such deficiency.
Section 179(a) provides:
For any implementation plan or plan revision required
under this part (or required in response to a finding
of substantial inadequacy as described in section
110(k) (5)), if the Administrator——
(1) finds that a State has failed, for an area
designated nonattainment under section 107(d), to
submit a plan, or to submit 1 or more of the elements
(as determined by the Administrator) required by the
provisions of this Act applicable to such an area, or
has failed to make a submission for such an area that
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satisfies the minimum criteria established in relation
to any such element under section 110(k),
(2) disapproves a submission under section
110(k), for an area designated as nonattainment
under section 107, based on the submission’s
failure to meet one or more of the elements
required by the provisions of this Act applicable
to such an area,
(3) (A) determines that a State has failed to
make any submission as may be required under this
Act, other than one described under paragraph (1)
or (2), including an adequate maintenance plan, or
has failed to make any submission, as may be
required under this Act, other than one described
under paragraph (1) or (2), that satisfies the
minimum criteria established in relation to such
submission under section 110(k) (1) (A), or
(B) disapproves in whole or in part a
submission described under subparagraph (A), or
(4) finds that any requirement of an approved
plan (or approved part of a plan) is not being
implemented,
unless such deficiency has been corrected within 18
months after the finding, disapproval, or determination
referred to in paragraphs (1), (2), (3), and (4), one
of the sanctions referred to in subsection (b) shall
apply, as selected by the Administrator, until the
Administrator determines that the State has come into
compliance, except that if the Administrator finds a
lack of good faith, sanctions under both paragraph (1)
and paragraph (2) of subsection (b) shall apply until
the Administrator determines that the State has come
into compliance. If the Administrator has selected one
of such sanctions and the deficiency has not been
corrected within 6 months thereafter, sanctions under
both paragraph (1) and paragraph (2) of subsection (b)
shall apply until the Administrator determines that the
State has come into compliance. In addition to any
other sanction applicable as provided in this section,
the Administrator may withhold all or part of the
grants for support of air pollution planning and
control programs that the Administrator may award under
section 105.
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II. DISCUSSION
A. May EPA impose sanctions under section 110(m)
prior to the expiration of the 18-month period
provided j section 179(a) ?
1. Analysis of Whether Congressional Intent
is Clear
In accordance with the method of analysis set forth in
Chevron , the first question must be whether the intent of
Congress is clear upon review of the face of the statute, the
language and design of the statute as a whole, and, if necessary,
the legislative history of the statute.
a. Statutory Language
We first address the express language of sections 110(m) and
179(a). Three key distinctions between sections 110(m) and
179(a) shed light upon the proper interpretation of these
provisions: (i) the use of “may” versus “shall;” (ii) the
description of the timing of sanctions; and (iii) the
restrictions on the timing for statewide sanctions.
The first distinction is that between discretionary and
nondiscretionary sanctioning power granted under sections 110(m)
and 179, respectively. The first sentence of section 110(m)
states unequivocally that the Administrator “ may apply any of the
sanctions listed in section 179(b) .“ (Emphasis added.) By
contrast, the power to sanction granted in section 179(a) is
mandatory. The latter section provides expressly that upon
certain events and barring subsequent compliance, the sanctions
listed in section 179(b) “ shall apply as selected by the
Administrator.” (Emphasis added.) Courts have long recognized
that Congress intentionally uses “may” and “shall” in statutes to
distinguish when an agency does and does not have discretion
regarding whether to act. See generally , N. Singer, Sutherland
Stat. Const . § 57.03 (5th ed. 1992). Although not conclusive
where there is clear evidence of Congressional intent to the
contrary, the use of “shall” creates a presumption of mandatory
obligation. Planned Parenthood Fed’n of Am.. Inc. v. Heckler ,
712 F.2d 650, 656 (D.C. Cir. 1983). The use of “may” in section
110(m) and “shall” in section 179(a) thus signals Congressional
intent to give EPA authority to sanction at certain times but the
obligation to sanction at others. Were the Agency’s
-discretionary power to sanction coterminous with its obligation
to sanction, Congress presumably would not have seen the need to
provide two sections under which EPA is authorized to impose the
same sanctions. To read the provisions otherwise requires the
conclusion that either “may” should mean “shall” or that “shall”
should mean “may.” Such a reading would be in contravention of
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the general principle of statutory construction that where a
reasonable construction of a statute will give effect to all
provisions, a court will not condone a reading that “renders one
part a mere redundancy.” arecki v. G. D. Searle & Co. , 367 U.s.
303, 307—08 (1961); see also United States v. Menasche , 348 U.s.
528, 538—39 (1955) (rejecting reading that would “emasculate an
entire section” of statute).
The second and, for the issue at hand, most important
distinction between the language of section 110(m) and section
179(a) pertains to the timing of sanctions. The first sentence
of section 110(m) provides that the Administrator “may apply any
of the sanctions ... at any time (or at any time after ) the
Administrator makes a finding.” (Emphasis added.) Section
179(a) provides that “ unless such deficiency has been corrected
within 18 months ... one of the sanctions referred to in
subsection (b) shall apply.” (Emphasis added.) A plain reading
of the two sections compels the conclusion that Congress must
have intended two distinct, yet compatible, sanctioning
authorities. Section 110(m) gives EPA discretionary power to
impose sanctions at certain times. More specifically, the
straightforward meaning of the words “at any time” in conjunction
with the parenthetical “(or at any time after) the Administrator
makes a finding” is that EPA has discretionary authority to
impose sanctions at the very time the Agency makes such a finding
and throughout the subsequent period during which the finding is
still effective. Section 179(a) then explicitly orders EPA to
impose sanctions after 18 months if the offending state has not
corrected the deficiency. Significantly, section 179(a) is
worded to require sanctions after 18 months, not to prohibit
sanctions prior to 18 months.
Thus, these two provisions on their face are perfectly
consistent in that one (section 110(m)) provides EPA with
discretionary authority to impose sanctions on or after the date
it makes a finding, while the other (section 179(a)) states that
EPA’S discretionary authority converts to a requirement to impose
sanctions 18 months from the time a finding is made. Whenever
possible, courts construe statutory provisions to be consistent
with one another. Fidelity Fed. Say. & Loan Ass’n V. de la
Cuesta , 458 U.S. 141, 163 (1982); see also Jarecki , 367 U.S. at
307-08. To allow the two provisions to operate consistently
requires merely a recognition of the obvious distinction between
discretionary and mandatory sanctions.
Finally, the restriction on the timing for imposition of
statewide sanctions in section 110(m) further suggests the
Agency’s power to impose sanctions prior to the expiration of the
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18—month period applicable to mandatory sanctions under section
179. The second sentence of section 110(m) instructs the EPA to:
establish criteria for exercising ... (the sanctioning]
authority under the previous sentence with respect to
any deficiency referred to in section 179(a) to ensure
that, during the 24-month period following the finding,
disapproval, or determination ... such sanctions are
not applied on a statewide basis.
(Emphasis added.) The combination of the “at any time” language
discussed above, the use of the phrase “during the 24-month
period,” and the absence here of any restriction to the period
between the 18th and the 24th months connotes that EPA may use
this sanctions authority on less than a statewide basis at any
time within the 24-month period following the finding of
deficiency. Furthermore, if EPA determines that a state is
“principally responsible” for a deficiency, the plain language of
this sentence empowers EPA to impose statewide sanctions during
the same 24-month period.
b. Statutory Structure
Further evidence of Congressional intent with respect to a
given statutory provision is sometimes manifested in the use of
comparable language or similar design elsewhere in the statute.
Such an example appears in Title V of the Act. Congress invested
EPA with authority to sanction in section 502, which requires
states to submit operating permit programs to the Agency for
approval or disapproval by a certain date. Section 502(d) (2) (B)
of the Act regarding permit programs provides:
[ i]f the Governor does not submit a program as required
under paragraph (1), or if the Administrator
disapproves any such program submitted by the Governor
under paragraph (1), in whole or in part, 18 months
after the date required for such submittal or the date
of such disapproval ... the Administrator shall apply
sanctions under section 179(b)
(Emphasis added.) Immediately prior to this mandatory sanctions
provision, section 502(d) (2) (A) provides that:
[ i)f the Governor does not submit a program as required
under paragraph (1) or if the Administrator disapproves
a program submitted by the Governor under paragraph
(1), in whole or in part, the Administrator may. prior
to the expiration of the 18-month period referred to in
subparagraph (B). in the Administrator’s discretion.
apply any of the sanctions specified in section 179(b).
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(Emphasis added.) Comparable provisions appear in section 502(i)
of the Act.
Thus, there is at least one other example in which Congress
created a dichotomy between discretionary and mandatory sanctions
in the Act, by enacting a set of provisions allowing EPA to
impose sanctions prior to the time at which it must do so.
Although this formulation of the distinction between
discretionary and mandatory sanctions is more explicit than the
provisions of sections 110(m) and 179(a), the provisi s set out
a structure that parallels sections 110(m) and 179(a).
Moreover, the apparent intent behind the companion
provisions of sections 502 would logically fit the language of
sections 110(m) and 179(a). Section 502 does not require EPA to
impose sanctions immediately upon issuing a finding of
deficiency, and thus creates an incentive for states to comply by
offering a period during which EPA can refrain from issuing
sanctions if the state is working to comply. Section 502
demonstrates that, in drafting the Clean Air Act Amendments of
1990, Congress did not intend to create 18-month periods that
function as de facto 18-month extensions for states regardless of
their efforts or lack of efforts to comply with requirements
established for operating permit programs. That approach would
fit as logically into the scheme for ensuring timely submission
of SIPs. Indeed, Congress’s antipathy towards failure to comply
and desire to encourage quick compliance with the SIP
requirements can be inferred in section 179(a), where one or both
sanctions are imposed automatically after 18 months. If the 18-
month period were indeed a guaranty of 18 additional months
before EPA could impose sanctions, then there would be little
incentive for states to make efforts toward adoption and
implementation of politically difficult SIP rules and regulations
by the established statutory deadlines.
In sum, both the parallel structure and similar purposes of
the Title V and Title I sanction provisions shed light on
Congress’s intent in designing the Title I provisions.
Congress’s clear intent to grant EPA discretion to impose
sanctions early under section 502 for failure to submit or
enforce a permit program provides confirmation that Congress
intended to grant similar power under the plain meaning of the
language in section 110(m).
c. Legislative History
Courts are generally loath to enter into the realm of
legislative history where the language of a statute is clear on
its face. As noted by the Supreme Court, “we look first to the
statutory language and then to the legislative history if the
statutory language is unclear.” Blum v. Stenson , 465 U.S. 886,
896 (1984); see also Toibb v. Radloff , 111 S. Ct. 2197, 2200
10
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(1991) (rejecting reliance on legislative history when statutory
language is clear).
Thus, if the statutory language is clear on its face, it is
normally unnecessary to resort to legislative history. As
described above, the language of section 110(m) is clear and its
straightforward meaning fits consistently with section 179(a).
Moreover, the parallel structure and purposes of section 502 tend
to confirm that Congress meant what it said in section 110(m).
For these reasons, there is no need to resort to the legislative
history to determine Congress’s intent in enacting section
110(m).’ In any case, we discuss the legislative history below
in the context of a consideration of GAO’s analysis, and conclude
that it is entirely consistent with the conclusions that flow
from the statutory language and structure.
d. Summary
Examination and comparison of the precise wording of
sections 110(m) and 179(a) indicate that Congress intended both
to give EPA discretionary authority to impose sanctions in
certain circumstances and to establish a requirement that EPA
impose sanctions in other circumstances. In addition, the
express wording of the provisions indicates that under section
110(m) the discretionary power to sanction arises prior to the
mandatory requirement to do so set forth in section 179(a). Read
literally, section 110(m) provides that EPA may impose sanctions
at any time or at any time after a deficiency finding. By
contrast, section 179(a) provides that EPA must impose sanctions
18 months after such a finding absent correction of the
l Even if a court resorts to legislative history, its
relative significance must be gauged in light of the statutory
language itself: “(a]bsent a clearly expressed legislative
intention to the contrary, that language must ordinarily be
regarded as conclusive.” Consumer Product Safety Conun’n v. GTE
Sylvania Inc. , 447 U.S. 102, 108 (1980). Thus, even assuming
arguendo that congress’ intent is not clear from the plain
language and design of section 110(m) and the other provisions,
the legislative history of those provisions cannot override the
words of the statute unless it clearly expresses an intent
contrary to those words, and even in such a case would have to
appear in such a context as to indicate the clear intent of the
Congress as a whole. We examine the legislative history in
section A.2. of this memorandum in an analysis of the specific
points raised in the GAO Opinion. As explained in that analysis,
the available legislative history for sections 110(m) and 179 is
not inconsistent with the expression of Congressional intent
conveyed by the language of sections 110(m) and 179(a) and the
general statutory structure for sanctions evidenced in section
502.
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deficiency. Rather than creating a conflict, the above
interpretation of the wording of the statute renders the two
provisions consistent and logical.
In addition to the precise wording of the individual
provisions, the language and design of the Act as a whole provide
further evidence of Congressional intent to give EPA both a
discretionary authority and a mandatory obligation to sanction.
A structure consisting of an obligation to impose sanctions at 18
months after a finding coupled with the authority to impose
sanctions sooner, appears in section 502(d) (2) (A) and (B) and
comparable provisions in section 502(i). No other provisions of
the Act give states a guaranteed extension of time before EPA can
impose sanctions. Congress’s clear intent to permit sanctions
prior to the expiration of an 18-month deadline for imposition of
sanctions in these comparable sections is evidence of its intent
to do the same in sections 110(m) and 179(a). Congress evidently
sought to provide an incentive for compliance and such an intent
would be frustrated by interpreting the 18-month period of
section 179(a) as a guaranteed extension of the deadline.
In sum, the plain language of section 110(m) and the ease
with which it can be read in harmony with section 179(a) (and the
comparable provisions of section 502) reveal that Congress spoke
directly to this issue and clearly intended to authorize EPA to
impose sanctions under section 110(m) before the Agency is
required to do so under section 179(a). Under Chevron and
subsequent cases, that is the end of the inquiry.
2. Analysis of GAO’s Arguments
The GAO Opinion concludes that section 110(m) does not grant
EPA authority to impose sanctions prior to the expiration of the
18-month period provided in section 179(a). In reaching this
conclusion, GAO analyzed the express language of sections 110(m)
and 179(a) and the extant legislative history for those
provisions.
a. Statutory Language
The essential thrust of GAO’s argument is that the express
language of sections 110(m) and 179(a) is “in conflict” and
cannot be reconciled in such a manner as to give full meaning to
each provision. By GAO’s reasoning, section 179(a) guarantees
noncomplying states 18 months before EPA shall impose sanctions
and the express power of EPA to impose sanctions “at any time”
under section 110(m) is simply an inconsistency or statutory
aberration. GAO believes that if section 110(m) creates
discretionary authority to sanction, then the 18-month period
provided by section 179(a) is “rendered a nullity.” GAO Opinion
at 6.
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This argument ignores the plain reading of the two statutory
provisions as described above. Section 110(m) expressly provides
that the Agency “may” impose sanctions “at any time” covering any
portion of the state the Administrator deems “reasonable and
appropriate” for the purpose of encouraging compliance. By
contrast, section 179(a) provides that upon a finding of
deficiency, “unless such deficiency has been corrected within 18
months,” sanctions “shall apply.” Far from rendering the 18—
month period a nullity, section 110(m) provides EPA with broader
authority to ensure compliance with the Act. If read as GAO
urges, section 179(a) merely gives a state a guaranteed extension
of at least 18 months before it need worry about repercussions of
failure to act. If, however, section 110(m) provides
discretionary sanctioning authority to EPA, then EPA has
authority to use sanctions during the 18-month period as an
incentive for states to comply before EPA is required to impose
sanctions. Read in this fashion, both sections 110(m) and 179(a)
have full effect. Courts are guided by the “well—settled rule
that all parts of a statute, if possible, are to be given
effect.” American Textile Mfrs. Inst. v. Donovan , 452 U.S. 490,
513 (1981); accord, Fidelity Fed. Say. & Loan Ass’n , 458 U.S. at
163. It is only GAO’S reading that entirely fails to give effect
to one of the statutory provisions.
As GAO correctly points out, this is the very same dual
system of discretionary and mandatory sanctions set forth in
sections 502(d) (2) (A) and (B) and sections 502(1) (1) and (2) of
the Act. GAO dismisses this similarity by arguing that Congress
would not have worded sections 110(m) and 179(a) differently from
the analogous provisions of section 502 if it intended to allow
the same discretionary sanctioning. This position ignores the
plain reading of sections 110(m) and 179(a), even if the sections
are worded differently from section 502, and ignores the overall
scheme for sanctions evidently intended by Congress. In light of
Congress’s clear intent, as evidenced by the statutory language,
to grant EPA discretionary sanctions power and a mandatory
deadline for imposition of sanctions in the analogous provisions
of section 502, adopting the parallel reading conveyed by the
plain reading of sections 110(m) and 179(a) would appear more
appropriate than GAO’S solution, which is simply to excise one of
the statutory provisions.
As further evidence of statutory conflict, GAO points to the
24-month clock provided in the second sentence of section 110(m).
That sentence requires the Agency to develop rules governing when
it may impose sanctions on a statewide basis. Specifically, the
Agency is to limit sanctions so that:
during the 24-month period following the finding
referred to in section 179(a), such sanctions are not
applied on a statewide basis where one or more
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political subdivisions covered by the applicable plan
are principally responsible for such deficiency.
Based upon this provision, GAO reasons:
In light of this 24-month clock, EPA’S construction of
section 110(m) would apparently produce an incongruous
or inexplicable result. The state would be guaranteed
a full 24 months to correct deficiencies before
sanctions could be imposed, if its political
subdivisions were principally responsible, but no time
at all if the state itself were responsible.
GAO Opinion at 7. A straightforward reading of the provision
demonstrates that there is nothing either “incongruous” or
“inexplicable.” The 24-month clock in section 110(m) merely
governs the timing with respect to the geographic scope of
discretionary sanctions. It is a different clock, measuring not
when sanctions must be imposed but rather the period during which
they must not be imposed statewide if a political subdivision is
principally responsible for the deficiency. The 24-month period
in section 110(m) does not affect the 18-month period of section
179(a). For example, if a political subdivision is not
principally responsible for a section 179(a) deficiency, then EPA
(i) impose sanctions on the state immediately, whether to all
or only a portion of the state as EPA determines reasonable and
appropriate, and (ii) must impose sanctions on at least portions
of the state after 18 months. If a political subdivision is
principally responsible for that deficiency, then EPA (i) y
impose sanctions immediately on less than a statewide basis but
may not do so on a statewide basis for 24 months, and (ii) must
impose sanctions on at least portions of the state after 18
months. Under either scenario, EPA may choose not to impose
sanctions earlier than 18 months after the finding, if
appropriate, but if EPA chooses to exercise its discretionary
authority, the availability of statewide sanctions earlier than
24 months after the finding is limited by whether a political
subdivision of the state is principally responsible for the
deficiency. This combined reading of sections 110(m) and 179(a)
results in no incongruity and the provisions are not in conflict.
GAO’s key statutory argument is that the explicit phrase in
the first sentence of section 110(m) authorizing EPA to impose
sanctions “at any time (or at any time after)” a finding is
inoperative. This position clearly contravenes the cardinal rule
of statutory construction that “all parts of a statute, if at all
possible, are to be given effect.” Weinberger v. Hynson,
Westcott & Dunning , 412 U.S. 609, 633 (1973) (rejecting
interpretation of Federal Food, Drug, and Cosmetic Act that
rendered one clause superfluous). Particularly relevant here is
“the elementary canon of construction that a statute should be
interpreted so as not to render one part inoperative . . ..,‘
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Colautti v. Franklin , 439 U.S. 379, 392 (1979); see also
Mountain States Tel. & Tel. Co. v. Pueblo of Santa Ana , 472 U.s.
237, 249-50 (1985) (rejecting interpretation of Pueblo Lands Act
that would “nullify” one of its provisions).
On rare occasions, a court will decline to give effect to
the express words of a statute. See generally , N. Singer,
Sutherland Stat. Const . S 46.07 (5th Ed.). GAO cites as an
example J.C. Penney Co. v. Commissioner of Internal venue , in
which the court refused to give literal effect to statutory
language when it produced absurd or unreasonable results
inconsistent with the purposes of the statute. 312 F.2d 65 (2d
Cir. 1962). The court reasoned:
When the “plain meaning” of statutory language “has led
to absurd or futile results,” the Supreme Court has
“looked beyond the words to the purpose of the act”;
“even when the plain meaning did not produce absurd
results but merely an unreasonable one ‘plainly at
variance with the policy of the legislation as a
whole” the Court has followed that purpose rather than
the literal words.
. at 68 (quoting United States v. American Trucking Ass’n. , 310
U.S. 534, 543 (1940)). The J.C. Penney court was able to
determine that the interpretation of the language in question as
urged by one of the parties would result in a meaning “directly
counter to the declared purpose of Congress and the statutory
scheme.” at 72. This case simply does not apply here
because the literal interpretation of “at any time” in section
110(m) does not result in an “absurd” or “futile” result counter
to the purpose and scheme of the Act as a whole. See Lehman v.
Dow Jones & Co., Inc. , 783 F.2d 285, 293—94 (2nd Cir. 1986) (in
distinguishing its earlier decision in J.C. Penney , the court
provides that uncertain legislative history is not sufficient to
override the literal words of the statute where those words are
consistent with the structure and purpose of the statute as a
whole). It is neither absurd nor futile for Congress to grant
EPA discretionary authority to sanction immediately after a
finding, coupled with a mandatory obligation to do so after 18
months. To the contrary, GAO’s reading of the statutory
provisions appears counter to the purpose and scheme of the Act
because it would create a guaranteed 18-month extension beyond
statutorily mandated deadlines rather than providing an incentive
for states to make diligent efforts toward timely compliance
throughout the 18-month period. As discussed above, a plain
reading of sections 110(m) and 179(a) renders the provisions
consistent and creates a structure of discretionary and mandatory
sanctions mirrored elsewhere in the Act.
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b. Legislative History
As described above, review of legislative history is
normally unnecessary where the statutory language is clear.
Moreover, even where courts have looked to the legislative
history of a clearly worded statute, they have concluded that the
history cannot override the plain meaning unless it clearly
expresses an intent contrary to the statutory language. To
support its conclusion that sections 110(m) and 179(a) are in
conflict, GAO turns to the legislative history of the relevant
provisions. In reviewing the legislative history, GAO focuses
primarily on three things: (i) statements surrounding the
introduction of the Administration bill; (ii) statements of the
House Energy and Commerce Committee; and (iii) statements of the
House Public Works and Transportation Committee. The express
language of sections 110(m) and 179(a) appears to reflect a clear
Congressional intent to authorize EPA to impose sanctions prior
to 18 months, but a review of the legislative history is helpful
to show that it is consistent with this reading of the statute.
In assessing the role of sanctions in the initial
Administration bill, GAO cites statements made by a spokesman
representing EPA in hearings before a House subcommittee. With
regard to the timing of sanctions, the spokesman stated:
There have been some questions in the past about
when and how sanctions should be applied. The
Administration’s bill clarifies this matter by
explicitly stating that sanctions should be used “for
the purposes of encouraging the state to undertake
reasonable efforts and preventing further deterioration
of the state’s air quality.”
Under the President’s bill, if an incomplete State
Implementation Plan is submitted or if the SIP ... is
disapproved, and if EPA finds that the State is not
making reasonable efforts to correct the deficiency,
EPA must propose one of four discretionary sanctions.
If a state does not correct a deficiency within
six months after the sanctions have been proposed, EPA
must promulgate one or more of the sanctions, which
would take effect within 60 days of promulgation.
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States would, therefore, have about eight months
to correct any deficiency following EPA’s initial
proposal of sanctions. 2
To view these comments in context, one must examine the
precise wording of the provisions regarding sanctions in the
Administration’s bill. On the date of these comments, November
9, 1989, the precursor to section 110(m) in the Administration’s
bill provided:
The Administrator may anply any of the sanctions listed
in section 179(b), or promulgate a Federal
implementation plan, at any time (or at any time
after) , he [ makes any one of four sets of findings of
state failure). The Administrator may apply such
sanction or sanctions, or promulgate a Federal
implementation plan, with respect to any portion of the
State he determines reasonable and appropriate for the
purpose of ensuring that the requirements of this Act
relating to such plan or plan revision are met.
H.R. 3030, 101st Cong., 1st sess., as introduced, July 27, 1989,
S 101 (emphasis added). The contemporaneous version of section
179(a) provided:
For any implementation plan or plan revision required
under this part (or required in response to a finding
of substantial inadequacy as described in section
110(e) (4)), at such time as the Administrator -- [ makes
one of four findings), he shall (and at any other time
the Administrator may) publish in the Federal Register
a proposed determination of whether the State is making
reasonable efforts to cure the relevant failure. If
the Administrator proposes to determine that the State
is not making reasonable efforts to cure the failure,
he shall simultaneously propose to apply, with respect
to the relevant area within such State, at least one of
the sanctions specified in subsection (b) (for the
purpose of encouraging the State to undertake
reasonable efforts and preventing further deterioration
of the State’s air quality) and describe why
application of such sanction or sanctions is
appropriate under the circumstances. The Administrator
2 See, generally, The Impact of Air quality Regulation on
Federal Highway and Transit Programs, and on Fuel Tax
Collections: Hearing Before the House Committee on Public Works
and Transportation, Subcommittee on Investigations and Oversight ,
101st Cong., 1st Sess. 16 (Nov. 9, 1989) (statement of Richard D.
Wilson, Director, Office of Mobile Sources, U.S. Environmental
Protection Agency).
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shall take final action on these proposals no later
than six months after the date such ro osals are
published . If the Administrator makes a final
determination that the State is not making reasonable
efforts, he shall simultaneously apply at least one of
the sanctions listed in subsection (b), to take effect
no later than 60 days following final action .
. S 102(g) (emphasis added).
Initially, we note that there are obvious problems with
reliance on the statements of the Administration spokesman:
(i) the position or intent of the Administration does not
necessarily reflect the intent of Congress, and (ii) the comments
address an early form of the bill before significant
modifications made by Congress. For just such reasons, courts
refuse to give weight to statements made in hearings by those who
are not members of Congress unless such statements are included
in official House or Senate Reports. See, e.g., Kelly v.
Robinson , 479 U.S. 36, 51 n.l3 (1986) (declining “to accord any
significance to” comments in the hearings and the Bankruptcy Laws
Commission Report where “none of those statements was made by a
Member of Congress, nor were they included in the official Senate
and House Reports”).
Nevertheless, examination of the comments of the spokesman
in light of the actual language of the Administration bill is
very illuminating. Rather than providing a guaranteed six months
for correction of deficiencies as intimated by the spokesman, the
language of the provision stated that EPA had to take final
action to impose sanctions “no later than six months” after its
sanctions proposal. Upon making a final determination that the
state was not making reasonable efforts to comply, the
Administrator was ordered “simultaneously” to apply sanctions to
take effect “no later than 60 days following” the final
determination. Thus, the statement by the Administration
spokesman that states would have “about eight months to correct
any deficiency following EPA’S initial proposal of sanctions” has
to be read in light of the bill’s language, i.e. , a state would
receive up to eight months to correct its deficiency if EPA chose
not to impose sanctions more promptly. Moreover, the alacrity
with which EPA was to impose sanctions was to be tied directly to
a determination of whether the state was making reasonable
efforts.
In short, the comments of the EPA official on the language
of the Administration’s original bill do not support GAO’S
conclusion with respect to Congress’s intent regarding the
enacted legislation. The comments are not persuasive that the
Administration’s original bill gave states an 8-month guaranteed
period before the imposition of sanctions and they are certainly
not persuasive that different provisions in the enacted
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legislation were intended to provide an 18-month guaranteed
extension .
The statements made by the House Committee on Energy and
Commerce are far more probative of Congressional intent regarding
the timing of sanctions, but likewise fail to support GAO’S
conclusions. In explaining a much-amended version of section
179(a), the Committee stated:
Section 179(a) outlines the State failures which are
sanctionable once the EPA Administrator makes the
finding or determination or takes a disapproval action
If the State has not corrected such deficiency
within 18 months from the Administrator’s finding,
determination, or disapproval, one of the two listed
sanctions in section 179(b) ... is to apply immediately
upon expiration of such 18-month period. If the
deficiency is not corrected within an additional six
months, the second sanction from section 179(b) is
similarly to apply immediately. Both sanctions are to
apply at the expiration of the original 18-month period
if the Administrator finds that the State is not making
a good faith effort.
H.R. Rep. No. 490, Part 1, 101st Cong., 2d Sess. at 227—28. The
GAO Opinion cites this passage in support of its interpretation.
However, this description only sets forth the internal
requirements of section 179(a), as enacted. As previously
discussed, these requirements are not inconsistent with EPA’S
interpretation of section 110(m). Nothing in the cited language
contradicts EPA’s interpretation of section 110(m) as granting
discretionary authority to impose the sanctions identified in
The GAO also cites the later statements of the same
spokesman regarding amendments to the Administration bill: “The
Committee bill significantly increases the time from six to
eighteen months that States have to correct deficiencies to avoid
sanctions.” Provisions of H.R. 3030. The Clean Air Act
Amendments of 1989, that Fall Within the Jurisdiction of the
Committee on Public Works and Transportation: Hearing Before the
House Committee on Public Works and Transportation , 101st Cong.,
2d Sess. 45 (April 19, 1990) (statement of Richard D. Wilson,
Director, Office of Mobile Sources, U.S. Environmental Protection
Agency). This statement likewise has to be read in light of what
the Administration bill and the sections as enacted actually
provided, i.e. , a period of time up to six or 18 months for
compliance before EPA must impose sanctions, not a guaranteed
extension of time across the board. Thus the spokesman’s
statements appear to pertain only to the period of time before
mandatory imposition of sanctions regardless of a state’s efforts
to comply.
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section 179(b) prior to the expiration of the 18—month period
provided in section 179(a).
Significantly, GAO also quotes the Committee’s statement
that:
(t)o give States operating in good faith an opportunity
to correct their failures, 18 months is provided for
States to correct deficiencies before sanctions apply.
- Id. at 228. The statement clarifies that the 18—month period is
intended for states acting in good faith and, by negative
implication, EPA must have the authority to provide less time to
states not correcting deficiencies in good faith. The express
statement tying the 18-month period to good faith thus suggests
that Congress could not have intended to give a blanket extension
to all noncomplying states and, most importantly, that the 18-
month period was not guaranteed. At bottom, the Committee’s
statement appears to pertain only to section 179, but to the
extent relevant to section 110(m), indicates that EPA has the
authority to cut short the 18-month period.
With regard to section 110(m) itself, the Committee stated
in the same report:
New Clean Air Act section 110(m) authorizes the
Administrator to apply the sanctions provided in
section 179. If the Administrator makes a ... (finding
of SIP deficiency under section 179), a sanction
applies as provided in section 179. The sanction may
be applied to any portion of a State, subject to
criteria established by rule from EPA.
j at 221. From this language, GAO concludes that the Committee
did not view section 110(m) as an alternate means for EPA to
impose sanctions separate and apart from that of section 179.
GAO Opinion at 10. This statement contains one item of
legislative history seemingly supportive of GAO’s interpretation
of the statute, i.e. , the statement that in section 110(m) “a
sanction applies as provided in section 179.” The use of “as
provided in” is susceptible to two interpretations; either it
refers to the sanctions as described in section 179 or it refers
to the imposition of sanctions as limited by the terms of section
179. Assuming that Congress intended the latter meaning,
however, it is uncertain whether the reference was to the 18-
month period or to some other limitation within section 179 such
as the limitation of the termination of highway funds to only
certain types of projects or the setting of offsets at certain
ratios. It is simply unclear from the report what portion of
section 179 Congress intended to reference. It is probable and
consistent with the plain meaning of section 110(m) that the
references to section 179 within section 110(m) are only for the
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purpose of identifying the available sanctions as set forth in
section 179. In any case, the quoted language does not directly
contradict the portion of section 110(m) which permits the
imposition of sanctions “at any time.” A stronger statement of
contrary Congressional intent should be necessary to overcome the
express statutory language.
Similarly, the comments of the House Public Works and
Transportation Committee do not precisely address the issue of
the timing of EPA discretionary sanctions power under section
- 110(m) except with respect to statewide sanctions. As GAO notes
• in its opinion, this Committee was most concerned with the
geographic scope of sanctions. As stated by the Committee:
Although (EPA] is empowered to apply sanctions to any
portion of a state under the Energy and Commerce
Committee version of H.R. 3030, the Committee sees a
need to clarify the circumstances under which areas
other than the nonattainment areas should be
sanctioned. To the extent that the EPA Administrator
must impose sanctions, they should be applied [ to the]
governmental entity (that) is primarily responsible for
the failure to achieve compliance. The past failure of
state legislatures to approve inspection and
maintenance programs required by a SIP can be cited as
an appropriate circumstance where statewide sanctions
were appropriate.
H.R. Rep. No.490, Part 3, at 5. Because of this concern, the
Public Works and Transportation Committee amended the precursor
to section 110(m):
to prohibit the Administrator from applying
sanctions on a statewide basis, during the 24-month
period following a finding of a SIP deficiency, when
one or more political subdivisions covered by the
applicable implementation plan is principally
responsible for such deficiency.
Id. at 10.
The GAO Opinion cites these passages to demonstrate that
this Committee did not intend section 110(m) “to provide an
alternative timetable for the imposition of statewide sanctions,
different from that of section 179.” GAO Opinion at 12.
significantly, however, the same report cited by GAO specifically
stated that: “H.R. 3030 provides discretionary authority for the
EPA Administrator to impose sanctions . . . .“ H.R. Rep. No. 490,
Part 3, at 5 (emphasis added). This suggests that at the time of
the Public Works and Transportation Committee’s comments, it
considered EPA’S authority to sanction under section 110(m) to be
discretionary. Thus these statements signal the Committee’s view
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that EPA has sanctioning authority separate from the mandatory
authority of section 179. In addition, given that the sanctions
set forth in section 179(b) apply primarily to nonattainxuent
areas, the Committee’s concern over the possibility of statewide
sanctions provides at least circumstantial evidence that the
Committee recognized that section 110(m) granted EPA a separate
sanctioning power on a statewide basis and felt the need to
restrict its use within section 110(m) itself. 4 Given that the
Committee appears to have acknowledged a separate sanctioning
authority, it does not necessarily follow that the discretionary
authority under section 110(m) and the mandatory obligation to
impose sanctions under section 179(a) are governed by the same
timetable.
To support its contention that the power to sanction under
section 110(m) is limited by the 18-month period of section
179(a), the GAO cites the comments of Chairman Anderson of the
House Public Works and Transportation Committee explaining the
effect of the Committee’s amendment:
on the issue of sanctions, ... after 18 months, the
sanction cannot be statewide if a political subdivision
of a State is principally responsible for the
noncompliance. In an additional 6 months, EPA may
extend sanctions statewide. This gives a State, after
the initial 18 months, 6 additional months to remedy
the failure of a region to come into compliance before
there is any threat of a statewide sanction.
136 Cong. Rec. H2579 (May 21, 1990).
The sanctions set forth in section 179 specifically
pertain to nonattainment areas of a state. The initial sentence
of section 179(a) provides that the EPA must impose sanctions for
a failure with respect to “any implementation plan or plan
revision required under this part.” The part referenced is part
D of Title I, which contains nonattainment area requirements.
Although some part D requirements apply to attainment areas in
certain circumstances, the primary focus of part D is
nonattainment areas. In addition, the sanctions in section
179(b), as applied under section 179(a), are almost exclusively
linked to nonattainment areas by their express language. The
highway funding sanction provided in section 179(b) (1) (A) is
expressly restricted to nonattainment areas. The emissions
offset sanction provided in section 179(b) (1) (B) requires new or
modified sources to increase their offsets to comply with section
173, and typically, only sources in nonattainment areas must
comply with section 173. Therefore, the mandatory sanctions
listed under section 179(b) would primarily affect nonattainment
areas.
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These comments are useful to understand Congress’s intent
with regard to qualifying EPA’s authority to impose statewide
sanctions, but they do not conflict with the Agency’s basic
discretionary authority to impose sanctions prior to 18 months on
a localized basis or on a statewide basis where a political
subdivision is not principally responsible. The comments may
easily refer only to the situation where EPA determines to use
its section 110(m) authority to broaden the geographic scope of
sanctions, but relies on section 179(a) for the timing. In this
circumstance it is correct that sanctions could not be statewide
for 24 months, assuming that a political subdivision is
principally responsible for the deficiency. Hence Chairman
Anderson’s statement that the statute “gives a State, after the
initial 18 months, 6 additional months to remedy the failure of a
region to come into compliance before there is any threat of a
statewide sanction.” (Emphasis added.) In this case, EPA must
impose mandatory sanctions on at least portions of the state 18
months after a finding, in accordance with the mandate of section
179(a), but cannot impose statewide sanctions for 24 months based
on the restrictions of section 110(m).
Alternatively, as urged by the GAO, these comments may
reflect the Congressman’s understanding that States would always
have 18 months to remedy deficiencies before EPA could impose any
sanctions. This reading places the emphasis on different phrases
of the same sentence: “gives a State, after the initial 18
months , 6 additional months to remedy the failure of a region to
come into compliance before there is any threat of a statewide ‘
sanction.” (Emphasis added.) Following the GAO’s reading, the
phrase “gives a State” 18 months must be read as “guarantees” a
state 18 months. Likewise following this reasoning, the phrase
“before there is any threat of statewide sanction” must be read
as “threat of any sanction” and must disregard the references to
the responsibility of a political subdivision or region for the
noncompliance. Contrary to the GAO’S intimation, Chairman
Anderson’s comments simply do not explicitly say that states must
always receive 18 months before EPA can impose sanctions. At
best, these comments are ambiguous. Chairman Anderson’s
statements do not directly contradict the portion of section
110(m) which permits the imposition of sanctions “at any time”
except to qualify the timing of statewide sanctions in a
situation in which EPA determines not to impose early sanctions.
The statements certainly provide no basis for disregarding the
express statutory language of section 110(m).
c. Summary
In sum, GAO’s interpretation of the statutory language does
not account for the plain meaning of the words and is counter to
the purpose and scheme of the Act as a whole. The legislative
history of sections 110(m) and 179(a) does not provide clear
evidence of Congressional intent that directly conflicts with the
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express language of those sections. The legislative history of
these provisions cannot override the express words of the statute
unless it clearly demonstrates an intent contrary to those words:
“(a)bsent a clearly expressed legislative intention to the
contrary, that language must ordinarily be regarded as
conclusive.” Consumer Product Safety Coittm’n , 447 U.S. at 108.
The statements of the Administration spokesman, the House Energy
and Commerce Committee, and the House Public Works and
Transportation Committee do not directly address the imposition
of sanctions prior to the expiration of the 18-month period
specified in section 179(a). To the extent that the history
addresses this issue even indirectly, however, the various
statements do not conflict with a plain reading of the statutory
provisions. Nothing in the history directly contradicts the
express grant of discretionary authority in section 110(m) to
impose sanctions prior to the expiration of the 18-month period,
or more specifically, “at any time (or at any time after)” a
finding of deficiency.
B. May EPA propose the imposition of sanctions
under section 110(m) prior to the time EPA
has made a final finding under section
179(a) (1)—(4) ?
The second question raised by GAO is whether EPA has the
authority to propose section 110(m) sanctions prior to the
Agency’s making a final finding of state failure pursuant to
section 179(a). In the Eckert letter, EPA responded that it does
have authority to propose the imposition of sanctions under
section 110(m) prior to making a final finding pursuant to
section 179(a). GAO concludes that EPA does not have such
authority, arguing on two levels. First, GAO reaches its
conclusion even while assuming that EPA does have independent
sanctioning authority under section 110(m). Second, GAO reaches
the same conclusion assuming that the only sanctions process
provided under the Act is the mandatory process of section
179(a). Since EPA’S approach rests on the view that section
110(m) provides discretionary authority to impose sanctions under
section 110(m), and only speaks to the proposal of sanctions
under that provision, we will only address GAO’s first set of
arguments. 5
Under section 179, notice-and-comment rulemaking on
whether to impose a sanction on the specified deadlines is not
necessary. Rather, the only issue subject to notice-and—comment
rulemaking is the order in which the two sanctions will
automatically be imposed 18-months after a finding is made and 6
months following the first sanction. In addition, when EPA
believes both sanctions should be imposed immediately at 18
months because of a lack of good faith, EPA’s finding that the
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1. Analysis of Whether the Action is
Precluded under the Administrative
Procedure Act or the Clean Air Act
a. The Clean Air Act
As mentioned in the discussion of the applicable standard of
review, a court reviewing an agency action must set aside the
action if, among other things, it is found to be “without
observance of procedure required by law ...,“ 5 U.S.C. S 706.
The procedures an agency must follow in a rulemaking action are
those established by the APA unless the implementing statute sets
forth overriding procedures. çj Vermont Yankee , 435 U.S. at 545-
47 (The APA sets forth the minimum procedural requirements which
may be expanded upon by other relevant statutes or the agency
itself).
In section 307(d), the CAA sets forth rulemaking procedures
that apply to various actions taken pursuant to the Act. Actions
to impose sanctions are not subject to these requirements. .gg
section 307(d)(1). Section 110(m) provides that a sanction may
be imposed “at any time (or at any time after)” a finding is
made. It is, of course, quite clear from this language that EPA
may not impose sanctions until it has made one of the deficiency
determinations authorized under section 179(a). However, section
110(m) is silent on the issue of when sanctions may be proposed .
Congress authorized EPA to impose sanctions at any time (or at
any time after) EPA makes the finding. That authorization
necessarily implies that EPA has the authority to propose those
sanctions before EPA issues the final finding. Without such a
capability, EPA would never be able to impose sanctions “at any
time” a finding is made. Finally, EPA has not established any
internal procedures that create a more restrictive process than
that set forth under the APA.
b. The Administrative Procedure Act
Absent any further guidance under the CAA on the applicable
procedural requirements for proposing and imposing sanctions
under section 110(m), the rulemaking requirements to be followed
for the imposition of sanctions under that provision are those
established in the APA, 5 U.S.C. S 553. The specific provision
relevant here establishes the requirements of a proposed rule:
(b) General notice of proposed rule making shall be
published in the Federal Register, unless persons
subject thereto are named and either personally served
State was not acting in good faith would be subject to notice—
and-comment rulemaking.
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or otherwise have actual notice thereof in accordance
with law. The notice shall include --
(1) a statement of the time, place, and
nature ot public rule making proceedings;
(2) reference to the legal authority under
which the rule is proposed; and
(3) either the terms or substance of the
proposed rule or a description of the
subjects and issues involved.
5 U.S.C. § 553(b). Although this provision establishes the
general requirements for a proposed rulemaking action, it
provides little guidance as to the substantive requirements of
the notice itself.
In interpreting this provision, courts have used broad
language to establish principles regarding adequate notice. One
common test is “whether the notice would fairly apprise
interested persons of the subjects and issues the agency was
considering.” American Transfer & Storage Co. V. I.C.C. , 719 F.2d
1283, 1303 (5th Cir. 1983); accord United Steelworkers of Am. v.
Marshall , 647 F.2d 1189, 1221 (D.C. Cir. 1980), cert. denied , 453
U.S. 913 (1981). On a similar note, a proposed rule must
“provide sufficient factual detail and rationale for the rule to
permit interested parties to comment meaningfully.” Florida
Power & Light Co. v. United States , 846 F.2d 765, 771 (D.C. Cir.
1988), cert. denied , 490 U.S. 1045 (1989). Finally, in reviewing
a final rule, the courts have held that if the final rule is a
logical outgrowth of the proposed rule, then the agency has not
abused its discretion in adopting that final rule. Small Refiner
Lead Phase-Down Task Force v. EPA , 705 F.2d 506, 547 (D.C. Cir.
1983)
Neither we nor GAO have discovered any case law addressing
the precise question of whether an agency may propose an action
that would take place upon the occurrence of a specific event
prior to the time that event occurs. Neither the APA itself nor
the case law interpreting it prohibits such advance proposals.
However, the Supreme Court has made it unmistakably clear that,
so long as an agency does not contravene any specific statutory
requirement, it is free to fashion its own procedures without
interference from the courts. See Vermont Yankee , 435 U.S. at
542—45 (“Absent constitutional constraints or extremely
compelling circumstances the ‘administrative agencies “should be
free to fashion their own rules of procedure and to pursue
methods of inquiry capable of permitting them to discharge their
multitudinous duties.”) (citations omitted). Here, where
Congress has not proscribed such a procedure in any statute, it
seems clear that EPA may propose an action that will occur based
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on a future event if such a proposal meets the APA’s general
requirement to provide adequate notice to affected parties.
Moreover, EPA will not be barred from taking final action on that
proposal if the final action is a logical outgrowth of the
proposed action.
In proposing the imposition of section 110(m) sanctions
before a final finding occurs under section 179(a), EPA can act
consistent with the requirement for providing sufficient notice.
As described above, under EPA’S interpretation, section 110(m)
provides EPA with the discretion to impose either or both the
-. highway funding or 2 to 1 offset sanctions at any time after EPA
makes a finding pursuant to section 179(a). EPA may impose those
sanctions on any area of the State for which EPA determines
imposing sanctions is reasonable and appropriate, but not
statewide during the 24 months following a finding if a political
subdivision of the State is principally responsible for the
deficiency that triggered the finding. In summary, section
110(m) provides EPA with discretion as to three things: (1) the
timing of the sanction or sanctions; (2) the selection of
sanctions; and (3) the extent of the geographic scope for
imposition. A fourth item, the finding that triggers EPA’s
discretion, may play a role in EPA’S choices with respect to the
three discretionary items, but is not an issue in and of itself
in the action propo3ing section 110(m) sanctions. 6
6 Under section 110(m), the findings that trigger EPA’s
discretionary sanctions authority are the four findings listed in
section 179(a): (1) a finding of failure to submit a required
submittal; (2) a finding that a submittal is incomplete; (3) a
disapproval of a submittal; and (4) a finding of failure to
implement an approved measure. EPA ordinarily must go through
notice-and—comment rulemaking to disapprove or to find a failure
to implement an approved plan item. The opportunity to comment
on the correctness of EPA’S disapproval action or finding of
failure to implement will be in the rulemaking action taking such
action. As to the first two findings, Congress evidenced an
intent that EPA was not required to take rulemaking action on the
findings themselves. Under the pre-amended Act, EPA established
the procedure for determining completeness of a State submittal
by a letter to the State. In adopting EPA’s pre—enactment
process into the amended Act, Congress evidenced its intent that
rulemaking was unnecessary in two ways. First, Congress codified
the process for determining completeness without expressly
requiring rulemaking action and by explicitly limiting the time
for completeness review; such action indicates Congress’s tacit
approval of EPA’s established process. See United States v. Board
of Comm’rs of Sheffield. Alabama , 435 U.S. 110, 134—35 (1978)
(“When a Congress that reenacts a statute voices its approval of
an administrative or other interpretation thereof, Congress is
treated as having adopted that interpretation, and this Court is
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A proposal of sanctions under section 110(m) based on an
anticipated State failure can provide the public with adequate
notice of the subjects and issues involved. Certainly, no one
would take issue if EPA proposed the imposition of sanctions at
the same time that EPA proposed a disapproval of the State’s
submittal. In such a case, the proposed disapproval is a
proposed finding; therefore, EPA’S proposed imposition of
sanctions would occur prior to the time the finding was made
final. In such a circumstance, there would be no restriction on
when EPA proposed the sanction, but EPA would be unable to take
final action imposing the sanction prior to final action on the
disapproval.
The specific example that prompted GAO’s inquiry gives even
less grounds for concern, because the proposal to impose
sanctions will be made after the proposed disapproval action. In
that case, the State of California submitted as a SIP revision a
commitment to adopt the required enhanced vehicle I/M program by
November 15, 1993. Upon learning that the State was having
difficulty enacting legislation for this program, EPA notified
the State that it planned to impose sanctions under section
110(m) if the State failed to adopt legislative authority for an
enhanced I/M program by the end of its 1993 legislative session.
The basis for such sanctions would be EPA’s disapproval of the
State’s commitment to adopt and submit authorizing legislation
bound thereby. t1 ). Second, under section 110(k) (1), Congress
provided EPA with a 60—day period in which to determine whether a
submittal is complete. This time is inadequate to complete a
notice-and-comment rulemaking process. See Republic Steel Corp.
v. Costle , 621 F.2d 797, 803—04 (6th Cir. 1980); United States
Steel Corp. v. U.S. Environmental Protection Agency , 605 F.2d 283
(7th Cir. 1979), cert. denied , 444 U.S. 1035 (1980), reh’g
denied , 445 U.S. 939 (both courts holding that the requirement to
designate areas under the 1977 Clean Air Act within 180 days, did
not provide sufficient time for rulemaking action). But see
State of New Jersey v. U.S. Environmental protection Agency , 626
F.2d 1038, 1045—49 (D.C. Cir. 1980) (holding that under the
designation provision of the 1977 Clean Air Act the Agency must
follow rulemaking procedures). Moreover, before EPA can make a
deteri ination of whether a submittal is complete, EPA must first
determine that it received a submittal from the State; therefore,
a finding of failure to submit would also need to be made within
that 60-day time frame and, for the reasons that apply to the
completeness determination, rulemaking is not required.
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and regulations for an enhanced I/M program by November 15, 1993,
because the State would be unable to meet the commitment. EPA
laid the groundwork for that action on June 28, 1993, when it
proposed to disapprove the California committal SIP. 7
Based on this anticipated failure, it is apparent that EPA
can provide the public with all relevant information on which to
comment in a proposal to impose sanctions under section 110(m)
prior to the Agency’s final disapproval of the State’s I/M
commitment. EPA can provide adequate notice and opportunity to
comment on the Agency’s proposal and reasoning with regard to the
timing of the sanctions; the geographic scope of the sanctions;
and the sanctions to be imposed. The public would be apprised
that the anticipated basis for these sanctions is the State’s
failure to adopt legislative authority for the enhanced I/M
program as provided in the commitment and that EPA would be
disapproving the State’s committal SIP on that basis. Therefore,
in such a sanctions proposal, the public would be able to comment
on the appropriateness of the timing, geographic scope and the
type and number of sanctions in light of the anticipated failure.
The public has already had an opportunity, during the period for
public comment on EPA’s proposal to disapprove the State’s I/M
commitment, to comment on whether the finding itself -— EPA’s
disapproval of the commitment —- is appropriate. Moreover, if
any new facts or issues were to arise after EPA’s proposal on
either the disapproval or the section 110(m) sanctions, EPA might
well need to supplement its proposals or otherwise change course
in one or both actions to account for such new information.
Finally, the disapproval itself must be made final before any
imposition of sanctions could occur.
c. Summary
Nothing in the APA, the Clean Air Act, or EPA’s internal
procedures expressly precludes EPA from proposing the imposition
of section 110(m) sanctions prior to making a final finding that
would trigger the Agency’s authority to impose those sanctions.
Since EPA will be able to comply with the requirements of the
APA, and neither the Clean Air Act nor internal procedures
establish stricter requirements, EPA may follow this procedure.
58 Fed. Reg. 34,553. In this action, EPA proposed to
approve the California committal SIP (based on the assumption
that the State would meet the commitment) and, in the
alternative, proposed to disapprove the committal SIP if the
State failed to adopt legislative authority or to meet other
interim milestones such that it would be impossible for the State
to meet its commitment.
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2. Analysis of GAO’s Arguments
a. The Clean Air Act
As an initial matter, GAO states that both sections 179(a)
and 110(m) clearly contemplate a multi-step process for
imposition of sanctions. GAO then proceeds to identify these
steps as: (1) The State submits a SIP or SIP revisi i; (2) EPA’s
evaluation of the State submittal; (3) EPA makes a finding under
section 179(a); (4) EPA proposes the imposition of sanctions; and
(5) EPA issues a final rule imposing the sanctions. GAO Opinion
at 16—17.
While GAO establishes one reasonable approach to making
findings, proposing and then imposing sanctions, this process is
not established anywhere within either section 110(m) or 179. In
fact, these provisions do not address in any way the notice—and—
comment rulemaking procedures. Sections 110(m) and 179(a) merely
provide that at certain times when or after EPA has made a
finding EPA must (section 179) or may (section 110(m)) “apply”
sanctions. In other words, these provisions simply make clear
that the finding must be made before authority to impose the
sanctions is triggered. No reference is made to when EPA may
propose the imposition of sanctions. If anything, as stated
previously, section 110(m)’s authorization for EPA to apply
sanctions “at any time (or at any time after)” EPA has made a
finding implies that, in at least some circumstances, the
sanctions proposal could precede the final finding, since
otherwise sanctions could never be imposed at the same time that
EPA makes the finding. In any event, since the CAA establishes
no express rulemaking procedure for imposing sanctions under
section 110(m), EPA must follow the rulemaking procedures under
the APA.
b. The Administrative Procedure Act
GAO contends that the only type of action EPA may take
before proposing sanctions is an “informal and cautionary”
action. GAO asserts that a proposed rulemaking does not fit
within that context. GAO Opinion at 17. GAO does not establish
any authority for this assertion. In the absence of any
statutory prohibition of a proposal in anticipation of events
supporting a final action, EPA’s compliance with the APA
rulemaking process is all that is required. See Vermont Yankee ,
435 U.S. at 542—45.
GAO next contends that the notice EPA has indicated it will
give would not satisfy the notice-and-comment procedures of the
APA because it provides no notice at all. GAO Opinion at 17. It
appears that GAO is asserting that since the failure on which a
finding is based has not yet occurred, the public will not be
30
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provided with adequate notice or opportunity for comment.
However, as elaborated above, the issues subject to notice and
comment in the sanctions rulemaking will be evident and fully
addressed in the proposal. The public will have sufficient
opportunity to comment on all issues pertinent to the imposition
of sanctions under section 110(m) in the proposed action.
GAO asserts that proposing sanctions prior to the actual
finding would place the State in the position of having to defend
a SIP it had not yet submitted. GAO Opinion at 17-18. As noted
previously, EPA’s proposed imposition of sanctions in no way
affects the State’s or the public’s ability to comment on the
finding itself. If rulemaking action is required on the finding,
the State and the public will be provided ample opportunity in
that rulemaking action to question EPA’S proposed action.
Therefore, the State and the public are not forced to raise those
issues in the action proposing sanctions. Furthermore, there is
no relevant issue here about defending a SIP that California has
not yet submitted or one that EPA has not yet found deficient.
The substantive issue in EPA’s final action disapproving the
California committal SIP is whether the State failed to meet its
commitment to enact and submit legislative authority and whether
that deficiency made California unable to meet its commitment to
submit I/M legislation and regulations by November 15, 1993. The
issue in the sanctions rulemaking is whether and to what extent
EPA should impose sanctions assuming that EPA issues a final
disapproval of the California I/M commitment. Clearly, if
California submitted an I/M SIP during these rulemakings and a
finding on that submittal raises issues that require new notice
and comment, EPA would need to provide such further notice and
comment before EPA imposed sanctions under section 110(m).
C. Summary
GAO’S arguments do not undermine EPA’s view that the Clean
Air Act and the Administrative Procedure Act do not bar proposal
of section 110(m) sanctions prior to the time EPA makes a formal
finding of failure under section 179(a)(1)-(4). Because EPA can
propose adequate notice in its proposal to impose sanctions, such
action will comply with the requirements of the APA.
III. CONCLUSION
Under the standard of review set forth by the Supreme Court
in Chevron and subsequent cases, an agency must interpret
statutes in accordance with Congressional intent. Where that
intent is clear on the face of the statute or, if necessary, by
resort to analysis of the statutory scheme or the legislative
history, the agency must act in accordance with that intent. In
the case of sections 110(m) and 179(a) of the Act, the express
language of the statute authorizes discretionary imposition of
sanctions “at any time” and requires the imposition of sanctions
31
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18—months after a finding of deficiency, if not sooner imposed.
Only this reading of the sections gives effect to all the
statutory language. Given the plain language of section 110(m)
and the ease with which 179 can be read to be consistent with it,
the language of the sections reflects a clear Congressional
intent to provide EPA discretion in imposition of sanctions
whereas GAO’S interpretation conflicts with express statutory
language.
Assuming arguendo that Congress’s intent is not clear and
unambiguous, any challenge to an interpretation duly adopted by
the Administrator must establish that such an interpretation of
the statute is unreasonable to the point of overcoming the
deference due to the Agency under the Chevron standard. Nothing
in the purposes or history of these sections indicates that the
interpretation set out above, which follows the plain language of
the statute, is unreasonable or impermissible. Indeed, that
interpretation is consistent with the language of the statute,
the scheme set up for sanctions in other analogous sections, and
the limited legislative history. More importantly, EPA’s
interpretation is consistent with the goals of the Act to attain
the national air ambient air quality standards in a timely
manner, the overall intent of Congress in any provision of Title
I of the Act.
Furthermore, an agency must, at a minimum, follow the
procedural requirements of the APA in taking any administrative
action. However, other relevant statutes or the agency’s own
internal procedures may impose more burdensome requirements on
the agency. See Vermont Yankee , 435 U.S. at 542-47; Ocilala Sioux
Tribe of Indians , 603 F.2d at 713. Neither the Clean Air Act nor
EPA’s own internal procedures establish procedures more stringent
than those established by the APA for imposing sanctions under
section 110(m). The specific rulemaking procedures under section
307(d) of the Act do not reference section 110(m) as a provision
subject to those more structured procedural requirements.
Moreover, section 110(m) itself does not establish any procedural
requirements. EPA may comply with the terms of the APA by
proposing the imposition of sanctions under section 110(m) prior
to the time a final finding is made under section 179(a) because
EPA may “apprise interested persons of the subjects and issues
(EPA is) considering.” American Transfer & Storage Co. , 719 F.2d
at 1303. More specifically, when proposing sanctions under
section 110(m) prior to the time a final finding is made under
179(a), EPA may adequately take comment on (1) the timing of the
sanction or sanctions; (2) the selection of sanctions; and (3)
the geographic scope for imposition of sanctions.
32
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park. North Carolina 27711
28 FEB 1986
MEMORANDUM
SUBJECT: Responses to Four VOC Issues Raised by the Regional
Offices and Department of Justice
FROM: Gerald A. E’nison ir ....
Office of Standards
TO: Air Management Division Directors
Regions I, III, V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division
Directors
Region IV and VI
kir and Toxics Division Directors
Regions VII, VIII and X
In the attachments, I.am transmitting responses to four
VOC issues identified by the Regional Offices and DOJ through
the VOC Compliance Workgroup. As you may know, absence of
policy addressing these VOC issues was being presented as an
impediment to Regional and State efforts in returning voc
violators to compliance.
On June 27, 19R5, the first draft of the attached responses,
as well as draft responses to many other VOC issues, were
circulated for comment. On August 21 and 22, various Regional
and Headquarters representatives met to discuss these first
drafts. A second draft of each issue was circulated to the
Regional Offices under two separate memoranda, dated October 25
and December 12. The attached responses incorporate the
various comments received.
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Under previous correspondence issued January 31, 1986
from SSCD and January 17, 1986 from OECM, four other responses
have been transmitted to you. Therefore, eight Issues have
been addressed to date. Many of the remaining proposed
responses raise significant policy issues which need to he
addressed. We are working to expedite these responses and to
assure any necessary coordination with the work of the Ozone
Task Force.
I appreciate the efforts of the Regions in commentinq on
the various drafts of the attached four issues and hope that
you find them helpful in resolving some of the issues concern-
ing VOC enforcement.
Attachments
cc: VOC Compliance Workgroup
Regional Counsel, Regions I—X
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ISSUe
What is the Agency’s enforcement response for sources
subject to pending bubbles, specifically for bubbles in areas
lacking an approved attainment demonstration?
Response
The June 28, 1984 guidance on ‘timely and appropriate’
enforcement response for significant air violators addressed
the situation of timely enforcement for sources subject to
SIP revisions. The guidance states that EPAwill routinely
issue NOVs, if n t already issued, 120 days following the
violation (or shortly after) if the violation is not resolved
in accordance with the guidance. Follow up to the NOV is
warranted unless EPA determines, in consultation with the
State, that continued deferral to the State activity will
produce timely compliance.
Where the State activity is a SIP revision (bubbles are
SIP revisions), the revision must, by day 120, at least have
been scheduled for a State hearing and EPA staff—level review
‘shows it likely to be approved. Where the SIP revision is
unlikely to be approved, EPA is obligated under the ‘timely
and appropriate’ guidance to issue a NOV on day 120 and
follow up with its own enforcement action as appropriate.
Sources subject to SIP revisions in areas that are
classified as attainment are not subject to the ‘timely and
appropriate’ guidance unless a specific State—EPA agreement
addresses such sources. However, such sources remain subject
to enforcement by EPA. The criteria for deferral outlined in
the ‘timely and appropriate’ guidance may be useful for
addressing such situations even though the timelines may not
be applicable.
2 8 FE5 1S36
Date Signed
Office of Air Quality Planning and Standards
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2
Issue : Are there any site—specific RACT limits
being set?
Response: Site—specific RACT determinations are required
for > 100 T/yr stationary sources not covered by a CTG where
(1) sources are located in urbanized areas that did not attain
by 1982 and (2) for urbanized areas that have requested an
extension until 1987. In addition, case—by—case RACT determina-
tions are allowable where the GIG suggested limi t has been
found to be technologically or economically infeasible. These
case-by-case RACT determinations must be approved by EPA as
source-specific SIP revisions.
Site-specific RACT determinations have been for a number
of > 100 I/yr stationary source categories not covered by
CIG’s. Examples of this are Region IV RACT determinations
for aluminum foil plants, woodworking plants, etc. Region I
reportedly is making RACT determinations for a large number of
sources. For example, more than 30 site-specific non—CTG
RACT determinations in the State of Massachusetts will be
submitted as SIP revisions to EPA in the near future. Also,
a number of case-by-case RACT determinations have been made
for CTG site—specific sources in Massachusetts in the past.
Case-by-case RACT determinations are allowable under EPA
policy for both CTG and non-CTG source categories where
appropri ate.
The VOC RACT Clearinghouse is available and should be
used for ensuring Regional consistency In RACT determinations
for similar site—specific source categories.
Of
ce of Air Quality Planning and Standards
2 6 FE l •_
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Issue
What baseline year should be used for determining VOC
percent emissions reductions as per State SIP regulations?
Response
o There is no one particular year that can be considered
to be the baseline year for compliance purposes for all source
categories. The baseline year is generally considered to be
the effective date of the emission control regulation for the
source category.
O The SIP itself, however, should be checked to determine
if it contains language affecting baseline year determinations.
It is possible that in approving the SIP either EPA or the State
commented on this issue, thus providing guidance to sources.
If there is no contrary guidance in the SIP, the general rule
stated above should take effect.
O The stated issue and response relate to individual source
compliance rather than to a SIP planning baseline or emissions
trading issue. SIP baselines are defined in current policy and
the issue of baselines relative to trading is covered in the
various Agency policy documents on trading. -
O The issue is only applicable to ‘percent reduction’
types of regulations. A regulation based strictly on ‘VOC
content’ (e.g., lbs VOC/gal coating or percent solvent regula-
tions, etc.) or add—on control equipment percent requirements,
would not require a baseline date as compliance would be based
only on a comparison against the SIP emission limits.
• The ‘percent reduction’ requirement applies to the emis-
sion rate as expressed in terms of VOC content, not to total VOC
emissions. That is, the percent reduction applies against the
pre—control coatings/inks formulations, not to the emissions
in mass per unit of time. This is consistent with the intent
of the CTG’S. The pre—control coatings/inks formulations used
as the baseline in determining percent reductions must be repre-
sentative of the coatings/inks in use at the time the regulation
became effective.
Gerald . Emison, Director
Office of Air Quality Planning
and Standards
d,f
Date Signed
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£3
ISSUE
Is an exemption for use of incinerators in non—ozone
season appropriate? How can we justify suing sources for
failure to utilize controls during non—ozone season in SIPs
where there is no exemption?
RESPONSE
The origin of the policy on seasonal controls began when
EPA issued guidance on July 28, 1976 which authorized proce-
dures for the approval of SIP revisions allowing seasonal
operation of certain gas—fired afterburners. Such revisions
could be accomplished without a detailed, time—consuming
analysis of air quality impact so long as the seasonal shutdown
period was consistent with that delineated in a staff study
(Oxidant Air Quality and Meteorology,’ February 6, 1976) and if
the existing air quality showed no past violations in the months
during which the afterburners were shut down.
On December 1, 1980, in a memorandum to the Regional Offices
titled ‘Revised Seasonal Afterburner Policy’ (attachment 1), EPA
further stated that any plan revision which provided for after-
burner shutdown in the period of November through March outside
of southern California and the Gulf Coast should be proposed for
approval.
It is important to note that the policy applies to gas—fired
afterburners installed to control emissions of volatile organic
compounds (VOCs) for the purpose of reducing ambient ozone con-
centrations. It does not apply to flares (which do not use natural
gas as an auxiliary fu TF, VOCS vented to boilers, afterburners
operated principally for odor control, or afterburners operated to
control toxic or hazardous substances. It is also important to
note that the policy on seasonal control of afterburners can only
be implemented through the SIP process. The EPA does not have a
general exemption regarding seasonal controls of VOC gas—fired
afterburners.
A second category of sources to which seasonal controls can
be applied through the SIP process are cutback asphalt facilities.
In some SIPS, control of these facilities is required only during
the summer months.
In 1984, EPA, through the Office of Air and Radiation con-
sidered whether to expand the categories of sources to which such
seasonal policies could apply. (‘Seasonal Volatile Organic
Compound (VOC) Control and Phillips Petroleum,’ dated September
21, 1984 (attachment 2)) The decision was made not to expan4
the scope of the policy primarily because:
— Only a relatively small additional cost savings could
be expected from any expansion of the policy.
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— Exposure to toxic emissions might increase.
— Pursuing such an initiative could disrupt VOC control
efforts at a time of uncertain implementation.
— Scarce resources might have to be diverted from current
programs to prepare the necessary administrative actions.
— The control flexibility in the program already availa5le
might be jeopardized since Section 302(K) of the Clean
Air Act, passed subsequent to EPA’S seasonal afterburner
policy, requires controls on a continuous basis.
It was for the above reasons that the recommendation was made
to implement the existing policy as presently written.
Thus, the policy concerning seasonal control of afterburners
can be implemented only if a State submits, and EPA approves, a SIP
provision providing for seasonal operation. In the absence of such
a provision, sources are obligated under State and federal law to
continuously operate afterburners as necessary to meet applicable
emission limits. EPA expects sources to meet their legal obliga-
tions, and is directed by Sections 113 and 120 of the Clean Air Act
to take corrective enforcement action if a source fails to do so.
The justification for enforcing SIP requirements providing for the
continuous operation of afterburners rests with this directive in
the Clean Air Act. SIP standards are initially developed by the
States and can be more stringent than required by the Clean Air Act
and EPA policy. Once federally effective, the SIP requirements are
to be met by sources and enforced by the States and EPA.
Gerald A. Ernison, Director
Office of Air Quality Planning
and Standards
2 8 FED 1986
Date Signed
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PU-i 72—80-12-1 _r)33
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
Research Triangle Park, North Carolina 27711
0 i 1980
iI.JtcT Revised Seasonal Afterburner
FROM Walter C. Barber, Dii
Office of Air Quality P1
10: Director, Air and Hazardous Materials Division
Regions !—X
On July 28, 1976, the Agency Issued Its policy on the “Seasonal
Operation of Natural Gas—Fired Afterburners.” This policy authorized
the approval of SIP revisions without a detailed, time-consuming analysis
of air quality impact if the seasonal shutdown period was consistent
with that delineated In a staff study (“Oxidant Mr Quality and
Meteorology,” February 6, 1976) and If existing aI quality showed no
past violations in the months during which the afterburners were shut
down. Because of the nation’s continuing need to conserve energy
resouroes and because of the revision to the national ambient air
quality standard for ozone, we have reconsidered a portion of this
policy.
An analysis of available ambient air quality data concluded that
exceedances of the revised national ambient air quality standard for
ozone do not occur In the November through March period, except for
areas of southern California and the Gulf Coast. As a result of this
analysis, it Is appropriate at this time to modify the “seasonal after-
burner policy” to state that any plan revisions which provide for after-
burner shutdown in the period of November through March outside of
southern California and the Gulf Coast should be proposed for approval.
All other portions of the original policy remain unchanged, namely:
(1) The policy applies to gas-fired afterburners installed to
control emissions of volatile organic compounds (VOCs) for
the purpose of reducing ambient ozone concentrations. It
does not apply to flares (which do not use natural gas as an
auxilTi fuel), YOCs vented to boilers, afterburners operated
principally for odor control, or afterburners operated to
control toxic or hazardous substances; and
tPa P... I33O. $ 74
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(2) A policy to seasonally control afterburners can only be
iu pleiuented through the SIP process. The attached staff
report, supported by air quality data, should be adequate
technical support for approving a SIP revision allowing for
seasonal shutdown of afterburners in a given location.
It is recoir*nded that you notify the State agencies in your
Region that EPA supports a policy which permits sources to shut off
afterburners during the months of November through March except for
areas of southern California and the Gulf Coast. Should you have any
questions In this regard, please contact Mr. Richard G. Rhoads, Director,
Control Progrwts Development Divist on, Office of Air Quality Planning
and Standards at FTS 6295251.
Attachment
cc: Chief, Air Programs Branch, Regions I-X
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ORANDUN
SøEJ T: Seasonal Volatile Organic Compound (VOC) Control
- -.ad L s-P n eua
eJo$eDfl A. Cannon *
FROM: 7oa.ph A • Cannon, Assistant Administrator
for Air and Radiation (ANR—443)
TO: t1ton Russell, Assistant Administrator
for Policy, Planning, and Evaluation (PN—219)
This is with regard to your emorandun of June 15, 1984, discussing
seasonal VOC control and the Phillips Petroleum Federal Register notice.
Your memorandum suggests that expanding seasonal VOC control beyond the
existing afterburner policy offers significant promise as a control
cost-savings initiative. You also expressed concern that the Office of
Air and Radiation (OAR) was attempting to revoke the •xisting seasonal
afterburner exemption in the Phillips Petroleum package. I would like to
address these two issues separately.
S SO L CONTROL
We can understand your perspective regarding expanded seasonal VOC
control since intuitively it is quite appealing to not control pollutants
if they clearly ars not causing an air pollution problem. However, such
a seemingly simple approach has a number of potential pitfalls which need
to be considered prior to pursuing such an initiative. The Office of Air
Quality Planning and Standards’ (OAQPS’) review of your recommendations
has reached th. following conclusions:
- Substantial control flexibility already exists under the current
policy in the area of greatest payoff; hence, only relatively
small idditional cost savings can be expected from an expansion.
— cposiare to toxic emissions may increase.
— The basis for no further control in several listing decisions under
Section 112 may be undermined.
— Pucsuing such an initiative at this tire may disrupt VOC control
efforts at a time of un: r ain transtt.ton to implementation.
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— Resources in State, local, Regional, and Headquarters Offices may
need to be d.tvsrted away from current programs to prepare the
necessary administrative actions. -
— The substantial control flexibility already availabl, under the
current policy may be jeopardized.
ir basis for these conclusions is discussed below.
No Major Payoff Can Be cpected
The VOC emissions can be reduced through incineration, other add-on
controls, or lov—solvert technology. While a few individual sources may still
realize significant savings through an expanded seasonal VOC control policy,
the bulk of the savings available has been addressed through the e sting
seasonal afterburner exemption. The consultant study prepared by your
staff confirms our initial conclusions regarding the limited potential
for cost savings from expanding this policy. The following is taken from
that analysis:
Twenty—three (23) RACT source categories were
examined to determine whether any of them could be
major beneficiaries from an extended seasonal control
policy. This ev 4 nation indicates that most sources
within these categories are unlikely to have major
savings directly attr .b itable to discontinuance of
existing VOC control measures under such a policy
extension due to the following reasons:
— They employ cent. l measures which are integral
to the process •qui ent (e.g., submerged fill
pipes, floating roofs, etc.) and which cannot be
disabled.
— RACT consists of switches to inherently low
polluting processes (e.g., substitution of
solvent-based to low— or no—solvent coatings).
Such sources are unlikely to switch back because:
(a) there is littl. financial incentive to do
so, (b) the quality of product using low or
no soLvent coatings is acceptable, and (c) there
will be costs associated with a changeover.
— Several sources have no add-on ox other controls
and, therefore, ar. unabl, to benefit from an
extended $CP because they currently use bubbles
as an effective method of complying with RACT.
This attests to the success of the bubble policy.
— Many sources that can benefit from a seasonal
control policy already do so since they are
equipped with natural gas fired incinerators.
These are exer pt from w .r ertime operltiou under
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the current SCP. However, it should be noted
that not. all incinerators are able to use the
current exemption f roe natual gas fired incinerators
b.causi: (a) some incinerators have dual fuel.
capability and say, th.r.f ore, be ineligible for
ez•aption in certain jurisdictions, (b) some
sources seem to be unaware of the exemption, Cc)
other sources have integrated their incinerator
into the general process and/or winter space
heating system so that th. recovered heat from
the incinerator is nov indispenaible, and Cd) as
is their prerogative under Section 116 of the
Clean Air Act, several State and local agencies
do not provide xemptaons for natural gas fired
afterburners on a routine basis.
- For many sources, savings due to recovery of
VOCa are sufficiently high so that they have
no incentive to disable controls.
Major beneficiaries from any shutdown of controls
resulting from an extended season l control policy
will be those sources that use (or will use) end-of-
pipe control devices for RACT and can neither use,
sale nor burn recovered Ci.•., collected) VOC.
Based on this observation, the categories most likely
to benefit are: graphic arts (especially flexography)
and paper coating.
With regard to flexographic and paper coaters, only those who install
incinerators without heat recovery could realistically expect to benefit
from the policy (very few have), and thsy have already been addressed
through the existing policy.
issions May Increase
The most visible advers. impact to the public will b. the potential
increase in toxic emissions • The Agency has maintained that significant
reductions in toxic smissions will accrue through VOC control for ozone.
The majority of the chemicals being studied for toxicity as air pollutants
are VOC. Table I illustrates that 29 of the 37 substances under assess-
ment exist as VOC. Further, in some cases, it is not the primary constitu-
ent of the C but simply on. of many constituents. For example, gasoline
vapor is a major source of benzene. Also, coating. are formulated with
solvertts co.pos.d of many compounds which can and are changed. Hence it
is not a simple task to determine whether a particular source has an
adverse toxics impact or whether in the future it will continue to haVe
an adverse impact. Given this complexity, toxic emissions say likely
be e! itted from sources in increased quantities if the policy is expanded
indiscriminately. Even if this were not true, the perception of its
possibl ty would require ç1rva er reporting .equirements and/or technical
support before the Agency cc d responsioly take such a general .tcp.
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8asj for Section 112 Decisions wjii be Undermined
Decisionr regarding controlling or not controlling toxic chemicals under
Section 112 often hinge on the incremental environmental impact of additional
cont oi requirs..nt • The baseline considers the existing s i end whether
there Is a SIP rsquireme to provide S0s Control. pansion of seasonal
afterburner, vi i ]. undermin, this basis • As an •zampl., bulk terminals are a
significant source of gasoline vapor and benzene emissions. Lifetim, risk of
cancer due to high exposure to gasoline in the vicinity of uncontrolled terminals
has a plausible upper bound of 1.2 X 10—3. This is the highest-rjs source
category in the gasoline marketing chain for benzene and gasoline vapors.
While the Agency has yet to decide to control bulk terminals for berizen., the
existence of SIP requiremen obviously mitigates the risk. This analysis
using the SIP baseline would be suspect if the Agency announced expansion of
the seasonal VOC policy allowing •xemption periods for VOC. This same problem
will reoccur in a number of listing decisions prss.ntiy being made.
Disruption of Present VOC Control Efforts
The less quantifiable but potentially greater adverse impact is the additional
disruption su.h a policy may cause State agencies. States presently feel
overwhelmed by the demands the VOC program has placed on them. To add an
additional requirement to an already complex regulatory program may adversely
affect SIP approvals and compliance.
Further, most of these regulations are to be implemented soon. Final
compliance dates have either passed or Will pass in 1985. To provide sources
with a potential new vehicle to argue that compliance requirementa sh3uld be
deferred may undermine the present Agency initiatives to move away from plann.tng
and into implementation. This initiative runs the risk of being the Straw that
breaks the proverbial camel’, back.
Diversion of Resources
The administrative burden of preparing an expanded seasonal VOC policy is
not inconsequential. Rulemaking which could be as extensive as that which is
presently underway for the •aission trading policy will be necessary to formally
promulgate the policy. Following issuance of the policy, States viii have to
undergo mdi vi dual rui.aak.ing activity to provide for seasonal controls in
their plans. Subsequently, individual Federal rulemaking will, be required to
incorporate the State rul•s into the Federal SIP. Therefore, even presuming no
litigation, a significant fraction of what we, the States and local agencies
are presently expending in the SIP pl&nni ,ng exercises may have to be expanded
on adopting and impiea.n ing this initiative • This can only be accomplished by
diverting activity sway fro. areas wher, environmental improvement is being
accomplished (e.g., inspections, compliance activity, Group III CTG adoption).
Once the policy is issued, processing s i revisions is a nondiscretionary duty.
Significant allocations of resources viii be necessary to address what is a
major administrative task.
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—5—
While the administrative burden is not insurmountable, it is real
and could adver..ly affect compliance. It will take n investment on the
part of States and EPA to surmount these administrative demands • The
available resources are limited. ven the lack of identified benefits,
it does not seem to be worth the .f fort.
Jeopardizing the Present Policy
Proposing an expansion of the seasonal VOC policy for notice and
comment is not without risk. As it now stands the present policy provides
significant flexibility to those who most can use it—users of gas-fired
afterburners • Reopening the policy introduces the risk of a challenge to
the entire policy. The present exemption for gas—fired afterburners was
adopted as a narrow exercise of administrative discretion • The primary
basis for approval was the natural gas supply shortage which existed in
the mid—1970’s. The energy availability situation has changed significantly
since that time. Hence, this basis may no longer be available if this
policy were r.opn.d. reover, .f forts were made in the initial policy
to distinguish this from intermittent control systems previously used by
sulfur dioxide sources. Since this policy was initially issued, the
Clean Air Act Amendments of 1977 added Sections 123 and 302(k) to expressly
recuire continuous controls. Whi3 e neither d.velopment necessarily
invalidates the present policy, both result in additional complexities.
As your staff noted, there are those who would like to see the present
po.iey rsscinded • By opening the issues, you say provide them a vehicle
to accomplish the very opposite goal you seek.
For these reasons, I recommend vs continue to implement the existing
pclicy on seasonal control as it is presently written. For all its
warts, the present policy works • It provide, significant flexibility for
those who can most use it, has been accepted, and can continue to be
mpleme ted without significant additional rulemakirg or resource burdens.
The most prudent course of action appears to be to leave the policy alone.
PHILLIPS PETROLEUM
The Office of Air and Radiation (OAR) had no intention of revoking
the existing seasonal afterburner policy in the notice. The original
wording of this Federal R.gi.ter notice explained in some detail why the
seasonal afterburner policy did not apply in this instance, and did not
place the policy into its statutory context, even though the original
wording provided an adequate basis for disapproving this particular
application. .vsn the Office of Management and Budget’s (OPIB’s) tendency
to ask for a statutory basis for EPA d.tsapprovals when a policy t cited,
I think it i 5 prudent to modify the disapproval language to reflect the
statute rather than explain why the afterburner policy does not apply in
hopes of avoiding extensive interplay with 0MB on this package.
I do not believe it has any precedential value for any future
exemptions the Agency might ish to pursue since we would have to take
noti:e and comment on any policy change to expand the use of seasonal
controls. It is not clear what you mean by narrowing our basis for
disapproval since there is no policy to ever approve such an action.
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Further, given the bsnzene/gasoltne vapor toxicity issue discussed above,
using this action as a ,ehicle to announce consideration of expanding the
seasonal VOC policy seas ill advised. Based on the discussion above, I
have concurred on th. disapproval package and have forwarded it to 0MB.
Attacbant
cc: Indur Gokiany, RR$
Michael Lsvin, RR.S
WilI.ia Pdersin, 0CC
‘ ‘E 1 Reich, O QPS
Gerald ison, OAQPS
Darryl Tyler, 0 QPS
Barbara Bankoff, O R
Paul Stol an OAR
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Table 1
37 potentially Tvxic S thstances Under EPA Assessment
A. Substances that exist in the ambient air primarily as particles (8)
Beryllium 4aleic Anhydride t
Cadmium Manganese
Coke oven emissions Nickel
Dioxin (2, 3, 7, 8—TC D)’ Polychiorinated Biphenyls
B. Substances that exist in ambient air primarily as volatile
organi c compounds (29)
Acetaldehyde Pormaidehyd.
Acrotein MexaChlorocyc]opentadisne
Acrylonitrile Methyl chloroform
Allyl Chlor .de P4ethylen. chloride
aenzyl chloride Ni.trobenzene
Carbon Tetrachloride Nitrosomorpholine
chioroenmen. Perchioro. thylene
chloroform Phenol
Chioroprene Phosgene
Cresol. Propylene Oxide
p—D .chlorobSflZefle Toulene
Dimethyl Nitrosaa ne Trich]oroethyl .ne
Epichlorohydrifl V nylidene chloride
Ethylene Dichioride Xylene
Ethylene de
• Although these organic compounds can exist in the ambient air as either
particles or gases, these substances wtll be considered particles for
the purposes of this analysis.
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SECTION B DOCUMENT 12
Guidance. Enforcement Applications of Contjnuo
Emissions Monitoring System Data
04/22/86 12 -
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i O S7
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY AA’
WASHINGTON, D.C. 20460
APR 2 2 1986
MEMORANDUM
SUBJECT: Guidance: Enforcement Applications of Continuous
Emission Monitoring System Data
FROM: Edward E. Reich, Director
Stationary Source Compliance Division
Office of Air Quality Planning and Standards
Michael S. Alushin 1 Z 4 i,4 ,_
Associate Enforcement Counsel
Air Enforcement Division
TO: Addressees
I. Purpose and Application
The purpose of this guidance is to increase the use of
continuous emission monitoring system (“CEMS”) data in the
Agency’s compliance and enforcement program.L/ EPA intends
in this way to strengthen its efforts to ensure that sources
comply with applicable law on a continuous basis and to
enforce against those that do not.
This document addresses the following three enforcement
applications for CEMS data:
1) the governing regulation specifies CEMS as the
official compliance test method (“Compliance
Method”), e.g. , the Reference Method for the
Standards of Performance for New Stationary
Sources (NSPS);
2) the governing regulation specifies some method
other than CEMS as the Compliance Method; and
1/ “CEMS” as used in this guidance principally means instrumental
or manual continuous emission monitoring systems. Furthermore,
as with any other data, “CEMS” as used in this guidance assumes
that EPA confirms that the specific data, normally available
from the source, are reasonably accurate and precise. ThLs
information includes data such as those acquired during
Performance Tests, Performance Specification Tests, and periodic
calibrations of the CEMS. For additional information see 6/.
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—2—
3) the governing regulation concerns proper
operation and maintenance, recordkeeping,
and other requirements where no test method
would be specified.
This guidance applies to any Federally—enforceable
re u1ation or other requirement governing emissions, operatioi s
and maintenance (“O&M”), and monitoring and reporting pro-
cedures for stationary sources of air pollution. It should be
read together with the attached document entitled “Guidance
Concerning EPA’s Use of Continuous Emission Monitoring Data”
(August 12, 1982).2/
II. Conclusion
EPA can put CEMS data to a variety of important enforcement
uses, irrespective of whether the legal requirement being
enforced specifies CEMS as the Compliance Method. For example,
EPA can rely on CEMS data alone to issue Findings of Violation
(“FOVs”) and Notices of Violation (“NOVs ”).
However, the legal requirement must specify CEMS as the
Compliance Method in order for EPA to rely on CEMS data alone
to refer a case to the Department of 7ustice (“DOJ”) , to
prove a violation of an emission limitation in Federal district
court, or to issue a Notice of Noncompliance (“NON”) under
S120. The same is true if EPA is to rely on CEMS data alone
to issue an administrative order respecting emissions violations
under §113(a).
On technical grounds, CEMS data typically are at least
comparable to Compliance Method and inspection data derived
from equally well-executed and quality—assured monitoring.
CEMS data certainly are more representative of actual continuous
emissions than are some traditional sources of compliance
data, such as emission factors and engineering calculations.
III. Discussion
A. Where the Governing Regulation Specifies CEMS as the
Compliance Method
CEMS is the Compliance Method in NSPS Subparts Da (covering
new electric steam generators), P, 0 and R (covering new non-
ferrous smelters), and in certain SIP provisions, Federally-
2/ The 1982 guidance clarifies, among other things, the cir-
cumstances under which CEMS constitutes the applicable Compliance
Method and the role played by CEMS under State Implementation
Plans (“SIPs”) which do not identify any Compliance Method.
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—3—
enforceable compliance orders and permits. For sources covered
by these provisions, EPA can rely on CEMS data alone to take
all of the following enforcement actions:
1. Devise a priority list for inspections and
other investigative activities;
2. Issue MOVs to SIP sources, or FOVs to non—SIP
sources
3. Document that a violation has continued 30 days
beyond the date of the NOV in SIP cases;
4. Quantify the severity of violations for penalty
calculation purposes, in negotiation or litigation;
5. Issue an administrative order under §113(a);
6. Issue a §120 NON;
7. Formally refer a case to the DO3 for filing as
a civil or criminal action; and
8. Prove a violation in civil or criminal litigation
in Federal district court.
B. Where the Governing Regulation Specifies Some
Method Other Than CEMS as the Compliance Method
Here, CEMS data still can be very useful in initiating
and supporting cases alleging emission violations. The
Agency can rely on CEMS data alone to take any of the first
four enforcement actions listed at Section 111(A) above.
For example, EPA can use CEMS data standing alone as the
basis for issuing an NOV or FOV for violation of an emission
liinitation.4/ Proof of the existance of a violation of an
emission limit for purposes of a compliance order or litigation
virtually always must be based on Compliance Method data.
However, issuance of an NOV or FOV requires a less rigorous
evidentiary showing.
3/ While some Regional Office’s do issue FOVs, it should be
noted that EPA has no legal obligation to do so.
4/ The Clean Air Act expressly permits the Administrator to
issue an NOV “on the basis of any information available to
him ... that any person is in violation of any requirement of
an applicable implementation plan”. 42 USC §7413(a)(l).
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—4—
If after issuance, the source fails to come into compliance
with the emission regulation. EPA normally must acquire Com-
pliance Method evidence before it takes any of the last four
enforcement actions listed at Section 1 1 1(A) above.5/ However,
a second NOV is not necessary under these circumstances,
assuming that there is evidence that a sufficient relationship
e,Clsts between the CEMSdata and the Compliance j4ethod data. -
In addition, CEMS data also can be used in support of
emission violation cases to quantify emission levels and to
document that a violation continued 30 days beyond the NOV
issuance date. While EPA is frequently prepared to argue
that any particular day should be considered a day of violation
in the absence of emission data p Se, CEMS data should
serve to strengthen the government’s case. -
We believe that courts will generally accept non—Compliance
Method CEMS data as an indicator of the magnitude and duration
of emission violations because they represent emissions
comparably to Compliance Method data.W
5/ However, in most circumstances a Regional Office may rely
on non—Compliance Method CEMS data alone to support a referral
where it constitutes a pre—negotiated settlement agreement,
referred for the single purpose of lodging with the court.
The exception would be in situations where adverse public
comments on the decree may be expected, and that could lead
the government not to request the court to enter the decree.
In such exceptional circumstances, the referral must be based
upon Compliance Method data.
6/ We assume that CEMS and Compliance Method data will be
reliable and comparable to each other. This assumption is
based principally upon three facts. First, the Agency requires
sources to acquire and report reliable data (whether CEMS or
Compliance Method). With respect to CEMS, this is accomplishe i
by requiring sources to: (a) purchase, install and operate
the CEMS in accordance with specific location criteria and
performance standards; (b) demonstrate achievement of the
Performance Specifications by comparing the CEMS and the Com-
pliance Method results; (C) implement (at least daily)
calibrations and O&M procedures; and (d) operate the CEMS
during all Perforx ance Tests. (If doubts remain, EPA can
require additional comparative tests using §114.)
Second, the Agency has acquired data from numerous sources.
Such data document the fact that sources are able to, and
generally do report reliable and comparable data to agencieS.
Such documentation includes data acquired: (a) during the
(footnote 6/ continued on page 5)
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—5—
Finally, of course, CEMS data provide an altogether appro-
priate basis upon which to issue a S114 request for Compliance
Method data.
C. Where No Compliance Method Is Specified by the
Governing Regulation
This Section applies exclusively to requirements which
govern violations of other than emission regulations. Here,
the Agency may rely upon CEMS data alone to enforce directly
various O&M, monitoring, recordkeeping and reporting requirements
set out in NSPS regulations, SIPS, and Federally—enforceable
orders and permits.
For example, Section 60.11(d) of the NSPS regulations
establishes a general “good practices” O&M requirement. This
requirement identifies no specific compliance method. Rather,
it states that the “determination of whether acceptable
procedures are being used will be based on information
which may include, but is not limited to, monitoring results ,
opacity observations, review of operating and maintenance
procedures, and inspection of the source.” (Emphasis added.)
Similar language is contained in many SIPs. CEMS data alone
are sufficient to prove violations of such O&M requirements.
IV. Recommendations
CEMS provides a very useful and versatile source of
enforcement data. EPA can use such data to take many traditional
enforcement actions, often even when CEMS is not specified as
the Compliance Method. Therefore, we encourage Regional Offices
to use CEMS data consistent with the aforementioned paragraphs.
In addition, we encourage Regional Offices to:
A. Make CEMS data acquisition and evaluation a
standard operating procedure;
(continuation of footnote 6/)
development of the CEMS Performance Specifications and
(Proposed) Appendix F of Part 60 (Quality Assurance Require-
ments for SO 2 CEMS); (b) by receipt of hundredS of Performance
Specification Test Results; and (C) while perfori.ing quality
assurance and compliance audits of CEMS. (See, e.g. , EPA
publications entitled “Summary of Opacity and Gas CEMS Audit
Programs” (EPA—340/l—84—016, September 1984); and “A Compilation
of SO 2 and NOx Continuous Emission Monitor Reliability Information”
(EPA—340/1—83—01 2 , January 1983).)
Third, all certifications of visible emission observers
are based upon quantitative comparisons between observers and
“smoke schools’” opacity CEMS.
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—6—
B. Cite CEMS data as supplementary evidence of violations
in each NOV or §113(a) administrative order issued
whenever the CEMS data substantiate the primary
evidence; and
C. Incorporate CEMS into ongoing enforcement actions
( e.g , (1) consider requiring chronic violators to
install and use CEMS; (2) cite CEMS procedural
violations whenever they exist; and (3) cite the
source for failure to properly operate and maintain
its facility, based upon CEMS data).
Attachment
Addressees
Regional Counsels
Region I — X
Air Management Division Directors
Region I, III, V and I X
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxics Management Division Directors
Region IV and VI
Air and Toxics Division Directors
Region VII, VIII and X
Air Branch Chiefs
Region I — X
Air Compliance Branch Chiefs
Region II, III, IV, V, VI and IX
CEMS Enforcement Workgroup
Jerry Emison, OAQPS
Jack Farmer, ESED
George Walsh, ESED
Roger Shigehara, ESED
Darryl Tyler, CPDD
Rodney Midgett, EMSL/RTP
Darryl von Lehmderi, EMSL/RTP
Earl Salo, OGC
Joseph Lees, DOJ
Reed Neuman, DOJ
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SECTION B DOCUMENT 13
Policy on the Availability of Low Solvent Technology
Scheduled in Clean Air Act Enforcement Actions
08/07/86
13
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460 I
‘ L pq 0 lt
MEMORANDUM
SUBJECT: Policy on the Availability of Low—Solvent Technology
Schedules in Clean Air Act Enforcement Actions
FROM: 3. Craig Potter
Assistant Administrator /4Y ki
/
for Enfor ent and Compliance Monitoring
TO: Regional Administrators
Regions r-x
Your staffs have requested resolution of the issue of when
low—solvent technology (L.ST) schedules can be considered as an
available method of cornDljance in cases brought to abate emis-
sions of volatile organic compounds (VOC). They also asked for
guidance on what oeriod of time should be given in a compliance
schedule. In response, we have determined the following Agency
policy.
Background
In earlier guidance addressing options for ‘bC control, EPA
encouraged the low solvent (reformulation) approach. Though
compliance dates in the SIPs were generally December 31, 1982,
EPA recognized when the earlier guidance was issued that it
could take thnger than December 31, 1982 for sources to develoo
and implement complying coatings. Through surveillance and
enforcement activities by the States and EPA in recent years,
it became evident that many sources had not made serious efforts
to find complying coatings or, in some instances, effàrts
directed toward complying coatings failed to yield desirable
results. Often, sources were not vigorously pursuing the
alternative of installing add—on controls. As a result we now
face extended non—compliance, increased voc enforcement activity,
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—2—
and a need to issue specific guidance on what is an acceptable
schedule for VOC violators where rursuit of LST is being con-
sidered. It must be emphasized that more than five years have
passed since the VOC regulations were first adopted by the
States. With the ozone attainment dates already past in many
areas and less than two years away in extension areas, it is
critically important to assure compliance in an expeditious
manner. -
Policy
LST schedules may be used in EPA enforcement actions as
long as the following five conditions are met:
1. The schedule must be expeditious. It can provide no
more than three—months from the date of filing of the
complaint (or equivalent State action in cases where
the State is pursuing the enforcement action) for a
source to demonstrate compliance’using complying
coatings.
2. Add—on controls must be Dart of the schedule with a
commitment to implementation should the LST program
fail. The add—on control program can extend up to an
additional twelve months. It must begin at the endof
the three—month (or shorter) t ST schedule and have
increments of progress encompassing: commencing engineer—
irtq studies, ordering control equipment, commencing
installation of control equipment, completing installa-
tion, and demonstrating compliance.
3. Final compliance cannot extend beyond December 1987.
4. Stipulated penalties must be part of the schedule for
failure to meet incremental dates of the add—on control
program.
5. Civil penalties must be obtained. (This requirement is
established by previous policies such as the September 20,
1982 Post—1982 Enforcement Policy and the June 28, 1984
‘timely and appropriate’ guidance for the air program.
These policies are located at Sections V.R. and 1.1.
respectively in the Clean Air Act Policy Compendium.)
Penalties assessed by EPA must be consistent with the
September 12, 1984 CAA Stationary Source Civil Penalty
Policy, as amended, and penalties assessed by States
must be consistent with the June 26, 1984 guidance by
the Deputy Administrator entitled “Implementing the
State/Federal Partnershio in Enforcement: State/Federal
Enforcement Agreements.’ These policies are located at
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—3—
Sections v.y. of the Clean Air Act Policy Compendium
and Tab GM-4]. of the General Enforcement Policy Compen-
dium, rasoectively.
Schedules resolving State enforcement actions will be
evaluated in light of this policy to deterTnine the appropriate-
ness of EPA deferring to the State resolution. A State enforce-
ment resolution should include at least conditions (1), (i), (3)
and (5) of those required in EPA actions.
This policy is effective on the date of this memorandum,
except for the following limited situation. To allow for a
smooth transition, ongoing State settlement negotiations where
greater than three—month LST schedules are being Considered
will be accepted as long as the other elements of this policy
for a State enforcement resolution are satisfied. This limited
exception will terminate ninety days from the date of this
guidance.
This policy is not applicable to schedules issued pursuant
to Section 113(d). Approvability of those schedules is depen-
dent upon meeting the requirements of Section 113(d). However,
in making a determination of expeditiousness for a DCO, the
concepts outlined in conditions (1) and (2) of this guidance
should be followed.
If you have any questions on this policy, please call your
Regional liaison contact in OAQPS’s Stationary Source Compliance
Division or (DECM’g Air Enforcement Division.
cc: Air Division Director, Regions i—x
Regional Counsel, Regions I—x
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SECTION B DOCUMENT 14
Application of August 7, 1986 Policy on LST Scheduled in
Consent Decrees
12105/86
74
-------
O Sr 41 ,
___ -
L T NITED STATt.S EN%IRONMENTAL PROTECTION AGENCY
VASHE4GTON, D.C. 20460
.. it.
OFFIC! Oc
— 5 986 All M W IADIATIO$
MC’M( Rk? DTJM
SUBJECT: oplication of Aucust 7, 1986 Policy on LST Schedules
in Consent Decrees
4 Z
FROM: ,Steve 4itte, Chief.
Recional Procrams Section
TO: 1OC Comoliartce Workgrouo
I would like to share with you an example of how the August 7
LST nolicy was aonlied to a recent Region V consent decree. A
source that coats the inside of metal drums olans to comoly
with the VOC SIP by usirto low solvent coatings in combinatiàn
with a new apolication process. The oroposed consent decree
schedule allows more than three months to install and adjust
the new application equiPment.
The source has two coating lines which have been in
violation of the standard. EPA issued a notice of violation on
.July 29, 1983 and filed the comolaint against the source on
August 19, 1985. In July 1986 the source installed naint
heaters and new aoolicators on one coating line and conducted
tests which demonstrated that this technology could be used to
aoolv low solvent coatings to the drum interiors. However, it
took more than three months to comolete the installation of the
new equipi ej t and make, the necessary adjustments. The source
has proposed a schedule for installing the oaint heaters nd
new ap 1icators on the second coating line which would bring
the seco coating line into compliance by February 28, 1986.
The question presented was whether this proposed schedule
violates the August 7 LST Policy.
--
—
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—2—
The Auqu t 7 LST Policy states that LST schedules can
orovide no more than three months from the date of filing of
the complaint for a source to r emonstrate comnliance USLr
complyinq coatings. The intent of the oolicy is to include the
time to make process chances within the three months allowed to
find and use couw].yina coatirvis. PLS you will recall, we reaF-
firmed this intent at our recent A tlanta meeting.
9owever, given the Facts of this case, SSCD and OECM—AFr
management decided that the r roposed longer comoliance schedule
would he acceotable, orovirled that it contains interim milestones
and stioulated penalties for failure to meet them. The decisive
fact which led to this result was that the source had already
demonstrated that the orocess changes, in corliunction with th
low solvent coatirios, would work and would allow the source to
comoly with the aoolicahle SI° limit.
tn thIs case, the source has conclusively demonstrated that
it can comply with the sr by usinc LST and a process change
both sooner and at less cost than by installing r ollution
control eauipment. tinder these circumstances, it would be
unreasonable for PP t to insist that the source install inciner —
tors or carbon adsorotion systems instead of installing paint
heaters and associated new coatinc anolication equipment. Such
a nosition would he indefensible at trial. -
This result is consistent with the orimary nuroose of the
LST policy which is to require sources to comply as exoeditiouslv
s oossible by the use of demonstrated technology.
If you have any auestions olease call me at 382—2829 or
Tracy Gioson in OECM—P Efl at 3 2—2842. Please share this
memorandum with your management and eqional Counsel.
cc: John Rasnic, SSCI)
Mike P lushin, OECM—AED
Tracy Gipson, OECM—P ED
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SECTION B DOCUMENT 15
Guidance on Inclusion of Environmental Auditing
Provisions in Clean Air Act Settlements
01/27/89
15
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.J& tQ SP 4 J. p
- UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WAS .UNGT0N. D.C. 20460 ,
L_/A 1 D
JN 121 8g
MEMORANDUM
SUBJECT: Guidance on Inclusion of Environmental Audi irtg
Provisions_j n Air Act settlements_j ’ ..... 7 -
FROM: Terrel], S. Hunt - -
Associate En orcement Counsel
Air Enforcement Division
John S. Seitz, Director
Stationary Source Compli e Division
Office of Air Quality Planning & Standards
TO: Addressees
Attached is the new “Guidance on Inclusion of Environm nta1
Auditing Provisions in Clean Air Act Settlements.” This guidance
supplements the “EPA Policy on the Inclusion of Environmental
Auditing Provisions in Enforcement Settlements,” issued by Tom
Adams on November 14, 1986. A draft of this guidance was dis-.
tributed to the Regions and DOJ for comment on June 30, 1987.
As you can see from the attached summary of comments
submitted by the Regions (DOJ asked that their comments remain
confidential), considerable effort has been invested in this
project. We attempted to incorporate every comment submitted.
The Geppert Bros . consent decree was the best example of an
asbestos case with environmental auditing that was available when
this guidance was sent out for comment. Several suggestions for
improvements in the Geppert Bros . consent decree were received.
Those improvements plus more recent consent decrees that have
been entered with the courts are available upon request. The
best example currently is U.S. v. City of Ottumva , which is
appended to this guidance, but it too will certainly be surpassed
in time. To stay abreast of the latest developments in this and
other dynamic areas, we recommend that you utilize the clearing-
house function provided by the lead regional attorney concept in—
addition to the resources we offer at Headquarters. Presently,
the lead regional attorney for environmental auditing is Randye
Stein, Region II (?TS 264—3277).
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We appreciate the considerable efforts which you have made
to comment on the draft guidance and to include environmental
auditing-in your programs. Please continue to emphasize this
valuable enforcement tool.
Questions regarding this guidance should be address ed to
Charles Garlow of OECM at FTS 475—7088.
Attachments
Addressees:
Regional Counsels
Regions I—X
Regional Counsel Air Contacts
Regions I—X
Air and Waste Management Division Director
Region II
Air Management Division Directors
Regions I, III, and IX
Air and Radiation Management Division Director
Regiog V
Air, Pes’ticides, and Toxics Management Division Directors
Regions IV and VI
Air and Toxics Division Directors
Regions VII, VIII, and X
David Suente, Chief
Environmental Enforcement Section
Department of Justice
Robert Van Heuvelen, Assistant Chief
Environmental Enforcement Section
Department of Justice
Justina Pugh
EDU Coordinator
O!cl—Ai r
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INCLUSION OF ENVIRONMENTAL AUDITING PROVISIONS
IN CLEAN AIR ACT SETTLEMENTS
This document sets forth guidance for inclusion of
environmental auditing provisions in settlement of Clean ir
Act enforcement actions. EPA pOlicy encourages the use of envj—
ronrnental auditing to enable regulated entities to achieve and
maintain compliance with environmental laws and regulations. EPA
maintaLns that effective environmental auditing promotes higher
levels of compliance and reduces risks to human health and the
environment. 51 Fed. Reg. 25004 (July 9, 1986). This policy is
based on the statutory authority of Section 114 of the Clean P ir
Act, 42 U.S.C., S7414 and the information gathering provisions of
other environmental statuteg.lf
The Clean Air Act environmental auditing guidance supplements
the “EPA Policy on the Inclusion of Environmental Auditing Provi-
sions in Enforcement Settlements,” issued on November 14, 1986
(“EPA Policy”). That policy establishes a genera ]. framework,
applicable to enforcement under all environmental statutes, for
the use of environmental auditing provisions in settlement agree-
ments. This guidance addresses the application of the general
policy to air pollution cases.
Appropriateness of Environmental Auditing Provisions
As stated in the general policy, environmental auditing
provi!ions are appropriate to propose in settlement negotiations
in i .tances in which: 1) a pattern of violations results, at
lea5 partially, om the absence of an effective environmental
man ent syst. or 2) the nature of the violations indicates a
lik.. ihood that ijjar noncompliance may occur at other parts of
t e same facil or at other facilities owned by the same entity.
The need for e ronmental auditing is most likely to apply to
the owner or c ator of extensive or multiple facilities, but
may in some ci umatancea apply to a single—facility company as
well. see EPI. Policy at p. 2.
In the stationary source program, the most likely candidates
to benefit from environmental auditing would include:
1 /section 104 of the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C.
S9604 et Section 308 of the Clean Water Act, as amended,
33 U.S . 51318 et Sections 3007 and 3013 of the Resource
Conservation and Recovery Act, 42 U.S.C. 556927 and 6933 Section
]423(c)(8) of the Safe Drinking Water Act, 42 U.S.C. S300h-2(c)(8);
and Section 11(c) of the Toxic Substances Control Act, 15 U.S.C.
52610(c).
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1) National demolition/renovation companies engaged in
activities subject to the National Emission Standard for Asbestos.
This is a. unique category of air pollution sources, since a
company does not typically own and operate a fixed universe of
facilities but instead is involved in the operation of a con-
stantly changing group of transient activities. EPA has learned
in enforcing the asbe$os regulations that large demolition
companies may have a corporate awareness of the applicable reaujre—
ments but lack an effective environmental management system to
assure compliance with the law. The need for such a system is
particularly acute due to the very nature of the business,- which
involves an itinerant work force and sometimei relies on temporary
employees. Establishing a means of managing the activity of
demolition or renovation crews is an appropriate element of a
consent decree designed to enjoin future noncompliance with
asbestos control requirements. Such a system should involve
accountability for environmental compliance at each work site
involving asbestos, training of workers, and enhanced corporate
oversight of the activities of the work crews. As an example of
model provisions applicable to a demolition contractor see the
consent decree in U.S. v. City of Ottumwa, et al . (S.D. Iowa),
attached.
Common characteristics of recent asbestos consent decrees
include:
o Training for all asbestos workers with tests to ensure
understanding. -
O Enhanced training for supervisors/managers.
o tnstruction brochures for each employee to keep
permanently as a reference.
o Ensuring the presence of -trained supervisors at work sites.
o Checklist for proper equipment, notice, training
certificates.
2) Owners/operators of multiple volatile organic compound
(VOC) sources. companies that own several facilities, such as
can-coating or automobile—coating plants, may benefit from
environmental auditing. In such instances, a compliance audit
may identify common problems at similar facilities, and the same
or similar remedies at one facility may be applicable to the
company’s other plants. Environmental auditing would be particu-
larly appropriate where EPA or a State has cited more than one
facility for VOC violations.
-------
Consequently, mobility of the Source can result in art evas].on of
enforcement. Environmental auditing of Such sources Would aive
enforcement personnel data that would help in identifying similar
violations of plant owners. Owners often have several other
facilities and art audit would reveal the locations of the plants.
Likely auditing provisions in this category could include:
o Making available to the auditor and EPA a list of all plants
owned within the last five years, a list of those currently
owned and the various states in which they have been
located. -
o Providing to the auditor and EPA arty and all evidence that
these plants have been and are in compliance with apolicabj,e
SIPs.
o Conducting a thorough compliance audit of all facilities.
o Having the auditor prepare a plan (training, management
procedures) to ensure compliance, which plan would be an
enforceable provision of the decree.
5) Multi—media sources. Facilities that are likely to have
water pollution or waste management problems in addition to being
a source of air pollution may also benefit from environmental
auditing. A compliance audit in such circumstances would enable
the company to develop a comprehensive approach to its environmental
responsibilities. Environmental auditing would be particularly
appropriate where EPA or a State has cited violations by the
facility under more than one statute.
A multi—media audit would at least include:
o A review of current management practices and procedures
used to ensure compliance with various environmental
requirements.
o An in—depth compliance audit to determine how well these
procedures are being utilized.
o An analysis of additional management procedures needed to
track compliance.
• ployee and supervisor training in the law and regulations
affecting the facility and in the new protocol to be
implemented.
• Certification by the source that it is in compliance with
all environmental requirements.
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Suggested provisions for VOC environmental auditing include:
o Improved checklists to log all coat ngs with a certification
that they are in compliance with the relevant requirements.
o Establishment of procedure for periodic maintenance of ‘id
incinerators and other control eauipment.
o Training for supervisors and other employees on recognizing
the occurrence of abnormal operating conditions.
3) Volatile hazardous air pollutant (VHAP) sources. The
National Emission Standard for Hazardous Air Pollutants reaulates
fugitive emissions of VHAPs at 40 CFR Part 61, Subpart V. The
regulations require that a source institute specified leak
detection and repair procedures addressing potentially hundreds
of pumps, valves, and other pieces of eaulpment at a facility.
The standard requires monitoring, reporting, and recordkeepina,
rather than installation of control eauipment. Compliance with
the VHAP regulations demands particular diligence and attention
to detail.. Our limited enforcement experience to date indicates
that companies have not completely identified the equipment
subject to the standard and have not established adequate systems
to assure that the required procedures are followed. Due to the
nature of the VHAP standard, a compliance audit would be appropriate
to enable corporate management to identify violations and to put
management systems in place to ensure that the requirements are
followed. An example of such a VHAP auditing requirement i-s
attached. (Consent decree, U.S. V. Texaco Refining & Marketing,
Inc . (D. Del.)).
The major provisions in the Texaco environmental auditing
decree are:
o Selection of EPA approved independent contractor.
o Delivery of detailed schematics identifying all equipment
in benzene service to EPA and auditor.
o Thorough compliance audit.
• Co.plianc. report with schedule for corrections to be
undertaken and training to be conducted.
4) Asphalt Concrete Plants are likely candidates for the
auditing provisions because these air pollution sources, which
‘ have a high turnover in ownership, can be easily relocated.
They, therefore, can be subject to differing emission limits
because of the various state implementation plan provisions.
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The consent decree should include clearly specified and
enforceable schedules, timetables and recuireynents for co oletjon
of the audit. In the case of demolition/renovation contra tors,
the audit will be an ongoing requirement that will accompany the
performance of work at facilities containing friable asbestos,
and will not be subject to a schedule for completion.
EPA assumes that any and all information submitted to EPA
pursuant to these audit provisions is not automatically considered
to be confidential business information (CBI). However, a. business
may submit such information with a request th at the information
be treated as CBI, subject to appropriate statutory and regulatory
restrictions (cf. 5 U.S.C. 5552, 40 C.F.R. Part 2, Subpart B).
The consent decree should specify that the Agency is entitled
to copies of all information developed during the audit, including
not only final audit reports, but also copies of all underlying
audit data as well as draft audit reports, whether developed by
the employees or contractors of the defendant. Though entitled
to this information, the Agency need not always demand access to
the data.
Consequences of Audit
For an audit to benefit the company and the environment, the
consent decree should require that, upon completion of the audit,
the company implement its recommendations provided, however., that
some procedure should be included for the Agency to review and
approve the audit’s conclusions and for the company to dispute
the findings/recommendations of the audit. The consent decree
may require the company simply to certify that it has remedied
any problems uncovered by the audit, or it may require full
disclosure to EPA of the audit results. The decree may also
require the party to submit a compliance or environmental manage-
ment plan, or both, with an enforceable schedule for completion.
Additionally, the consent decree should address the
enforcement of audit—discovered violations. In particular, the
consent decree may provide for stipulated penalties for viola-
tions that can be predicted and are promptly remedied. See EPA
Policy at p. 5. See also the city of Ottumwa consent decree for
an example of stipulated penalties for violations of the audit
provisions.
Impact of Audit Provisions on Civil Penalties
If a source, by agreeing to implement an environmental
audit, exhibits an extraordinary degree of cooperation, it may be
appropriate to consider that cooperation, in adjusting the gravity
component, but not the economic benefit of noncompliance, downward.
See EPA Policy at p.6. An audit would not be a credit towards
paying the bottom line penalty.
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We suggest these categories of Sources as likely candidates
to benefit from environmental auditing, bu they are not intended
to limit in any way the universe of sources for which auditjn
appropriate. The case development or litigation team Should e
alert to indications that a company has an environmental manage-
ment problem or that similar violations are likely to occur at
other parts of the same facility or at other facilities. An
example of such a management problem would be a continuing series’
of violations blamed on operator error. This management problem
could be addressed by better required operator training courses
complemented by periodic refresher courses. The litigation team
should routinely review the case docket to determine if the
company has had environmental problems in other regions or other
media. Where such indications exist, EPA should probe the need
-for auditing with a site inspection, in a Section 114 letter or
in a discovery request. An example of such a Section 114 letter
is attached.
Contents of Audit Provisions
The consent decree provisions should clearly identify the
type of audit to be performed. A compliance audit is an indepen-
dent assessment of the current status of the party’s compliance
with environmental req...irements. A management audit is art inde-
pendent evaluation of -ic party’s environmental compliance
policies, practices, ar.J controls. The nature of each type of
audit is described in greater detail in the EPA Policy at p. 3.
Both a compliance audit and a management audit shouldbe
encouraged. The nature of the case will determine which type of
audit is more appropriate. The audit provisions appropriate for
demolition and renovation contractors are unique but fit more
closely within the ambit of a management audit. Its focus is t
assure centralized management controls over the decentralized
functions of the company. VOC sources are most likely to benefit
from a compliance audit, which may identify recurring problems at
similar facilities. VHAP sources may be candidates for a hybrid
of the two, Violating VEAP sources typically have not even
determined what equipment is subject to the standard and conse-
quently are not fully aware of their compliance status. In
addition, VBAP sources have a particular need for operation and
maintenance programs, monitoring, recordkeeping, and reporting
systems, and other management controls to assure compliance with
the standard.
The consent decree provisions should identify the party
conducting an audit. The auditors nay be a consultant or an in—
house person or team. In any event, the auditors should be
independent of the persons and activities to be audited, although
in—house auditors are often not as ‘independent’ as outside
auditors. See EPA Policy at p. 4. EPA and the state should be
provided with advance notice of the audit and an opportunity to
participate in the audit.
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Summary of Regional Comments on Draft Guidance on the
IflClUSj of Environmental Auditing Prov sions in
Clean Air Act Enforcement Cases
Region I: In—house auditors are not likely to be “independent.”
EPA and States should get advance notice of audit and an
Opportunity to participate in audit.
Audit results should always be fully disclosed.
Several comments on improving the Geppert Bros . Consent
Decree were offered.
Region III : Regions should remain free to determine when auditing is
appropriate.
It is good that no additional decree requirements are
mandated.
Region V: Asphalt/concrete plants are good examples of candidates
for auditing.
There should be due process for companies by Including
an opportunity to dispute the findings of the audit.
Agency should review & approve audit findings before the
company is required to implement the recommendation.
Region VI: In—house auditors are riot very independent.
Difficult to determine how much to adjust penalties if
auditing done.
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—7—
Adjustments to the gravtty component should only be made
in compelling circumstances in cases in which the gravity
component Is a major portion of the penalty. Appendix III of
the Civil Penalty Policy, pertaining to asbestos cases, establis 4
a scheme for the gravity component which recognizes that asbesto
is a hazardous air pollutant and explicitly punishes repeat
violators more than first—time violators. EPA should assure that
the penalty in any asbestos case meets these objectives. In most
such asbestos cases, the gravity component of the penalty is much
higher than the benefit component. Similarly, the benefit com-
ponent in VHAP cases is likely to be smaller than the gravity
component. Therefore, in both instances, the gravity component
should not be adjusted unless the bottom line penalty is still
sufficient to deter future violations.
Attachments
-------
A ’rAcO NT I
NOTICE OF
ASBESTOS REMOVAL ACTIVITIES
DEMOLITION AND/OR RENOVATION
ASBESTOS NESHAP’S CONTACT DATE:
AIR MANAGE1 NT DIVISION
TJS EPA
D.ar ________________________
FACILITY TO BE DEMOLISHED OR RENOVATED
Name, address and phone nuab.r of facility:
Nan., addrsss aM p on. number of owner:
.
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Descriptipn, size, age and prior use of facility:
Demolition or renovation methods to be used:
Name, title and authority of state or local government
representative who has ordered the demolition (if applicable)
ASBESTOS NOTIFICATION
ASBESTOS INFORMATION
Site Asbestos Coordinator: ____________________________________
Site-Asbestos—Foreman (if applicable): _________________________
Start date: __________________ Completion dat.: ____________
Quantity Sf friabis asbestos containing material on pipes: ___
linear ft. (r.quird) ____________________________
cubic ft.(optional) ___________
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ATTACHMENT II
ASBESTOS REMOVAL PROJECT
DAILY CHECK LIST
PROJECT LOCATION: ___________________________________________
ASBESTOS SITE COORDINATOR: _____________________________________
JOB NUMBER: ______________ DAY: - DATE: __________
ASBESTOS SITE COORDINATOR, TINE AT SITE _____TINE LEFT SITE —
YES NO
1. ( ) ( ) COPY OF ALL NOTIFICATIONS AND WORKER TRAINING
RECORDS AT SITE
2. ( ) ( ) ALL ASBESTOS WORKERS TRAINED AND TESTED AND
RECORDS CERTIFYING TRAINING ARE COMPLETE
3. ( ) ( ) NEDICALS PERFORMED ON ALL ASBESTOS WORKERS
BEFORE JOB BEGAN
4. ( ) ( ) WORK AREA ISOLATED BEFORE .703 BEGAN
5. ( ) ( ) WARNING SIGNS POSTED BEFORE JOB BEGAN
6. ( ) C ) DECONTAMINATION UNIT INSTALLED AND OPERATING
7. ( ) ( ) PROTECTIVE CLOTHING USED BY ALL WORKERS DURING
ENTIRE WORKDAY
( ) coveralls ( ) respirator.
( ) hood. ( ) spar. filters
()boots ()glov.s
8. ( ) ( ) WATER AVAILABLE AT SITE AND USED FOR ASBESTOS
REMOVAL AND SHOWERS
9. ( ) ( ) AIRLESS SPRAYER/BETrER WE ER ON SITE AND USED
I X .WE? ING OPERATION
10. ( ) ( ) NEGATIVE AIR MACHINES USED ENTIRE WORKDAY
11. ( ) ( ) HEPA VACUUM USED ENTIRE WORKDAY (NO: _______
32. ( ) ( ) VACU-LOADER USED ENTIRE WORKDAY (NO: ________
13. ( ) ( ) ALL ASBESTOS CONTAINING MATERIALS (ACH) HANDLED
WET
14. C
( ) AFTER WETTING, ALL ASBESTOS CONTAINING
MATERIALS PLACED IN PROPERLY LABELED LEAK TIGHT
CONTAINERS
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15. ( ).
16. (
17. C )
18. ( )
19. ( )
- number of containers used __________________
- type of containers used ___________________
— size of containers used __________________
( ) ALL ACM REMOVED BEFORE ANY DISMANTLING OR
DEMOLITION STARTED
VISIBLE EMISSIONS TO OUTSIDE AIR PREVENTED
( ) ALL ACM DISPOSED OP IN AN APPROVED LANDFILL
MANIFESTS COMPLETE (OWNER SIGNATURE)
( ) VISITORS ON SITE: ____________________________
Asbestos-S its—Supervisor
COIOcENTS:
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ATTACRMENZ III
LOYEE ‘ S ACKNOWL )(ENT OF ASBESTOS TRAINING
In accordance with applicable law, Cleveland Wrecking
Company is required to provid, proper safety training to all
employees whos, job responsibilities involve (or will inv0lv )
the removal, handling, transportation or disposal of materials
containing asbestos.
If you have received asbestos training, please read
paragraph 1, below, and decide if it accurately describes the
training you racsived. By signing your name at the botto of
this sheet, you will be acknowledging (1) that YOU received the
training described; and C2) that you understand that tevi.v of
the training materials by the United States Environmental
Protection Agency does not assure that your job site is free from
all health and safety risks.
AC IOWL!DGnp N’r
1. I have completed at least eight hours of training
on the dangers of asbestos, and the proper procedures for
removing, handling, transporting, and disposing 0 materials
containing asbestos. I took an examination following the
training c s., and was informed that I had passed that
examinatj . I viii ks.p on my person proof of my training.
2. I have received and read a copy of the Cleveland
Wrecking Company’s Asbestos Training Pamphlet.
3. I understand that although the Environmental
Protection Agency reviewed the materials employed by the
Cleveland Wrecking Company in training me, the Environmental
-------
Protdction Agency’s approval of those asterials was not intended
as a guarante. or assurance to me that my workplace is free of
all health and safety risks, or that Cleveland Wrecking is in
compliance with regulations and laws enforced by EPA or other
agencies such as the Occupational Safety and Health
Administration. -
Signature of Employ.. _________________________
Printed Name of Employee ______________________
WITNESS
I witnessed the named employee’s signature.
() I certify that the employ., can read English.
OR
( ) The employee cannot read, or cannot read English.
— I read this document to him before he signed it
and he acknov l.dg.d understanding it. contents.
Signature of Witness —
Printed Name of Witness
-------
Quantity of friable asbestos-containing material on other
facility components:
square ft. (required) ____________________________
cubic ft. (optional) __________________________________
If les, than 260 linear feet on pipes and less than 160 square
feet on other facility components, explain techniques of
estimation ______
Description of Asbestos-Containing Material. ____________________
Location of Asbestos-containing Materials: ______________________
Person who made the identification:
Method of identification: ______________________________________
(Attach the results of any laboratory analysis of suspected
asbestos-containing material to this form.)
Emission Control Procedurss and other procedures to be used to
comply with 40 C.F.R. Part 61 Subpart N: ______________________
ASBESTOS NOTIFICATION
A5 STOS DISPOSAL INPORM TIpN
Type of ls*k tight containers to be used: ______________________
Waste haMling emission control procedures and other procedures
to be .msed to comply with 40 C.T.R. Part 61, Subpart N: ________
Transporter: name, address and phone number; _________________
-------
Disposal Sit.: nan., address and phone number;
Sinc.r.ly,
Aebsitos Proqra Manager
cc: Appropriate State or Løcal
Air Pollution Control Ag.ncy
-------
SECTION B DOCUMENT 16
Revised Guidance Concerning Compliance By Use of
Low Solvent Technology in VOC Enforcement Cases
02/08/89
16
-------
‘OS
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
FEB 8 O9
MEMORANDUM
SUBJECT:
FROM:
TO:
ance By Use
Terre
Associate Enforcement Counsel
Air Enforcement Division
John S. Seitz, Director
Stationary Source Comp1 ce Division
Air Management Division Directors
Regions I, III and IX
Air and Waste Management Division Director
Region II
Air, Pesticides and Toxics Management Division
Directors
Regions IV and VI
Air and Radiation Division Director
Region V
Air and Toxics Division Directors
Regions VII, VIII and X
Regional Counsels
Regions I-X
Attached is a memorandum revising existing guidance
regarding the terms and conditions under which case development
teams may agree to consent decree language affording sources the
option to comply by means of Low Solvent Technology (“LST”),
where such compliance would not be achieved within the ninety-day
period otherwise required in the August 7, 1986 policy on the
availability of LST schedules in VOC enforcement cases. This
guidance memorandum supersedes a memorandum on this subject
issued by AED and SSCD on November 21, 1986.
Attached Revised Guidance
of Low so:
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—2—
Background
On August 7, 1986, the Office of Enforcement and Compliance
Monitoring and the Office of Air and Radiation jointly published
a policy concerning the availability of schedules for LST in VOC
enforcement actions. This policy provided that, provided certain
conditions were met, such schedules could be obtained. The -
policy stated, however, that any such schedule could not allow
for final compliance to be achieved later than ninety days after
the filing of EPA’S enforcement complaint.
On November 21, 1986, recogniZing that the environment
would be equally served if a source came into compliance by LST
prior to the final compliance deadline of an expeditious schedule
for add-on controls, though after the ninety-day limit, AED and
SSCD distributed guidance clarifying the August 7, 1986 policy.
This guidance stated that a consent decree containing a schedule
for add—on controls could provide that compliance be achieved by
some alternate means prior to the final compliance date for add-
on controls. The memo went on to specify, however, that any such
decrees could not contain provisions excusing accrued stipulated
penalties for missed interim dates in the add-on control
schedule, even if the source complied by LST prior to the add-on
control schedule end date. This restriction was based on the
belief that forgiving interim date stipulated penalties might
encourage sources to unrealistically attempt to comply by LST.
Upon further consideration, it appears that the policy of
precluding forgiveness of stipulated penalties might be
counterproductive in some cases. It is particularly true in the
case where a defendant might be capable of complying by LST as
quickly or more quickly than by installing add-on controls -
although not within a ninety-day period - and where unforgiven
stipulated penalties would be very costly. In such
circumstances, th. source might view litigation as more
attzactive than signing a consent decree providing for
unforgivable interim date stipulated penalties. To avoid forcing
costly arid environmentally unnecessary litigation in such
situations, AED and SSCD have developed the modification to the
November 21, 1986 guidance set out in the attached revised
guidance.-
RevisiOflft
The revised guidance continues the availabilitY of
“alternate means” clauses as provided in the memorandum of
November 21., 1986. However, a defendant seeking such a clause
-------
—3—
must agree to either of two precor(ditions designed to ensure
that the defendant is not embarking on a speculative LST scheme.
The defendant may agree to escrow stipulated penalties which
accrue for violations of interim milestones in the schedule for
add—on controls. In such cases, the decree may provide for the
forgiveness of such penalties if the source complies by the
schedule end date. Alternatively, the defendant inay agree to
post an appropriate up-front performance bond in lieu of being
subject to interim date stipulated penalties. Should the source
comply by LST prior to the end date, the escrowed penalties or
the performance bond are returned to the defendant.
This revision does not affect other aspects of the August 7,
1986 policy, which remain in effect.
Attachments (August 7, 1986 Policy and November 21, 1986
Guidance; Revised Guidance)
cc: Air Division Branch Chiefs
ORC Air Branch Chiefs
David Buente, Chief
Environmental Enforcement Section
Department of Justice
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i D
- UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASI INGTON, D.C. 20460
FEB
81989
MEMORANDUM
SUBJECT:
FROM:
TO:
Revised Guidance Concerning Compliance B,( Use of Low
Terre
Associate Enforcement Counsel
Air Enforcement Divjajon
John Seitz, D:
Stationary Source bpliance DivisL
Air Management Division Directors
Regions I, III and IX
Air and Waste Management Division Director
Region II
Air, Pesticides and Toxics Management Division
Directors
Regions IV and VI
Air and Radiation Division Director
Region V
Air and Toxics Division Directors
Regions Vii, VIII and X
Regional Counsels
Regions I-X
This guidance specifies the terms and conditions under
which cass development teams may agree to consent decree language
affordinq sourcea the option of achieving compliance by means of
Low Solv t Technology (“LST”), where such compliance would not
be achieved withfti the ninety-day period otherwise required in
the August 7, 1986 policy on the availability of LST schedules in
VOC enforcement cases. This memorandum supersedes a memorandum
on this subject issued by AED and SSCD on November 21, 1986.
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—2—
Background
On August 7, 1986, the Office of Enforcement and Compliance
Monitoring and the Office of Air and Radiation jointly published
a policy concerning the availability of schedules for LST in Voc
enforcement actions. This policy provided that if certain
conditions were met, such schedules could be obtained. The
policy provided, however, that any such schedule could not allow
for final compliance to be achieved later than ninety days after
the filing of EPA’s enforcement complaint.
On November 21, 1986, recognizing that the environment
would be equally served if a source came into compliance by LST
prior to the final compliance deadline of an expeditious schedule
for add-on controls, though after the ninety-day limit, AED and
SSCD distributed guidance clarifying the August 7, 1986 policy.
This guidance provided that a consent decree containing a
schedule for add-on controls could provide that compliance could
be achieved by some alternate means at an earlier date than the
final compliance date for add-ons. The memo went on to specify,
however, that any such decrees could not contain provisions
excusing accrued stipulated penalties for missed interim dates in
the add-on control schedule, even if the source complied by LST.
prior to the add-on control schedule end date. The reason for
this restriction was the belief that holding out the promise that
interim date stipulated penalties would be forgiven might unduly
encourage sources to attempt to comply by LST.
Upon further consideration, it appears that there are
alternatives to precluding forgiveness of stipulated penalties
which would equally ensure that defendants proposing to comply by
LST in longer than 90 days are not embarking on speculative LST
schemes. The revised guidance expressed in this memorandum
continues the availability of “alternate means” clauses as
provided in the November 21, 1986 memorandum. it requires a
defendant seeking inclusion of such a clause in a consent decree
to agree to either of two preconditions for ensuring that the
defendant is not embarking on a speculative LST scheme, however.
The defendant may agree to escrow stipulated penalties which
accrue for violations of interim milestones in the schedule for
add-on controls. In such cases, the decree may provide for the
forgivene of such penalties if compliance occurs by the
schedule end—date. Alternatively, the defendant may agree to
post an appropriate up—front performance bond in lieu of being
subject to interim date stipulated penalties.
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—3—
Revised Guidance Concerning the Auaust 7. 1986 Policy on LST
Schedules in VOC Enforcement Actions
If during negotiations a source offers to comply by LST as
soon as, or sooner than, it would comply pursuant to an
expeditious schedule for add-on controls - although not within a
ninety day period from the riling of EPA’S complaint - and the
case team determines that there is an adequate basis for
believing that the source can and will so comply, the case team
may negotiate a consent decree affording the source the option of
complying by LIST, provided the following are met:
1. The consent decree must contain a schedule providing for
expeditious compliance through the installation of add-on
controls. (In keeping with the August 7, 1986 policy on LST
schedules, the maximum length of any such schedule gill be
twelve months from the date of entry of the consent decree.)
The decree may provide that compliance may alternatively be
accomplished by the use of complying coatings, so long as
compliance occurs within the time period specified for
compliance by add-on controls.
2. As a precondition for EPA’S agreement to such an “alternate
means” clause, a defendant must agree to either:
A. Escrow, on at least a monthly basis, any stipulated
penalties which would accrue for failures to meet
interim deadlines specified in the schedule for add-on
controls, in which case the decree may provide that
such stipulated penalties will be forgiven if the
source achieves compliance by the final deadline for
complying by add-on controls.
The penalty amounts placed in escrow would be in
addition to stipulated penalties for the add-on control
schedule end date, which would still be required if the
source fails to meet the scheduled final compliance
date.
The amount of stipulated penalties for missed add-on
control schedule interim dates for sources seeking
alternate means clauses pursuant to this guidance shall
be det.riined on a case-by-case basis, depending on
such factors as the degree of excess em ssiona
associated with the source’s noncompliance, air quality
in the affected area, etc., but shall in no case be
less than the amounts specified below:
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—4—
Violator’s Net Worth Minimum Interim Date
Stipulated Penalty Amount
Up to $250,000 $250/day
$250,000 to $1,000,000 $500/day
$1,000,001 to $20,000,000 $1,000/day
$20,000,001 to $50,000,000 $2,000/day
Over $50,000,000 $2,500/day
The case team may demand higher stipulated penalty
amounts, and may consider amounts that escalate as the
time of violation increases. The team should also
consider establishing a timeframe during which the
source must place the accruing amounts into escrow,
e.a. , within fifteen (15) days following the date the
penalties accrued.
B. A defendant may post a third-party performance bond
providing for absolute, non—contingent forfeiture of
the face amount in the event compliance is not achieved
by the add-on control schedule end date. The face
amount must be at least equal to the total amount of
interim date stipulated penalties which could possibly
accrue and have to be escrowed assuming the approach
specified in Subsection A, above, were utilized and
defendant were to miss all interim schedule dates.
Such a bond would be in lieu of stipulated penalties
for add-on control schedule interim dates, but would be
in addition to stipulated penalties for the add—on
control schedule end date, which would still be
required.
Example: A defendant with $5,000,000 net worth desires the
option of complying by LST in greater than 90 days. If convinced
that defendant can and will so comply, the case development team
may agree to the inclusion of a clause affording such an option,
providing either:
The df.ndant agrees to stipulated penalties for the add-on
controk sChedule interim milestones required by the
August 7, 1986 policy in the minimum amount of $1,000 per
day. Thsdcrs. may provide that such penalties will be
forgiv if compliance is achieved by the add-on control
schedule end date, provided defendant agrees to escrow
accrued penalties on at least a monthly basis; or
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—5—
The defendant agrees to post an up-front performance bond
in an amount equal to $1,000 per day times the number of
days between the add-on control schedule’s first interim
milestone and the schedule end date, such bond to be
forfeited if compliance is not achieved by the end date and
to be in addition to whatever stipulated penalties are
provided for failure to meet the schedule end date.
Attachments (August 7, 1986 and November 21, 1986 Policy
Statements)
cc: Air Division Branch Chiefs
ORC Air Branch Chiefs
David Buente, Chief
Environmental Enforcement Section
Department of Justice
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.UNITED STATES ENVIRONMEMTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
P 21
MEMORANDUM
SUBJECT: Early Compliance And Stipulated Penalties in
VOC Enforcement Cases
FROM: John B. Rasnjc, Acting Directo
Stationary Source Compliance ision
Of fice of Air Quality Planning and S andarde
Michael S. Alushjn LI 144 t ’
Associate Enforcement Counsel
Air Enforcement Division
TO: Air Management Division Directors
Regions I, III, V and IX
Air and Waste Management Division Director
Region II
Air, Pesticides, and Toxic. Management Division
Directors
Regions IV and VI
Air and Toxic. Division Directors
Regions V I I, VIII and X
Regional Counsels
Regions I—X
In an August 7, 1986 policy issued by Craig Potter and
Richard Nays (“Policy on the Availability of LST Schedules In
CAA Enforcement Actions”), EPA disallowed any compliance schedules
in con.eme decrees which gave the source more than three months
after th* filing of the complaint to reach compliance through the
applicatf of low solvent technology. Two issues have arisen
concerning the application of this policy which we hope to answer
below.
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-2—
First, consent decrees may contain a clause providing
for compliance through a means other than add-on controls
prior to the compliance date for add-on controls. Such a
clause could read ‘(Source) agrees to attain final compliance
by (date of add-on controls) through the following schedule
for controls, or by some other means at an earlier date.”
The language should be general in order to keep EPA from commit-
ting itself to a compliance plan other than the add—on control
schedule.
Second, even if the source achieves early compliance through
low solvent technology, EPA will not forgive stipulated penalties
which have been incurred as the result of missed milestones in
the schedule for installing add-on controls. However, we will
not require stipulated penalties for the milestones which come
after the date that the source achieved compliance through low
solvent technology. The rationale for this position is that we
view the add-on schedule to be the “real” one in these cases,
and in order for sources to take that schedule seriously, we
need to collect stipulated penalties until the time compliance
actually occurs. Including a clause allowing complete forgive-
ness of stipulated penalties would encourage sources to continue
to gamble on the possible success of low—solvent technology,
precisely the situation that we hoped to end by issuing the
August 7, 1986 policy.
cc: VOC Workgroup Members
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SECTION B DOCUMENT 17
Model Notice of Violation
03/05/91
ii
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tD
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
e) t
OFFICE OF ENFORCEMENT
MENORANDtJM
SUBJECT: Model Noticeof Violation
FROM: Michael S.
Associate Enforcement Counsel
TO: Regional Counsels
Regions I-X
Regional Air Division Directors
Region I-X
The attached is an interim draft model notice of violation
(“ TOV”), that includes changes and additions from the Clean Air
Act Amendments. NOVs being issued should now reflect the fact
that there is no continuing violation requirement and that the
source may have the burden in an enforcement proceeding to prove
compliance after the date of the notice. This model can be
adapted to the particular format already in use in the Region.
Please use this model on an interim basis to accomodate changes
which are presently effective under the Clean Air Act Amendments.
The use of the language describing the presuiuptionof
noncompliance is not limited to NOVs for SIP violations. Section
113 (e) (2), for purposes of determining the number of days of
violation, allows EPA to benefit from a presumption of a
continuing.violation “where the Administrator or an air pollution
control agency has notified. the source of the violation...”.
Thus, Sectlon 113(e) (2) also presents the opportunity for the
Agency ta- use- this presumption in administrative orders or
finding of violation notices. An order or a document containin4
a finding of violation by the Agency constitutes “notice” such
that from the date of the document’s issuance, the presumption of
noncompliance begins to run and a source can be considered to e
in violation until it establishes continuous compliance.
Because the presumption exists only where EPA “makes a prima
facie showing that the conduct or events giving rise to the
violation are likely to have continued or recurred past the date
of notice...”, the Region should be aware that, at some point, a
Pnnte on Recycled Paper
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demonstration that the violation is continuing or recurring in
nature will be required. An order should include language, like
that in the NOV 1 notifying the source that EPA considers the
source to be in violation until it establishes continuous
compliance. It should also include the “Penalty Assessment
Criteria” section from the NOV that contains the language
creating a presumption of noncompliance.
This model can be used now, though language regarding
administrative penalty orders should only be used after the
implementing Part 22 hearing procedures are promulgated.
Promulgation is expected by September, 1991.
Please submit comments on this draft to Alexandra Callam by
April 1, 1991. In addition, please let me know of any developing
cases that could serve as a test of the new presuinption of
noncompliance, i.e. cases that have favorable facts for
determining the extent to which EPA must show that a violation is
continuing and for determining the nature of defendant’s burden
to prove compliance. We are available to assist you with the
initial cases where the issue is presented.
Attachment
cc: Regional Counsel
Air Contacts -
John Rasnic, Acting Director
Stationary Source Compliance Division
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MODEL NOTICE OF VIOLATION
UNITED STATES ENVIRONKEN 1 TAL PROTECTION AGENCY
REGION
x
)
In the Matter of: ) Notice Of Violation
Index No.000000
Company Name
City, State )
)
x
STATUTORY AUTHORITY
THIS NOTICE OF VIOLATION (NOV.) is issued to Company Name
(“Respondent”), for violations at its facility located at Company
Address , pursuant to Section 113(a)(l) of the Clean Air Act (the
Act), 42 U.S.C. Section 7413(a)(l), as amended on November 15,
1990 by P.L. 101—549. Section 113(a)(1) requires the
Administrator of the United States Environmental Protection
Agency (EPA) to notify a person in violation of a state
implementation plan or permit of the violation. The authority to
issue NOVs has been delegated to the Division Director. Branct1
PA. Region
FINDINGS
1. The state administrative code, Section 010, provides
that no person shall cause, suffer, allow, or permit volatile
organic compounds (“VOC”) to be emitted into the outdoor
atmosphere from a source operation under Section 020, in excess
of the emission rate- as determined in accordance with. Table 030.
. Section 010 is a part of the federally—approved and
federally—enforceable state implementation plan (see 40 CFR
52. ).. - -
3. Company name manufactures drugs and vitamins in
capsules. Company name uses a granulation drying process to
evaporate solvent used in washing the capsules. The. drying oven
used by Respondent is a source operation listed under Section
020.
4. On date , duly authorized EPA inspectors conducted an
unannounced inspection of the company name facilities at address
in accordance with Section 114 of the Act. The inspectors
observed the operation of the drying oven and found that there
were no devices to control the VOC emissions from the drying
)ven.
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5. On date , EPA performed a stack test to measure the
emissions from the drying oven to the outside atmosphere. The
results of the stack test showed that the drying oven emitted
solvent at emission rate .
6. Information provided by company name to the EPA pursuant
to a Section 114 information request indicates that Respondent
operates the drying oven at full capacity 14 hours per day, 6
days per week. -
7. Under Section 010, the allowable emission rate for
Respondent’s drying oven, as determined by Table 030, is emission
rat . Respondent emits % # amount, in excess of allowable
einj ssion rate .
8. Therefore, Respondent is in violation, and is considered
to be in violation until it establishes continuous compliance, of
state administrative code, Section 010. [ Respondent has been in
violation of state administrative code, Section 010 since date .
(Use if there are facts indicating the date noncompliance began
prior to NOV issuance.)]
ENFORCEMENT
Section 113(a)(l) of the Act provides that at any time after
the expiration of 30 days following the date of the issuance of
this Notice, the Regional Administrator (delegated?) may, without
regard to the period of violation,
—issue an order requiring compliance with the
requirements of the state implementation plan or
permit, or - -
[ —issue an administrative penalty order. pursuant to
Section 113(d) for civil administrative penalties of up
to $25,000 per day of violation] (to be used after
ai ’i nistrative penalty regulation.s- are issued),
—bring a civil action pursuant to Section 113(b) for
injunctive relief and/or civil penalties of not more
than $25,000 per day for each violation.
Furthermore, for any person who knowingly violates any plan
or permit requirement more than 30 days after the date of the
issuance of this Notice, Section 113(c) provides for criminal
penalties or imprisonment, or both.
In addition, under Section 306(a), the regulations
promulgated thereunder (40 CFR Part 15), and Executive Order
11738, facilities to be utilized in federal contracts, grants and
loans must be in full compliance with the Act and all regulations
promulgated pursuant thereto. Violation of the Act may result in
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the subject facility being declared ineligible for participation
in any federal contract, grant, or loan.
PENALTY ASSESSMENT CRITERIA
Section 1l3(e)(l) of the Act states that the court, as
appropriate, shall, in determining the amount of penalty to be -
assessed, take into consideration (in addition to such other
factors as justice may require) the size of the business, the
economic impact of the penalty on the business, the violator’s
full compliance history and good faith efforts to comply, the
duration of the violation as established by any credible evidence
(including evidence other than the applicable test method),
payment by the violator of penalties previously assessed for the
same violation, the economic benefit of noncompliance, and the
seriousness of the violation.
Section 113(e)(2) of the Act allows the ‘court to assess a
penalty for each day of violation.. For purposes of determining
the number of days of violation, where the EPA(plaintiff) (or the
r Levarit air pollution control agency ) makes a prima facie
showing that the conduct or events giving rise to this violation
are likely to have continued or recurred past the date of this
NOV (or a previously issued air pollution control agency NOV for-
the same violation), the days of violation shall be presumed to
include the date of this NOV (or the previous NOV) and each and
every day thereafter until Respondent establishes that continuous
compliance has been achieved, except to the, extent that
Respondent can prove by the preponderance of the evidence that
there were intervening days during which no violation occurred or
that the violation was not continuing in nature.
OPPORTUNITY FOR CONFERENCE
Respondent may, upon request, confer with EPA. The
conference will enable Respondent to present evidence bearing on
the finding of violation, on the nature of violation, and on any
efforts it may have taken or proposes to-take to achieve
compliance. Respondent has the right to be represented by
counsel. A request for a conference must be made within i days
of receipt of this NOV. The request for a conference or other
inquiries concerning the NOV should be made in writing to
ORC Attorney
EFFECTIVE DATE
This NOV shall be effective immediately upon receipt.
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SECTION 8 DOCUMENT 18
Enforcement Role in the 33/50 Program (Industrial
T oxic s Project)
05/15/91
18
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I ___ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
I 5
OFF E OF ENFORCEMEJIr
MEMORANDUM
SUBJECT: Enforcement Role in the 33/50 (Industrial
Toxics Project)
FROM: Raymond B. Ludwisz
Acting Assistant A
Off ice of Enforcement
TO: Regional Administrators
Assistant Administrators
Associate Assistant Administratoj
General Counsel
Inspector General
Vigorous enforcement of existing requirements and a new
focus on prevention of pollution at its source have been and will
continue to be two of the highest priorities of the Agency. The
two objectives are mutually reinforcing. A strong enforcement
program can do much to foster pollution prevention by creating
general incentives for the regulated community to eliminate or
significantly reduce pollutants to avoid liability, reduce costs
of compliance, and reduce the possibility of incurring penalties
for failure to comply with applicable requirements.
The attached paper on the “Enforcement Role in the 33/50
Program (Industrial Toxics Project)” clarifies how the Agency
plans to reconcile the relationship between strong enforcement of
existing requirements with the voluntary nature of the 33/50
Program. In summary, no company or facility will be singled out
for enforcement because of its participation or decision not to
participate in the 33/50 Program. Conversely, vigorous
enforcement will proceed, regardless of participation in the
33/50 Program where we have discovered violations of
environmental requirements. The companies from which EPA is
seeking voluntary reductions in the 17 chemicals are also being
apprised that participation in the Program will not shield them
from any regulatory or enforcement action or risk—based targeted
enforcement initiatives.
Pnnted on Recycled Paper
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We also will be implementing our recently issued “Interim
Policy on the Inclusion of Pollution Prevention and Recycling
Provisions in Enforcement Settlements”. This policy encourages
enforcement personnel to favor pollution prevention and recycling
as a means of correcting violations or as supplemental
environmental projects agreed upon during settlement
negotiations.
If you have any questions or concerns about this matter,
please feel free to contact Cheryl Wasserman, Chief, Compliance
Policy and Planning at (202) 382—7550.
Attachment
cc: Deputy Assistant Administrators
Headquarters Compliance Office Directors
OE Managers
Daniel Esty
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3/21/91
ENFORCEMENT ROLE IN THE 33/50 PROGRAM (INDUSTRIAL TOXIC3 PROJECT)
This paper describes how the Agency’s enforcement
authorities can foster the goals of the 33/50 Program (Industrial
Toxics Project) and steps that EPA Headquarters and Regional
personnel should take to ensure that implementation of the
project is consistent with Agency compliance and.enforcement
goals.
The 33/50 Program (Industrial Toxics Project) is a non—
regulatory Agency-wide effort to achieve, voluntarily, overall
reductions in a group of seventeen toxic chemicals reported in
the Toxics Release Inventory (TRI). Individual facilities are
not singled out for reductions, nor are specific pollutants per
Se. Rather, the Administrator is seeking commitments from the
contributors of these pollutants to achieve reductions of at
least fifty percent of the pollutants, as a group, nation-wide
over the next five years. This Program is a pilot program to
determine what can be achieved cooperatively, and perhaps in a
more expeditious manner than through reliance only on regulation
and permitting of pollutants or individual facilities
respectively.
First, the Agency will continue efforts to regulate, permit,
and enforce reductions for the targeted chemicals, where
appropriate. Nothing in the 33/50 Program (Industrial Toxics
Project) is intended to impede or interfere with existing
regulatory and enforcement activities at facilities which are
releasing these substances or otherwise violating the law. The
project is designed to add to, not detract from, these ongoing
programs. To the extent that releases of the listed pollutants
are regulated at particular facilities, EPA and the States will
continue to closely monitor adherence to reductions which are
enforceable requirements under regulatory permits or enforcement
settlements. For example, EPA ’s lead enforcement initiative
which focuses on violations of existing requirements, and
regulatory clusters will proceed as planned, as will other
efforts designed to reduce these chemicals based upon health and
environmental factors generally or at particular sites.
Second, enforcement can play an important role in project
integrity by creating consequences for and deterring false or
inaccurate reporting. Enforcement can provide some assurance:
1) that those that are releasing these chemicals have, in
fact, reported the releases; and
Ongoing EPA efforts to identify and pursue enforcement
against those who have failed to report, or failed to report
releases of particular toxic chemicals, under the Toxics
Release Inventory will continue. In particular, industrial
sources which are likely contributors of the seventeen high
priority pollutants but have not reported under the TRI are
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candidates under the neutral inspection scheme for
inspection. Such facilities may be screened by EPA Regional
staff in cooperation with the States during planned
inspections at such facilities for other purposes to
determine if the absence of reporting appears appropriate.
2) that claims of reductions by facilities and companies are
accurate. -
Data quality audits, now a routine part of the compliance
program for the Toxics Release Inventory, will be used to
ensure proper reporting of baseline TRI releases and overall
reported levels following reductions. The program should
continue to explore opportunities to coordinate such reviews
with other Agency inspections.
Third, enforcement can provide a further impetus for
voluntary reductions through enforcement settlement negotiations.
The Agency plans to use the opportunity presented by settlement
negotiations for related violations to encourage consideration of
changes to existing operations and processes which would either
eliminate or reduce these and other pollutants. EPA will use its
enforcement case screening process to identify current violators
who are potential candidates for such pollution prevention
conditions in federal enforcement settlements to achieve desired
reductions.
Fourth, the conduct of the Agency’s enforcement program will
be entirely consistent with the voluntary nature of the 33/50
Program. The credibility of the 33/50 Program (Industrial Toxics
Project) will depend upon on number of factors, particularly the
ability to maintain its voluntary nature.
1) Companies and facilities which choose not to participate
in the 33/50 Program will not be singled out for inspections
or other enforcement activities because of their non-
participation.
2) Companies and facilities that make commitments to the
33/50 Program will not be subject to special data quality
audit activities based on that commitment.
Company facilities participating in the 33/50 Program may be
subject to inspections to corroborate the quality of report
under the Toxics Release Inventory (as noted in Principle
3.2 above) only to the same extent as any other facilities
might be inspected, but will not be subject to inspections
specifically for the purposes of the 33/50 Program such as
to review their baseline commitments, reduction plans
proposed, or achievement of reduction goals.
One exception to this will be voluntary participation of
companies who would like to be considered for the Agency’s
award and recognition program. The recognition system will
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include an activity to insure the credibIlity of the
company’s application for the award.
Finally, in implementing the 33/50 Program we must follow
three principles to ensure that a clear and consistent message is
conveyed that we will continue to pursue vigorous enforcement and
regulatory action against such facilities or pollutants where
appropriate, that voluntary agreements cannot shield signatories..
from enforcement and regulatory requiremen and approaches, and
that opportunities to use pollution prevention Conditions in
enforcement settlement agreements are not foreclosed. To do
this:
1) 33/50 Progra correspondence to companies, States, and
facilities should include a caveat that nothing in the
implementation of this project in any way substitutes for
compliance with existing State, local and Federal regulatory
and permit requirements, nor would it define future
enforceable levels of control required of the companies by
States, localities or the Federal government to address
concerns about toxic releases.
2) Any 33/50 Program activity at the facility level should
be preceded by careful review of the status of any pending
regulatory and enforcement actions at the site. Involved
personnel at the Federal, state and local levels should be
identified and Consulted as to the merits of pursuing
facility-specific voluntary reduction agriements before
proceeding. Regions should specifically cross-reference the
list of facilities on the 33/50 Program list with those who
are current violators under any of the statutes and subject
to enforcement before contact at the facility level.
3) The purpose(s) of the voluntary commitments should be
clearly articulated and distinguished from traditional
requirements to reduce toxic releases through permits and
enforcement actions.
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SECTION B DOCUMENT 19
Clean Air Act Stationary Source Civil Penalty Policy
NOTE: Includes “Clarification to the October 25, 1991
Clean Air Act Stationary Source Civil Penalty Policy”,
added 1/17192.
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o
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASI-flNGTON 0 C 20460
JAN I 7 1992
MEMORANDUM
SUBJECT: Clarifications to the October 25, 1991 Clean Air Act
Stationary Source Civil P
FROM: John B. Rasnic, Director -
Stationary Source Compli nce Divi
Office of Air and Radiation
Michael S. Alushin, Enforcement Counse l iW’,
Air Enforcement Division
Office of Enforcement
TO: Addressees
As a result of the many comments and suggestions received
during the Administrative Enforcement Training in Chicago on
November 5—6, 1991, we would like to clarify several issues
regarding the October 25, 1991 Clean Air Act Stationary Source
Civil Penalty Policy. In addition to the addressees, we are
distribut-ing this clarification memorandum to all those who
attended the training in Chicago.
We would like to clarify that the toxicity of pollutant and
sensit .rity of the environment figures of the gravity component
apply ónly to violations of emissions standards and to work
practice or -technology standar s that are serving as emissions
standards. In additiot , the lêngthof violatior figure of the
gravity component is based on tke nuinb.er of actual days—of
violation, not calendar months. The n mber of actual days of
violation should be counted and- di ided by thirty to dé ermine the
numbef of months. Any portion of:&-t1 irty’da period sb uId be
;counted as -another-month. - In addi€icrT, any days over -a - alendar
year should becounted as another mohth (i.e., 368 days should be
counted as 13 months). -
Several Regions questioned which enforcement forum would be
appropriate where a portion of the vidlation occurred over twe1ve
months rom .the initiation of the enforcement -action. - I&.
determining whether the action may be pursued adinist atl rely,
EPA may ever drop viable causes of action. However, if some
portion of the alleged violations occurred over 12 months p ior to
filing of the complaint, the portion of those violations whjch
occurred over 12 months prior to filing of the complaint may be
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disregarded and the case may be pursued administratively with the
following qualification. This can only be done where no causes of
action are dropped and the resulting preliminary deterrence amount
(PDA) is at least 90% of the PDA calculated with the entire length
of all violations included.
One Region suggested that Headquarters adopt an air-specific
Supplemental Environmental Projects (SEP) policy. Both the
Stati.onary Source Compliance Division (SSCD) and Air Enforcement
Division (AED) will work next year to develop such a policy which
will include examples of appropriate air SEPs. Supplemental
Enviror1 flefltal Projects which are appropriate under the current
Office of Enforcement guidance may be included in consent
agreements and final orders (CAFOs) in administrative actions.
As one Region suggested, this could be done by conditionally
remitting a portion of an assessed penalty by requiring in the
CAFO that the defendant pay that portion offset by the SEP unless
all the actions required by the SEP are performed by a certain
date. The burden is always on the defendant to establish that the
SEP has been fully complied with. Actions which the respondent
must take to come into compliance can not be addressed in the CAFO
but must be addressed through 113(a) administrative compliance
orders or a civil judicial action under 113(b) in accordance with
the October 29, 1991 “Guidance on Choosing the Appropriate Forum
in Clean Air Act Stationary Source Civil Enforcement.”
The penalty policy requires that members of the litigation
team are responsible for ensuring their management agrees with any
adjustment to the PDA. We would like to emphasize that each
member of the litigation team must keep formal documentation of
management concurrence in his or her case file. The documentation
of management concurrence must include a signature on the penalty
calcul tiOfl worksheet (or similar document) by the first line
superyiSOr of the team members.
Finally, attached are three replacement pages which correct
Example 3. The original example incorrectly left out a length of
violation figure for the work practice violation. The appropriate
length of violation figure should always be assessed for each
violation.
Several suggestions which were made have not yet been adopted
but are under consideration. We ‘will evaluate the implementation
of the revised penalty policy after one year. To the extent
changes in the policy are warranted, we will reconsider the
unincorporated suggestions at that time.
Several Regions disagreed with Example 1 in the policy
because it only calculates the gravity component once even though
the emissions standard applies to each individual boiler and was
violated at several boilers at the same facility. The Regions
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believed the gravity component should be calculated separately for
each violation at each boiler. SSCD arid ED have decided to
maintain the position that in instances whe’re a particular
regulation applies to each individual emissions unit and the
standard is violated at several emissions units, the gravity
component is calculated only once for the entire facility.
The main reason for this is a concern that calculating for each
emissions unit separately would lead to unrealistically high
penalties. Nonetheless, several factors will result in a higher
penalty for these multiple unit violations. The economic benefit
as calculated by BEN should be significantly higher if the
standard is being violated at more than one emissions unit.
The level of violation figure of the gravity component will also
generally be higher if the standard is being violated at more than
one emissions unit. Of course, the violation at each boiler would
be separately alleged in the complaint.
One Region suggested that the policy should allow the
litigation team to mitigate the gravity component by as much as
15% for degree of cooperation anytime the defendant is willing to
settle. The penalty policy still takes the position that EPA
expects every Source to negotiate in good faith and come into
compliance expeditiously and doing so does not justify mitigation.
The litigation, team still has room to negotiate under the policy.
The penalty plead in the administrative complaint is generally the
unmitigated preliminary deterrence amount. Therefore, any
mitigation justified under the policy may take place during
negotiations to reach a settlement. Also, the penalty plead in
the administrative complaint is to be based on the most aggressive
assumptions supported by the facts available at that time
concerning such factors as length of violation and level of
violation. These factors may be recalculated if defendants
demonstrate that they are inaccurate.
If you have any questions about these changes, please contact
us or Scott Throwe in SSCD at FTS 678—8699 or (703) 308-8699 or
Elise Hoerath in AED at FTS 260—2843 or (202) 260—2843.
Attachment
Addressees: Regional Administrators, Regions I - X
Regional Counsels, Regions I — X
Air Management Division Director
Region I
Air and Waste Management Division Director
Region II
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Air, ToXiCS and Radiation Nanagement Division
Director
Region III
Air, Pesticides, and Toxics Management Division
Director
Region IV
Air and Radiation Division Director
Region V
Air, Pesticides, and Toxics Division Director
Region VI
Air and ToxiCS ‘Division Director
Regions VII, VIII, IX and X
Bruce Rothrock, OCAPO
Robert Heiss, OCAPO
Jonathan Lthber, OCAPO
John Cruden, Chief
Environmental Enforcement Section
U.S. Department of Justice
Bill Becker
STAPPA-ALAPCO
cc: Scott S. Fulton
Acting Deputy Assistant Administrator
Office of Enforcement
Robert Van Huevelen
Acting Director of Civil Enforcement
John Seitz, Director
Office of Air Quality Planning and Standards
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CLEAN AIR ACT
STATIONARY SOURCE
CIVIL PENALTY POLICY
October 25, 1991
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Table of Contents
I . Introduction. • • • • • • • • • • • • • • • • • • • • . . . . . . . . . . . . . . . . . . . . . . . i
II. PreliminaryDeterreflceAlflOuflt... 4
A. Economic BenefitCompoflent ... 4
1. Benefit from delayed costs ..
2. Benefit from avoided costs .................... 5
3. Adjusting the economic benefit component 6
a. Economic benefit component involves
insignificant amount. . ...... . ..... ... . . . . . .‘. 7
b. compelling public concerns . . . . . 7
c. Concurrent Section 120 administratiVe
action •.•....•• ..••
B. Gravity Component . . . . . . . . 8
1. ActualorpoSSibleharm ................. 10
a. Level of violation
b. Toxicity of the pollutant
c. Sensitivity of environment
d. Length of time of violation
2. ImportanCe to regulatory scheme . 12
3. Size of violator .. . . . . .. .. . 14
4. Adjusting the Gravity Componeflt....... . ..... ... .15
a. Degree of willfulness or Negligence 16
b. DegreeofCOoPeratiofl.... 16
c. History o. Noncompliance .. 17
d. vjroflmeflta1Damage.. .19
III . Litigation Risk . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
iv. Ability to Pay 20
V. Offsetting Penalties Paid to State and Local Ver tS
or Ci:izen Groups for the Sane Violations.... 21
VI. Suppletental Environmental Projects.... 22
VII. Calculating a Penalty in Cases with More Than
One violation • • 22
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VIII. Ap;crtioni ent of the Penalty A cng Multiple
Defendants . , • • 23
IX. Exaiiples . . . . . . 24
X. Conclusion • • • • • • • • • • • • • • • • • • • • • 31
XI. Appendices
I. Permit Penalty Policy
II. Vinyl Chloride Penalty Policy
III. Asbestos Penalty Policy
IV. VOC Penalty Policy
V. Air Civil Penalty Worksheet
VI. Volatile Hazardous Air Pollutant Penalty Policy
VII. Residential Wood Heaters Penalty Policy
VIII. Stratospheric Ozone Penalty Policy
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CLEAN AIR ACT STATIONARY SOURCE CIVIL PENALTY POLICY
I. INTRODUCTION
Section 113(b) of the Clean Air Act, 42 U.S.C. § 7411(b),
provides the AdministratOr of EPA with the authority to commence a
civil action against certain violators to recover a civil penalty
of up to $25,000 per day per violation. Since July 8, 1980, EPA
has sought the assessment of civil penalties for Clean Air Act
violations under Section 113(b) based on the considerations listed
in the statute and the guidance provided in the Civil Penalty
policy issued on that date.
On February 16, 1984, EPA issued the Policy on Civil Penalties
(GM—fl) and a Framework for Statute—Specific ADDroacheS to Penalty
Assessments (Gl4-22). The Policy focuses on the general philosophy
behind the penalty program. The Framework provides guidance to
each program on how to develop medium—specific penalty policies.
The Air Enforcement program followed the Policy and the Framework
in drafting the Clean Air Act Stationary Source Civil Penalty
Policy, which was issued on September 12, 1984, and revised March
25, 1987. This policy amends the March 25, 1987 revision,
incorporating EPA’S further experience in calculating and
negotiating penalties. This guidance document governs only
stationary source violations of the Clean Air Act. All violations
of Title II of the Act are governed by separate guidance.
The Act was amended on November 15, 1990, providing the
Administrator with the authority to issue administrative penalty
orders in Section 113(d), 42 U.S.C. § 7413(d). These penalty
orders may assess penalties of up to $25,000 per day of violation
and are generally authorized in cases where the penalty sought is
not over $200,000 and the first alleged date of violation occurred
no more than 12 months prior to initiation of the administrative
action. In an effort to provide consistent application of the
Agency’s civil penalty authorities, this penalty policy will serve
as the civil penalty guidance used in calculating administrative
penalties under Section 113(d) of the Act and will be used in
calculating a minimum settlement amount in civil udicia1 cases
brought under Section 113(b) of the Act.
In calculating the penalty amount which should be sought in an
administrative complaint, the economic be Lef it of noncompliance and
a gravity component should be calculated under this penalty policy
using the most aggressive assumptions supportable. Pleadings will
always include the full economic benefit component. As a general
rule, the gravity component of the penalty plead in adminiSt at
complaints may not be mitigated. However, the gravity component
portion of the plead penalty may be mitigated by up to ten per cent
solely for degree of cooperation. Any mitigation for this facto:
must be justified under Section II.B.4.b. of this, Policy. The
total mitigation for good faith efforts to comply for purpose or
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determining a settlement amount ay never exceed thirty per cent.
Applicable adjustment factors which aggravate the penalty must be
included in the amount plead in the administrative comp1a ,nt.
Where key financial or cost figures are not available, for example
those costs involved in calculating the BEN calculation, the
highest figures supportable should be used.
This policy will ensure the penalty plead in the complaint is
never lower than any revised penalty calculated later based on more
detailed information. It will also encourage sources to provide
the litigation team with the more accurate cost or financial
information. The penalty may then be recalculated during
negotiations where justified tinder this policy to reflect any
appropriate adjustment factors. In administrative cases, where the
penalty is recalculated based upon information received in
negotiations or the prehearing exchange, the administrative -
complaint must be amended to reflect the new amount if the case is
going to or expected to go to hearing. This will ensure the
complaint reflects the amount the government is prepared to justify
at the hearing. This pleading policy also fulfills the obligation
of 40 C.F.R. § 22.l4(a)(5) that all administrative complaints
include “a statement explaining the reasoning behind the proposed
penalty.”
This policy reflects the factors enumerated in Section 113(e)
that the court (in Section 113(b) actions) and the Administrator
(in Section 113(d) actions) shall take into consideration in the
assessment of any penalty. These factors include: the size of
the business, the economic impact of the penalty on the business,
the violator’s full compliance history and good faith efforts to
comply, the duration of the violation, payment by the violator of
penalties assessed for the sane violation, the economic benefit of
noncompliance, the seriousness of the violation and such other
factors as justice may require.
This document is not ‘meant to control the penalty amount
requested in judicial actions to enforce existing consent decrees.L
In judicial cases, the use of this guidance is limited to pre-tri.al
settlement of enforcement actions. In a trial, government
attorneys may find it relevant and helpful to introduce a penalty
calculated under this policy, as a point of reference in a demand
for penalties. However, once a case goes to trial, government
attorneys should demand a larger penalty than the mi.nimum
settlement figure as calculated under the policy.
In these actions, EPA will normally seek the penalty amount
dictated by the stipulated penalty provisions, of the consent
decree. If a consent decree contains no st pulate4 penalty
provisions, the case development team should propose penalties
suitable to vindicate the authority of the Court.
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The general policy applies to most Clean Air Act violations.
There are some types of violations, however, that have
characteristics which make the use of the general policy
inappropriate. These are treated in separate guidance, included as
appendices. Appendix I covers violations of PSD/NSR permit
requirements. Appendix II deals with the gravity component or
vinyl chloride NESHAP violations.’ Appendix III covers the economic
benefit and gravity components for asbestos NESHAP demolition and
renovation violations. The general policy applies to violations of
volatile organic compound regulations where the method of
compliance involves installation of control equipment. Separate
guidance is provided for VOC violators which comply through
reformulation (Appendix IV). Appendix VI deals with the gravity
component for volatile hazardous air pollutants violations.
Appendix VII covers violations of the residential wood heaters NSPS
regulations. Violations of the regulations to protect
stratospheric ozone are covered in Appendix VIII. These appendixes
specify how the gravity component and/or economic benefit
components will be calculated for these types of violations.
Adjustment, aggravation or mitigation, of penalties calculated
under any of the appendixes is governed by this general penalty
policy.
This penalty policy contains two components. First, it
describes how to achieve the goal of deterrence through a penalty
that removes the economic benefit of noncompliance and reflects the
gravity of the violation. Second, it discusses adjustment factors
applied so that a fair and equitable penalty will result. The
litigation team 2 should calculate the full economic benefit and
gravity components and then decide whether any of the adjustment
factors applicable to either component are appropriate. The final
penalty obtained should never be lower than the penalty calculated
under this policy taking into account all appropriate adjustment
factors including litigation risk and inability to pay.
All consent agreements should state that penalties paid
pursuant to this penalty policy are not deductible for federal tax
purposes under 28 U.S.C. S 162(f).
2 With respect to civil judicial cases, the litigation team
will consist of the Assistant Regional Counsel, the Office of
Enforcement attorney, the Assistant United States Attorney, the
Department of Justice attorney from the Environmental Enforcement
Section, and EPA technical professionals assigned to the case.
With respect to administrative cases, the litigation team will
generally consist of the EPA technical professional and Assistant
Regional Counsel assigned to the case. The recommendation of the
litigation team must be unanimous. If a unanimous position cannot
be reached, the matter should be escalated and a decision made by
EPA and the Department of Justice managers, as required.
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The procedures set out in this document are intended solely
for the guidance of government personnel. They are not intended
and cannot be relied upon to create rights, substantive or
procedural, enforceable by any party in litigation with the United
States. The Agency reserves the right to act at variance with t iis
policy and to change it at any time without public notice.
This penalty policy is effective immediately with respect to
all cases in which the first penalty offer has not yet been
transmitted to the opposing party.
II. THE PRELIMINARY DETERRENCE J MOUNT
The February 16, 1984, Policy on Civil Penalties establishes
deterrence as an important goal of penalty assessment. More
specifically, it says that any penalty should, at a minimum , remove
any significant economic benefit resulting from noncompliance. In
addition, it should include an amount beyond recovery of the
economic benefit to reflect the seriousness of the violation. That
portion of the penalty which recovers the economic benefit of
noncompliance is referred to as the “economic benefit component;”
that part of the penalty which reflects the seriousness of the
violation is referred to as the “gravity component.” When
combined, these two components yield the “preliminary deterrence
amount.”
This section provides guidelines for calculating the economic
benefit component and the gravity component. It will also discuss
the limited circumstances which justify adjusting either component.
A. THE ECONOMIC BENEFIT COMPONENT
In order to ensure that penalties recover any significant
economic benefit of noncompliance, it is necessary to have reliable
methods to calculate that benefit. The existence of reliable
methods also strengthens the Agency’s position in both litigation
and negotiation. This section sets out guidelines for computing
the economic benefit component. It first addresses costs which are
delayed by noncompliance. Then it addresses costs which are
avoided completely by noncompliance. It also identifies issues to
be considered when computing the economic benefit component for
those violations where the benefit of noncompliance results from
factors other than cost savings. The section concludes with a
discussion of the limited circumstances where the economic benefit
component may be mitigated.
1. Benefit from delayed costs
In many instances, the economic advantage to be derived from
noncompliance is the ability to delay making the expenditures
necessary to achieve compliance. For example, a facility which
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5
fails to install a scrubber will eventually have to spend the money
needed to install the scrubber in order to achieve compliance.
But, by deferring these capital costs until EPA or a State takes an
enforcement action, that facility has achieved an economic benefit.
Among the types of violations which may result in savings fiom
deferred cost are the following:
• Failure to install equipment needed to meet emission
control standards.
• Failure to effect process changes needed to reduce
pollution.
• Failure to test where the test still must be performed.
• Failure to install required monitoring equipment.
The economic benefit of delayed compliance should be computed
using the “Methodology for Computing the Economic Benefit of
Noncompliance,” which is Technical Appendix A of the BEN User’s
Manual . This document provides a method for computing the economic
benefit of noncompliance based on a detailed economic analysis.
The method is a refined version of the method used in the previous
Civil Penalty Policy issued July 8, 1980, for the Clean Water Act
and the Clean Air Act. BEN is a computer program available to the
Regions for performing the analysis. Questions concerning the BEN
model should be directed to the Program Development and Training
Branch in the Office of Enforcement, FTS 475-6777.
2. Benefit from avoided costs
Many types of violations enable a violator to avoid
permanently certain costs associated with compliance. These
include cost savings for:
Disconnecting or failing to properly operate and maintain
existing pollution control equipment (or other equipment
if it affects pollution control).
• Failure to employ a sufficient number of adequately
trained staff.
• Failure to establish or follow precautionary methods
required by regulations or permits.
• Removal of pollution equipment resulting in process,
operational, or maintenance savings.
• Failure to conduct a test which is no longer required.
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6
• Disconnecting or failing to properly operate and maintain
required monitoring equipment.
• Operation and maintenance of equipment that the violator
failed to install. -
The benefit from avoided costs must also be computed using
methodology in Technical Appendix A of the BEN User’s Manual .
The benefit from delayed and avoided costs is calculated
together, using the BEN computer program, to arrive at an amount
equal to the economic benefit of noncompliance for’ the period from
the first provable date of violation until the date of compliance.
As noted above, the BEN model may be used to calculate only
the economic benefit accruing to a violator through delay or
avoidance of the costs of complying with applicable requirements of
the Clean Air Act and its implementing regulations. There are
instances in which the BEN methodology either cannot compute or
will fail to capture the actual economic benefit of noncompliance.
In those instances, it will be appropriate for the Agency to
include in its penalty analysis a calculation of the economic
benefit in a manner other than that provided for in the BEN
methodology.
In some instances this may include calculating and including
in the economic benefit component profits from illegal activities.
An example would be a source operating without a preconstruction
review permit under PSD/NSR regulations or without an operating
permit under Title V. In such a case, an additional calculation
would be performed to determine the present value of these illegal
profits which would be added to the BEN calculation for the total
economic benefit component. Care must be taken to account for the
preassessed delayed or avoided costs included in the BEN
calculation when calculating illegal profits. Otherwise, these
costs could be assessed twice. The delayed or avoided costs
already accounted for in the BEN calculation should be subtracted
from any calculation of illegal profits.
3. Adjusting the Economic Benefit Component
As noted above, settling for an amount which does not recover
the economic benefit of noncompliance can encourage people to wait
until EPA or the State begins an enforcement action before
complying. For this reason, it is general Agency policy not to
adjust or mitigate this amount. There are three general
circumstances (described below) in which mitigating the economic
benefit component may be appropriate. However, in any individual
case where the Agency decides to mitigate the economic benefit
component, the litigation team must detail those reasons in the
case file and in any memoranda accompanying the settlement.
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Following are the limited circumstances in which EPA can
mitigate the economic benefit component of the penalty:
a. Economic benefit component involves
insignificant amount - -
Assessing the economic benefit component and subsequent
negotiations will often represent a substantial commitment of
resources. Such a commitment may not be warranted in cases where
the magnitude of the economic benefit component is not likely to be
significant because it is not likely to have substantial financial
impact on the violator. For this reason, the litigation team has
the discretion not to seek the economic benefit component where it
is less than $5,000. In exercising that discretion, the litigation
team should consider the following factors:
Impact on violator : The likelihood that assessing the
economic benefit component as part of the penalty will
have a noticeable effect on the violator’s competitive
position or overall profits. If no such effect appears
likely, the benefit component should probably not be
pursued.
The size of the aravitv comi,onent : If the gravity
component is relatively small, it may not provide a
sufficient deterrent, by itself, to achieve the goals of
this policy. In situations like this, the litigation
team should insist on including the economic benefit
component in order to develop an adequate penalty.
b. Compelling public concerns
The Agency recognizes that there may be some instances where
there are compelling public concerns that would not be served by
taking a case to trial. In such instances, it may become necessary
to consider mitigating the economic benefit component. This may be
done only if it is absolutely necessary to preserve the
countervailing public interests. Such settlement might be
appropriate where the following circumstances occur:
The economic benefit component may be mitigated where
recovery would result in plant closings, bankruptcy, or
other extreme financial burden, and there is an important
public interest in allowing the firm to continue in
business. Alternative payment plans, such as installment
payments with interest, should be fully explored before
resorting to this option. Otherwise, the Agency will
give the perception that shirking one’s environmental
responsibilities is a way to keep a failing enterprise
afloat. This exemption does not apply to situations
where the plant was likely to close anyway, or where
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8
there is a likelihood of continued harmful noncompliance.
The economic benefit component may also be mitigated in
enforcement actions against nonprofit public entities,
such as municipalities and publicly-owned utilities,
where assessment threatens to disrupt continued provision
of essential public services.
c. Concurrent Section 120 administrative action
EPA will not usually seek to recover the economic benefit of
noncompliance from one violation under both a Section 113(b) civil
judicial action or 113 (d) civil administrative action and a Section
120 action. Therefore, if a Section 120 administrative action is
pending or has been concluded against a source for a particular
violation and an administrative or judicial penalty settlement
amouz?t is being calculated for the same violation, the economic
benefit component need not include the period of noncompliance
covered by the Section 120 administrative action.
In these cases, although the Agency will not usually seek
double recovery, the litigation team should not automatically
mitigate the economic benefit component by the amount assessed in
the Section 120 administrative action. The Clean Air Act allows
dual recovery of the economic benefit, and so each case must be
considered on its individual merits. The Agency may mitigate the
economic benefit component in the administrative or judicial action
if the litigation team determines such a settlement is equitable
and justifiable. The litigation team should consider in making
this decision primarily whether the penalty calculated without the
Section 120 noncompliance penalty is a sufficient deterrent.
B. THE GRAVITY COMPONENT
As noted above, the Policy on Civil Penalties specifies that
a penalty, to achieve deterrence, should recover any economic
benefit of noncompliance, and should also include an amount
reflecting the seriousness of the violation. Section 113(e)
instructs courts to take into consideration in setting the
appropriate penalty amount several factors including the size of
the business, the duration of the violation, and the seriousness of
the violation. These factors are reflected in the “gravity
component.” This section of the policy establishes an approach to
quantifying the gravity component.
Assigning a dollar figure to represent the gravity of the
violation is a process which must, of necessity, involve the
consideration of a variety of factors and circumstances. Linking
the dollar amount of the, gravity component to these objective
factors is a useful way of insuring that violations of
approximately equal seriousness are treated the same way. These
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9
objective factors are designed to reflect those listed in Section
113(e) of the Act.
The specific objective factors in this civil penalty policy
designed to measure the seriousness of the violation and reflect
the considerations listed in the Clean Air Act are as follows:
Actual or possible harm : This factor focuses on whether
(and to what extent) the activity of the defendant
actually resulted or was likely to result in the emission
of a pollutant in violation of the level allowed by an
applicable State Implementation Plan, federal regulation
or permit.
Importance to the reaulatorv scheme : This factor focuses
on the importance of the requirement to achieving the
goals of the Clean Air Act and its implementing
regulations. For example, the NSPS regulations require
owners and operators of new sources to conduct emissions
testing and report the results within a certain time
after start-up. If a source owner or operator does not
report the test results, EPA would have no way of knowing
whether that source is complying with NSPS emissions
limits.
Size of violator : The gravity component should be
increased, in proportion to the size of the violator’s
business.
The assessment of the first gravity component factor listed
above, actual or possible harm arising from a violation, is a
complex matter. For purposes of determining how serious a given
violation is, it is possible to distinguish violations based on
certain considerations, including the following:
• Amount of pollutant : Adjustments based on the amount of
the pollutant emitted are appropriate.
• Sensitivity of the environment : This factor focuses on
where the violation occurred. For example, excessive
emissions in a nonattairunent area are usually more
serious than excessive emissions in an attainment area.
Toxicity pf the pollutant : Violations involving toxic
pollutants regulated by a National Emissions Standard for
Hazardous Air Pollutants (NESHAP) or listed under Section
112(b) (1) of the Act are more serious and should result
in larger penalties.
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• The 1en th of time a violation continues : Generally, the
longer a vio] ation continues uncorrected, the greater the
risk of harm. -
• Size of violator : A corporation’s size is indicated by
its stockholders’ equity or “net worth.” This value,
which is calculated by adding the value of capital stock,
capital surplus, and accumulated retained earn .ngs,
corresponds to the entry for “worth” in the Dun and
Bradstreet reports for publicly traded corporations. The
simple: bockkeeping methods employed by sole
proprietorships and partnerships allow determination of
their size on the basis of net current assets. Net
current assets are calculated by subtracting current
liabilities from current assets.
The following dollar amounts assigned to each factor should be
added together to arrive at the total gravity component:
1. Actual or possible harm
a. Level of violation
Percent Above Standard 3
1 — 30%
31 — 60%
61 — 90%
91 — 120%
121 — 150%
151 — 180%
181 — 210%
211 — 240%
241 — 270%
271 — 300%
over 300%
Dollar Abount
$ 5,000
10,000
15,000
20,000
- 25,000
30,000
35,000
40,000
45,000
50,000
50,000 + $5,000 for each 30% or fraction
of 30% increment above the standard
This factor should be used only for violations of emissions
standards. Ordinarily the highest documented level of violation
should be used. If that level, in the opinion of the litigation
team, is not representative of the period of violation, then a more
representative level of violation may be used. This figure should
be assessed for each emissions violation. For example, if a source
—— .— — — —. ———.—..
a 1 . a ..ar . .o an
standard and a mass emission standard and is in violation of both
standards, this figure should be assessed for both violations.
Compiiance is equivalent to 0% above the emission standard.
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b. Toxicity of the pollutant
Violations of NESILAPS emission standards net handled by a
separate appendix and non-NESMAP emission violations involving
pollutants listed in Section 112(b)(l) of the Clean Air Act
Amendments of l99O : $15,000 for each hazardous air pollutant for
which there is a violation.
c. Sensitivity of environment (for SIP and NSPS cases
only).
The penalty amount selected should be based on the status of
the air quality control district in question with respect to the
pollutant involved in the violation.
].. Nonattaiflmeflt Areas
i. Ozone:
Extreme $18,000
severe 16,000
Serious 14,000
Moderate 12,000
Marginal 10,000
ii. Carbon Monoxide and Particulate Matter:
Serious $14,000
Moderate 12,000
iii. All other Criteria Pollutants: $10,000
2. Attainment area PSD Class I: $ 10,000
3. Attainment area PSD Class II or III: $ 5,000
d. Length of time of violation
To determine the length of time of violation for purposes of
calculating I penalty under this policy, violations should be
assumed to be continuous from the first provable date of violation
until the source demonstrates compliance if there have been flO
significant process or operational changes. If the source has
affirmative evidence, such as continuous emission monitoring data,
An example of a non-NESMAP violation involving a hazardous
air pollutant would be a violation of a volatile organic conpour.d
(VOC) standard in a state Implementation Plan j volving a VCC
contained in the Section l12(b)(1) list of pollutants for whic t r.o
NESMAP has yet been promulgated.
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to show that the violation was not continuous, appropriate
adjustnents should be made. In determining the length of
violation, the litigation team should take full advantage of-the
presumption regarding continuous violation in Section 113(e)(2).
This figure should be assessed separately for each violation,
including procedural. violations such as monitoring, recordkeeping
and reporting violations. For example, if a source violated an
emissions standard, a testing requirement, and a reporting
requirement, three separate length of violation figures should be
assessed, one for each of the three violations based on how long
each was violated.
Months Dollars
0 — 2. $ 5,000
2— 3 8,000
4 — 6 12,000
7 — 12 15,000
13 — 18 20,000
19 — 24 25,000
25 — 30 30,000
31 — 36 35,000
37 — 42 4.0,000
43 — 48 45,000
49 — 54 50,000
55 — 60 55,000
2. Importance to the regulatory scheme
The following violations are also very significant in the
regulatory scheme and therefore require the assessment of the
following penalties:
Work Practice Standa d Violations:
- failure to perform a work practice requirement:
$10 , 000—15 , 000
(See Appendix III for Asbestos NESHAP violations.)
Reporting and Notification Violations:
— failure to report or notify: $15,000
— late report or notice: $5,000
— incomplete report or notice: $5,000 — $15,000
(See Appendix III for Asbestos NESHAP violations.)
RecordJceeping Violations: -
- ai :e t keep :ai e :e; :ds: $1 ,CC0
— incomplete records: $5,000 — $15,000
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— 13 —
Testing Violations:
— failure to conduct required performance testing or
testing using an improper test method: $15,000 -
- late performanCe test or performing a required test
method using an incorrect procedure: $5,000
Permitting violations:
— failure to obtain an operating permit: $15,000
— failure to pay permit fee: See Section
502(b)(3)(C)(ii) of the Act
Emission Control Equipment Violations:
— failure to operate and maintain control equipment
required by the Clean Air Act, its implementing
regulatiQns or a permit: $15,000
— intermittent or improper operation or maintenance of -
control equipment: 55,000—15,000
Monitoring violations
- failure to install monitoring equipment required by
the Clean Air Act, its implementing regulations or a
permit: $15,000
— late installation of required monitoring equipment:
$5,000
- failure to operate and maintain required monitoring
equipment: $15,000
iolatio S of AdminiStratiVe Orders: $15,000
Section 114 RequeSts’ for Information Violations:
— failure to respond: $15,000
— incomplete response: $5,000 — $15,000
Compliance Certification Violations:
— failure to submit a certification: $15,000
— late certifications: $5,000
— incomplete certifications; $5,000 — $15,000
violations of Permit Schedules of CompliaflCe
— failure to meet interim deadlines: $5,000
— failure to submit progress reports: $15,000
— incomplete progress reports: $5,000 — $15,000
— late progress reports: $5,000
This figure should be assessed even if the violation of the
administrative order is also a violation of another requirement of
t -.e Act, for example a NESMAP or NSPS requirement. In this
situation, the figure for violation of the administrative, order .s
in addition to appropriate penalties for violating the otter
requirement of the Act.
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A penalty range is provided for work practice violations to
allow Regions some discretion depending on the severity of the
violation. Complete disregard of work practice requirements sh6uj .
be assessed the full $15,000 penalty. Penalty ranges are provided
for incomplete notices, reports, and recordkeeping to allow the
Regions some discretion depending on the seriousness of the
omissions and how critical they are to the regulatory program. If
the source omits information in notices, reports or records which
document the source’s compliance status, this omission should be
treated as a failure to meet the requirement and assessed S15,000.
- A late notice, report or test should be considered a failure
to notify, report or test if the notice or report is submitted or
the test is performed after the objective of the requirement is no
longer served. For example, if a source is required to submit a -
notice of a test so that EPA may observe the test, a n otice
received after the test is performed would be considered a failure
to notify.
Each separate violation under this section should be assessed
the corresponding penalty. For example, a NSPS source may be
required to notify EPA at startup arid be subject to a separate
quarterly reporting requirement thereafter. If the source fails to
submit the initial start-up notice and violates the subsequent
reporting requirement, then the source should be assessed $15,000
under this section for each violation. In addition, a length of
violation figure should be assessed for each violation based on how
long each has been violated. Also, a figure reflecting the size of
the violator should be assessed once for the case as a whole. If,
however, the source violates the same reporting requirement over a
period of time, for example by failing to submit quarterly reports
for one year, the source should be assessed one $15,000 penalty
under this section for failure to submit a report. In addition, a
length of violation figure of $15,000 for 12 months 9f violation
and a size of the violator figure should be assessed.
3. Size of the violator
Net worth (corporations); or net current assets (partnerships
and sole proprietorships):
Under $100,000 $2,000
$100,001 — $1,000,000 5,000
1,0007001 — 5,000,000 10,000
5,000,001 — 20,000,000 20,000
20,000,001— 40,000,000 35,000
40,000,001— 70,000,000 50,000
70,000,001 — 100,000,000 70,000
Over 100,000,000 70,000 + $25,000 for every
additional $30,000,000 Cr
fraction thereof
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In the case of a company with mare than one facility, the size
of the violator is determined based on the company’s entire
operation, net Just the violating facility. With regard to parent
and subsidiary corporations, only the size of the entity sued
should be considered. Where the size of the violator figure
represents over 50% of the total preliminary deterrence amount, the
litigation team may reduce the size of- the violator figure to 50%
of the preliminary deterrence amoi.mt.
The process by which the gravity component was computed must
be memorialized in the case file. Combining the economic benefit
component with the gravity component yields the preliminary
deterrence amount.
4. Adjusting the Gravity Component
The second goal of the Policy on Civil Penalties is the
equitable treatment of the regulated community. One important
mechanism for promoting equitable treatment is to include the
economic benefit component discussed above in a civil penalty
assessment. This approach prevents violators from benefitting
economically from thei noncompliance relative to parties which
have complied with environmental requirements.
In addition, in order to promote equity, the system for
penalty assessment must have enough flexibility to account for the
unique facts of each case. Yet it still must produce consistent
enough results to ensure similarly-situated violators are treated
similarly. This is accomplished by identifying many of the
legitimate differences between cases and providing guidelines for
how to adjust the gravity component amount when those facts-occur.
The application of these adjustments to the gravity component prior
to the commencement of negot atiOfl yields the initial minimum
settlement amount. During the course of negotiation, the
litigation team may further adjust this figure based on new
information learned during negotiations and discovery to yield the
adjusted minimum settlement amount.
The purpose of this section is to establish adjustment factors
which promote flexibility while maintaining national consistency.
It sets guidelines for adjusting the gravity component which
account for some factors that frequently distinguish different
cases. Those factors are: degree of willfulness or negligence,
degree of cooperation, history of noncompliance, and environmental
damage. These adjustment factors apply only to tne gravity
component and not to the economic benefit component. Violators
bear the burden of justifying mitigation adjustments they propose.
The gravity component may be mitigated only for degree of
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— 16 —
cooperation as specified in II.B.4.b. The gravity component may be
aggravated by as much as 100% for the other factors discussed
below: degree of willfulness or negligence, history of
noncompliance, arid environmental damage.
The litigatiOn - team is required to base any adjustment of-the
gravity component on the factors mentioned and to carefully
document the reasons justifying its application in the particular
case. The entire litigation team must agree to any adjustments to
the preliminary deterrence amount. Members of the litigation tearn
are responsiule for ensuring their management also agrees with any
adjustments to the penalty proposed by the litigation team.
a. Degree of Willfulness or NealiQerice
This factor may be used only to raise a penalty. The Clean
Air Act is a strict liability statute for civil actions, so that
willfulness, or lack thereof, is irrelevant to the determination of
legal liability. kiowever, this does not render the violator’s
willfulness or negligence irrelevant in assessing an appropriate
penalty. Knowing or willful violations can give rise to criminal
liability, and the lack of any negligence or willfulness would
indicate that no addition to the penalty based on this factor is
apfropriate. Between these two extremes, the willfulness or
negligence of the violator should be reflected in the amount of t ’.e
penalty.
In assessing the degree of willfulness or negligence, all of
the following points should be considered:
• The degree of control the violator had over the events
constituting the violation.
• The foreseeability of the events constituting the
violation.
• The level of sophistication within the industry in
dealing with compliance issues or the accessibility of
appropriate control technology (if this information is
readily available). This should be balanced against the
technology-forcing nature of the statute, where
applicable.
• The extent to which the violator in fact knew of the
legal requirement which was violated.
b. Degree of Cocperation
The degree of cooperation of the violator in remedying the
v o1aticn is an appropriate factor to consider in adLsting ..e
penalty. In some cases, this factor may justify aggravat on of the
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gravity component because the source is not making efforts to come
into compliance and is negotiating with the agency in bad faith- or
refusing to negotiate. This factor may justify mitigation of the
gravity component in the circumstances specified below where the
violator institutes comprehensive corrective action after discovery
of the violation. Prompt correction of violations will be
encouraged if the violator clearly sees that it will be financially
disadvantageous to litigate without remedying noncompliance. EPA
expects all sources in ‘violation to come into compliance
expeditiously and to negotiate in good faith. Therefore,
mitigation based on this fact r is limited to no more than 30% of
the gravity component and is allowed only in the following three
situations:
1. Prompt reporting of noncompliance
The gravity component may be mitigated when a source pro ptly -
reports ‘its noncompliance to EPA or the state or local air
pollution control agency where there is no legal obligation to do
so.
2. Prompt correction of environmental prob1em.s
The gravity component may also be mitigated where a source
makes extraordinary efforts to avoid violating an imminent
requirement or to come into compliance after learning of a
violation. Such efforts may include paying for extra work shifts
or a premium on a contract to have control equipment installed
sooner or shutting down the facility until it is operating in
compliance.
3. Cooperation durina pre—filing investigation
Some mitigation may also be appropriate in instances where the
‘defendant is cooperative during EPA’S pre—filing investigation of
the source’s compliance status or a particular incident.
c. History of Noncom liaflce
This factor may be use.t only to raise a penalty. Evidence
that a party has violated n environmental requirement before
clearly indicates that the party was not deterred by a previous
governmental ‘enforcement response. Unless one of the violations
was caused by factors entirely out of the control of the violator,
the penalty should be increased. The litigation team should check
for and consider prior violations under all environmental statutes
enforced by the Agency in determining the amount of the ad)ustmeflt
to be made under this fact r.
In determining the size of this adjustment, the litigation
team should consider the following points:
Similarity of the violation in question to prior
violations.
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• Time elapsed since the prior violation.
• The nunber of prior violations.
• Violator’s response to prior violation(s) with regard to
correcting the previous problem arid attempts to avoid
future violations.
• The extent to which the gravity component has already
been increased due to a repeat violation. (For example,
under the Asbestos Demolition and Renovation Penalty
Policy in Appendix III.)
A violation should generally be considered “similar” if a
previous enforcement response should have alerted the party to a
particular type of compliance problem. Some facts indicating a -
“similar violation” are:
• Violation of the same permit.
• Violation of the same emissions standard.
• Violation at the same process points of a source.
• Violation of the same statutory or regulatory provision.
• A similar act or omission.
For purposes of this section, a “prior violation” includes any
act or omission resulting in a State, local, or federal enforcement
response (e.a.., notice of violation, warning letter, administrative
order, field citation, complaint, consent decree, consent
agreement, or administrative and judicial order) under, any
environmental statute enforced by the Agency unless subsequently
dismissed or withdrawn on the grounds that the party was not
liable. It also includes any act or omission for which the
violator has previously been given written notification, however
informal, that the regulating agency believes a violation exists.
In researchirtg a defendant’s compliance history, the litigation
team should check to see if the defendant has been listed pursuant
to Section 306 of the Act.
In the case of large corporations with many divisions or
wholly-owned subsidiaries, it is sometimes difficult to determine
whether a ‘ ricr violation by the parent corporation should tr q;er
the adjustments described in this section. New ownership often
raises similar problems. In making this determination, the
litigation teas should ascertain who in the organization exercised
or had authority to exercise control or oversight responsibi1 Y
over the violative conduct. Where the parent corporation exercised
or had authority to exero se control over the violative conduCt,
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the parent corporation’s prior violations should be considered part
of the subsidiary or division’s compliance history. -
In general, the litigation team should begin with the
assumption that if the same corporation was involved, the
adjustment for history of noncompliance should apply. In addition,
the team should be wary of a party changing operations or shifting
responsibility for compliance tO different groups as a way of
avoiding increased penalties. The Agency may find a consistent
pattern of noncompliance by many divisions or subsidiaries of a
corporation even though the facilities are at different geographic
locations. This often reflects, at best, a corporate-Wide
indifference to environmental protection. consequently, the
adjustment for history of noncompliance should apply unless the
violator can demonstrate that the other violating corporate
facilities are under totally independent control.
d. Environmental Damaae
Although the gravity component already reflects the amount of
environmental damage a violation causes, the litigation team may
further increase the gravity component based Ofl severe
environmental damage. As calculated, the gravity component takes
in to account such factors as the toxicity of the pollutant, the
attainment status of the area of violation, the length of time the
violation continues, •and the degree tO which the source has
exceeded an emission limit. However, there may be cases where the
environmental damage caused by the violation is so severe that the
gravity component alone is not a sufficient deterrent, for example,
a significant release of a toxic air pollutant in a populated area.
In these cases, aggravation of the gravity component may be
warranted.
III. LITIGATION RISK
The preliminary deterrence amount, both economic benefit and
gravity components, may be mitigated in appropriate circumstances
based on litigation risk. Several types of litigation risk may be
cot sidered. For example, regardless of the type of violatiOnS a
defendant has committed or a particular defendant’s reprehensible
conduct, EPA can never demand more in civil penalties than the
statutory maximum (twenty-five thousand dollars per day per
violation). In calculating the statutory maximum, the litigation
team shculd assume continuous noncompliance from the first date of
provable violation (taking into account the fiVe year statute of
limitations) to the final date of compliance where approPriates
fully utilizing the presumptiOfl of Section l].3(e)(2). When the
penalty policy yields an amount over the statutory maximum, the
litigation team should propose an alternative penalty Which must be
concurred on by their respective management )ust like any other
penalty.
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Other examples of litigation risks would be evidentiary
problems, or an indication from the court, mediator, or
Adini.nistratjve Law Judge during settlement negotiations that he or
she is prepared to recommend a penalty below the minimum settlement
amount. Mitigation..base on these concerns should consider the
specific facts, equities, evidentiary issues or legal problems
pertaining to a particular case as well as the credibility of
government witnesses.
Adverse legal precedent which the deferidartt aroi.ies is
indistinguishable from the current enforcement action is also a
valid litigation risk. Cases raising legal issues of first
impression should be carefully chosen to present the issue fairly
in a factual context the Agency is prepared to litigate.
Consequently in such cases, penalties should generally not be
mitigated due to the risk the court may rule against EPA. If an
issue of first impression is litigated and EPA’s position is upheld
by the court, the mitigation was not justified. If EPA’s position
is not upheld, it is generally better that the issue be decided
than to avoid resolution by accepting a low penalty. Mitigation
based on litigation risk should be carefully documented and
explained in particular detail. In judicial cases this should be
done in coordination with the Department of Justice.
IV. ABILITY TO PAY
The Agency will generally not request penalties that are
clearly beyond the means of the violator. Therefore, EPA should
consider the ability to pay a penalty in adjusting the preliminary
deterrence amount, both gravity component and economic benefit
component. At the same time, it is important that the regulated
community not see the violation of environmental requirements as a
way of aiding a financially-troubled business. EPA reserves the
option, in appropriate circumstances, of seeking a penalty that
might contribute to a company going out of business.
For example, it is unlikely that EPA would reduce a penalty
where a facility refuses to correct a serious violation. The s me
could be said for a violator with a long history of previous
violations. ‘That long history would demonstrate that less severe
measures are ineffective.
The litigation team should assess this factor after
commencement of negotiations only jf. the source raises it as an
issue and only j the source provides the necessary financial
information to evaluate the source’s claim. The source’s ability
to pay should be determined according to the December 16, 1986
Guidance on Determining a Violator’s Ability tc Pay a Civil Penalty
(GM-56) along with any other appropriate means.
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The burden to demonstrate inability to pay, as with the burden
of dernonstrating the presence of any other mitigating
circumstances, rests on the defendant. If the violator fails to
provide sufficient information, then the litigation team should
disregard this factor in adjusting the penalty. The Office of
Enforcement Policy has developed the capability to assist the
Regions in determining a firm’s ability to pay. This is done
through the computer program, ABEL. If ABEL indicates that the
source may have an inability to pay, a more detailed financial
analysis verifying the ABEL results shculd be done prior to
mitigating the penalty.
Consider delayed mayment schedule with interest : When EPA
determines that a violator cannot afford the penalty prescribed by
this policy, the next step is to consider a delayed payment
schedule with interest. Such a schedule might even be contingent
upon an increase in sales or some other indicator of improved
business. EPA’S compute: pr ;:am, ABEL, can calculate a delayed
payment amount for up to five years.
Consider straight penalty redu ctions as a last recourse : If
this app roach is necessary, the reasons for the litigation team’s
conclusion as to the size of the necessary reduction should be
carefully documented in the case file.’
consider joinder of a corporate violator’s individual owners :
This is appropriate if joinder is legally possible and justified
under the circumstances. Joinder is not legally possible for SIP
cases unless the prerequisite of Section 113 of the Clean Air Act
has been met -— issuance of an NOV to the person.
Regardless of the Agency’s determination of an appropriate
penalty amount to pursue based on ability to pay considerations,
the violator is always expected to comply with the law.
V. OFFSETTING PENALTIES PAID TO STATE AND LOCAL GOVERNMENTS OR
CI’rIZEN GROUPS FOR THE SAME VIOLATIONS
Under Section 113(e)(1), the court in a civil judicial action
or the Administrator in a civil administrative action must consider
in assessing a penalty “payment b the violator of penalties
previously assessed for the same violation.” While EPA will not
automatically subtract any penalty amount paid by a source to a
State or local agency in an enfc ::e ent action or to a c tUen
‘ If a firm fails to pay the agreed to penalty in a final
administrative or judicial order, then the Agency must follow the
procedures outlined in the February 6, 1990 Manual on MoriitCrlrl
and Enforcing Administrative and Judicial Orders for collecting
the penalty amount.
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group in a citizen suit for the same violation that is the basis
for EPA’s enforcement action, the litigation team may do so if
circumstances suggest that it is appropriate. The litigatjontean
should consider primarily whether the remaining penalty is a
sufficient deterrent.
VI. SUPPLEMENTAL ENVIRONMENTAL PROJECTS
The February 12, 1991 Policy on the Use• of Supplemental
Environmental Pro ects in EPA Settlenents must be followed when
reducing a penalty for such a pro)ect in any Clean Air Act
settlement.
VII. CALCULATING A PENALTY IN CASES WITH MORE THA I ONE TYPE OF
VIOLATION
EPA often takes an enforcement action against a stationary
source for more than one type of violation of the Clean Air Act.
The economic benefit of noncompliance with all requirements
violated should be calculated. Next, the gravity component factors
under actual or possible harm and importance to the regulatory
scheme which are applicable should be calculated separately for
each violation. The size of the violator factor should be figured
only once for all violations.
For example, consider the case of a plant which makes
laminated particle board. The particle bQard plant is found to
emit particulates in violation of the SIP particulate emission
limit and the laminating line which laminates the particle board
with a vinyl covering is found to emit volatile organic compounds
in violation of the SIP VOC emission limit. The penalty for the
particulate violation should be calculated figuring the economic
benefit of not complying with that limit (capital cost of
particulate control, etc., determined by running the BEN computer
model), and then the gravity component for this violation should be
calculated using all the factors in the penalty policy. After the
particulate violation penalty is determined, the VOC violation
should be calculated as follows: the economic benefit should be
calculated if. additional measures need to be taken to comply with
the VOC limit. In addition, a gravity component should be
calculated for the VOC violation using all the applicable factors
under actual or possible harm and importance to the regulatory
scheme. The size of the violator factor should be figured only
once for both violations.
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Another example would be a case where, pursuant to Section
114, EPA issues a request for information to a source which emits
S0 , such as a coal-burning boiler. The source does not respond.
Two months later, EPA issues an order under Section 113(a)
requiring the sourceto comply with the Section 114 letter. The
source does not respond. Three months later, EPA inspects the
source and determines that the source is violating the SIP SO 3
emission limit.
In this case, separate econor ic benefits should be calculated,
if applicable. Thus, if the source obtained any economic benefit
from not responding to the Section 3.14 letter or obeying the
Section 113(ai order, that should be calculated. If not, only the
economic benefit from the so emission violation should be
calculated using the BEN computer model. In determining the
gravity component, the penalty should be calculated as follows:
1. Actual or possible harm
a. level of violation — calculate for the emission
violation only
b. toxicity of pollutant - applicable to the emission
violation only
c. sensitivity of environment - applicable to the
emission violation only
d. length of time of violation — separately calculate
the time for all three violations. Note the Section 114
violation continues to run even after the Section 113(a)
order is issued until the Section 13.4 requirements are-
satisfied.
2. ImportanCe to regulatory scheme
Section 114 requet for information violation -
$15,000
Section 113 administrative order violation — $1 .5,Q00
3. size of violator
a. One figure based Ofl the source’s assets.
VIII. APPORTIONMENT OF THE PENALTY AMONG MULTIPLE DEFENDANTS
This policy is intended to yield a minim m settlement penalty
figure for the case as a whole. In many cases, there may be more
than one defendant. In such instances, the Government should
generally take the position of seeking a sum for the case asa
whole, which the defendants allocate among themselves. Civil
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— 24 —
Violations of the Clean Air Act are strict liability violations and
it is generally riot in the government’s interest to get tnto
discus jo of the relative fault of the indivjdual defendants.
The government should therefore adopt a single settlement figure
for the case and should not reject a settlement consistent with the
bottom line settlement figure because of the way the penalty is
allocated.
Apportionment of the penalty in a multi-defendant case may be
recuired if one party is willing to settle and others are not. In
such circumstances, the government should take the position that if
certain portions of the penalty are attributable to such party
(such as economic benefit or aggravation due to prior violations),
that party should pay those amounts and a reasonable portion of the
amounts not directly assigned to any single party. If the case is
settled as to one defendant, a penalty not less than the balance of
the settlement figure for the case as a whole must be obtained from
the remaining defendants.
There are limited circumstances where the Government may try
to influence apportionment of the penalty. For example, if one
party has a history of prior violations, the Government may try to
assure that party pays the amount the gravity component has been
aggravated due to the prior violations. Also, if one party is
known to have realized all or most of the economic benefit, that
party may be asked to pay that amount.
IX. EXAMPLES
Example 1
I. Facts:
Company A runs its manufacturing operations With power
produced by its own coal-fired boilers 7 . The boilers are major
sources of sulfur dioxide. The State Implementation Plan has a
sulfur dioxide emission limitation for each boiler of .68 lbs. per
million B.T.U. The boilers were inspected by EPA on March 19,
1989, and the $03 emission rate was 3.15 lbs. per million B.T.U for
each boiler. A NOV was issued for the SO 3 violations on April 10,
1989. EPA again inspected Company A on June 2, 1989 and found the
‘ Note that a oenaltv is assessed for the entire facility an
not for each emission unit. In this example, the source has
several boilers. However, the penalty figures are not multiplied
by the number of boilers. The penalty is based on the vio1at ons
at the facility as a whole, specifically the amount of pollutant
factor and length of violation factor are assessed once based on
the amount of excess emissions at the facility from all the
boilers.
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502 emission rate to be unchanged. Company A had never installed
any pollution control equipment on its boilers, even though
personnel from the state pollution control agency had contacted
Company A and informed it that the company was subject to state a ix
pollution regulations. The state had issued an administrative
order on September 1, 1988 for SO 3 emission violations at the same
boilers. The order required compliance with applicable
requlatiOrtS, but company A had never complied with the state order.
Company A is located in a nonattainment area for sulfur oxides.
company A has net current assets of $760,000. Company A’S response
to an EPA Section 114 request for information documented the first
provable day of violation of the emission standard as July 1, 1988.
II. Computation of penalty
A. Economic benefit component
EPA used the BEN computer model in the standard mode to
calculate the economic benefit component. The economic benefit
component calculated by the computer model was $243,500.
8. Gravity omponent
i. Actual or possible harm
a. Amount of pollutant: between 360-390%
above standard — $65,000
b. Toxicity of pollutant: not applicable.
c. Sensitivity of the environment:
nonattainment — $10,000
d. Length of time of violation: Measured
from the date of first provable
violation, July 1, 1988 to the date of
final compliance under a consent decree,
hypotheticallY December 1, 1991. (If
consent decree or judqmeflt order is filed
at a later date, this element, as well as
elements in the economic benefit
component must be recalculated.) 41 mos.
— $40,000
2. Importance to regulator? scheme.
No applicable violations.
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— 26 —
3. Size of Violator: net assets of $760,000 —
$5,000.
$243,500 economic benefit component
+120.000 gravity component
$363,500 preliminary deterrence amount
C. Adjustment Factors
1. Degree of willfulness/negljgei,ce
Because Company A was on notice of its
violations and, moreover, disregarded the
state administrative order to comply with
applicable regulations, the gravity component
in this example should be aggravated b some
percentage based on this factor.
2. Degree of Cooperation
No adjustments were made in the category
because Company A did not meet the criteria.
3. History of noncompliance
The gravity component should be aggravated by
some percentage for this factor because
Company A violated the state order issued for
the same violation.
Initial penalty figure: $353,500 preliminary deterrence
amount plus adjustments for history of noncompliance and degree of
willfulness or negligence.
Example 2:
I. Facts:
Company C, located in a serious nonattainment area for
particulate matter, commenced construction in January 1988. It
began its operations in April 1989. It runs a hot mix asphalt
plant subject to the NSPS regulations at 40 C.F.R. Part 60, Subpart
I. Subpart I requires that emissions of particulates not exceed 90
mg/dscm (.04 gr/dscf) nor exhibit 20% opacity or greater. General
NSPS regulations require that a source owner or operator subject to
a NSPS fulfill certain notification and recordkeeping functions (40
C.F.R. § 60.7), and conduct performance tests and submit a report
of the test results (40 C.F.R. § 60.8).
Company C failed to notify EPA of: the date it commenced
construction witnin 30 days after such date (February 1988)(40
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— 27 —
C.F.R. § 60.7(a)(l)); the date of anticipated start-up between 30—
60 days prior to such date (March, 1989)(40 C.F.R. § 60.7(a)(2));
or the date of actual start-up within 15 days after such date
(April, 1989) (40 C.F.R. § 60.7(a)(3). Company C was required
under 40 C.F.R. § 60.8(a) to test within 180 days of start-up, or
by October 1989. The company finally conducted the required
performance test in September 1990. The test showed the plant to
be emitting 120 mg/dscm of particulates and to exhibit 30% opacity.
company C did submit the required notices inNovember 1989 in
response to a letter from EPA informing it that it was subject to
NSPS requirements. It did negotiate with EPA after the complaint
was filed in September 1991, and agreed to a consent decree
requiring compliance by December 1, 1991. Company C has assets of
$7,000,000.
ii. Computation of penalty
.
The Region determined after calculation that the economic
benefit component was $90,000 for violation of the emissions
standard according to the BEN computer calculation. The litigation
team determined that the economic benefit from the notice and
testing requirement was less than $5,000. Therefore, the
litigation team has discretion not to include this amount in the
penalty consistent with the discussion at II.A.3.a.
B. Gravity component
1. Actual or possible harm
a. Amount of pollutant:
i. mass emission standard:
33% above standard — $10,000
il. opacity standard
50% over standard — $10,000
b. Toxicity of pollutant: not applicable
C. Sensitivity of the environmeflt
serious nonattainment — $14,000
d. Length cf tifle Cf vi:laticfl
1) PerformanCe testing: October, 1989 -
September 1990: 12 monthS — $15,000
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— 28 —
2) Failure to report commencement of
construction: February 1988 -
November 1989: 21 months (date of
EPA’S first letter to Company) -
$25,000
3) Failure to report actual start-up:
April, 1989 — November 1989: 7
months — $15,000 -
4) Failure to report date of
anticipated startup between 30-60
days prior to such date: March, 1989
— November 1989: 8 months — $15,000
5) Mass Emission Standard Vio1 tion -:
September l990 — December 1991: 15
months — $20,000
6) Opacity Violation: September 1990 -
December 1991: 15 months — $20,000
2. Importance to regulatory scheme:
Failure to notify 40 C.F.R. § 60.7(a)(l) ‘-
$15,000
Failure to notify 40 C.F.R. § 60.7(a)(2) —
$15,000
Failure to notify 40 C.F.R. § 60.7(a)(3) —
$15,000 -
Failure to conduct required performance test 40
C.F.R. § 60.8(a) — $15,000
3. Size of violator: ?et current Assets
$7,000,000 — $20,000
$ 90,000 economic benefit component
224:000 gravity component
$314 ,000 preliminary deterrence amount
C. - Adjustment factors
1. Degree of willfulness/negligence
No adjustments were made based on willfulness in
this category because there was no evidence that
Company C knew of the requirements prior t
receiving the letter from EPA. Specific. evicence
may suggest that the company’s violations were cue
to negligence justifying art aggravat Ofl cf
penalty on that basis.
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2. Degree of Cooperation
No adjustments were made in this category because
Company C did not meet the criteria.
3. History of noncompliance
The gravity component should be aggravated by an
amount agreed to by the litigation team for this
factor because the source ignored two letters from
EPA informing them of the requirements.
Example 3:
I. Facts
Chemical Inc. operates a mercury cell chior-alkali plant which
produces chlorine gas. The plant is subject to regulations under
the National Emissions Standard for Hazardous Air Pollutants
(NESHAP) for mercury, 40 C.F.R. Part 61, Subpart E. On September
9, 1990, EPA inspectors conducted art inspection of the facility,
and EPA required the source to conduct a stack test pursuant to
Section 114. The stack test showed emissions at a rate of 3000
grams of mercury per 24-hour period. The mercury NESHAP states
that emissions from mercury cell chior—alkali plants shall not
exceed 2300 grams per 24-hour period. The facility has been in
operation since June 1989.
In addition under 40 C.F.R. 61.53, Chemical Inc. either had
to test emissions from the cell room ventilation system within 90
days of the effective date of the NESHAP or follow specified
approved design, maintenance and housekeeping practices. Chemical
Inc. has never tested emissions. Therefore, it has committed
itself to following the housekeeping requirements. At the
inspection, EPA personnel noted the floors of the facility were
badly cracked and mercury droplets were found in several of the
cracks. The inspectors noted that the mercury in the floor cracks
was caused by leaks from the hydrogen seal pots and .compressOr
seals which housekeeping practices require be collected and
confined for further processing to collect mercury. A follow up
inspection was conducted on September 30, 1990 and showed that all
of the housekeeping requirements were being observed. -
Chemical Inc. will have to install control equipment to come
into compliance with the emissions standard. A complaint was filed
in June 1991. The equipment was installed and operational by June
1992. A consent decree was entered and penalty paid in February
1992. Chemical Inc. has a net corporate worth of $2,000,000.
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— 30 —
II. Calculation of Penalty
A. Economic Benefit Component
The delay in installing necessary control equipment from June
1989 to June 1992 as calculated using the BEN computer model
resulted in an economic benefit to Chemical Inc. of $35,000.
B. Gravity Component
1. Actual or possible harm
a. Amount of pollutant: 30 % above the
standard — $5,000
b. Toxicity of pollutant : $15,000 for
violations involving a NESHAP
c. Sensitivity of the environment: not
applicable
d. Length of time of violation:
1) Emissions violation: 22 mos. -
$25, 000
2) Work Practice violation: 1 mo. -
$5,000
2. Importance to regulatory scheme.
Failure to perform work practice requirements -
$15,000
3. Size of Violator: net worth of $2,000,000 —
$10,000
$35,000 economic benefit component
+75,000 gravity component
$110,000 preliminary deterrence amount
C. Adjustment Factors
1. Degree of willfulness/negligence
It is unlikely Chemical Inc. would not be aware of
the NESHAP requirements. Therefore, an adjustment
should probably be made for this factor.
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— 31 —
2. Degree of Cooperation’
No adjustments made because Chemical Inc. did not
meet the criteria.
3. History of Compliance
No adjustments were made because Chemical Inc. had
no prior violations.
X. CONCLUSION
Treating similar situations in a similar fashion is central to
the credibility of EPA’s enforcement effort and to the success of
achieving the goal. of equitable treatment. This document has
established several mechanisms to promote such consistency. Yet it
still leaves enough flexibility for tailoring the penalty to
particular icircuinstances. Perhaps the most important mechanisms
for achieving consistency are the systematic methods for
calculating the benefit component and gravity component of the
penalty. Together, they add up to the preliminary deterrence
amount. The document also sets out guidance on uniform approaches
for applying adjustment factors to arrive at an initial amount
prior to beginning settlement negotiations or an adjusted amount
after negotiations have begun.
Nevertheless, if the Agency is to promote consistency, it is
essential that each case file contain a complete description of how
each penalty was developed as required by the August 9. 1990
Guidance on Documentina Penalty Calculations arid Justifications _ in
EPA Enforcement Actions . This description should cover how the
preliminary deterrence amount was calculated and any adjustments
made to the preliminary deterrence amount. I-t should also describe
the facts and reasons which support such adjustments. Only through
such complete documentation can enforcement attorneys, program
staff and their managers learn from each other’s experience and
promote the fairness required by the Policy on Civil Penalties .
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Appendix I: Penalty Policy for Violations of Permit
Requirements
NOTE: See also “Clarification on Use of Appendix I” at
Section B, No. 28 below.
revised 03125187
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APPENDIX I
Penalty Policy for Violations of Certain Clean Air Act
Permit Requirements for the Construction or
Modification of Major Stationary Sources of Air Pollution
I. Introduction
EPA’S Clean Air Act Stationary Source Civil Penalty
Policy applies generally to stationary sources of air pollu-
tion which violate requirements enforceable •under Section 113
of the Clean Air Act when such violations are the result of a
failure to make capital expenditures and/or failure to employ
operation and maintenance procedures which are necessary to
achieve compliance. The general policy does not, however,
specifically address violations of permit requirements related
to the construction or modification of major stationary
sources under the prevention of significant deterioration
(PSD) program and the nonattainment area new source review
progam.
This document outlines a penalty policy which applies to
certain permit-related violations of the Clean Air Act and
provides a method of calculating a minimum settlement amount
for such violations. This “Permit Penalty Policy” was origi-
nally issued in February 1981 to deal with a subject area not
covered by the 1980 penalty policy. It has been revised for
inclusion in the 1987 policy to reflect more realistic penalty
amounts.
As illustrated by the examples, a source may have
violated a new source requirement which makes it subject to
this Permit Penalty Policy, and, in addition, violated a
regulation subject to the general policy or another appendix.
If this is the case, the Permit Penalty Policy should be used
to find the minimum settlement figure for the permit viola-
tion(s) and the general policy or applicable appendix should
be used to establish a penalty amount for the other violation(s).
These two figures should be added together to produce an
appropriate overall settlement amount. It is also important
to note that the policy outlined in this doctm ent, like the
general stationary source civil penalty policy, is used to
set a minimum settlement figure. Therefore, the penalty
actually negotiated for can always be higher than the figure
derived through use of this Permit Penalty Policy.
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It. The Permit Penalty Policy
The Permit Penalty Policy covers cases involving sources
which begin construction or operation without first obtaining
the required PSD or nonattainment’new source permit, as well
as those which construct or operate in violation of such
valid permits. Construction proceeding in compliance with an
invalid permit is considered to be, in the context of this
penalty policy, construction without a permit.
In these cases, when the source is operating and has
enjoyed an economic benefit from noncompliance, that benefit
should be calculated as directed in the general stationary
source civil penalty policy. As directed by the general
policy, however, the Regional Office may decide not to cal-
culate the economic benefit if that office decides that the
economic benefit is likely to be below $5,000. The gravity
component is then calculated based on the matrix contained in
this permit penalty policy. Construction in the absence of a
permit or in violation of a permit has been assigned a scale
of dollar values on a matrix. The matrix also provides for
the assessment of an additional penalty for certain specified
violations of substantive permit preconditions or requirements.
The appropriate dollar value for a violation is dependent on
an estimate of the total cost of air pollution control at
those facilities of the source for which the permit is
required. 1 ! This value is then multiplied by the rit nber of
months ofTviolation. 2 / When there are multiple permit-related
1/ “Total cost of air pollution control” should include, where
r levant, pollution control equipment costs, design costs,
operation and maintenancecosts, differential cost of complying
fuel v. noncomplying fuel, and other costs pertaining to
adequate control of the new source. Total cost is to be
determined by examination of what would have been required as
BACT (for a PSD violation) or LAER (in the case of an Offset
Policy or Part D violation). When construction is done in
phases, the operative amount is the total cost of air pollution
controls for the entire project. If a source has installed
partial control before the enforcement action commenced, that
part of the cost can be subtracted from the total cost8.
2/ Month-by-month accrual of penalties was selected for
p rposes of convenience and for consistency with the general
policy. Any fraction of a month in violation is counted as a
full month of violation unless circtunstances present a case
for mitigation of this rule.
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-3-
violations, a penalty figure is calculated for each violation
and the individuaL penalty figures are added together to
produce one minimum settlement figure. In those cases where
a source subject to a valid permit violates only the require-
ments of Section 173(1) and/or Section 173(3) (requirements
for construction permits in nonattainment area8) , the appro-
priate penalty amount is determined by reference only to the
matrix column(s) citing the violation(s). -
The economic benefit component and the gravity component
are added together to determine the preliminary deterrence
amount. This initial amount should then be adjusted, using
the general stationary source civil penalty policy factors
which take into consideration individual equitable considera-
tions (Part III of the general policy.) This will yield the
initial penalty figure.
The period of civil penalty liability will, of course,
depend upon the nature and circumstances of the violation.
For example, if a source has begun actual construction without
a required permit or under an invalid permit, the penalty
period begins on the date the source began construction and
continues either until the source obtains a valid permit,
notifies the State or EPA that it has permanently ceased
construction and the project has been abandoned, or the State
issues a federally enforceable construction permit containing
operating restrictions which keep the source below the new
source review applicability threshold. 3 ’ A temporary cessation
in construction does not toll the running of the penalty period.
The Agency may, however, consider mitigation of the calculated
civil penalty if a source ceases construction within a reason-
able time after being notified of the violtion and does not
resume construction until a valid permit is issued. If a
source violates a permit condition, the period of penalty
liability for purposes of calculating a settlement figure
begins on the- first date the violation can be documented and
will cease when the violation is corrected.
EPA realizes that in certain cases, it is highly unlikely
that the Agency will be able to obtain the full amount of the
initial penalty figure in litigation. This may be due to
applicable precedent, competing public interest considerations,
3 IThe period of liability is not be be confused with the
period of continuing violation for Section 113 notice of
violation (NOV) purposes. A source which constructs without
a valid permit is in continuing violation of the Clean Air
Act for NOV purposes until it receives a valid permit or it
dismantles the new construction.
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-4-
or the specific facts, equities, or evidentiary issues
pertaining to a particular case. In such a situation it is
unrealistic to expect EPA to obtain a penalty settlement
which it could not achieve through litigation. The liti-
gation team must receive the approval of the Associate
Enforcement Counsel for Air in order to propose settling for
less than the minimt i penalty amount from the matrix because
of litigation practicalities. -
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-5-
PERMIT PENALTY POLICY MATRIX
MINIMUM SETTLEMENT FIGURES
( per month of violation)
PSD SOURCES
TOTAL COST OF AIR
POLLUTON CONTROL FOR
NEW OR MODIFIED
SOURCE (S ThOUSANDS )
less than 50
50-1 50
150-500 /
500—1 ,500
1 ,500-5,000
5,000-15 ,000
15,000-50,000
over 50,000
CONSTRUCTION OR
OPERATION WITHOUT
A PERMIT OR IN
VIOLATION OF A
VALID PERMIT
$ 2,000
4,000
7 ,000
11 ,000
1 6,000
22,000
29,000
37,000
I NCREMENT
E CCEEDED
$ 7,000
11 ,000
16,000
18,000
21 ,000
25 ,000
31 ,000
39,000
PART D AND OFFSET INTERPRETATIVE RULING SOURCES
TOTAL COST OF AIR
POLLUTION CONTROL
FOR NEW OR MODIFIED
SOURCE (S THOUSANDS )
less than 50
50-1 50
150-500
500-1 ,500
1,500-5,000
5,000-15,000
15,000-50 ,000
over 50,000
CONSTRUCTION
OR OPERATION
WITHOUT A
PERMIT OR
IN VIOLATION
OF A VALID
PERMIT
$ 2,000
4,000
7,000
11 ,000
16 ,000
22 ,000
29 ,000
37,000
FAILURE TO
SATISFY
§173(1) OR
OBTAIN
OFFSETS
$ 3,000
4,000
6 ,000
9,000
11 ,000
1 3 ,000
15,000
1 7,000
VIOLATION OF
SECTION 173(3)
OR CONDITION 2
$ 2,000
3,000
4,000
4,000
5,000
7,000
11 ,000
12,000
(Add numbers
when multiple
categories apply)
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-6-
EXA1 LE CASES
The following hypothetical cases illustrate how the matrix is
used to calculate a minimwn settlement figure.
PSD SOURCE
I. Facts
On July 1 , 1985, an existing major source began construc-
tion of a modification to its plywood manufacturing plant.
The modification will result in a significant net emission
increase of particulate matter. The source had not obtained
or filed for a PSD permit as of the date construction began.
On July 2, 1985, EPA investigators discovered the
construction during a routine inspection of the plywood plant.
The EPA Regional Office detert ined that the mddification was
st bject to PSD review and issued a Notice of Violation on
August 1, 1985. The NOV cited the PSD regulations and outlined
possible enforcement alternatives.
The source received the NOV on August 5, 1985, and
contacted the Regional Office on August 10, 1985. On
August 30, 1985, the Region and the source held a conference
at which the source stated that it had been aware of the need
for PSD review and permitting prior to construction. The
source also stated that it would file an application for a
permit but that it would not cease construction during the
review process.
On October 1 , 1985, the source filed a PSD application.
During the review process the Region discovered that the
source had no plans to install pollution control devices.
The Region also determined that without BACT, the modification’s
particulate emissions would result in an exceedance of the
particulate matter increment in the source’s area of impact.
The source, when informed of the BACT problem, indicated it
would install the necessary controls.
However, throughout the review process the source
continued construction of the modification. On December 1
1985, the source began operation of the modified source
without the required permit and without controls.
On January 15, 1986, the source was issued a PSD permit.
On February 28, 1986, the source ceased operation of the
plywood plant to connect the pollution control equi nent
called for in the PSD permit. The source resumed operation
on Harch 15, 1986, in a manner consistent with the PSD permit
conditions.
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—7—
II. Computation of Penalty
A. Benefit Component
The penalty calculation begins with a calculation of the
economic benefit of noncompliance (using the BEN model) for
the period of operation without a permit (December 1 , 1985 -
January 15, 1986). BEN calculated a penalty of $6,400.
B. Gravity Component
This component of the penalty is calculated by initially
assessing the total cost of air pollution control equipment
at the modification. For purposes of this example, assume
BACT costs $140,000.
Next, the PSD Matrix must be consulted and the type and
number of matrix categories determined. In this example the
source (1) began construction without a permit, (2) operated
the plant without a P 50 permit and (3) exceeded the growth
increment for particulate matter. Therefore, this source is
subject to both of the columns of dollar values under the
heading “PSD Sources.”
Once the type, number and dollar values of the penalty
are determined, these figures are multiplied by the number of
months in violation. The sums are then added together to
produce the matrix penalty amount.
In this example, the source’s period of construction
without a permit runs from July 1 , 1985, until operations
began on December 1 ,1985 (5 months). The period of operation
without a permit runs from the time the source began operation
(December 1 , 1985) to the date the source received a permit
(January 15, 1986) (2 months). The source also exceeded the
area growth increment for particulate matter during the
period of operation from December 1, 1985, to February 28,
1986 (3 months). 4 !
4/ It is important to note that some aspects of the matrix do
not necessarily track the statutory provisions regarding
violations. For example, there is no Clean Air Act provision
which makes increment exceedance, in and of itself, a violation
by an individual source. (The SIP must protect the increment.
The method used is PSD review with permit conditions such as
BACT, fuel use limitations, etc.) However, as a portion of
the gravity component, considering the seriousness of the
violation if a source operates and thereby violates the
increment due to failure to go through PSD review as required,
an added penalty in appropriate.
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-8-
The matrix penalty figure for this source’s PSD related
violations, based on a $140,000 total cost of control estimate,
IS:
- for the 5 month period of construction without a permit,
5 x $4,000 = $20,000
- for the2 month period of operation without. a permit,
2 x $4,000 = $8,000
- for the 3 month period of operation during which the
increment was exceeded,
3 x $11 ,000 = $33,000
- matrix penalty figure
$20,000 + $8,000 + $33,000 S61 ,000
This is added to the economic benefit component
$ 6,400 economic benefit
61 ,000 gravity
$67,400 preliminary deterrence
amount.
C. Adjustment Factors
1. Degree of willfulness/negligence
Because the source knew it needed a PSD permit and
commenced construction without applying for a PSD
permit, the gravity component is increased 10%
.10% of $61,000 = $6,100
2. Degree of cooperation
No adjustment
3. History of noncompliance
No past history of noncompliance
4. Ability tO pay
No adjustment here because the source did not provide
EPA with financial information indicating inability
to pay.
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-9—
Total Penalty
$67,400 pi eliminary deterrence amount
+ 6,100 adjustment
$Th,500 initial minimum penalty figure
The source paid the U.S. Treasury $73,500.
Section 173 and Offset Policy Sources
I. Facts
On December 1, 1984, a plywood manufacturing company
began operation of a modification at its plant which is
located in a nonattainment area for particulate’ matter. The
modification is subject to new source review permitting and,
in fact, the source has obtained a valid NSR permit from the
State. The permit specifies 1) that the applicant has demon-
strated that all other major stationary sources owned or
operated by the applicant in ‘the State are in compliance with
the Act, 2) what constitutes required LAER, and 3) what
offsets (internal) 5 ! would be required to be obtained prior to
start-up or commencement of operation. (These requirements
are found in Section 173 of the Clean Air Act.)
In March of 1985, the Regional Office learned that the
source did not install controls on a certain piece of process
equipment and therefore did not have LAER as specified in
the State permit. On April 1, 1985, the Region issued an NOV
for failure to comply with the terms of the permit by not
installing LAER prior to start-up. At an April 15, 1985,
conference between EPA and the source, the source agreed to
meet the terms of its permit and to demonstrate compliance.
On November 15, 1985, the equipment had been installed and a
performance demonstration showed that the source was in
cornpliance with the LAER limit specified in the permit.
5/ In light of the Supreme Court decision in Chevron U.S.A.
Inc. v. NRDC , ___ U.S. ___ , 104 S. Ct. 2778 (1984) , a state may
choose to adopt a plant-wide definition of source in nonattain-
ment areas. In such instances, sources obtaining internal
offsets may be exempt from nonattainment new source review
requirements.
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-10-
II. Computation of penalty
A. Benefit Component
The BEN model determined that the economic benefit from
operating without LAER controls from December 1, 1984
until November 15, 1985 was $63,400.
B. Gravity Component
First the cost of the pollution control equipment must
be determined. In this case, LAER costs $110,000.
Since the plant operated from December 1 , 1984 until
November 15, 1985 without LAER, the period of violation
is 12 months. The matrix yields a gravity component of
12 x 4,000 = $48,000. The other two categories of the
NSR matrix need not be used because there were no viola-
tions in these categories.
The gravity component is added to the economic benefit
component
$63,000 economic benefit
+ 48,000 gravity
$111,400 preliminary deterrence amount
C. Adjust.iient factors
1 . Degree of willfulness
No adjustment here. At the NOV conference, EPA
learned that the company had had serious, but temporary
economic reverses that prevented it from installing the
control equipment.
2. Degree of cooperation
No adjust nents here.
3. History of compliance
o past history of noncompliance.
4. Ability to pay
No adjustment here because the company had reversed
its financial losses and was currently financially
healthy.
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—11—
Total penalty - initial penalty target figure same as
preliminary deterrence amount.
Because the State had intervened in the case and had
gathered the evidence of violation, the U.S. split the
penalty with the State.
The Company paid $55,700 to the U.S. treasury and $55,700-
to the State.
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App.ndlx I: VhiyI Chlorid. C lvii P.n.Ity Polcy
rvSd 02108185
-------
APPENDIX it
Vinyl ChLorLde Civ].L ?enal.zy Policy
The attached chart shall oe used to determine the gravity
cocnpoclerit of the ctvil penalty setcleme:ic anounc for cases -
enforcing the national Emission Standard for Vinyl. Chloride. It
is to be used in lieu of the scheme for determining the gravity
component set forth in the genera]. Clean Air Act Stationary
Source Civil Penalty Policy.
The settlement penalty for viny]. chloride cases, as for
other Clean Air Act cases, consists of a gravity component and an
economic benefit component. Adjus nents for degree of willfulness
or negligence, degree of cooperation/noncooperatiOn, history of
noncompliance, ability to pay, “other unique factors,” and
litigation practicalities should be made, if appropriate, in
accordance with the Stationary Source Civil Penalty Policy.
The gravity component of t te penalty reflects the seriousness
of the violation. A separate scheme c.zas developed for vinyl
chloride cases because several of the factors in the general
policy, such as length of time of violation, whether the area is
primary non-attaininent, and level. of violation as a percentage
above the ‘standard largely do not apply to vinyl chloride cases.
Also, the hazardous nature of the pollutant and the difficuLty in
determining economic benefit are reflected by establishing a
substantial gravity component.
The vinyl chloride gravity component is therefore tied to
the ainourtc of vinyl chloride released in a given incident, which
is used as a measure of the seriousness of each violation. Also,
for relief valve discharges, manual vent valve discharges, and 10
ppm violations, an adjustment factor is to be used to account for
excessive frequency of discharges in a given time, which is a
reflection of poor performance regardless of the amount of ‘viny ] .
chloride discharged to the atmosphere. The frequency adjustnen
factor differs from the adjustment factor for history of
noncompliance, which reflects violations occurring prior to those
which are the subject of the curreht enforcement action.
The chart is to be applied as follows: For each violation,
assign a dollar amount based on the type and magnitude of viola-
tion as described in the chart. Relief valve discharges, manual
vent valve discharges and violations of 10 ppm standards should
then be grouped by calendar years. ‘If the n ber of these vi.o-
ldCiorls is three or more in any calendar year, the total penalty
for that period should be multiplied by the approprl-aCe “frequency
ad uscmenC factor.” The total...gravitY component for tne case .s
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—2-
the suit of the pen.a].ty numbers for each violation, adjusted where
approprLaCe to account for excessive frequency. The setdeinei:
penalty for the case as a whole cannot exceed the statutory
axLrnurn of $25,000 per day per violation. Sarnp].e calculatiois
are attached to this policy.
The economic benefit component may be impractical to deterii ine
in vinyl chloride cases, depending on the nature of the violations.
The benefit component should be determined if feasible,
where a pattern of violations indicates a need for specifi.c
technology, equipment, or procedures, or wherethe defendant has
- chosen a “fix” to address a series of violations,
This revised policy shall apply to all, pending and future
vinyl chloride cases.
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Relief Valve Discharges, anuaL Vent Valve DLscharges, VLoLacLor s
— of 10 porn Standards
Em iss LOt
Pounds of VC released Penalty
0 - 100 $ 1000
>100 — 2000 2000
>2000 - 5000 5000
>5000 - 7500 10,000
>7500 - 10,000 15,000
over 10,000 25,000
Frequency Adjustment Factors
Of Violations in Calendar Year Multiplier
3 1.5
4+ 2
Failure to Report
Size of Release Not Reported (lbs.) Penalty
0-100 $ 2000
100-500 5000
500-1000 10,000
1000—2000 20,000
over 2000 25,000
Graduated scale for late reporting (if not in response to direct
request from State or EPA) - 10-day discharge reports
(as percentage of penalty for failure to report)
• Within 2 months (from di’scharge) 25% of penalty
2-4 monthS 50% “
4-6 months 75%
over 6 months 100% “
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SCrLpDLrLg viorations arid Reactor 0 ening Loss Violations
S Cr i oD i n g
M 9 nitude of Violation pe nalty
suspension/Latex Dispersion
400-500 ppm 2000-2500 pp $ 1000
500-600 2500-3000 2000
600-700 3000-3500 3000
700-800 3500-4000 4000
800-900 4000-4500 5000
900-1200 4500-6000 10000
1200-1400 6000-7000 15000
1400-1600 7000-8000 20000
over 1600 over 8000 25000
Reactor Opening Loss
Penalty — $1000/violation (for each reactor)
Failure tO Measure
Penalty Maximum penalty amount for each type of violatio’I
$25000 (stripping)
= $1000 (reactor opening loss)
Failure to Submit Complete Semiannual Report
Penalty $25000
Graduated scale for late semi aflflual report (if not in
response to direct request from State to EPA)
Within 2 months $ 6,250
2-4k months 12,500
4-6 months 18,750
Over 6 months 25 ,000
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Example 1
ABC Chemical Corporation owns .i polyvinyl t.thloride plant
in Loui.sia ia. The United States has filed an enforcement
acti .on alleging relief valve discharge viol.atiorts, failure to
ceport relief valve discharges, reactor opening violations,
and stripping violations. The settlement penalty is determined
as follows: -
Gravity Component
Relief Valve Discharges Penalty/Discharge
July 6, 1981 446 lbs. $2,000 —
August 15, 1981 1250 Lbs. $ 2,000 x 1
ovember 30, 1981 46 lbs. $1 ,000 —
March 17, 1982 127 lbs. $2,000 — c 1
July 15, 1982 6271 lbs. $10,000 —
Subtotal for Relief Valve Discharges
Failure to Report
Failed to report July 6, 1981 discharge
Report August 15, 1981 discharge 1
month late — 25% x $20,000 ______
Subtotal for reporU.ng
Reactor Opening Loss Violations
77 reactor opening loss violations
Stripping Violations (Suspension )
V
January 17, 1982 556 ppm
July 10, 1982 421 ppm
August 19, 1982 494 ppm
Subtotal for stripping
Total Gravity Component
.5 — $7,500
$1 2’,00
$19,500
$5 ,000
5 .000
$10,000
$77 ,000
$2 ,000
$1 ,000
$1 .000
$4,000
$110,500
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Benefit c ponenc
None decerrnined
Prelimthary deterrence amount $110,500
Adj ust.ments
Negligence
Add 3O of gravity component - emission
violations generally due to
repetition of same cause
+ 30% (110,500) $ 33,150
tinim u penalty settlement amount $143,650
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Example 2
Polynesian EoLymers, tic., owns a polyvinyl chloride plant
i-i Texas... The United States has filed .cifl enforcetuenc action
aL 1 .eging relief valve and manual vent vdlve discharge violations,
reportLis violations, and reactor operung loss violations. The
sectlei ent pena1ty is determined as follows:
Gravity Component
Relief Valve and Manual Vent Valve Discharges
Pena].ty/ Discharge
July 6, 1983
July 15, 1983
August 21 , 1983
Noveinber 1 , 1983
January 17, 1984
271 lbs.
621 lbs.
710 Lbs.
6,221 lbs.
7,721 lbs.
$ 2,000
2 ,000
2 ,000
10,000
15,000
$25 .000
10,000
x 2 — 32,000
x 1 17,000
x 1.5 12,000
$ 61 ,000
‘t’ ovember 30, 1984 526 lbs. 2,000
January 14., 1985 2,771 lbs. 5,000
July 19, 1985 4 lbs. 1,000
December 21, 1985 172 lbs. 2,000
Subtotal for Relief Valve Discharges
Failure to Report
Failed to report Nov. 1, 1984 discharge
Failed to report Nov. 30, 1984 discharge
Subtotal for reporting
$ 35 ,000
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Reactor Opening Loss Violations
214 reactor o ening loss violations $214,000
Toca]. Gravity Component $310,000
Benefit Component
Economic benefit of delay in installing
“clean reactor” technology-deemed
necessary to comply with reactor
opening Loss standard (BEN calculation) $100,000
Preliminary deterrence amount $410,000
Adj us tments
History of Noncompliance
Add 30% of subtotal for reporting violations;
cited for similar violations at this plant
in action under the Clean Water Act + 10,500
No ocher adjustments
Minimum penalty settlement amount $420,500
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Appendix Ill: Final Revisions to the Asbestos Demolition
and Renovation Civil Penalty Policy, dated 08/22189
revised 05/11/92
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APPENDIX III
ASBESTOS DEMOLITION AND RENOVATION CIVIL PENALTY POLICY
Revised: May 5, 1992
The Clean Air Act Stationary Source Civil Penalty Policy
(“General Penalty Policy”) provides guidance for determining the
amount of civil penalties EPA will seek in pre-trial settlement
of civil judicial actions under Section 113 (b) of the Clean Air
Act (“the Act”). In addition, the General Penalty Policy is used
by the Agency in determining an appropriate penalty in
administrative penalty actions brought under Section 113 (d) (1)
of the Act. Due to certain unique aspects of asbestos demolition
and renovation cases, this Appendix provides separate guidance
for determining the gravity and economic benefit components of
the penalty. Adjustment f ctors should be treated in accordance
with. the General Penalty Policy.
This Appendix is to be used for settlement purposes in civil
judicial cases involving asbestos ifESHAP demolition and
renovation violations, but the Agency retains the discretion to
seek the full statutory maximum penalty in all civil judicial
cases which do not settle. In addition, for administrative
penalty cases, the Appendix is to be used in conjunction with the
General Penalty Policy to determine an appropriate penalty to be
pled in the administrative complaint, aswell as serving as
guidance for settlement amounts in such cases. If the Region
is referring a civil action under Section 113(b) against a
demolition :or renovation source, it should recommend a minimum
civil penalty settlement amount in the referral. For
administra€ive penalty cases under Section 113 (d) (1), the Region
will plead the calculated penalty in its complaint. In both
instances, consistent with the General Penalty Policy, the Region
should determine a “preliminary deterrence amount” by assessing
an economic benefit component and a gravity component. This
amount may then be adjusted upward or downward by consideration
of other factors, such as degree of willfulness and/or
negligence, history of noncompliance,’ 1 ability to pay, and
litigation risk.
The “gravity” component should account for statutory
criteria such as the environmental harm resulting from the
violation, the importance of the requirement to the regulatorY
As discussed in the General Penalty Policy, history of
noncompliance takes into account prior violations of all
environmental statutes. In addition, the litigation team should
consider the extent to which the gravity component has already
been increased for prior violations by application of this
Appendix.
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—2—
scherne, the duration of the violation, and the size of the
violator. Since asbestos is a hazardous air pollutant, the
penalty policy generates an appropriately high gravity factor
associated with substantive violations (i.e., failure to adhere
to work practices or to prevent visible emissions from waste
disposal). Also, since notification is essential to Agency
enforcement, a notification violation may also warrant a high
gravity component, except for minor violations as set forth in
the chart for notification violations on page 15.
I. GRAVITY COMPONENT
The chart on rages 15-16 sets forth penalty amounts to be
assessed for notificatipfl and waste shipihent violations as part
of the gravity component of the penalty settlement figure. The
chart on page 17 sets forth a matrix for calculating penalties
for work-practice, emission and other violations of the asbestos
NESHAP.
A. Notice Violations
1. No Notice
The figures in the first line of the Notification and Waste
Shipment Violations chart (pp. 15-16) apply as a general rule to
failure to:notify, including those situations in which
substantive violations occurred and those instances in which EPA
has been unable to determine if substantive violations occurred.
If EPA does not know whether substantive violations
occurred, additional info matiofl, such as confirmation of the
amount of asbestos in the facility obtained from owners,
operators, or unsuccessful bidders, may be obtained by using
section 114 requests for information or administrative subpoenas.
If there has been a recent purchase of the facility, there may
have been a pre-sale audit of environmental liabilities that
might prove useful. Failure to respond to such a request should
be assessed an additional penalty in accordance with the General
Penalty Policy. The reduced amo mts in the second line of the
chart apply only if the Agency can conclude, from its own
inspection, a State inspection, or other reliable information,
that the source probably achieved compliance with all substantive
requirements.
2. Late, Incomplete or Inaccurate NotiCe
Where notification is late, incomplete or inaccurate, the
Region should use the figures in the chart, but has discretion to
insert appropriate figures in circumstances not addressed lfl the
matrix. The important factor is the impact the company’s action
has on the Agency’s ability to monitor substantive compliance.
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—3—
B. Work-Practice. Emission and Other Violations
Penalties for work-practice, emissions and other violations
are based on the particular regulatory requirements violated.
The figures on the chart (page 17) are for each day, of documented
violations, and each additional day of violation in the case of
continuing violations. The total figure is the sum of the
penalty assigned to. a violation of each requirement. Apply the
matrix for each distinct violation of sub-paragraphs of the
regulation that would constitute a separate claim for relief if
applicable (e.g., 61.].45(c) (6) Ci), (ii), and (iii)).
The gravity component also depends on the amount of asbestos
involved in the operation, which relates to.the potential for
environmental harm associated with improper removal and disposal.
There are three categories based on the amount of asbestos,
expressed in “units,” a unit being the threshold for
applicability of the substantive requirements. 2 If a job
involves friable asbestos on pipes and other facility components,
the amounts of linear feet and square feet should each be
separately converted to units, and the numbers of units should be
added together to arrive at a total. Where the only information
on the amount of asbestos involved in a particular demolition or
renovation is in cubic dimensions (volume), 35 cubic feet is the
applicability limit which is specified in § 61.145(a) (1) (ii).
Where the facility has been reduced to rubble prior to the
inspection, information on the amount of asbestos can be sought
from the notice, the contract for removal or demolition,
unsuccessful bidders, depositions of the owners and operators or
maintenance personnel, or from blueprints if available. The
Region may also make use of § 114 requests arid § 307 subpoenas to
gather information regarding the amount of asbestos at the
facility. If the Region is unable to obtain specific information
on the amount of asbestos involved at the site from the source,
the Region should use the maximum unit range for which it has
adequate evidence.
Where there is evidence indicating that only part of a
demolition or renovation project involved improper stripping,
removal, disposal or handling, the Region may calculate the
number of units based upon the amount of asbestos reasonably
related to such improper practice. For example, if improper
2 This applicability threshold is prescribed in
61.145 (a) (1) as the combined amount of regulated—asbestos
containing material (RAcH) on at least 80 linear meters (260
linear feet) of pipes, or at least 15 square meters (160 square
feet) on other facility components, or at least 1 cubic meter (35
cubic feet) of f facility components.
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re ova1 is observed in one room of a facility, but it is apparent
that the removal activities in the remainder of the facility are
done in full compliance with the NESHAP, the Region may calculate
the number of units for the room, rather than the entire
facility.
C. Gravity Component Adiust!TterItS
1. Second and Subsecuent Violations
Gravity components are adjusted based on whether the
violation is a first, second, or subsequent (i.e., third, fourth,
fifth, etc.) offense. 3 A “second” or “subsequent” violation
should be determined to have occurred if, after being notified of
a violation by the local agency, State or EPA at a prior
demolition or renovation project, the owner or operator violates
the Asbestos NESHAP regulations during another project, even if
different provisions of the NESHAP are violated. This prior
notification could range from simply an oral or written warning
to the filingof a judicial enforcement action. Such prior
notification of a violation is sufficient to trigger treatment of
any future violations as second or subsequent violations; there
is no need to have an adnission or judicial determination of
liability.
Violations should be treated as second or subsequent
offenses only if the new violations occur at a different time
and/or a different jobsite. Escalation of the penalty to the
second or subsequent category should not occur within the context
of a single demolition or renovation project unless the project
is accomplished in distinct phases or is unusually long in
duration. Escalation of the violation to the second or
subsequent category is required, even if the first violation is
deemed to be “minor”.
A violation of a § 113(a) administratiVe order (AO) will
generally be considered a “second violation” given the length of
time usually taken before issuing an AO and should be assessed a
separate penalty in accordance with the General Penalty Policy.
If the case involves multiple potential defendants and any
one of them is involved in a second or subsequent offense, the
penalty should be derived based on the second or subsequent
offense. In such instance, the Government should try to get the
prior-9ffefldirlg party to pay the extra penalties attributable to
this factor. (See discussion below on apportionment of the
penalty).
continuing violations are treated differently than second
or subsequent violations. See, Duration of Violation, below.
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2. Duration of the Violation
The Region should enhance the gravity component o.f the
penalty according to the chart (p. 17) to reflect the duration of
the violation. Where the Region has evidence of the duration of
a violation or can invoke the benefit of the presumption of
continuing violation pursuant to Section 113(e) (2) of the Act,
the gravity component of the penalty should be increased by the
number of additional days of violation multiplied by the
corresponding number on the chart.
In order for the presumption of continuing noncompliance to
apply, the Act requires that the owner or operator has been
notified of the violation by EPA or a state pollution control
agency and that a prima facie showing can be made that the
conduct or events giving rise to the violation are likely to hav
continued or recurred past the date of notice. When these
requirements have been met, the length of violation should
include the date of notice and each day thereafter until the
violator establishes the date upon which continuous compliance
was achieved.
When there is evidence of an ongoing violation and facts do
not indicate when compliance was achieved, presume the longest
period of noncompliance for which there is any credible evidence
and calculate the duration of the violation based on that date.
This period should include any violations which occurred prior to
the notification date if there is evidence to support such
violations. However, if the violations are based upon the
statutory presumption of continuing violation, only those dates
after notification may be included. When the presumption of
continuing noncompliance can be invoked and there is no evidence
of compliance, the date of completion of the demo].ition or
renovation should be used as the date of compliance. ( U.S. V.
Tzavah Urban Renewal Corp. , 696 F; Supp. 1013 (D.N.J. 1988))
Where there has been no compliance and the demolition or
renovation activities are ongoing, the penalty should be
calculated as of the date of the referral and revised upon a
completion date or the date upon which correction of the
violation occurs.
Successive violations exist at the same facility when there
is evidence of violations on separate days, but no evidence (or
presumption) that the violations were continuing during the
‘ The court in Tzavah held that for purposes of asbestos
NESHAP requirements, a demolition or renovation project has not
been completed until the NESHAP has been complied with and all
asbestos waste has been properly dispoSed. 696 F. Supp. at 1019.
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intervening days. For example, where there has been more than -
one inspection and no evidence of a continuing violation,
violations uncovered at each inspection should be calculated as
separate successive violations. As discussed in Section C (1)
above, successive violations occurring at a single demolition or
renovation pr oject will each be treated as first violations,
unless they are initially treated as second or subsequent’
violations based upon a finding of prior violations at a
different jobsite or because they warrant escalation based upon
the fact that the current job is done in distinct phases or is
unusually long in duration. The chart on page 16 reflects that
additional days of violation for which there is inspection
evidence are assessed the full substantive penalty amount while
additional days based upon the presumption of continuing
violation are assessed only ten percent of the substantive
penalty per day.
Since asbestos projects are usually short—lived, any
correction of substantive violations must be prompt to be
effective. Therefore, EPA expects that work practice violations
brought to the attention of an owner or operator will be
corrected promptly, thus ending the presumption of continuing
violation. This correction should not be a mitigating factor,
rather this policy recognizes that the failure to promptly
correct the environmental harm and the attendant human health
risk implicitly increases the gravity of the violation. In
particularly egregious cases the Region should consider enhancing
the penalty based on the factors set forth in the General Penalty
Policy.
3. Size of the Violator
An increase in the gravity component based upon the size of
the violator’s business should be calculated in accordance with
the General Penalty Policy. Where there are multiple defendants,
the Region has discretion to base the size of the violator
caloulation on any one or all of the defendants’ assets. The
Region may choose to use the size of the more culpable defendant
if such determination is warranted by the facts of the case or it
may choose to calculate each defendant’5 size separately and
apportion this part of the penalty (see discussion of
apportionment below).
II. ECONOMIC BENEFIT COMPONENT
This component is a measure of the economic benefit accruing
to the operator (usually a contractor), the facility owner, or
both, as a result of noncompliance with the asbestos regulations.
Information on actual economic benefit should be used if
available. It is difficult to determine actual economic benefit,
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but a comparison of unsuccessful bids with the successful bid may
provide an initial point of departure. A comparison of the
operator’s actual expenses with the contract price is another
indicator. In the absence of reliable information regarding a
defendant’s actual expenses, the attached chart provides figures
which may be used as a “rule of thui b” to determine the costs of
stripping, removing, disposing of and handling asbestos in
compliance with § 61.145(c) and §61.150. The figures are based
on rough cost estimates of asbestos removal nationwide. If any
portion of the job is done in compliance, the economic benefit
should be based only on the asbestos improperly handled. It
should be assumed, unless there is convincing evidence to the
contrary, that all stripping, removal, disposal and handling was
done improperly if such improper practices are observed by the
inspector.
III. APPORTIONMENT OF THE PENALTY
This policy is intended to yield a minimum settlement
penalty figure for the case as a whole. In many cases, more than
one contractor and/or the facility owner will be named as
defendants. In such instances, the Government should generally
take the position of seeking a sum for the case as a whole, which
the multiple defendants can allocate among themselves as they
wish. On the other hand, if one party is particularly deserving
of punishment so as to deter future violations, separate
settlements may ensure that the offending party pays the
appropriate penalty.
It is not necessary in applying this penalty policy to
allocate the economic benefit to each of the parties precisely.
The total benefit accruing to the parties should be used for this
compone tt. Depending on the circumstances, the economic benefit
may actually be split among the parties in any combination. For
example, if the contractor charges the owner fair market value
for compliance with asbestos removal requirements and fails to
comply, the contractor has derived an economic benefit and the
owner has not. If the contractor underbids because it does not
factor in compliance with asbestos requirements, the facility
owner has realized the full amount of the financial savings. (In
such an instance, the contractor may have also received a benefit
which is harder to quantify — obtaining the contract by virtue of
the low bid.)
There are circumstances in which the Government may try to
influence apportionment of the penalty. For example, if one
party is a second offender, the Government may try to assure that
such party pays the portion of the penalty attributable to the
second offense. If one party is known to have realized all or
most of the economic benefit, that party may be asked to pay for
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that amount. Other circumstances may arise in which one party...
appears more culpable than others. We realize, however, that it
may be impractical to dictate allocation of the penalties in
negotiating a settlement with multiple defendants. The
Government should therefore adopt a single “bottom line” sum for
the case and should not reject a settlement which meets the
bottom line because of the way the amount is apportioned.
Apportionment of the penalty in a multi-defendant case may
be required if one party is willing to settle and others are not.
In such circumstances, the Government should take the position
that if certain portions of the penalty are attributable to such
party (such as economic benefit or second offense), that party
should pay those amounts and a reasonable portion of the amounts
not directly assigned to any single party. However, the
Government should also be flexible enough to mitigate the penalty
for cooperativeness in accordance with the General Penalty
Policy. If a case is settled as to one defendant, a penalty not
less than the balance of the settlement figure for the case as a
whole should be sought from the remaining defendants. This
remainder can be adjusted upward, in accordance with the general
Civil Penalty Policy, if the circumstances warrant it. Of
couzse, the case can also be. litigated against the remaining
defendants for the maximum attainable penalty. In order to
assure that the full penalty amount can be collected from
separate settlements, it is recommended that the litigation team
use ABEL calculations, tax returns, audited financial statements
and other reliable financial documents for all defendants prior
to making settlement offers.
IV. OTHER CONSIDERATIONS
- The policy seeks substantial penalties for substantive
violations and repeat violations. Penalties should generally be
sought for all violations which fit these categories. If a
company knowingly violates the regulations, particularlY if the
violations are severe or the company has a prior history of
violations, the Region should consider initiating a criminal
enforcement action.
The best way to prevent future violations of notice and work
practice requirements is to ensure that management procedures and
training programs are in place to maintain compliance. Such
injunctive relief, in the nature of environmental auditing and
compliance certification or internal asbestos contro . programs,
are desirable provisions to include in consent decrees settling
asbestos violations.
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7. EXAMPLES
Following are two examples of application of this polic .
Example 1 (This example illustrates calculations involving
proof of continuing violations based on the
inferences drawn from the evidence)
XYZ Associates hires America’s Best Demolition Contractors
to demolish a dilapidated abandoned building containing 1300
linear feet of pipe covered with friable asbestos, and 1600
sguare feet of siding and roofing sprayed with asbestos. Neither
company notifies EPA or State officials prior to commencing
demolition of the building on November 1. Tipped off by a
citizen complaint, EPA inspects the site on November 5 and finds
that the contractor has not been wetting the suspected asbestos
removed from the building, in violation of 40 C.F.R. §
61.145(c) (3). In addition, the contractor has piled dry asbestos-
waste material on a plastic sheet in the work area pending its
disposal, in violation of 40 C.F.R § 61.145(c)(6)(i). There is
no evidence of any visible emissions from this pile. During the
inspection, the site supervisor professes complete ignorance of
asbestos NESHAP requirements. An employee tells the inspector
that workers were never told the material on—site contained
asbestos and states “since this job began we’ve just been
scraping the pipe coverings of f with our hammers.” The inspector
observes there is no water at the site. The inspector takes
samples and sends them to an EPA approved lab which later
confirms that the material is asbestos. Work is stopped until
the next day when a water tank truck is brought to the facility
for use in wetting during removal and storage.
On November 12 the inspector returns to the site only to
find that the workers are dry stripping the siding and roofing
because the water supply had been exhausted and the tank truck
removed. A worker reports that the water supply had lasted four
days before it ran out at the close of the November 9 work day.
The inspector observes a new pile of dry asbestos containing
debris in tall grass at the back of the property. Unlike the
pile observed inside the facility during the first inspection,
this pile is presumed to have produced visible emissions. At the
time of the second inspection 75% of the asbestos had been
removed from the building 50% of which is deemed to have been
The examples are intended to il] ustrate application of
the civil penalty policy. For purposes of this policy, any
crim5 .nal conduct that may be implied in the examples has been
ignored. Of course, in appropriate cases, prosecution for
criminal violations should be pursued through appropriate
channels.
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improperly removed 6 . After discussion with EPA off cia1s, work -
is halted at the site and XYZ Associates hires another contractor
to properly dispose of the asbestos wastes and to remove the
remaining 25% of the asbestos in compliance with the asbestos
NESHAP. The new contractor completes disposal of the illegal
waste pile on November 18.
Neither XYZ Associates nor America’s Best Demolition
Contractors has ever been cited for asbestos violations by EPA or
the State. Both companies have assets of approximately
$5,000,000.00 and have sufficient resources to pay a substantial
penalty.
The defendants committed the following violations: one
violation of the notice provision ( 61.145(b) (1)); one violation
for failure to wet during stripping ( 61.145(c) (3)) and failure
to keep wet until disposal ( 61.145(c) (6) (i)), each detected at
the first inspection and lasting a duration of five days (Nov. 1-
5); a second separate dry stripping violation ( 61.145(c) (3)),
observed at the second inspection and lasting for three days
(Nov. 10—12); an improper disposal violation ( 61.150(b)),
discoveredduring the second inspection, lasting a duration of
nine days (the violation began on November 10 and continued to
November 18 per Tzavah ) and a visible emissions violation
( 6l.150(a)) discovered during the second inspection, lasting a
duration of ;seven days (Nov. 12—18). Thus, the defendants are
liable for a statutory maximum of $750,000 (29 days of work
practice violations x $25,000 (statutory maximum ena1ty per day
of each separate substantive violation) + $25,000 for the
notice violation = $750,000).
The penalty is computed as follows:
Gravity Component
Notice violation, § 61.145(b)
(first time) $15,000
6 America’s Best completed 75% of the work over a 12 day
period. For 4 of the 12 days (Nov.6—9) there is evidence that
water was used and asbestos properly handled. Assume that equal
amounts of asbestos were removed each day. Thus, 50% of the
asbestos was properly removed (25% by America’s Best, 25% by the
new contractor.
?‘ Arguably, for purposes of calculating the statutory
maximum, the notice violation can be construed to have lasted at
least until the EPA has actual notice of the demolition (or
renovation, as the case may be).
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—— First Inspection Violations
Violation of § 61.145(c) (3)
(10 + 5 = 15 units
of asbestos) (1 x $10,000) $10,000
Additional days of violation
($1,000 x 4 days of
violations) $ 4,000
Violation of § 61.145(C) (6) (i)
(1 x $10,000) $10,000
Additional days of violation
($1,000 x 4 days of
violations) $ 4,000
—- Second Inspection Violations
New violation of § 61.145(c) (3)
(1 x $10,000) $10,000
Additiona1 days of violation
($1,000 x 2 days of
violations) $ 2,000
Violation of §61.150(a) $10,000
(1 x $10,000)
Additional days of violation
($1,000 x 6 days of violations) $ 6,000
Violation of § 61.150(b)
(1 x $10,000) $10,000
Additional days of violation
($1,000 x 8 days of
violations) S 8,000
$109,000
—— Size of Violator $20,000
(size of both defendants
combined)
Total Gravity Component $129,000
Economic Benefit Component
$20/sq. foot x 1600 sq. feet + $32,000
$20/linear foot x 1300 linear feet + 26.000
$58,000
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— 12 —
$58,000 x 50% (% of asbestos
improperly handled) $ 29,000
Preliminary Deterrence Amount $158,000
Adjustment factors - No adjustment
for prompt correction of environ-
mental problem because that is what
the defendant is supposed to do.
Minimum penalty settlement amount $158,000
NOTE: If the statutory maximum had been smaller than this
sum, then the minimum penalty would have to be adjusted
accordingly. Also, for the dry stripping violations, no
additional days were added for the period between the two
inspections because there was no evidence that the dry
stripping had continued in the interim period.
Example 2 (This example illustrates calculations involving
proof of continuing violations based on the
statutory inference drawn from the notice of
violation)
Consolidated Conglomerates, Inc. hires Bert and Ernie’s
Trucking company to demolish a building which contains 1,000
linear feet of friable asbestos on pipes. Neither party gives
notice to EPA or to the state prior to commencement of
demolition. An EPA inspector acting on a tip, visits the site on
April 1, the first day of the building demolition. During the
inspection he observes workers removing pipe coverings dry.
Further inquiry reveals there is no water available on site. He
also finds a large uncontained pile of what appears to be dry
asbestos—containing waste material at the bottom of an embankfllent
behind the building. He takes samples and issues an oral notice
of violation citing to 40 C.F.R. § 61.145(c)(3) (dry removal),
61.145(c) (6) (i) (failure to keep wet until disposal), and
61.150(a) (visible emissions) 8 , and gives the job supervisor a
copy of the asbestos NESHAP. Test results confirm the samples
contain a substantial percentage of asbestos.
On April 12, the inspector receives information from a
8 Regardless of whether the inspector observes emissions of
asbestos during a site inspection, where there is circumstantial
evidence (such as uncontained, dry asbestos piles outside), that
supports a conclusion that visible emissions were present, the
Region has discretion to include this violation.
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reliable source that the pile of dry asbestos debris has not been
properly disposed of and there is still no access to water at the
facility. This information supports a new violation of
§61.150(b) (improper disposal). The inspector revisits the site
on April 22 and determines that the waste pile has been removed.
A representative of consolidated Conglomerates, Inc. gives the
inspector documents showing that actual work at the demolition
site concluded on April 17, but the contractor cannot document
when the debris pile was removed. Thus, there are at least 61
days of violation (17 days of dry removal in violation of §
61.145(c) (3) 22 days of failure to keep wet until disposal in
violation of §61.145(c) (6) Ci), 1]. days of visible emissions in
violation of §61.150(a) and 11 days of improper disposal in
violation of § 61.150(b)) times $25,000 per day, plus $25,000 for
the notice violation 9 , or a statutory maximum of $1,550,000.
Consolidated Conglomerates is a corporation with assets of
over $100 million and annual sales in excess of $10 million.
Bert and Ernie’s Trucking is a limited partnership of two
brothers who own tow trucks and have less than $25,000 worth of
business each year. This contract was for $50,000. Bert and
Ernie’s was once previously cited by the State Department of
Environmental Quality for violations of asbestos regulations.
As a result, all violations are deemed to be second violations.
The penalty is computed as follows:
Gravity component
No notice (2nd violation) $ 20,000
Violation of §61.145(c) (3)
(approx. 3.85 units)
(second violation) $ 15,000
Additional days of violation
(per presumption) (16 x $1,500) $ 24,000
Violation of §61.145(c) (6) (i) $ 15,000
(second violation)
Additional days of violation
(per presumption) (21 x $1,500) $ 31,500
Violation of §61.150(a) $ 15,000
See footnote 3.
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— 14 —
(second violation)
Additional days of violation
(per presumption) (10 x $1,500) $ 15,000
Violation of §61.150(b)
(second violation) $ 15,000
Additional days of violation
(per presumption) (10 x $1,500) $ 15,000
$180 500
Size of Violator $ 2,000
(based on Bert and Ernie’s size only)
Total Gravity Component $182,500
Economic Benefit Component
$20/linear foot x i,ooo linear feet $ 20,000
Preliminary Deterrence Amount 202.500
Adjustment factors - 10% increase for
willfulness $ 18,250
Minimum Settlement Penalty Amount $220,750
NOTE: Since this example assumes there was a proper factual
basis for invoking the statutory presumption of continuing
noncompliance, the duration of the §61.150(a) visible emissionS
and § 61.150(b) disposal violation runs to April 21 and the §
61.145(c) (3) dry removal violation runs to April 17, the longest
periods for which noncompliance can be presumed.
Apportionment of the PenaltY
The calculation of the gravity component of the penalty in
this case reflects a $5,000 increase in the notice penalty and a
$48,500 increase in the penalty for substantive violations
because it involves a second violation by the contractor.
ordinarily, the Government should try to get Bert and Ernie’s to
pay at least these additional penalty amounts. However,
Consolidated Conglomerate’s financial size compared to the
contractor’s may dictate that consolidated pay most of the
penalty.
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Notification and Waste Shipment Record Violations
Notification Violations tst Violation 2nd Violation Subseauent
No notice $1 ,000 $20,000 $25,000
No notice but probable $ 5,000 $15,000 $25,000
substantive compliance
Late, Incomplete or Inaccurate notice. -
For each notice, select the single largest dollar figure
that applies from the following table. These violations are
assessed a one-time penalty except for waste shipment vehicle
marking which should be assessed a penalty per day of shipment.
Add the dollar figures for each notice or waste shipment
violation:
Notice submitted after asbestos removal $15,000
completed tantamount to no notice.
Notice lacks both job location and asbestos 4,000
removal starting and completion dates.
Notice submitted while asbestos removal is 2,000
in progress.
Notice lacks either job location or asbestos 2,000
removal starting arid completion dates.
Failure to update notice when amount of asbestos 2,000
changes by at least 20%
Failure to provide telephone and written notice 2,000
when start date changes
Notice lacks either asbestos removal starting 1,000
or completion dates, but not both.
Amount of asbestos in notice is missing, 500
improperly dimensioned, or for multiple facilities.
Notice lacks any other required informatiOn. 200
Notice submitted late, but till 200
prior to asbestos removal starting date.
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— 16 —
Waste Shio! ent Violations
Failure to maintain records which 2,000
precludes discovery of waste disposal activity
Failure to maintain records but other 1,000
information regarding waste disposal available
‘Failure to mark waste transport vehicles 1,000
during loading and unloading (assess for
each day of shipment)
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— 17 —
Work-practice, Emission and Other Violations
Gravity Cowpo ent
Total amount of Each add. Each add . - Each add .
asbestos involved First day of Secofl day of Subsequent y of
j the operation vjo:Lation violation violation violation violations violation
10 units $ 5,000 $ 500 $15,000 $ 1,500 $25,000 $ 2,500
> 10 units
but 50 units $10,000 $ 1,000 $20,000 $ 2,000 $25,000 $ 2,500
> 50 units $15,000 $ 1,500 $25,000 $ 2,500 $25,000 $ 2,500
Unit 260 linear feet, 160 square feet or 35 cubic feet - if more than one is Involved,
convert each amount to units and acid together
Apply matrix separately to each violation of §61.145(a) and each sub-paragraph of
§ 61.145(c) and § 61.150, except §61.150(d) (waste shipment records) which is treated as a
one time violation and § 61.150(c) (vehicle marking) (see chart on pages 15-16); calculate
additional days of violation, when applicable, for each sub-paragraph — add together
Benefit Component
For asbestos on pipes or other facility components:
$20 per linear, square or cubic foot of asbestos for any substantive violation.
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Appendix IV: Volatile Organix Compounds Penalty Policy
revised 03/25/87
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APPENDIX IV
CLEAN AIR ACT PENALTY POLICY AS APPLIED TO
STATIONARY SOURCES OF VOLATILE ORGANIC COMPOUNDS
WHERE REFORMULATION TO LOW SOLVENT TECHNOLOGY
IS THE APPLICABLE METHOD OF COMPLIANCE
Introduction
This addend’ provides guidance for calculating the civil
penalties EPA will require in pre-trial settlement of district
court enforcement actions, pursuant to Title I of the Clean Air
Act (CAA), against sources of volatile organic compounds (VOC’s)
in violation of State Implementation Plan emission limitations,
where low solvent technology (LST) is an acceptable control
strategy for achieving compliance. If compliance using LST is
the control strategy chosen by the source and if it can be un-
plemented expeditiously, the penalty analysis methodology set
forth in this appendix must be used. If compliance using LST
is not the compliance strategy chosen by the source, or if LST
cannot be accomplished expeditiously or is not available, the
penalty must be calculated according to the general Clean Air
Act Stationary Source Civil Penalty Policy (hereinafter CAA
Penalty Policy) , based on the costs of add-on controls.
A separate policy for arriving at a penalty figure in VOC
cases where LST is an acceptable control strategy is necessary
because penalties calculated pursuant to the general CAA Penalt
Policy in such instances are insufficient to deter vi 1atioflS. !
The general AA Penalty Policy focuses upon recapturing
1, Penalties must be high enough to have the desired specific
— and general deterrent effects. They must also be, to the
extent possible, objective in order to ensure fairness. The
general CAA Penlty Policy , relying on the cost of pollution
control equipment, does not provide such penalties in the case
of VOC sources using LST. Indeed VOC penalties have been much
smaller than the penalties collected in other CAA cases. A
sample of VOC sources, with total sales in the $10,000,000
range, have had civil penalties ranging from $2,000 to $45,000.
By comparison, a company cited for TSP violations, with sales
in 1983 of $4,656,000, will be asked to pay a minimt of $75,000
in penalties.
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the economic savings of non-compliance based upon the typically
substantial capital expenditures and operation and maintenance
costs of the necessary pollution control equipment. The capital
costs of implementing LST are by comparison relatively small, and
in many cases LST actually results in a net economic savings. 2 /
This guidance, therefore, sets forth an objective methodology
for arriving at a substantial cash penalty figure in cases not
requiring the expenses associated with add-on technology. Specif-
ically, in all VOC cases including those where a source may
choose to come into compliance using LST as a control option,
Regions must base their pre-negotiatiOn penalty calculations for
the Economic Benefit Component on the cost of add-on controls.
Once negotiations begin, the Region may recalculate the penalty
figure using the alternative methodology in this Appendix where
applicable based on information to be supplied by the source.
The Economic Benefit Component will be re-calculated based on the
cost of LST as a control option. An additional penalty component
(hereinafter referred to as the Production Component) must there-
after be calculated by multiplying the dollar amount of sales
onthe non-complying lines as reported by the source, by the
average return on sales for the industry, to be supplied by
NEIC. The average return on sales is the norm for the industry
for net profits after taxes divided by total sales. Industry-
specific average return on sales multipliers are available from
the Information Services Office at NEIC in Denver, FTS 776-5124
(contact Charlene Swibas). NEIC will require the following
information from the Region to calculate the average return on
sales multiplier for an individual source: (1) type of VOC
source, (2) total assets or nimiber of employees, and (3) dollar
amount of sales produced on the non-complying lines by year. In
this regard, EPA should advise sources that it is to their benefit
2, Although substantial capital expenditures are required for VOC
sources using add-on technology to come into compliance, sour-
ces having the option of using low solvent or water-based techno-
logy derive economic savings by coming into compliance.
For example, reformulation to LST generally involves only minor
mechanical and process modifications costing less than $10,000.
( See note 4 infra.) These small outlays are recaptured by subse-
quent cost savings. For example, water-based coatings are usually
less expensive. Similarly, high solid ernulsion-LSTs, although
perhaps more expensive on a volume basis, are more efficient
when properly applied, requiring fewer coatings. Reduced VOC
emissions result in further indirect savings in the form of
lower employee health problems and absenteism, reduction in the
cost and amount of OSHA-required ventilation, and lower fire insu-
rance rates. Finally, the vast majority of VOC sources having
LST as a readily available option for compliance make only small
investments in R&D, expenditures which are, moreover, fully tax
deductible.
—2-
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to supply EPA with detailed information such as a plant specific
breakdown of assets rather than companyowide reports, and line-
by-line sales figures. This will help ensure that the penalty
is limited to sales from production on their non-complying
lines as opposed to their total sales. When ver’ifiable line-by-
line production information is not available, the Regions must
base their estimates on sources’ total sales as reported in
company books and annual reports. In addition, the Production -
Component figure may be adjusted to reflect the source’s actual
return on sales where this figure can be established from reliable
information. -
The total of the Production and Economic Benefit Components
should be compared to the penalty that would have been imposed were
the source coming into compliance using add-on controls. In no
event should the total of the Economic Benefit and Production
Components exceed the penalty amount based solely on the cost of
add-on controls.
This policy may be used in all situations involving LST as an
acceptable compliance option, including those where the source is
granted an expeditious schedule to continue development of LST,
but may ultimately have to comply using add-on controls. In
those situations where the source will comply through a combination
of LST and add-on controls, the penalty may be adjusted in accordance
with this Appendix only to the extent the two compliance options
and the source’s financial data are segregable on a line-by-line
basis.
No other adjustments to the Economic Benefit and Production
Components may be made other than as contemplated in the general
CAA Penalty Policy . These adjustments are described in
Section II.A.3. of the general policy. In addition, in all cases
the Gravity Component should be estimated in accordance with the
general CAA Penalty Policy . This policy is based upon the principles
established by the CAA Penalty Policy and general Agency policies.
The Production Component formula produces penalties which
automatically account for the size of the source and correlate
with the emissions vol.=e from non-complying lines. Moreover,
attaching a source’s after tax net profits on noncomplying produc-
tion helps to ensure a meaningful penalty without impinging on
employee salari s, necessary operating costs, or tax deductions
for good faith pollution control expenditures such as R & D on
LST.
—3—
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Removing the profitability of non-complying production is
particularly appropriate in cases where LST is an acceptable con-
trol strategy due to the ease with which many such sources could
have come into compliance, as well as the competitive advantage
some VOC sources obtain from non-compliance. For example, many
paper coating concerns have continued to use high solvent coatings
due to the versatility such solutions afford in meeting customer
preferences such as color brightness. Such VOC sources are,
thus, probably able to capture a larger share of the market due
to their noncompliance. Similarly, metal furniture coaters have
had high solid emulsion-LSTs available for many years. Many
sources have, however, delayed the minimal costs and process
changes necessary to come into compliance, perhaps enabling these
businesses, in the short’ run, to offer their products at a slightly
reduced price. 3 /
What follows is the specific methodology to be applied in
calculating civil penalty settlement amounts in actions against
sources of VOC where LST is an acceptable control strategy.
3 Use of high solid emulsion-LST requires installation of a
$5-7 ,000 emulsion heater, retraining of employess to apply
the thicker emursion, and installation of a larger or more effi-
cient metal washing system to prevent pitting. As is noted
above, however, these costs are in the long run recaptured by
the economic savings associated ith high solid emulsion-LST.
( See note 2 supra.)
-4-
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Alternative Methodology for Calculating VOC Penalties Where LST
is the Applicable Method of Compliance
ECONOMIC BENEFIT COMPONENT*
+
PRODUCTION COMPONENT
total sales from production on non-complying lines
x industry norm return on sales ________
Compare this figure to the penalty based on the
cost of add-on controls as the control option. Use the
lower of the two figures.
+
Settlement Adjustments to Production Component**
substitute the source’s actual return on sales
for the average industry return on sales
+
GRAVITY COMPONENT
+
Settlement Adjustments to Gravity Component*
ADJUSTED MINIMUM PENALTY FIGURE
* See, Clean Air Act Civil Pena1t ’ Policy for the procedures to
llow in making these calculations. Note, however, that
the CAA Penalty Policy permits Regions in their discretion not
to seek to recover the Benefit Component when it is likely to be
less than $5,000. This Appendix contemplates including the
Economic Benefit Component along with the Production Component
even where the Economic Benefit is estimated to be less than
$5,000. If the combination of both the Economic Benefit and
Production Components is estimated to be less than $5,000, jt is
not necessary for the case development team to include either
one in the minimum settlement penalty amount.
** Note that the considerations described in Section II.A.3 of
the general policy may also be applied in adjusting the FroduCtiOr
Component, as well as the Economic Benefit Component.
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Appendix V: Air Civil Penalty Worksheet
revised 03/25/87
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APPENDIX V
Air Civil Penalty Worksheet
A. Benefit Component:
(enter from computer calculation)
B. Gravity Component:
1. Actual or possible harm
a. Amount above standard: _______
b. Toxicity of pollutant: _______
c. Sensitivity of environment _______
d. Length of time of violation _______
2. Importance to regulatory scheme: _______
3, Size of violator:
Total gravity component:
Preliminary deterrence amount:
(si n of benefit and gravity components)
C. Flexibility-Adjustment Factors:
1 . Degree of willfulness or negligence:
total gravity component x any
augmentation percentage
2. Degree of cooperation:
total gravity component x any mitigation
percentage
3. History of noncompliance:
total gravity component x any
augmentation percentage
4. Ability to pay:
any mitigation amount
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—2-
5. Other unique factors:
total gravity component x any mitigation
or augmentation percentage
All augmentation (+) and mitigation (-)
amounts added: (if negative, cannot
exceed total gravity component)
D. Initial Minim m Settlement Amount:
Preliminary Deterrence Amount + or -
SLvi of Flexibility Adjustment Factors:
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Appendix VI: Volatile Hazardous Air Pollutant Penalty
Policy
added 03/02188
-------
new appen added 03/02/88
APPENDIX V I
Volatile M zardous Air Pollutant Civil Penalty Policy
This policy shall be used to determine the gravity component
of the civil penalty settlement amount for cases enforcing the
National Emission Standard for Equipment Leaks (Fugitive Emission
Sources), 40 C.F.R. Part 61, Subpart V, which applies to volatile
hazardous air pollutants (VHAP) and the general reporting require-
ments of Subpart A. It is to be used in lieu of the scheme for
determining the gravity component set forth in the general Clean
Air Act Stationary Source Civil Penalty Policy. It is intended
as a supplement to the Vinyl Chloride Civil Penalty Policy for
vinyl chloride cases. In those vinyl chloride cases in which the
vinyl chloride and VHAP civil penalty policies are inconsistent
(such as the $25,000 penalty for failure to timely submit a
complete semi—annual report under the vinyl chloride policy versus
the $15,000 penalty for the same violation under the VHAP policy)
the vinyl chloride penalty policy should be applied.
The preliminary deterrence amount for VHAP cases, as for
other stationary source cases, consists of a gravity component
and a benefit component. Adjustments for degree of wi1lfulness
or negligence, degree of cooperation, history of noncompliance,
ability to pay, litigation practicalitieg, and “other unique
factors” should be made, if appropriate, in accordance with the
Stationary Source Civil Penalty Policy. Additionally, adjustments
may be considered because a company’s VHAP/VOC emissions or
potential emissions are more serious in a nonattainment area for
ozone. Reporting penalties could be adjusted depending on the
number of .VHAP sources, that is, whether a plant has few or
numerous valves and pumps.
The gravity component of the penalty reflects the seriousness
of the violation. - A separate scheme has been developed for VHAP
cases partly because the economic benefit component may be
difficult to determine, although if the economic benefit can be
calculated, it should be. In addition, several factors in the
general policy, such as the level of violation as a percentage
above the standard, do not directly apply to VHAP cases. The
hazardous nature of VHAPs is reflected in establishing a substantial
gravity component.
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—2—
The attached chart addresses six major types of requirements
in the VHAP standard:
1.) Reportjn q . A source is required to submit initial and
semiannual reports which include, among other things, a listing of
equipment in VHAP service, records of leaks from certain pieces of
equipment and repairs of leaks, and results of performance tests.
2) Monitoring, inspection,, and testing . The standard
includes four types of such requirements: annual testing, such
as testing from certain requirements, under S61.242—2(e)(3);
monthly monitoring, such as monitoring of valves under S61.242—
7(a); weekly inspection, such as visual inspection of a pump
under S61.242—2(a)(2); and daily checking, such as checking a
sensor on a compressor seal system under S61.242—3(e)(l).
3) Repair of leaks . The standard generally requires that
a source, upon detection of a leak from regulated equipment, make
a first attempt at repair within 5 calendar days of detection and
complete ti e repair as soon as practicable but not later than 15
calendar days after detection. Since violations of these require-
ments appear to present the greatest potential for emissions
of VHAPs, the associated penalties are substantial.
4) Equipment standards . Certain pieces of equipment must
comply with requirements that specify that they be equipped with
certain devices, sometimes as an alternative to another standard.
For example, a compressor must be equipped with a seal system
that includes a barrier fluid system and that prevents leakage of
process fluid to the atmosphere, with certain exceptions, in
accordance .with S61.242—3(a). One allowable alternative is that
the compressor be equipped with a closed—vent system capable of
capturing and transporting any leakage to a control device, in
accordance with S6l.242—3(h). Another example is open—ended
valves which must be capped or otherwise secured.
5) Recordkeeping . A source must keep records of a number
of items, including leaks and attempts to repair leaks, design
parameters of certain equipment, and dates of startups and
shutdowns of closed—vent systems and control devices.
6) Marking equipment - Equipment in VMAP service must be
tagged and leaking equipment must be separately or additionally
tagged.
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—3—
The chart assigns a gravity component for each violation.
For equipment standards, noncompliance with respect to each piece
of affected equipment ( e.g. , pump, compressor, etc.) constitutes
a separate io1ation for purposes of this policy. For monitoring,
inspection, and testing provisions, noncompliance with respect to
each requirement ( e.g. , monthly monitoring of pumps, monthly
monitoring of valves) constitutes a separate violation. Do riot
count each pump or valve ‘as a separate violation if not monitored.
The gravity component for the case as a whole is the sum of the
numbers associated with all the violations in the case.
Type of Volation Penalty
REPORTING
Initial Report
Failuire to submit initial report $25,000
for new or existing source
Late submission of initial report $500/day up to $25,000
On—time but incomplete initial $25,000 x % of infor—
report. Estimate percentage of mation missing
information missing. If missing
information submitted without
prompting $400/day, up to the
figure calculated above
Semi—annual Reports
Failure to submit semiannual report $15,000 per report
Late submission of semiannual report $150/day up to
(If submitted only in response to 15,000 per report
prompting by EPA or delegated
agency, regard as failure to submit
report]
On—time but incomplete semiannual report — $15,000 x % of infor—
estimate percentage of information mation missing
missing. If missing information
submitted without prompting by the
government $125/day up to the figure
calculated above.
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—4—
Type of Violation Penalty
Non— response
Failure to respond to prompting $25,000
(written requests) regarding reports
MONITORING, INSPECTION, AND TESTING
Annual requirement $10,000 + $250/day up
to $25,000 total
Monthly requirement $5,000 + $250/day (up
to $7500 total for
missed month)
Weekly requirement $500 + $150/day up to
$1500 total for
missed week
Daily requirement $100/day for each day
missed for first
10 daily inspections
missed.
$500/day for each daily
inspection missed
thereafter.
For any monitoring,
inspection or testing
timely performed, but
performed incorrectly,
assess 50% of the
above pena.ties
REPAIR b t EAKS
Failure to make first attempt $5000/day up to $25,000
at repair within specified time per leak
Failure tocomplete repair within $5000/day up to $25,000
soecified time per leak
Violations of alternative standards $5000/day up to $25,000
for valves in VHAP service
pursuant to 40 CFR S61.243
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—5—
Type of Violation Penalty
EQUIPMENT STANDARbS
Failure to equip with required device $15,000 per item made—
- quately equipped
RECORDKEEpING
Failure to keep records in logs $25,000 per semiannual
pursuant to 40 C.F.R. S61.246 period
for period associated with
semiannual report
Incomplete records — estimate per— $25,000 per semiannual
centage of information missing period x % of infor—
- mation missing
FAILURE TO MARK (TAG) EQUIPMENT
Mark equipment in VHAP service $100/day per piece of
equipment up to
/ $5,000
Mark leaking equipment $500/day per piece of
equipment up to
$5,000
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Appendix VII: Penalty Policy for New Residential Wood
Heaters
added 09114189
-------
CLEAN AIR ACT STATIONARY SOURCE PENALTY POLICY
APPENDIX VI !
RESIDENTIAL WOOD HEATERS
40 C.F.R. PART 60, SUBPART MA
The Clean Air Act Stationary Source Civil Penalty Policy
(“the CAA penalty policy” or “the general penalty policy”)
provides the basis for determining the minimum civil penalty-U.S.
EPA will accept in settlement of enforcement actions taken
pursuant to Title I of the Clean Air Act. The CM penalty
policy provides guidance to pre—trial settlement of initial
enforcement actions in district courts.
The New Source Performance Standard for Residential Wood
HeaterS, 40 C.F.R. Part 60, Subpart AM, warrants a penalty
scheme related to the CM penalty policy, but adjusted to reflect
certain unique features of the wood heater industry. Unlike
other NSPS programs, for example, the wood heater 1 standard
regulates a mass-produced consumer product marketed nationally
and is directed at manufacturers as well as retailers and
distributors. In addition, management -of the wood stove
enforcement program will be centralized at Headquarters rather
than delegated to the Regions.
This appendix should be used in conjunction with the general
penalty policy to determine the preliminary deterrence amount,
which is the sum of the economic benefit’ accruing from
noncompliance and the gravity component reflecting the
seriousness of the violation. 3 This appendix retains in full the
concept of adjusting the gravity component to provide equitable
treatment ofthe regulated community. The penalty adjustments
may be based upon consideration of the violator’s: (1) degree
of willfulness or negligence, (2) degree of cooperation,
including prompt reporting of noncompliance and prompt correction
l/ For the purpose of this penalty policy, the following
terms will be used interchangeably and regarded as synonymous:
“residential wood heater,” “residential wood stove,” “wood
heater,” “wood stove.”
2, The economic benefit gained by a violator due to delayed
or avoided costs will be determined using the BEN computer
model. In certain instances, the government may settle a case
for an amount less than the calculated economic benefit after
evaluating the factors mentioned in the general penalty policy.
,‘ In determi iiflq of the amount of civil penalty, Section
113 of the CAA lists three considerations, inter qua : (1) size
of the businesS, (2) economic impact of the penalty on the
business, and (3) seriousness of the violation.
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—2—
of environmental problems, (3) history of noncompliance, (4)
ability to pay, and (5) other unique factors.
The wood stove penalty policy details most of the violations
articulated in the regulations and assesses a basic penalty for
each. Of the factors set forth in the general penalty policy
only the size of the violator matrix and the adjustment factors
are retained completely. The matrix for length of tthe of
violation has been revised. All other factors are inapplicable
to the wood stove penalty policy. -
- - E-ve ry gray .jy component calculation will be based on a(’ ase—
by-case éXa tii tiOfl of the facts underlying the enforcement\ __-
action.,—In developing the penalty values for these violations,
we evaluated the relative importance of each respective
requirement to the regulatory scheme. In certain instances, u.s.
PA may find that a deviation from a requirement is tantamount to
a complete violation and hold the violator liable for the full
amount of the assessed penalty. -In other .nstances, however,
U.S. EPA may believe that the deviation is minor and therefore
assess a reduced penalty. As an example, consider the
§60.538(b) violation, offering for sale a stove without a
permanent label. If the stove has no label at all, the full
penalty will be levied. If, on the other hand, the permanent
label is merely deficient, not conforming to the requirements
under §60.536(a)(l)(2), then the penalty amount assessed will
likely be less than the full amount. The following violations
fall into this”none/deficieflt” category:
parameter quality assurance program
emission test QA program
permanent label
maintain record of certification test
maintain record of parameter QA program
maintain record of emission test QA program
maintain record of sales
maintain/produce sealed stove
apply for small manufacturer exemption
report number of exempted stoves manufactured
maintain record of production
report biennially on certified model lines
maintain record of exempted stoves
maintain record of used stoves
maintain records for five years
operation of stove without permanent label
offer for sale a stove w/o permanent label
offer for sale a stove w/o temporary label
offer for sale a stove yb owner’s manual
— 60.533(o)(2)
— 60.533(o)(3)
— 60.536(a)(l),(2)
— 60.537(a)(l),(2)
— 60.537(a)(l),(3)
— 60.537(a)(l),(4)
— 60.537(a)(l),(5)
— 60.537(c)
— 60.537(e)(l),(4)
— 60.537(e)(2)
— 60.537(e)(3)
— 60.537(f)
— 60.537(g)
— 60.537(h)
— 60.537(i)
— 60.538(a)
— 60.538(b)
— 60.538(d)(l),(2)
— 60.538(d)(l)(ii)
For the other violations contained in pages 3 to 6 of this.
penalty policy, U.S. EPA intends to assess the full amount.
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—3-
SIZE OF THE VIOL&POR (calculate once per violator)
Net worth of corporation or
net current assets of partnership :
60.530(C)(2)
Sale of Oregon exempted stove after July 1.,
1992
60.530(C)(3)
Failure to notify of any modification to
Oregon certification
60.533(n)
Failure to perform certification testing
60.533(O)(2)
Failure to conduct adequate parameter Q?
inspeCtiCfl
$5,000 per model
line and $500
per unit
$500 per unit
$5,000 per model
line and $500
per unit
$500 per unit
not tested as
required
(!ALCtJLATION OP GRAVITY
Under $100,000 $1,000
$100,001 — $1,000,000 2,000
$1,000,001 — $5,000,000 8,000
$5,000,001 — $20,000,000 12,000
$20,000,001 — $40,000,000 20,000
$41,000,001 — $70,000,000 40,000
over $70,000,000 65,000
L 1GTh OF TI1 OP VIOLATION (calculate for each violation)
0 to 6 months $ 500
7 to 12 mànths 1,000
13 to 18 months 1,500
over 19 months 2,000
VIOLPTIONS OF 40 C.P.R P 60 SUBPA P AAA
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—4—
60.533(o)(3)
Failure to conduct emission test QA program $500 per unit
not tested as
required
60.536(a)(1), (2)
Failure to have permanent label on stove $2,000 per model
manufactured after July 1, 1988 (related to - line and $2 per
60.538(b), but we can bring both in an unit
enforcement action)
60.536(i), (j)
Failure to have temporary label on a stove $1,000 per model
with a permanent label line and $2 per
unit
60.536(k)
(please see 60.538(d)(l)(ii))
60.537(a)(1), (2)
Failure to maintain record of certification $100 permodel
test line
60.537(a)(1), (3)
Failure to maintain record of parameter QA $1,000 per model
program line
60.537(a)(1), (4)
Failure to maintain record of emission test $1,000 per model
QA program - line
60.537(a)(1), (5)
Failure to maintain record of sales $1,000
60.537(c)
Failure to maintain or produce sealed stove $750 per sealed
stove required
60.537(e)(1), (4)
Failure to apply for small manufacturer’s $250
exemption
60.537(e)(2)
Failure to report number of exempted tteaters $500
manufactured between 7/1/88 and 6/30/89
60.537(e)(3)
Failure to maintain wood heater production $1,000
records for 7/1/87 to 7/1/89
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—5—
60.537(f)
Failure to report biennially on certified $100 per model
model line line
60.537(g)
Failure to maintain record of R&D exempted $500
stoves
60.537(b)
Failure to maintain record of used stoves $500
60.537(i)
Failure to maintain records for five years $500
60.538(a)
Operation of affected facility without a $500 per unit
permanent label
60.538(b)
Offer for sale a stove without’ certification $2,000 per model
test or permanent label- - line and $2 per -
unit
60.538(C)
Offer for domestic sale of export stove $1,000 per unit
Sale of stove without a permanent label after $1,000 per unit
July 1, 1990
60.538(d)(1)(i), (2)
Offer for sale a stove with a permanent label $1,000 per model
but not temporary label line and $2 per
unit
60.538(d)(1)(ii) -
Of fer for sale a stove with a permanent label $500 per unit
but no owner’s manual (encompasses 60.536(k))
60.538(d)(1)(iii)
Offer for sale a stove with a permanent label $1,000 per model
but without a catalyst warranty line and $2 per
unit
60.538(e)
Sale of stove after notice of certification $5,000 per unit
revocation
60.538(f)
Installation or operation of stove $2,000 per unit
inconsistent with label or owner’s manual
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—6—
60.538(g)
Operation of stove with deactivated or $2,000 per unit
removed catalyst
60.538(h)
Operation of altered stove $5,000 per unit
60.538(i)
? lteration or removal of permanent label $1,000 per unit
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—7—
An inspector files a violation report against Blockbuster
Manufacturing, which produces the Blue Flame and Heat Jet model
lines. The report, dated November 8, 1988, states that the
temporary label on the Blue Flame model line is deficient and
that the company failed to conduct certification testing on the
Heat Jet model line. In addition, the Heat Jetmodel line lacks
permanent and temporary labels as well as owner’s manuals. Blue
Flame production since July 1., 1988 totalled 464 units with sales
of 223 units, while Heat Jet production since July 1, 1988
totalled 108 un .ts with sales of 36 units. Blockbuster’s net
worth is estimated at $800,000.
The initial assessment of Blockbuster’s violations indicates
the following violations by model line:
Blue Flame
- attaching deficient temporary-label
- selling unit with deficient temporary label
Heat Jet
- failure to conduct certification testing
— failure to attach permanent label
- selling unit without permanent label
(NOTE: the temporary label and owner’s manuals violations are
inapplicable for the Heat Jet model line because the units were
not permanently labeled)
U.S. EPA issues a Finding of Violation to Blockbuster which
includes both the Blue Flame and Heat Jet violations. In
addition, an Administrative brder is issued to correct these
violations. Blockbuster does correct all the Blue Flame
violations by the stated deadline, but does not take any action
toward correcting the Heat Jet violations. When contacted by EPA
personnel after the deadline, Blockbuster says it feels no
obligation to correct the Heat Jet violations. At this point,
EPA decides to bring a civil action against Blockbuster
concerning the Heat Jet model line only.
The preliminary deterrence amount is calculated by adding
the economic benefit and gravity components. The economic
benefit component is subdivided into two categories: capital
investments, or one—time costs, and annual expenses. For this
example, current capital investments are $9,000 for a full test
series and $4,000 for model line labels and manuals. Current
annual expenses include $3,067 for emissions and parameter
inspection quality assurance and $1,400 for research and
development. EPA personnel run the BEN1 model assuming
compliance in April 1989 and the payment of penalty in March
1989. The BEN1 model shows an economic beflef it of $3,252. A
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—8—
copy of the BEN1 printout is attached for reference. The gravity
component of $66,788 is calculated as shown below:
Basic Per Length Size of
Violation Rate Unit’ of T Ine Violator
No certification test $5,000 S500(108) $500 $2,000
60.533(n)
Not attaching perma— 2,000 2(108) 500
nent label
60.536(a)(l), (2)
Selling unit without 2,000 2(36) 500
permanent label
60.538(b)
In light of Blockbuster’s lack of cooperation in correcting
the Heat . et violations, EPA decides to increase the gravity
component by 25%. The gravity component becomes $66,788(1.25) =
$83,485. The bottom line amount for the purposes of settlement
is $3,252 (the economic benefit) + $83,485 (the adjusted gravity
component) $86,737.
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Appendix VIII: Penalty Policy For Production or
Imporatation in Violation of 40 C.F.R. Part 82 of
Substances that Deplete the Stratospheric Ozone
revised 11/02/90
-------
APPENDIX VIII
CLEAN AIR ACT CIVIL PENALTY POLICY APPLICABLE TO
PERSONS WHO MANUFACTURE OR IMPORT CONTROLLED StJBSTANCES
IN AMOUNTS EXCEEDING ALLOWANCES PROPERLY HELD UNDER
40 C.F.R. PART 82: PROTECTION OF THE STRATOSPHERIC OZONE
Introduction
This appendix provides guidance for calculating the civil
penalties EPA will require in pre-trial settlement of district
court enforcement actions, pursuant to Title I of the Clean Air
Act (“CAA”), against persons who manufacture or import controlled
substances in amounts exceeding allowances properly held under 40
C.F.R. Part 82, Protection of the Stratospheric Ozone (“the
Rule”). Settlement of violations of the recordkeeping and
reporting provisions of the Rule need not, for purposes of
penalty asses ment, be treated differently from any other CAA
recordkeeping and reporting violation. See Clean Air Act
Stationary Source Civil Penalty Policy, p. 11.
The Rule designates bulk quantities of the chemicals named
in Appendix A as “controlled substances” on the basis of the
demonstrated capacity of these chemicals to attack and destroy
ozone in the stratosphere. Manufacturers and importers of the
controlled substances who responded to EPA’s request for baseline
data are apportioned yearly production and consumption allowances
which limit the amounts of controlled substances that person or
corporate entity may introduce for use into the United States
during a twelve month control period. 2
1 The Rule- was promulgated in accordance, with the Agency’s
authority under CAA Part B——Ozone P otection, 42 U.S.C. 150—
159 (“Part B”), and with the Montreal Protocol (an agreement
signed by most industrial nations in 1987), to protect the
stratospheric ozone layer, a thin blanket of triatomic oxygen
fifteen miles above the surface of the earth that blocks harmful
ultraviolet radiation emitted by the sun. Section 113 of the CAA
ref erences Part B, expressly providing that the 113(b) civil and
the 113(c) criminal remedies are available for violations of
regulations promulgated under that Part.
2 EPA restricted production and consumption of five
chlorofluorocarbons (CFCs) to 1986 levels beginning July 1, 1989.
Additional restrictions on production and consumption of CFCs,
and and other controlled substances were in development at this
writing.
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copy of the BEN1 printout is attached for reference. The gravity
component of $66,788 is calculated as shown below:
Basic Per Length Size of
Violation Rate Unit of T .me Violator
No certification test $5,000 $500(108) $500 $2,000
60.533 (n)
Not attaching perma— 2,000 2(108) 500
nent label
60.536(a)(l), (2)
Selling unit without 2,000 2(36) 500
permanent label
60.538(b)
In light of Blockbuster’s lack of cooperation in correcting
the Heat Jet violations, EPA decides to increase the gravity
component by 25%. The gravity component becomes $66,788(l.25) =
$83,485. The bottom line amount for the purposes of settlement
is $3,252 (the economic benefit) + $83,485 (the adjusted gravity
component) $86,737.
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To assist EPA in monitoring compliance with production and
consumption limits, the Rule requires manufacturers of controlled
substances to keep daily records and submit quarterly reports to
EPA. Importers must submit information to EPA regarding the
quantity of controlled substances brought into the United States
and the country of their origin.
Production and consumption allowances may be traded, but
such transactions are invalid if not reported to EPA. If Agency
records indicate that the seller of allowances holds a sufficient
quantity unexpended, EPA will issue a notice of no objection, and
enter the transfer in its records. If EPA initially does not
object to an allowance trade, but later finds reason t
disapprove, the Agency will rescind the earlier transfer and
correct its records. For the purposes of the Rule, ownership of
the allowances that were the subject of the rescinded transfer
never shifted from the seller to the buyer.
The Penalty for Excess Amounts
The Rule states that each kilogram of controlled substances
iufactured or imported in excess of allowances is a separate
lation. 3 Each excess kilogram, therefore, creates potential
liability in the violator for a penalty of up to the statutory
maximum of $25,000. To promote judicial economy and to conserve
Agency resources, EPA will be willing to accept substantially
less in settlement.
The relative amount of stratospheric ozone that will be
destroyed by a given quantity of a controlled.. substance is called
that substance’s ozone depletion weight, and. varies from ..chemiCa]
to chemical. 4 Allowances are allocated. on the basis of a.
calculated level, i.e., the total ozone depletion effect of all
controlled substances produced and imported, a value that is
expressed in kilograms. The holder of allowances is free to
produce or import any combination of controlled substances during
the control period so long as the calculated level of its
activity does not exceed the calculated level of the allowances
it holds. When the Rule states that- each kilogram in excess of
allowances is a separate violation, the reference is to kilograms
in the sense of a calculated level. Therefore, the statutory
maximum penalty is $25,000 per kilogram of calculated level
manufactured or imported in excess of properly held allowances.
40 C.F.R. 82.4(a) and (b).
‘ The ozone depletion weights for the controlled substances
can be found in Appendix A of 40 C.F.R. Part 82.
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Calculatiria a Perta1t
In accordance with the general practice EPA follows when -
calculating all Clean Air Act civil penalties, penalties assessed
for manufacturing or importing excess quantities of controlled
substances will be the sum of an economiC benefit component and a
gravity component.
Economic Benefit
Determining the actual economic benefit accruing to the
violator will be difficult, if not impossible. Some allowance
holders produce a variety of controlled substances at different
locations across the country. Rather than attempt to distinguish
what amount of which chemical produced at each of several
continuously operating facilities was responsible for how many
kilograms of excess calculated level, EPA will instead rely on an
economic benefit rule of thumb. On t e basis of financial
information currently available, EPA will assume an economic
benef it (profit margin) of $1.50 per kilogram of calculated level
for both the manufacture and importation of controlled
substances. EPA may supplant this amount by reference to price
lists appearing in industry journals o to any other source which
the Agency believes is a reliable indicator. Because the
Agency’s economic benefit rule of thumb is subject to change, in
situations where the Region is applying this penalty policy,
Regional staff should consult with EPA Headquarters before
attempting to assess the violator’s economic benefit of
noncompliance.
The violator’s economic benefit may be offset by amounts
paid for allowances purchased during the same control period to
cure excess production or imports, as such purchases clearly
lessen the. economiC benefit of noncompliance.
The economiC benefit component .may be omitted entirely if an
allowance apPOrtiOfled violator agree’s in the next control period
to a reduction of its current allowances in amounts equal to the
calculated level of its earlier violations. The economic benefit
component will not be assessed against violators who are. not
apportioned allowances if such violators obtain in the next
control period and. hold unexpended. allowances in amountS equal to
the calculated level of their earlier violations. The Montreal
Protocol does not permit member nations to meet their national
limits by applying allowances left unexpended in one control
period to negate excess quantities of controlled substances
manufactured or imported in any other control period. EPA,
however, can acknowledge the financial impact on importers of a
reduction of current allowances and adjust the penalty assessment
accordingly in order to provide importers with an incentive to
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consent to injunctive relief mandating such reductions. In this
way, EPA can help avert the potential environmental harm
resulting from the violator’s actions.
Gravity
Even if the violator demonstrates that its purchase of
additional allowances or its voluntary reduction of current
allowances eliminates its economic benefit, it still must pay the
-gravity component of the penalty. The gravity component is the
measure of the seriousness of the violation. Accordingly, this
component is linked both to the integrity of the regulatory
system and to the ozone-depleting effect of the violator’s
act-ions. The Rule states that each kilogram of controlled
substance manufactured or imported in excess of allowances is a
separate violation.
To protect the integrity of the Rule, EPA will assess a
penalty of $15,003 against all violators. An additional $0.50
for each kilogram of calculated level manufactured or imported in
excess of allowances held at the time of manufacture or
importation will be assessed against first time violators, or
.oo for each kilogram against repeat offenders.
So that the penalty will reflect the seriousness of the
environmental harm resulting from the violations and to provide
violators with an incentive to cure their violations completely,
EPA will assess a penalty of $15,000 against violators who leave
any amount of their violations, no matter how small, uncured.
EPA will assess an additional penalty of $.50 for each kilogram
of calculated level left uncured at the end of the control period
in question. In the event that the violator expeditiously and
fully cures its violations in the ue ct control period following
its violations, EPA will assess- this integrity of the regulation
factor at $5,000, instead of $15,000, and the kilograms of
calculated level left uncured will be assessed at $0.10. for each
kilogram. -
A violator can cure the potential environmental harm by
purchasing allowances, by chemically transforming the controlled
substances into other substances not regulated by the Rule, by
proper exportation, or by any combination of these means. In
keeping- with the matrix provided by the general stationary source
civil penalty policy, p. 11, .EPA will assess an additional amount
to scale the penalty to the size of the violator.
Adjustments to the gravity component must be made in
accordance with the provisions of the general stationary scurce
vu penalty policy, pp. 12—18, taking into account such factors
degree of wi1lful -iess or negligence, degree of cooperation,
d history of noncompliance. EPA construes these adjustment
factors strictly, with a bias toward upward adjustment. Downward
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adjustments to the gravity component will be effected only in
rare instar CeS where the defendant manifests extreme cooperation
by agreeing to perform environmentallY beneficial actions not
required by law that are directly related to repairing the
environmental harm potentially resulting from its violations.
Niti atin Penalty Amounts
Application of this policy significantlY compromises the
penalty amount EPA is authorized to pursue under both the CAA and
he Rule. penalty amounts calculated in accordance with this
policy represent the minimum penalty that EPA can accept in
settlement of cases of this nature. Reductions from this amount
are acceptable only on the basis of the violator’s demonstrated
inability to pay the full amount (substantiated by the ABEL
computer model) or other unique factors. A proposed penalty
reduction, accompanied by a justification memorandum, must be
submitted to the.ASSOCiate Enforcement counsel for Air for his
approval.
Exam le5 of Penalty Calculations
Following are four examples of application of this policy.
Adjustments to the gravity component are made in accordance with
the general statiOnarY source civil penalty policy.
Exam 1e _ l . -
Due to inadequate communications between its seven
facilities for the production of controlled substances, Chemical
Co. overshoots its production and consumPtion allowances of
147,000,000 kg of calculated level by 250,000 kg before ceasing
all production on ) ay 20. On June 5, Chemical Co. .maflag eS to
purchase 200,000 kg of calculated level in additional allowances
at a cost of $200,000.
Assuming that Chemical Co. does nothing more. to cure. its
violations, the penalty is computed as follows:
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*
Economic Benefit Component-
Profit on sale of wrongfully produced
controlled substances (250,000 kg at $l.50/kg*) $375,000
Offset by actual expenditure of $200,000
to purchase additional allowances — 200,000
$175,000
Gravity Comoonent
Integrity of Regulation $15,000
250,000 kg of calculated level
wrongfully produced (at $0.5/kg) 125,000
Integrity of Regulation
(amounts left uncured) 15,000
50,000 kg of calculated level left uncured
at close of control period (at $0.5/kg) 25,000
Size of violator (worth in excess
of $70,000,000) +65.000
$245,000
Preliminary deterrence amount
Economic Benefit Component - $175,000
Gravity Component +245 ,000
$410,000
Adiustment factors
20% upward adjustment to the gravity
component_tO reflect defendant’ snegligenCe +$49, 000
l4inimuin penalty settlement amount
$459,000
* The economiC benefit rule of thumb is subject to change.
egiorial offices using this guidance should consult with Head—
uarters to insure that they use the appropriate number.
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If , in the next control pericd prior to settlement, Chemical
Co. obtains and holds unexpended sufficient consumption allow-
ances to avert the environmental harm potentially resulting from
the uricured portion of its wrongful production, the penalty would
be calculated as follows:
Economic Benefit Cotnoonent
Because Chemical Co. has obtained
consumption allowances in an amount
eq ual to the total amount of its vio-
lations, there were no costs averted,
and there is no remaining economic
benefit. $0
Gravity Comirnonent
Integrity of Regulation $15,000
250,000 kg of calculated level
wrongfully produced (at $0.5/kg) 125,000
Integrity of Regulation
(amounts left uncured, -but environmental
harm averted) 5,000
50,000 kg of calculated level left uncured,
but environmental harm averted (at $0.1/kg) 5,000
Size of violator (worth in excess
of $70,000,000) +65,000
$215, 000
Preliminary deterrence amount -
Economic Benefit Component $0
Gravity Component $215 ,000
$215,000
Adjusthent factors
20% uoward adjustment to the gravity
component to reflect defendant’s negligence +$43,000
Minimum oenaltv settlement amount
$258,000
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Exainole 2
Commodities, Inc., which does not normally deal in
chloroflUroCarbOfls (CFCs), works toward buying up the inex’pended
consumption allowances it needs to permit its purchase of
1,000,000 kg of calculated level of a controlled substance from a
seller in Country A at a price of $1,500,000. The shipment of
cheap CFCs is off loaded at the inerican port of entry while
Commodities, Inc. is still negotiating with Company Z to buy the
last block of 300,000 kg of calculated level of allowances. In
Country B, a major industrial accident virtually destroys that
country’s largest producer of CFCs, suddenly creating a huge
demand in that country for Commodities, Inc.’s CFCs.
Commodities, Inc. ji mediately breaks of f negotiations with
Company Z and exports its entire stock of 1,000,000 kg of
calculated level to Country for a selling price of $3 million.
Commodities, Inc. provides proof to the EPA of its export and
receives consumption allowances in the amount of 1,000,000 kg of
calculated level, which it then sells on the bullish CFC market
at $2.00 per kilogram of calculated level.
During settlement negotiations with EPA, commodities, Inc.
:roduces records showing that it purchased 700,000 kg of
ca.j.culated level of consumption allowances for $0.75 per kilogram
and argues that this amount should be used to calculate its
economic benefit.
The penalty is computed as follows (for the purposes of this
exercise, we assume that Commodities, Inc. bore none of the
shipping expenses):
Economic Benefit Comooner%t
Cost averted by not purchasing
allowanceS. (300,000 kg at $l.50/kg*) $450,000
Profit on export sale of wrongfully imported
controlled substances (300,-000 kg at $1.50/kg) 450,000
Profit on sale of wrongfully obtained
consumption rights (300,000 kg at $2.00/kg) +600,000
$1,500,000
* The economic benefit rule of thumb is subject to change.
gional offices using this guidance should consult with Head-
quarters to insure that they use the appropriate number.
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—9—-
In computing Coi odities, Inc.’s economic benefit, EPA would
not use $0.75/kg as the cost averted by not purchasing allowances
because Company Z, apparently, was unwilling to sell at the price
Commodities, Inc. was offering. EPA would not use - Commodities,
Inc.’s later selling price, $2.00/kg, because that amount does
not necessarily reflect the market rate at ‘the time Commodities,
Inc. was attempting to buy. In the absence of a more reliable
figure, EPA will use the $1.50/kg rule of thumb. The profit on
—.the sale of wrongfully imported controlled substances is simply
the difference between the selling price and the defendant’s
purchase price ($3.00/kg — $1.50/kg = $1.50/kg) as there were no
allowance costs for these 300,000 kilograms. The profit on the
sale of the wrongfully obtained consumption allowances is the
full selling price because the defendant never properly held
consumption allowances for those 300,000 kilograms.
Gravity Cotnoortent
Integrity of Regulation $15,000
300,000 kg of calculated level
wrongfully imported (at $0.5/kg) 150,000
Integrity of Regulation
(amounts left urtcured) 15,000
300,000 kg of calculated level left uncured
at close of control period (at $0.5/kg) 150,000
Reporting violation — one incorrect report
See general CAA penalty policy at 11.
(Although Commodities, Inc. did export
1,000,000 kg of calculated level of a
controlled substance, only 700,000 kg of
that amount had entered the country legally.
Therefore, Commodities, Inc.’s tranSf er
request could not properly claim ownership of
the entire 1,000,000 kg of calculated level.) 15,000
Size of violator (worth between $20-40 million) +20,000
$365,000
Preliminary Deterrence Amount
Economic Benefit Component $1,500,000
Gravity Component +365 ,0Q0
$1,865,000
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— 10 —
Ad-iustrnent Factors
Degree of. willfulness or negligence
(20% of the gravity component) +$73,000
Minimum settlement penalty amount
$1,938,000
If, in the next control period prior to settlement,
Commodities, Inc. had obtained and held unexpended the 300,000
kilograms of calculated level of consumption allowances necessary
to avert the potential environmental harm resulting from its
wrongful importation, the penalty would be calculated as follows:
Zconomic Benefit Co woonent
Profit on export sale of wrongfully imported
controlled-substanCes (300,000 ‘kg at $1.50/kg) 450,000
Profit on sale of wrongfully obtained
consumption rights (300,000 kg at $2.00/kg) +600,000
$1,050,000
Gravity Cornoonent
Integrity of Regulation $15,000
300,000 kg of calculated level
wrongfully imported (at $0.5/kg) 150,000
rttegrity of Regulation
(amounts left uncured, but environmental
harm averted.) 5,000
300,000 kg of calculated level left uncured,
but environmental harm averted (at $0.1/kg) 30,000
Reporting violation - one incorrect report 15,000
Size of violator (worth between $20—40 million) - 1-20,000
$235,000
Preli!ninarv Deterrence Amount
Economic Benefit Component $1,050,000
Gravity Component +235,000
$1,285,000
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— 11 —
A&iustment Factors
Degree of willfulness Cr negligence
(20% of the gravity component) - +547,000 -
MthinluTn settlement enaltv amount
$1,332,000
Exam le 3
During the fourth quarter of the control period, Importers
International contracts to sell 40,000 kg of calculated level of
consumption allowances to CFCs, Inc., a producer and importer of
CFCs, at $1.25/kg, despite the fact that Importers International
has recently exhausted all of its -250,000 kg allowance.
Importers International submits a transfer request to EPA for
which the Agency issues a no objection notice. (EPA’S
determination is based on information contained in Importers
International’s previous quarterly report.) Upon receipt of -
EPA’s notice f no objection, CFCs, Inc. purchases the allowances
from Importers International for $50,000 and imports 40,000 kg of
calculated level of controlled substances. EPA discovers during
its review of Importers International’s fourth quarter report
that the company did not hold unexpended allowances at the time
of the trade, rescinds the transfer, and notifies both parties to
the transaction.
Importers International’s action appears to be a fraudulent
.transfer in knowing violation of consumption limitations, and
this matter should be referred to OE’s Office of Criminal
Enforcement. Importers in ernationa1 is probably subject to
fines and imprisonment under 113 (C) of the Clean Air Act, 18
u.s.c. iooi. (supplying false information to the federal
government), and possibly 18 U.S.C. 1341 (fraudulent use of the
mails) .
EPA’s election to pursue a criminal enforcement action
must hinge on its evaluation of the strength of the evidence of
knowing violation and also of the adequacy of available civil
relief. Where a defendant exceeds its production or consumption
allowances and submits inaccurate information in a transfer
request, EPA may find it difficult to show a knowing violation,
but large civil penalties are available. If the defendant.. stays
within the limits of its allowances but transfers allowances it
does not hold, the available civil relief would be ased on a
single reporting violation, but EPA can more likely demonstrate
that the violation was knowing. It is important also to remember
that buyers of large amounts of allowances will be aware of the
financial risk associated with wrcngful production or importation
and will purchase only from reputable sellers.
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— 12 —
CFCs, Inc., which purchased Importers I ternationa1’s
purported allowances at risk, held other consumption allowances
at the time it imported the 40,000 kg of calculated level. These
other consumption allowances, in part, offset that import. After
analyzing CFC5, Inc.’s final quarter reports, EPA determines that-
CFCs, Inc. is liable for the importation of only 15,000 kg of
calculated level of controlled substances for which it did not
hold proper consumption allowances. After receiving notification
from EPA, CFCs, Inc. agrees to reduce its current-year production
and consumption allowances by that amount.
The penalty for CFC, Inc. is computed as follows:
Economic Benefit Component 6
Profit on sale of wrongfully produced
CFCs (15,000 kg at $l.50/kg*) $22,500
Offset by reduction of current-year
allowances by 15,000 kg of calculated level — 22.500
0
Gravity Component
Integrity of Regulation $15,000
15,000 kg of calculated level
wrongfully imported (at $0.5/kg) 7,500
Integrity of Regulation
(amounts left uncured, but environmental
harm averted) 5,000
15,000 kg of calculated level left uncured,
but environmental harm averted(at $0.10/kg) 1,500
Size of violator (worth more that $70 million) +65.000
$94,000
* The economic benefit rule of thumb is subject to change.
Regional offices using this guidance should consult with Head-
quarters to insure that they use the appropriate number.
6 CFCs, Inc.’s economic benefit would not be offset by the
amount it paid to Importers International for the purported
allowances. Only those transactions which result in a transfer
of valid consumption allowances to the violator can be counted
against its economic benefit.
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— 13 —
Preli!ttinarv Deterrence Amount
EconomiC Benefit Component $0
Gravity Component +94 ,00Q
$94,000
justitient FactOr
No adjustment of gravity
MinirrtUTrt Settletrient penalty AmO i
$94,000
ExaInOleA
Small okerage Co., an import broker located ina minor
port city, importS 200 kg of calculated level of CFC—113 for
Company x, a thanufaCtUrer of airplane parts. Company x intends
to use the CFC-113 to degreaSa preCiSiOfl metal parts prior to
assembly. Neither company holds consumptiofl allOWaflce EPA
discovers the violation during its review of the computer
printout of Customs Entry Summary forms provided to EPA by the
U.S. Census Bureau.
Upon receipt of a SectiOn 114 letter from EPA reqi.ieStifl
more information about its imports of controlled substances,
Small Brokerage Co. contacts EPA to explain that neither it nor
Company X was aware of the Rule’s prohibitiofl on importing
controlled substances without consumption alloWaflCe • Small
Brokerage Co. fully responds to the Section 114 requeSt, but
points out that its imports were in one liter canisters, and
asserts exemptiOn under the Stone-gallon rule of thumb.”
The one-gallon rule of thumb exemptS from regulation imports
of controlled substances in containers of one. gallon or smaller
only if the eventual use of the container is not known and cannot
be determined with reasonable efforts. ( Se GUIDANCE FOR THE
STRATOSPHERIC OZONE PROTECTION PROGRA1 , pp. 4—5.) Here, EPA
investigates the process Company x uses to degreaSe small metal
parts and determines that Company x pours CYC—113 from the one
liter canister into a basin containing the parts to be cleaned.
Therefore, the eventual use of the imported canister is known,
and the canister is not part of a “use system.” EPA informs
Small Brokerage Co. that its imports are subject to regulat) .0n
Before the end of the control period, Small Okerage CO. obtaln 5
from another company a 5 uffiCieflt amount of unexpended
consumption allowances to cure its vioU.ti0flS
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— 14 —
The penalty is ca1cu1ated as follows:
Economic Benefit Coi!rnonent
Because Small rokerage Co. obtained
consumDtion allowances in an amount
eqi.ial to the total amount of its vio-
lations, there were no costs averted,
and there was no economic benefit. $0
Gravity Com orient
Integrity of Regulation $15,000
200 kg of calculated level wrongfully
imported (at $0.5/kg) ioo
Size cf violator (worth between $100,001
and $1,000,000) S2,000
$17,100
Preliminary Deterrence Amount
Economic Benefit Component $0
Gravity Component S17,000
$17,000
Adlustment Factors
Degree of willfulness or negligence
(20% of the gravity component) +$3,400
Minimum Penalty Amount
- $20,400
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Appendix IX: Penalty Policy Applicable to Persons who
Perform Service for Consideration on a Motor Vehicle Air
Conditioner Involving the Refrigerant or who Sell Small
Containers of Refrigerant in Violation of 40 C.F.R. Part 82
added 07119/93
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APPENDIX IX
CLEAN AIR ACT CIVIL PENALTY POLICY APPLICABLE TO PERSONS WHO
PERFORM SERVICE FOR CONSIDERATION ON,A MOTOR VEHICLE AIR
CONDITIONER INVOLVING THE REFRIGERANT OR WHO SELL SMALL
CONTAINERS OF REFRIGERANT IN VIOLATION OF 40 C.F.R. PART 82,
PROTECTION OF THE STRATOSPHERIC OZONE, SUBPART B: SERVICING
OF MOTOR VEHICLE AIR CONDITIONERS
July 19, 1993 -
Introduction
This appendix provides guidance for calculating the civil
penalties EPA will require in pre-trial settlement of judicial
enforcement actions, as well as the pleading and settlement of
administrative enforcement actions, pursuant to Sections 113(b)
and (d) and Section 609 of the Clean Air Act (“CAA”), as amended,
and 40 C.F.R. Part 82, Subpart B against persons who perform
service for consideration on motor vehicle air conditioners
involving the refrigerant or who sell small containers of
refrigerant. Settlement of violations of the recordiceepirig and
reporting provisions of the regulations should not, for purposes
of penalty assessment, be treated differently from any other CAA
recordkeeping and reporting violation. See Clean Air Act
Stationary Source Civil Penalty Policy, p. 12.
This appendix is to be used for settlement purposes in civil
judicial cases, but EPA retains the discretion to seek the full
statutory maximum penalty in all civil judicial cases which do
not settle. In addition, for administrative penalty cases, the
appendix is to be used in conjunction with the Stationary Source
Civil Penalty Policy to determine an appropriate penalty to be
pled in the administrative complaint, as well as serving as
guidance for settlement amounts in such cases.
To assist EPA in monitoring compliance, the regulations
require persons who perform service for consideration on motor
vehicle air conditioners involving the refrigerant to report one
time and to keep records; persons who certify technicians must
report once every two years; and persons who sell small cans of
refrigerant must keep records and post a sign.
The Penalties for Violatina Reaulations
Section 113 of the Clean Air Act allows EPA to seek
penalties of up to $25,000 per day per violation. Each time a
motor vehicle air conditioner is serviced without properly using
approved refrigerant recycling or recovery equipment or is
serviced by an uncertified technician, each container of
refrigerant containing less than 20 pounds is sold to a
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person who is not ..a certified technician or who does not certify
to the retail establishment that the container was purchased for
resale, and each time a technician is certified by a technician
training program which has not been approved by the EPA
Administrator constitutes a separate violation (each with a
statutory maximum of $25,000).
EPA may in appropriate cases accept less than the statutory
maximum in settlement. The penalty, assessments contained in this
policy (this appendix read with the Stationary Source Civil
Penalty Policy) reflect reductions from the statutory maximum
which can be made based on the statutory penalty assessment
criteria found in Section 113(e) of the Act. This policy takes
into account the size of the violator’s business, the violator’s
full compliance history, the economic benefit of noncompliance,
and the seriousness of the violation. The other factors in
Section 113(e) such as the economic impact of the penalty on the
business and any good faith efforts to comply should be taken
into account in determining whether the penalty should be
reduced, but the burden is on the defendant to raise those
factors.
Penalties for violations are based on the particular
regulatory requirements violated. The minimum settlement penalty
amount is the sum of the penalties assigned to each vio 1ation of
a requirement.
Calculating p PenaltY
In accordance with the general practice EPA follows when
calculating all Clean Air Act civil penalties, penalties assessed
for performing any service for consideration on a motor vehicle
air conditioner involving the refrigerant or selling small
containers of refrigerant wjll be the sum of an economic benefit
component and a gravity component.
Economic Benefit
This componeht is a measure of the economic benefit accruing
to the facility as a result of noncompliance with the Act. To
determine the actual economic benefit to a person 1 who performs
“Person” includes the technician who actually works on the
motor vehicle air conditioner and the individual, corporation,
partnership, association, State, municipality, political
subdivision of a State, and any Agency, department, or
instrumentality of the United States who employs the technician.
For the purpose of calculating the penalty under this policy, it
was assumed that Regions would generally take enforcement actions
against service faciiities rather than individual technicians.
Both technicians and service facilities, however, are legally
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service for consideration on motor vehicle air conditioners
involving the refrigerant, EPA will rely on the matrix which
follows to determine the economic benefit’from delayed costs
(failure to purchase approved recycling or recovery equipment)
and avoided costs (failure to properly operate and maintain such
equipment).
Economic Benefit From Servicing Motor Vehicle Air Conditioners
Without Properly Using Approved Refrigerant Recovery Equipment:
Number of Months since August 13, 1992/EconomiC_Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
# of
Months
Economic
Benefit
1—3
$115
22—24
$1103
43—45
$2494
4—6
$236
25—27
$1274
46—48
$2733
7—9
$363
28—30
$1454
49—51
$2984
10—12
$496
31—33
$1642
52—54
$3247
13—15
$637
34—36
$1840
55—57
$3523
16—18
$785
37—39
$2048
58—60
$3811
19—21
$940
40—42
$2266
The matrix reflects that the service facility should’have
purchased one piece of recovery equipment. The matrix was
calculated using August 13, 1992 as the date noncompliance began.
The date of compliance (the date equipment is acquired) and the
date that the penalty is paid are the same. Because the matrix
reflects that enforcement actions will be taken against the
service facility and because many technicians will be personally
responsible for the cost of getting trained and certified, the
matrix does not include the cost of technician certification. In
addition, it is difficult to predict how many uncertified
technicians a service facility mi ht employ to perform service
for consideration on motor vehicle air conditioners involving the
refrigerant. If the Regions find that service facilities usually
pay for technician training, then they should include the cost of
technician training and certification in their economic benefit
calculations. In any enforcement action against an individual
uncertified technician, the Regions should include the cost of
training and certification in the economic benefit calculation.
The matrix is based on the BEN computer model. If the litigation
team determines that the matrix does not reflect the defendant’s
actual economic benefit in a particular enforcement action, the
responsible for complèying with 40 C.F.R. Part 82, Subpart B.
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litigation team ay calculate the benefit using the BEN- model
with inputs specific to the action.
The economic benefit to the person 2 who sells cans of
refrigerant containing less than 20 pounds is the profit on each
can. The profit will vary depending on how much the person paid
to purchase the cans and at what price the cans-are sold. The
amount of profit averages $1.50 per 12 ounce can.
EPA policy requires the removal of the violator’s economic
benefit in every enforcement action, unless the factors in
Section 113(e) or litigation risks suggest that a reduction is
appropriate. Although the Stationary Source Civil Penalty Policy
indicates that the litigation team may elect not to assess an
economic benefit component in enforcement actions where the
violator’s economic benefit is less than $5,000 (see p. 7),
Regions should assess the economic benefit component in Section
609 enforcement actions. Given that the economic benefit
component in Section 609 enforcement actions will likely always
be small (less than $5,000), if the general rule from the
Stationary Source Civil Penalty Policy were to apply, the
economic benefit component would rarely be included in the
penalty calculation. Therefore, Regions should assess an -
economic benefit component in all Section 609 cases.
Gravity
In addition to economic benefit, the violator must pay the
gravity component of the penalty. The gravity component is the
measure of the seriousness of the violation. The seriousness of
the violation has two components: the importance to the
regulatory scheme and the potential environmental harm (ozone—
depleting effect of the violator’s actions) resulting from the
violations.
The following violations can defeat the purpose of Section
609 by permitting the release of substances that degrade the
stratospheric ozone layer. Their importance to the regulatory
scheme, therefore, includes the assessment of the following
2 “Person 1 ’ includes the employee who actually sells the
small can and the individual, corporation, partnership,
association, State, municipality, political subdivision of a
State, and any Agency, department, or instrumentality of the
United States who employs the employee. For the purpose of
calculating the penalty under this policy, it was assumed that
Regions would generally take enforcement actions against retail
facilities rather than individual employees. Both employees and
retail facilities, hqwever, are legally responsible for complying
with 40 C.F.R. Part 82, Subpart B.
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penalties:
A penalty of $10,000 against any person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment;
A penalty of $15,000 against each person who performs
services for consideration on motor vehicle air conditioners
involving the refrigerant without properly using approved
refrigerant recycling or recovery equipment and who has
previously been the subject of a Section 609 enforcement response
(e.g. notice of violation, warning letter, administrative order,
field citation, complaint, consent decree, consent agreement, or
administrative or judicial order);
A penalty of $5,000 against any person who performs services
for consideration on motor vehicle air conditioners involving the
refrigerant for each person who performs such service who is not
properly trained and certified by a technician certification
program approved by the EPA Administrator;
A penalty of $2,000 against any person who sells a container
of refrigerant (suitable for use in a motor vehicle air
conditioner) containing less than 20 pounds to a person who is
not a certified technician or who does not certify to the seller
that the container was purchased for resale;
A penalty of $5,000 against any person who sells a container
of refrigerant containing less than 20 pounds to a person who is
not a certified technician or who does not certify to the seller
that the container was purchased for resale and who has
previously been the subject of a Section 609 enforcement response
(e.g. notice of violation, warning letter, administrative order,
field citation, complaint, consent decree, consent agreement, or
administrative or judicial order);
A penalty of $5,000 for each certificate issued after the
effective date of the regulation against any technician training
program that has not received approval from the Administrator of
EPA;
A penalty of $1,000 against any retail establishment that
sells or offers for sale the refrigerant suitable for use in a
motor vehicle air conditioner in containers of less than 20
pounds and fails to post a sign that meets the requirements of 40
C.F.R. §82.42(c). This amount should be assessed regardless of
how many (if any) small cans are actually sold after November 15,
1992, as long as they are offered for sale. This amount is in
addition to the $2,000 assessment described above against the
retail establish1uent fOr the sale of a container-of refrigerant
containing less than 20 pounds to a person who is not a certified
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technician or who does not certify to the retail establishment
that it is purchased for resale;
A penalty of $2,500 against any retail establishment that
sells or offers for sale the refrigerant suitable for use in a
motor vehicle air conditioner in containers of less than 20
pounds and fails to post a sign that meets the requirements of ‘40
C.F.R. S82.42(c) and who has previously been the subject of a
Section 609 enforcement response (e.g. notice of violation,
warning letter, administrative order, field citation, complaint,
consent decree, consent agreement, or administrative or judicial
order);
EPA acknowledges that multiple violations of the Section 609
requirements may significantly increase the potential
environmental harm (ozone—depleting effect of the violator’s
actions) resulting from the violations. The Agency, therefore,
will assess the following additional amounts for each separate
violation to ensure that the total penalty assessed appropriately
reflects the seriousness of the defendant’s violations:
EPA will assess $40 against any person for each motor
vehicle air conditioner serviced without properly using approved
refrigerant recycling or recovery equipment, or $50 against any
person who has previously been the subject of a Section 609
enforcement response (e.g. notice of violation, warning letter,
administrative order, field citation, complaint, consent decree,
consent agreement, or administrative or judicial order) for each
motor vehicle air conditioner serviced without properly using
approved refrigerant recycling equipment; and
EPA will assess $l8 per pound against any person for each
sale of a container of refrigerant containing less than 20 pounds
to a person who is not a certified technician or who does not
certify to the retail establishment that it is purchased for
resale and $25 against any person that has previously been the
subject of a Section 609 enforcement response (e,g. notice of
violation, warning letter, administrative order, field citation,
complaint, consent decree, consent agreement, or administrative
or judicial order) for each sale of a container of refrigerant
containing less than 20 pounds to a person who is not a certified
technician or who does not certify to the retail establishment
that it is purchased for resale.
EPA estimates that the benefit to be obtained from
avoiding the release of 1. kilogram of ozone depleting substance
ranges from $13—$53/kg. For the purposes of this penalty policy,
the benefit should be calculated at $40/kg. See Regulatory
Impact Analysis for Section 608, Chapter 5 (March 25, 1993).
See fn. 3.
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EPA ‘ill assess reporting violations pursuant to the Clean
Air Act Stationary Source Civil Penalty Policy, October 25, 1991,
page 12. However, this assessment shall not include a length of
time violation component. -
EPA will assess an additional amount to scale the penalty’ to
the size of the violator using the following matrix:
Net worth (corporations); or net current assets (partnerships and
sole proprietorships):
Under $100,000 $0
$100,001 — $500,000 $1,000
$500,001 — $1,000,000 $2,500
1,000,001 — 5,000,000 $5,000
5,000,001—20,000,000 $10,000
20,000,001 — 40,000,000 $15,000
40,000,001 and above $20,000
Where the size of the violator figure represents over 50% of
the total preliminary deterrence amount, the litigation team may
reduce the size of the vjolator figure to 50% of the preliminary
deterrence amount.
Adjustments to the gravity component must be made in
accordance with the provisions of the Stationary Source Civil
Penalty Policy, pp. 15-19.
Mitigating Penalty Amounts
Application of this policy significantly compromises the
penalty amount EPA is authorized to pursue under the CAA.
Penalty amounts calculated in accordance with this policy
represent the minimum penalty that EPA can accept in settlement
of cases of this nature. Reductions from this amount are
acceptable only on the basis of the violator’s demonstrated
inability to pay the full amount (substantiated in accordance
with Agency policy) or other unique factors. In civil judicial
actions, a proposed penalty reduction from the amount calculated
under this policy must be approved by the Enforcement Counsel for
the Air Enforcement Division. If the litigation team believes
that reduction of the penalty is appropriate, the case file
should contain both a memorandum justifying the reduction and
documentation that the penalty reduction was approved. In
administrative enforcement actions, Regional Administrators or
their designees must submit penalty justification documentation
within 20 days of issuance or signing of consent agreements to
the Director of the Stationary Source Compliance Division in the
Office of Air Quality Planning and Standards and the Enforcement
Counsel for Air in the Office of Enforcement.
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Examples of’ Penalty Calculations
Following are examples of the applica’tion of this policy.
AdjustmentS to the gravity component are made in accordance with
the Stationary Source Civil Penalty Policy.
Example 1
Ace Automotive Air-Conditionii g Service, Incorporated (ACE)
services motor vehicle air conditioners. Despite a significant
outreach effort by the Region (acquainting the regulated
community with Section 609’s requirements), Ace did not submit
the required owner certification to EPA and failed to purchase
recovery or recycling equipment. A search of Ace’s records
indicates that Ace has serviced 60 motor vehicle air conditioners
since the effective date of the rule. The facility performed 150
service jobs in 1990 and 1991. None of the three technicians who
regularly service motor vehicle air conditioners are trained and
certified. EPA inspected the facility on March 13, 1993.
Economic Benefit ComPonent
The economic benefit of delaying
the purchase of equipment for seven
months + avoided costs of operating equipment $363
Gravity Component
Importance to regulatory scheme
(servicing without equipment) $10,000
60 motor vehicle air conditioners
(at $40 per vehicle) 2,400
Reporting violation
(failure to certify to EPA that person
performing service is using approved
recycling equipment and that such person
is properly trained and certified)
(from Stationary Source Civil
Penalty Policy, page 12) 15,000
3 Uncertified technicians performing
service (at $5,000 per technician) 15,000
Size of violator (Net Worth is approx.
$2,000,000) +5000
Total Gravity $47,400
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Preliminary deterrence amount
Economic Benefit Component $363
Gravity Component +47,763
Adi ustment factors
20% upward adjustment to the gravity
component - Ace should have been aware
of Section 609’s requirements + 9,552.60
Minimum ena1tv settlement amount
$57,315.60
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Example 2
Diamond Auto Parts sells CFCs in canisters containing 14
ounces. On May 16, 1993, an EPA inspector purchased two 14 ounce
cans of refrigerant. He was not asked to show his technician
training certificate which he claimed to have. In addition, the
inspector noted there was no sign in the check out area notifying
customers that the sale of such cans is prohibited unless the
purchaser is a trained technician. The inspector asked the
owner whether the sign was posted on or after November 15, 1992.
The owner responded that he never posted the sign.
Economic Benefit Component
2 cans of refrigerant
(at $1.50 per 12 ounce can) $3.50
Gravity Component
Importance to regulatory scheme
(Sale of small can of refrigerant) $2,000
2 — 14 ounce cans of refrigerant
(at $18 per pound) 31.50
Importance to regulatory scheme
(Failing to post sign) 1,000
Size of violator (Net Worth is approx.
$6,000,000) +3,031.50
Total Gravity $ 6,063.00
Preliminary deterrence amount
Economic Benefit Component $3.50
Gravity Component +6,063.00
Minimum Settlement Penalty Amount
$6, 066. 50
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Su inmar
Type of violation
Penalty amount
Servicing without equipment
1st violation — $10,000
2nd violation — $15,000
$40/per motor vehicle
Failing to certify
$15,000
Uncertified technicians
$5,000/per technician
Sale of Small Cans to Non—TechniCiafl_
1st violation — $2,000
2nd violation — $5,000
$18/per pound
Uncertified Training Program
$5,000/certificate
Failure to Post Sign
1st violation — 1,000
2nd violation — 2,500
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Appendix X: Clean Air Act Civil Penalty Policy for
Violations of 40 C.F.R. Part 82, Subpart F: Maintenance
Service, Repair and Diposal of Appliances Containing
Refrigerant
added 06/01/94
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APPENDIX X
CLEAN AIR ACT CIVIL PENALTY POLICY FOR VIOLATIONS OF
40 C.F.R. PART 82, SUBPART F: MAINTENANCE, SERVICE,
REPAIR, AND DISPOSAL OF APPLIANCES CONTAINING REFRIGERANT
June 1, 1994
INTRODUCTION
Purpose
This appendix provides guidance for calculating the civil
penalties EPA will require in pre-trial settlement of judicial
enforcement actions, as well as the pleading and settlement of
administrative enforcement actions.
Scope
This appendix is to be used pursuant to Sections 113(b) and
(d) for violations of Section 608 of the Clean Air Act (“Act” or
“CAA”), as amended, and 40 C.F.R. Part82, Subpart F.
Usage
This appendix should be used in conjunction with the
Stationary Source Civil Penalty Policy to determine a preliminary
deterrence amount, which is the sum of the economic benefit
accruing- from noncompliance and the gravity component reflecting
the seriousness of the violation.
This appendix is to be used for settlement purposes in civil
judicial cases involving violations of Section 608, but EPA
retains the discretion to.. seek the full statutory maximum penalty
in all civil judicial cases that do not settle. In addition, for
administrative penalty cases, the appendix is to be used in
conjunction with the Stationary Source Civil Penalty Policy to
determine an appropriate penalty to be pled in the administrative
complaint, as well as serving as guidance for settlement amounts
in such cases. As the Stationary Source Civil Penalty Policy
indicates, for administrative penalty cases under Section
113(d) (1), the Region should plead the penalty calculated under
this policy, using the most aggressive assumptions supportable,
in its complaint.
Persons Liable
Any “person” as defined in the Act and in the Section 608
regulations may be held liable for violations of Section 608.
For example, all “persons” owning and/or operating a facility
subject to the provisions of the Act, and any employees of such a
facility, are legally responsible for complying with Section 608
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and with 40 C.F.R; Part 82, Subpart F. For the purpose of
seeking penalties for violations, EPA will often bring
enforcement actions against the owners and/or operators of such
facilities, rather than against individual employees. However,
for the purpose of Section 608 violations, “person” includes the
technician who services an appliance and the employee who sells
refrigerant, as well as the individual, corporation, partnership,
association, State, municipality, political subdivision of a
State, and any Agency, department, or instrumentality of the
United States who employs the technician or employee. Person
also includes owners of appliances, disposal facilities,
manufacturers and importers of recycling or recovery equipment,
technician certification programs, reclaimers, and equipment
testing organizations. Matters involving possible criminal
behavior by individuals or organizations should be referred to
the Regional Criminal Enforcement Counsel.
PENALTIES FOR VIOLATING TEE ACT AND TEE REGULATIONS
Section 113 of the Clean Air Act allows EPA to seek
penalties of up to $25,000 per day for each violation. EPA may
in appropriate cases accept less than the statutory maximum in
settlement. The penalty assessments contained in this policy
(this appendix read with the Stationary Source Civil Penalty
Policy) reflect the statutory penalty assessment criteria found
in Section 113(e) of the Act. This policy takes into account the
size of the violator’s business, the violator’s full compliance
history, duration of the violation as established by any credible
evidence, the economic benefit of noncompliance, and the
seriousness of the violation. The other penalty assessment
factors in Section 113(e) should be taken into account in
determining an appropriate penalty (the economic impact of the
penalty on the business, good faith efforts to comply, and
payment by the violator of penalties previously assessed for the
same violation). However, reliable information on these factors
is rarely available to EPA when a penalty is proposed.
Accordingly, these factors will be considered if raised and
properly documented during settlement. RespondentS have the
burden of persuasion on these factors, which are in the nature of
affirmative defenses.
CALCULATING A PENALTY
In accordance with the general practice EPA follows when
calculating all Clean Air Act civil penalties, penalties assessed
for violations of Section 608 and the implementing regulations,
40 C.F.R. Part 82, Subpart F, will be the sum of an economic
benefit component and a gravity component.
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Economic Benefit
This component is a measure of the economic benefit gained
by the violator as a result of noncompliance with the Act. The
economic benefit gained by a person due to delayed or avoided
costs will be determined in accordance with the Stationary Source
Civil Penalty Policy using, as appropriate, the BEN computer
model. Economic benefit should be calculated from the earliest
provable date of violation until the date that the violation is
corrected.
BEN is not appropriate in addressing the sales restriction
imposed by the regulations. In this case, the economic benefit
to the person who sells class I or II substances for use as a
refrigerant is the profit on each sale. The profit will vary
depending on how much the person paid to purchase the refrigerant
and at what price the refrigerant is sold. -
Although the Stationary Source Civil Penalty Policy
indicates that the litigation team may elect not to assess an
economic benefit component in enforcement actions where the
violator’s economic benefit is less than $5,000 (see p. 7 of the
general policy), Regions should assess an economic benefit
component for the entire matter in Section 608 enforcement
actions unless it is less than $500. Given that the economic
benefit component in Section 608 enforcement actions will likely
always be small (less than $5,000), if the general rule from the
Stationary Source Civil Penalty Policy were to apply, the
economic benefit component would rarely be included in the
penalty calculation. Since EPA policy requires the removal of
the violator’s economic benefit in every enforcement action,
except for very limited circumstances, Regions should assess an
economic benefit component in all Section 608 cases where it is
greater than $500.
Gravity -
The gravity component, which is assessed in addition to
economic benefit, is the measure of the seriousness of the
violation. The gravity component should be determined by
examining three factors: the potential environmental harm
(ozone-depleting effect of the violator’s actions) resulting from
the violations, the extent of deviation from the statutory or
regulatory scheme, and the size of violator.
1. Potential Environmental Harm
The Section 608 regulations were promulgated to prevent harm
to human health and the environment by preventing the release of
substances that degrade the stratospheric ozone layer.
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Noncompliance with the requirements of the regulations,
therefore, can result in harm to human health or the environment.
Accordingly, the portion of the penalty calculationS reflecting
the potential environmental harm of the violation should be based
on two factors:
1) the risk of or actual loss of refrigerant to the
environment
2) the importance of compliance to the statutory or
regulatory scheme
Risk of or actual loss
The risk of or actual loss presented by a given violation
depends on both the likelihood of loss to the environment and the
seriousness of the loss, which would include both the amount of
refrigerant lost and its ozone depletion potential. A penalty
should reflect the probability that the violation could have
resulted in, or has resulted in, a loss of refrigerant to the
environment. A larger penalty is appropriate for class I
chemicals because of the greater ozone depletion potential than
for class II chemicals. The greater the potential, the more
ozone that may be destroyed in the stratosphere. In most cases,
an actual loss would result in higher penalties than a potential
loss.
One factor enforcement personnel should evaluate in
determining whether the potential for harm is major, moderate, or
minor in a particular situation is the risk of loss. The degree
of risk of loss represented by each category is defined as:
MAJOR: the violation poses or may pose a substantial risk of
or actual loss of refrigerant to the environment
MODERATE: the violation poses or may pose a significant risk of
or actual loss of refrigerant to the environment
MINOR: the violation poses or may pose a relatively low risk
of or actual loss of refrigerant to the environment
In determining the degree of the risk of loss of refrigerant
to the environment, Regions should consider: how much
refrigerant is normally in the system (e.g. 20,000 pounds or 2
pounds) and how likely was the activity in question to result in
a release (e.g. changing a filter or changing the compressor).
For example, changing the compressor on a system containing
20,000 pounds of CFC—12 without having removed the refrigerant
prior to repair would fall into the category of Substantial risk
of or actual loss, Changing the filter on the same system
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without having removed the refrigerant prior to repair would fall
into the category of Significant risk of or actual loss.
Changing the filter on a system containing .2 pounds of HCFC-22
without having removed the refrigerant prior to repair would fall
into the category of Relatively Low risk of or actual loss. This
assumes that filter changes’ can be accomplished quickly and with
a smaller loss of refrigerant. -
Importance of compliance to statutory or requlatory scheme
A second factor enforcement personnel should evaluate in
determining whether the potential for harm is major, moderate, or
minor in a particular situation is the importance of compliance
to the statutory or regulatory scheme. The degree of importance
of compliance to the statutory or regulatory scheme represented
by each category is defined as:
MAJOR: the actions have or may have a substantial adverse
effect on the statutory or regulatory scheme
MODERATE: the actions have or may have a significant adverse
effect on the statutory or regulatory scheme
MINOR: the actions have or may have a small adverse effect on
the statutory or regulatory scheme
In determining the importance of compliance to the statutory
or regulatory scheme, Regions should use the categorizations on
the following list unless unusual circumstances suggest the these
categories are inappropriate:
Maj or
1. Knowing Venting
2. Not using recycling/recovery equipment
3. Not repairing leaks (for equipment 50 lbs and over)
4. Accepting signed statement pursuant to § 82 • 156 (f) (2)
if the person knew or had reason to know that such a
signed statement is false
5. Failure to follow required practices in §82.156
Moderate
1. Technicians not properly trained and certified
2. Recovery/Recycling equipment not properly
maintained/does not pull specified vacuum
3. Not using equipment certified for the type of appliance
4. Manufacture or import of recycling or recovery
equipment that is not certified
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5. Altering design of certified refrigerant recycling or
recovery equipment
6. Unapproved technician training or testing programs
issuing certificates
7. Sale and distribution of refrigerants to persons who
are not certified technicians after November 1994, -
unless for resale
Minor
1. Recordieeping requirements not properly followed
2. Training certificate not available on request
3. Sale of unreclaimed refrigerant
4. Sale of refrigerant reclaimed by uncertified reclaimer
5. Release of more than 1.5% by reclaimer
6. Sale of equipment that does not have servicing aperture
or process stub
7. Failure of owner or reclaimer to certify
If, in the Region’s analysis, the two factors constituting
potential for harm result in two different designations, the more
serious designation should be used. For example, the actions
have or may have a substantial adverse effect on the statutory Or
regulatory scheme, but the violation poses or may pose a
relatively low risk of loss of refrigerant to the environment.
In this example, the potential for harm would be designated
major.
2. Extent of Deviation
The extent of deviation from Section 608 and the
implementing regulations relates to the degree to which the
violation defeats the requirement violated. In any situation, a
range of potential noncompliance with each requirement exists.
In other words, a violator may be substantially in compliance
with the provisions of a requirement or it may have totally
disregarded a requirement. In determining the extent of
deviation, the following categories should be used:
MAJOR: the violator deviates from requirements of the
regulation or statute to such an extent that most (or important
aspects) of the requirements are not met, resulting in
substantial noncompliance. For example, the owner certification
is not submitted.
MODERATE: the violator significantly deviates from the
requirements of the regulation or statute, but some of the
requirements are implemented as intended. For example, the owner
certification is submitted six months late and includes only the
name and address of the purchaser and the name and address of the
establishment where each piece of equipment is located.
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MINOR: the violator deviates somewhat from the regulation or
statutory requirements but most, if not all important aspects of
the requirements are met. For example, the owner certification
is submitted one month late and does not include the number of
service trucks used.
Each of the above factors, potential for harm and extent of
deviation from a requirement, forms one of the axes of the
penalty assessment matrix. The specific cell is chosen after
determining which category (major, moderate, minor) is
appropriate for the potential for harm factor and which category
is appropriate for the extent of deviation factor. The complete
matrix is;
Matrix 1 :
EXTENT OF DEVIATION FROM REQUIREMENT
Major
Moderate
Minor
$15,000
$12,000
$10,000
$9,000
$7,000
$4,000
$3,000
$1,500
$750
For violations by a person who has previously been the
subject of a Section 608 enforcement response (e.g. notice of
violation, warning letter, or administrative or judicial order),
the amounts in Matrix 1 should be increased by a minimum of 30%
for the first violation after an enforcement response and by a
minimum of 50% for the first violation after the second ot
subsequent enforcement responses. These percentages may be
increased at the Regions’ discretion.
Multthle Violations
EPA acknowledges that multiple violations of the same
requirement by the same company of the Section 608 requirements
may significantly increase the actual or potential environmental
harm resulting from the violations. The Agency, therefore, will
assess additional amounts against a company for each repeated
violation of the same requirement to ensure that the total
penalty assessed appropriately reflects the seriousness of the
defendant’s violations. After the base gravity component has
been determined from Matrix 1 for the violation of a particular
requirement, the multi-incident component of the settlement
penalty is calculated as follows:
POTENTIAL
FOR
HARM
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1) Using the same gravity-based designations for the
violations as were used in Matrix 1, locate the
corresponding cell in Matrix 2. If the potential for
harm of •the initial violation (e.g., venting of 20
pounds of HCFC-22) is significantly different than the
subsequent violations (e.g., venting 20 pounds of CFC-
12), Regions may use a different potential for harm
cell in Matrix 2 that the one used in Matrix 1.
2) Multiply the dollar amount selected from the
appropriate cell in Matrix 2 by the number of
violations (e.g., number of additional appliances
serviced).
Matrix 2 :
EXTENT OF DEVIATION FROM REQUIREMENT
Major
Moderate
Minor
Major
$3,000
$2,500
$2,000
Moderate
$1,800
$1,200
$800
Minor
$600
$300
$100
For violations by a person who has previously been the
subject of a Section 608 enforcement response (e.g., notice of
violation, warning letter, or administrative or judicial order),
Regions should also assess an aggravated amount from Matrix 2
(i.e., increased by the same percentage as Matrix 1). The
aggravated amount should be multiplied by the number of repeat
violations of the same requirement. If the Region believes that
this penalty amount is insufficient for deterrent effect, it may
apply Matrix 1 to all repeat violations.
3. Size of violator
EPA will scale the penalty to the size of the violator
(calculate only once per violator). Size of violator is
determined from an individual’s or a company’s net worth. In the
case of a company with more than one facility, the size of the
violator figure is determined based on the company’s entire
operation, not just the violating facility. With regard to
parent and subsidiary corporations, only the size of the entity
sued should be considered. If the Region is unable to determine
net worth, it may determine size of violator based on gross
POTENTIAL
FOR
HARM
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—9—
revenues from all-revenue sources during the prior calendar year.
If the revenue data for the previous year appears to be
unrepresentative of the general performance of the business or
the income of the individual, an average of the gross revenues
for the prior three years may be used. The gravity component
will be scaled for size of violator using a multiplier. If a -
business has a net worth of $300,000 (or gross revenues of
$1,000,000), the appropriate amount from the matrix (or matrices)
above should be multiplied by 1. For businesses with net worth
of less than or more than $300,000 (or gross revenues of less
than or more than $1,000,000), Regions should divide the net
worth by $300,000 (or the gross revenues by $1,000,000) to
determine the multiplier. Generally, the size of violator
component should not be more than 50% of the penalty (i.e., no
multiplier greater than 2 would be used). The penalty for
environmental harm/importance to the regulatory scheme multiplied
by the size, of violator factor becomes the adjusted gravity
component. If EPA is unable to obtain information about either
net worth or gross revenues, than the Region should use an
aggressive assumption for the size of violator, and adjust it
downward if proof of a lower number is presented during
negotiations.
Mitigating Penalty Amounts
The penalty amount calculated in accordance with this policy
represents the minimum penalty that EPA can accept in settlement
of cases of this nature, unless reductions from this amount are
made in accordance with the provisions of the Stationary Source
Civil Penalty Policy, pp. 15-19 (dated October 25, 1991). In
civil judicial actions, a proposed penalty reduction from the
amount calculated under this policy must be approved by the Air
Enforcement Division. If the litigation team believes that
reduction of the penalty is appropriate, the case file should
contain both a memorandum justifying the reduction and
documentation that the penalty reduction was approved. In
administrative enforcement actions, Regional Administrators or
their designees must submit penalty justification documentation
within 20 days of issuance or signing of consent agreements to
the Director of the Stationary Source Compliance Division in the
Office of Air Quality Planning and Standards and the Enforcement
Counsel for Air in the Office of Enforcement.
Examples of Penalty Calculations
Following are examples of the application of this policy.
Adjustments to the gravity component are made in accordance with
the Stationary Source Civil Penalty Policy.
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— 10 —
Example 1
Grady’s Heating and Air—conditioning Service services home
and office air conditioning systems. Hotel A, located in Miami,
Florida, is having problems with its air conditioning system. It
does not seem to be cooling properly. In October 1993, Hotel A
hires Grady’s to fix the system. One of Hotel A’s employees,
Grace, notices that the service person is not carrying recovery
or recycling equipment. She follows him to where the chiller is
located. The unit contains 230 kilograms of CFC-12. She
observes him vent the entire charge from the system. Grace
reports her observation to EPA. An inspection- by EPA of Grady’s
facility reveals that the company owns recovery equipment and has
apparently properly serviced all other appliances using the
equipment. Grady’s net worth is $330,000.
Economic Benefit Component
The economic benefit of not using
the equipment for this job and
avoided labor cost
(less than $500) $0
Gravity Component
Knowing venting $15,000
(from major-major cell)
Analysis: The violator’s actions resulted in Major potential for
harm because-there was an actual loss of a substantial
amount of CFC—12, which is relatively more ozone
depleting than HCFCs, and because a knowing release is
prohibited during servicing unless it is de minimis.
The violator’s actions were a Major deviation from the
requirement because the company did not comply at all
with the requirement that persons not knowingly release
refrigerant.
Size of violator (Business’ net worth
is approximately $330,000)
(330,000/300,000 = * 1.1
Sl6 500
Preliminary deterrence amount
Economic Benefit Component 0
Gravity Component +16 500
Minimum penalty settlement amount $16,500
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— 11 —
One year later, the Agency receives a tip that Grady’s has
hired a new certified technician who is not always using recovery
equipment when it is needed. After investigating the tip, the
Agency concludes that on three occasions, Grady’s has violated
the venting prohibition.
Economic Benefit Component
The economic benefit of not using
the equipment for this job and
avoided labor cost
(less than $500) $0
Gravity Component
Knowing venting $15,000
(from major—major cell)
aggravated by 30% (15,000 *.30)
because violation occurred after
an enforcement response + 4.500
19,500
19,500
Analysis: The violator’s actions resulted in Major potential for
harm because there was an actual loss of a substantial
amount of CFC—12, which is relatively more ozone
depleting than HCFCS, and because a knowing release is
prohibited during servicing unless it is de minimis.
The violator’s actions were a Major deviation from the
requirement because the company did not comply at all
with the requirement that persons not knowingly release
refrigerant. -
Multi—incident assessment
(# of additional violations multiplied
by major—major cell amount)
2 * $3000 6,000
aggravated by 30% (6,000 *.30) -
because violations occurred after
an enforcement response + 1.800
7,800
+ 7,800
27,300
Size of violator (Business’ net worth
is approximately $330,000)
(330,000/300,000 = * 1.1
$30 ,030
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— 12 —
Preliminary deterrence amount
Economic Benefit Component 0
Gravity Component +30,030
Minimum penalty settlement amount $30,030
Example 2
Joe, owner of Joe’s Repair, has been manufacturing
refrigerant reáovery devices for small appliances in his spare
time., Joe has not had the devices tested or certified by an
approved equipment testing organization. Since November 15,
1993, Joe has manufactured seven units and is using them at his
shop. When EPA tested the units, it determined that the
equipment could recover 50% of the refrigerant in a small
appliance. Joe’s net worth is $180,000.
Economic Benefit Component
The economic benefit of delaying
the cost of testing + cost of building
equipment that meets standards or-
purchasing approved equipment $ amount
from BEN
Gravity Component
Manufacturing uncertified equipment $7,000
(from moderate-moderate cell)
Analysis: The violator’s actions resulted in a Moderate potential
for harm because there was an actual loss of a
significant amount of refrigerant (the equipment can
only recover 50%) and because his equipment does not
meet the minimum standard for recovery.- The violator’s
actions involve a Moderate deviation from the
requirements because although Joe is using some
equipment, i.e, he is not simply venting, he did not
have his equipment tested and certified.
Multi-incident assessment
(# of additional violations multiplied
by moderate—moderate cell amount)
6 * $1200 = $7,200
$14,200
Size of violator (Business’ net worth
is approximately $180,000)
180,000/300,000 = * .6
$8,520
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I —13—
preliminary deterrence amount
Economic Benefit Component
Gravity Component + 8,520
Minimum penalty settlement amount $
Example 3
Dave, a building m nager for an office complex in Tacoma,
Washington, uses passive recovery equipment when he or his crew
(two people) work on the rooftop chiller that contains 30 pounds
of R-22. Dave decided not to purchase the appropriate (and more
expensive) recovery equipment for the building or get himself or
his crew trained and certified. During a routine inspection in
January 1994, an EPA inspector discovers that the building does
not have the required recovery equipment, nor did Dave or the
building owner ever submit a certification indicating that
certified equipment had been acquired. The inspector also
reviews the building’s repair log which shows 5 repairs when the
passive equipment was used. The building owner’s net worth is
$1,500,000.
Economic Benefit Component
The economic benefit of delaying
the purchase of equipment + cost
of operation and maintenance +
cost of certifying technicians $ amount
from BEN
Gravity Component
Servicing without using
certified equipment $7,000
(from moderate—moderate cell)
Analysis: The violator’s actions resulted in a Moderate potential
for harm because there was an actual loss of a
significant amount of refrigerant (passive equipment
can only recover a small percentage of the actual
charge) and because Dave is not using equipment that is
appropriate for the appliance serviced. The violator’s
actions involve a Moderate deviation from the
requirements because although Dave is using some
equipment, i.e , he is not simply venting, he is not
using the equipment required by the regulations for
this type of appliance.
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— 14 —
Multi-incident -
(# of additional violations multiplied
by major-moderate cell amount)
(4 * $1200) 4,800
Technicians not certified 9,000
(from moderate-major cell)
Analysis: The violator’s actions resulted in a Moderate potential
for harm because the risk of loss due to untrained
technicians improperly using recovery equipment is
significant. The violator’s actions involve a Major
deviation from the requirements because the technicians
did not comply with any of the technician certification
requirements.
Multi- incident
(# of additional violations multiplied
by moderate—moderate cell amount)
(2 * $1200) 2,400
Failure to submit certification 3.000
(from minor—major cell)
Analysis: The violator’s actions resulted in a Minor potential
for environmental harm because failure of an owner to
certify undermines the Agency’s ability to determine
compliance with the regulations. The violator’s
actions involve a Major deviation from the requirements
because the owner did not comply with any of the
certification requirements.
26, 200
Size of violator (Business’ net worth
is approximately $1,500,000)
(1,500,000/300,000 = 5)
Because generally the size of violator
should be no more than 50% of the
preliminary deterrence amount, the
multiplier is reduced to 2) * 2
$52,400
Preliminary deterrence amount
Economic Benefit Component
Gravity Component +52.400
Minimum penalty settlement amount $
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SECTION B DOCUMENT 20
Guidance on Chosing the Appropriate Forum in Clean Air
Act Stationary Source Civil Enforcement Actions
NOTE: Confidential cover memo is included in Section I
below.
10/29/91
20
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SECTION B DOCUMENT 21
Supplemental Environmental Projects in EPA Settlements
Involving Early Reductions under the Clean Air Act
11101191
21
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- .
( .)r’ t ‘ iy
-
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY r
WASHINGTON. D.C. 20460
5 fqfT
f OV 15 1991
ç ( (•
OF. V.j — ‘ . • — t. 4 I - OFFICE OF ENFORCEMENT
PEG O f L A!)MMS P.ATOR
MEMORANDUM
SUBJECT: Supplemental Environmental Projects in EPA Settlements
Involving Early Reductions under the Clean Air Act
FROM: Edward E. Reich
Acting Assistant dininistrator
TO: Addressees
This memorandum supplements the articulation of the Agency’s
policy entitled “Policy on the Use of Supplemental Enforcement
Projects in EPA Settlements”, dated February 12, 1991. This
discussion of the policy is prompted by questions that have -
arisen when noncomplying sources or EPA enforcement personnel
have proposed a supplemental environmental project (SEP) as part
of a settlement agreement in an enforcement action which, if
approved, may also qualify under the Early Reductions Program
(ERP) being implemented pursuant to the authority of Clean Air
•Act Section 112(i) (5).
The central issue here concerns the propriety of approving
an otherwise valid proposed SEP which will both reduce a civil
penalty in an enforcement action and qualify as a project for the
ERP under Clean Air Act Section 112(i)(5). That section provides
that if a source achieves an early reduction of 90% in air toxic
emissions (95% in the case of particulate air toxics), the source
will receive a six year extension of compliance with the
otherwise applicable maximum achievable control technology (MACT)
standard. The question, then, is whether a source should be
allowed to use an approved SEP both to reduce a monetary penalty
and to obtain a six year MACT extension under the ERP.
The fact that a project may ultimately have a value to the
source beyond penalty mitigation does not necessarily render a
project unacceptable as a SEP. The SEP policy thus provides that
pollution prevention projects which offer significant long-term
environmental and health benefits may qualify as SEPs even though
the project may represent a “sound business practice” and the
benefits of the project may ultimately inure to the source.
Because early MACT reductions will often be in the nature of
pollution prevention, we are comfortable treating these projects
Pruuedo Rw .ckd P r
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—2—
as SEPs where they are offered as part of a settlement of
enforcement claims. The extent of the mitigation in a given case
should be determined by application of the SEP policy.
We note in this regard that, to be appropriate for penalty
mitigation, the SEP should ordinarily be inspired, at least in
part, by an enforcement case or the prospect of an enforcement
case. Because the basic premise for mitigation is that we are
getting relief beyond that which would otherwise occur, projects
already underway entirely disconnected from the prospect of
enforcement will not ordinarily qualify for penalty mitigation.
Nonetheless, there may be supplemental value to the
government in converting a previously voluntary undertaking to
an enforceable commitment under a consent agreement where the
undertaking represents an important gain for the environment.
Recognizing the significant environmental benefits associated
with early reductions of toxic emissions, and that early
reductions efforts designed to extend MACT deadlines are not
guaranteed to achieve the desired reductions, the conversion of
an early reduction effort to an enforceable conunitnient in the
context of an enforcement settlement can be considered for
purposes of penalty mitigation. In this setting, however,
mitigation should not, in view of the independent thrust behind
the project, be based on the full value of the project.
Additionally, projects which are continued (beyond the point
at which they would otherwise be concluded) or expanded as a
result of enforcement may qualify for mitigation.
I hope that you find this of value in devising your early
reduction strategy. For further information, please contact
Joanne Berman at FTS 260—6224, or Charlie Garlow at FTS 260—1088.
Addressees:
Regional Administrators
Regions I-X
Deputy Regional Administrators
Regions I-X
Regional Counsels
Regions I—X
Air Management Division Directors
Regions I, III, and IX
Air and Waste Management Division Director
Region II
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SECTION B DOCUMENT 22
Guidance on the Timely and Appropriate (T&A)
Enforcement Response to Significant Air Pollution
Violators (Svs)
NOTE: Includes cover memorandum
02/07/92
22
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ST 4 ,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
-
WASHINGTON 0 C O46O
FEB-i 1992
MEMORAND
SUBJECT: Issuance of Guidance on the “Timely and Appropriate
Enforcement Response to Significant Air Pollution
Violators”
FROM: John S. Seitz,
Of , ice of Air Quality Planning & andards
A1jc (L L
Robert Van Heuvelen
Acting Director of Civil Enforcement
TO: Air, Pesticides and Toxics Management Division
Directors
Regions I and IV
Air and Waste Management Division Director
Region II
Air, Radiation and Toxics Division Director
Region III
Air and Radiation Division Director
Region V
Air, Pesticides and Toxics Division Director
Region VI -
Air and Toxics Division Directors
Regions VII, VIII, IX and X
Regional Counsels
Regions I - X
In June of 1989, the Agency recognized the need for making a
substantial revision to the Agency ’s Significant Violator and
Timely and Appropriate Guidances. A workgroup was formed
consisting of Branch Chiefs from Regions II, III, V, VII, and IX
and representatives from SSCD and AED to develop a revised
guidance document (Attachment I). The Penalties Section, which
establishes a new standard for Federal overfiling, was developed
by the State/Federal Penalties Workgroup chaired by the Air
Enforcement Division (AED) with representatives from STAPPA/ALAPCO
and EPA Regions and Headquarters. This document has been
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2
thoroughly reviewed and commented upon by representatives of other
Regional Offices, STA??A and ALJAPCO. A summary of these corrunents
and responses is presenced in Attachment II.
The subject guidance supersedes and consolidates previous
Clean Air Act guidance related to Significant Violators (SVs),
Timely and Appropriate (T&A), and Federally Reportable Violations
(FRV) . Specifically, this document supersedes all previous
guidances on the three subjects.
This guidance applies to all umajore (as defined by the CAAA)
stationary sources of air pollution which are in violation of a
Federally-enforceable regulation. ‘Jote that a revision of the
definition of SV was necessitated by the new emphasis placed by
the CAAA upon continuous compliance by JJ. major sources. Thus
the new SV universe includes all of the present significant
violators and other environmentally significant violators of
concern to the EPA or State agencies. . We recognize that this
may represent a substantial increase in the number of SVs over the
number that would have resulted from the previous definition of
Significant Violator, but this revision was necessary to address
significant air quality concerns of the new Act.
This guidance is being revised largely to encourage a greater
degree of team-building and cooperative resolution of Significant
Violators by all responsible agencies, to encourage agencies to
give priority attention to those violators which they believe are
most environmentally important, and to permit an increased degree
of agency flexibility in identifying and resolving SVs.
This guidance is designed to foster the development of a more
complete and accurate compliance picture, regardless of the short-
term resource imDlications . It is EPA’s position that by
portraying a more complete and accurate compliance picture,
agencies will be more likely to address the most environmentally
important violators first, and will have a better opportunity to
receive appropriate resources to complete the task.
Further, ‘this guidance has been revised to more accurately
reflect the time and resources necessary to bring major sources
into a state of continuous compliance. To that end, the timeline
for addressing a SV has been lengthened by 30 days (to 150 days),
and an optional prioritization procedure has been added to help
agencies focus their resources upon the most environmentally
“State” as used throughout this paper also refers to local
agencies where they have enforcement authority.
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3
significant SVs. A prloritlzation procedure must be used in all
instances where an agency is unable to address of its SV5 in a
“timely and appropriate” manner, and at any other times when it so
chooses. The Agency recognizes that some of the highest priorrty
SVs may require substantially more time and resources to resolve
than a routine SV. Situations where this guidance will not be met
should be noted qualitatively in the routine quarterly reports to
EPA Headquarters.
This guidance, by agreement of the parties, will be
implemented starting at the beginning of the thi d cuarter of
F? 1992. During the remainder of the first and second quarters,
each agency should compare all of the currently outstanding SVs
( including any SVs for which the agency has al ready initiated
action) with this revised guidance, On the basis of this review,
each agency should report a ‘revised SV list” to SSCD, and revise
its AFS database accordingly.
Please feel free to contact John Rasnic of the Stationary
Source Compliance Division or Michael Alushin of the Air
Enforcement Division if you have any questions or comments on this
document. John may be reached at (703) 308-8600 commercial, or
FTS 678-8600. Mike may be reached at FTS 260-2820.
Attachments
CC: S. William Becker, Executive Director
STAPPA/ALAp C0
John Calcagni, Director
Air Quality Management Division
Bruce Jordan, Director
Emission Standards Division
Bill La.xton, Director
Technical Support Division
John Rasnic, Director
Stationary Source Compliance Division
Michael Alushin, Enforcement Counsel Air
Office of Enforcement
Air Compliance Branch Chiefs
Regional Counsel Air Branch Chiefs
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ATTACHMENT I
GUIDANCE ON THE TIMELY AND APPROPRIATE (T&A) ENFORCEMENT RESPONSE
TO SIGNIFICANT AIR POLLUTION VIOLATORS (SVs)
I. SCOPE AND SU 1ARY OF GUIDANCE
A. Applicability
This guidance supersedes and consolidates previous guidance
documents related to Significant Violators (SV), Timely and
Appropriate (T&A), and Federally Reportable Violations (FRy)
Specifically, this document supersedes the following guidance
documents: (1) Definition of SV Contained in “EPA Accountability
System —— OANR Policy Guidance”, dated December 2 , 1981;
(2) “Significant Violators”, dated June 24, 1982; (3) “Definition
of Significant Violator for PM1O”, dated September 23, 1988;
(4) “Timely and Appropriate Enforcement Response Guidance”, dated
April 11, 1986; and (5) “Guidance on Federally-Reportable
Violations for Stationary Air Sources”, dated April 11, 1986.
B. Summary of Guidance
This guidance applies to all “major” (as defined by the Clean
Air Act Amendments of 1990 (CAAA)) stationary sources of air
pollution which are in violation of. a Federally-enforceable
regulation. Note that the guidance also applies to emergency
episodes or sources which construct without a valid permit.
However, the timelines for resolution of such violations are
substantially shorter than specified in this document. Similarly,
this guidance applies to violators of asbestos demolition and
renovation (D&R) regulations. However, the specific definition of
SV, prioritization criteria and timelines for resolution of such
violations will be found in a future Attachment to be incorporated
into this document.
Once a violator is detected, the agencies shall take the
following five actions:
1. The “finding” agency shall determine whether or not
the source is a Significant Violator.
2. A NOV/FOV shall be issued (preferably by the State)
to each SV within 45 days of such determination. .1
3. The EPA and State shall jointly determine which has
the initial lead in addressing the SV.
“State” as used throughout this paper also refers to local
agencies where they have enforcement authority.
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2
4. The lead agency shall routinely address each SV as it
is identified. However, if..the agency is unable or
unwilling to do so in a manner consistent with the
timelines section of this guidance, the lead agency -
shall use the following optional approach. It shall
fxrst prioritize all of the SVs as outlined in Appendix
A prior to initiating action against the highest
- priority SV. (However, to the extent the available
timeframe for using Administrative Penalty authority is
running out for a particular SV, the EPA may move
against that SV in order to avail itself of the
advantages of an administrative action.)
5. EPA shall add the newly designated sv to the SV list.
This guidance recognizes the importance of addressing the
significance of penalties when resolving SV cases. Consistent
with the recommendations from the “State/Federal Penalties
Workgroup”, EPA expects that agencies will obtain an “appropriate”
penalty (including one to offset the source’s economic gain)
whenever it resolves a SV.
C. General Information about the Guidance
1. While EPA expects that States will address
violations of air pollution regulations within their
•jurisdictions, except for non-delegated Federal
standards, by focusing on a limited group of violators
(e.g., those targeted by çhis guidance), this guidance
is not intended to detract from the importance of
addressing other violators and the right and
responsibilities of the States and EPA for doing so.
2. This guidance articulates the mutual expectations of
the respective parties of the Federal - State
partnership in the enforcement of air pollution control
requirements for stationary sources. it is fully
expected that this guidance will be modified and
expanded in future years to reflect experiences in its
implementation and the evolution of the air program
itself.
3. In accordance with the Deputy Administrator’s
memorandum of April 9, 1984 on Forging an Effective
State/Federal Enforcement Relationship, this national
guidance will serve as the framework for State specific
agreements reflecting the parties’ mutual expectations.
As that memorandum states, “the Regions will have to
accommodate differences among States, for example, where
their administrative procedures require different
tirnelines for enforcement action.”
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3
LI. HILOSOFEY OF GUIDANCE - DEFINITION OF SV
Agency Significant Violator activities shall be designed to
identify arid to expeditiously return to compliance those violating
sources which the agency believes are environmentally most
important, namely the SVS. Although this guidance requires
agencies to address all Significant Violators, EPA recognizes that
agencies may be unable to address all of them immediately. Each
agency shall return SVs to compliance in accordance with the
Timely and Appropriate section of this guidance. Octionallv the
agency may utilize a quantitative targeting and prioritization
procedure (similar to the one shown in Appendix A) whenever there
are more SVs than there are resources available to address them
consistent with the T&A section of this guidance.
A. Definition of a Sienificant Violator (SV )
Agencies shall deem a source to be a Significant Violator if
it iS:
1. A Naior” source (as defined by the CAAA, except for
asbestos D&R NESHAP), nd it violates any one or more of
the following:
a. SIP emission, monitoring or substantial
procedural requirements, regardless of pollutant
designation status.
b. NSPS emission, monitoring or substantial
procedural requirements.
C. NESHAP emission, monitoring or substantial
procedural requirements for existing NESHAP
standards and promulgated MACT requirements.
d. SIP, NSPS or NESHAP emission, procedural or
monitoring requirements violated reDeatedlv or
chronically (e.g., exceeds emission limit or gets
rio continuous monitoring data for 5% or more of the
time in a calendar quarter).
e. Any provision of a Federal Consent Decree or
Federal Administrative Order.
f. Any substantive provision of a State Judicial
Order or a State Administrative Order which was
issued for an underlying SIP violation.
g. Any requirement of Part C or Part D of Title I
•of the CAAA (e.g., new construction of a major
source, major modification of a major source).
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4
2. Any synthetic minor source, and it is in violation of
any one or more of the following:
a. Avoiding PSD while violating an emission limit
or permit condition which affects the PSD status.
b. Exceeding its permitted emission standard
above the amount that would classify the source as
a nonattainrnent area major source.
With respect to emergency episodes or sources which construct
without a valid PSD or Part D permit (where one i required), the
timelines delineated below do not pertain. In the case of
emergency episodes, the seriousness of the violation would
normally require expedited action. In the case of a source
constructed without a required PSD or Part D permit, options for
obtaining relief may be foreclosed by allowing the source to
continue to construct and, therefore, expedited action may be
essential.
III. PROCESSING OF SIGNIFICANT VIOLATORS
A. Aaencv Corru unicatjons Concerning SVs
As soon as possible (at least within one month) after an
agency initially detects a violation at a potential significant
violator, that agency shall communicate the compliance status of
that source to all other agencies which are responsible for
bringing and maintaining that source into continuous compliance
(e.g., State to EPA, or EPA to State). Such communications shall
be performed to:
1. Develop and maintain a common, agreed upon list
of SVs;
2. Determine, on a case by case basis, which agency is
best suited to take the initial lead in addressing
this SV; 2.
Determining which agency will “take the initial lead” should
be through mutual agreement between the agencies, on a case-
by-case basis. Examples of the criteria which may be used in
making the determination include, but are not limited to:
agency authority and policies, particularly with respect to
penalties; agency expertise with the specific process,
controls, or monitors; whether or not he violator’s
characteristics meet those highlighted by a national/State
“initiative’; and availability of resources. JJ the
State agency will be given the initial lead.
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3. Ensure that the SVs are returned to compliance,
consistent with the T&A section of this guidance; and
4. Foster a cooperative ceam-building” spirit among all
of the involved agencies.
B. Processing of Significant Violators
Once a violation is detected, the agencies shall take the
following five actions:
1. The “finding’ agency shall compare the source’s
characteristics with the definition of SV contained in
this guidance. To the extent that the violator fits one
or more of the elements of the definition, it shall
be designated as a “Significant Violator” and is subject
to the Timely and Appropriate section of this guidance.
2. Within forty five (45) days after designation of the
violator as a SV, a NOV or FOV shall be issued (b the’
State preferably) to each SV, regardless of which agency
has the lead.
3. The State agency and the EPA Regional Office shall
iointlv decide which agency will take the lead in
resolving the Sv.
4. As resources become available, the lead agency shall
routinely address each SV as it is identified. However,
if it is unable or unwilling to do so in a manner
consistent with the T&A section of this guidance, the
lead agency shall use the following optional approach.
It shall first prioritize a].]. of the SVs prior to
initiating action against the highest priority SV. The
agency shall use a prioritization procedure similar to
the “Table of Criteria and Environmental Weighting
FactorsN (Appendix A) to determine its priority relative
to other outstanding SVs. As resources become
available, the highest priority (at that time) SV shall
be addressed. Once the agency initiates any type of
enforcement activity related to a SV, it shall not
interrupt this activity, even if a higher ranked SV is
subsequently identified. Note that the prioritization
step is related to EPA assumption of responsibility
for a State’s SV; it is .simply a means of ensuring that
the most environmentally imoortant SVs are addressed in
a timely and appropriate manner.
5. EPA shall add the source toits SV list for agency
tracking and reporting.
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C. EPA Maintai. ns Enforcement Authority
The Clean Air Act vests responsibli.ty for enforcement of the
law in EPA. Therefore, EPA may move independently with respect to
designation of a violator as a “Significant violator’, and EPA
shall assume the lead in cases when it becomes apparent that the
State is unable or unwilling to act in accordance with this
guidance to resolve a violation in a timely and appropriate
manner.
IV. T&A TIMEL 1 INES FOR ENFORCEMENT ACTION
All SVs, except emergency episodes and sources which
construct without a valid PSD or Part D permit (where one is
required), are subject to the following timelines and penalty
requirements (see section V below). The timeline for enforcement
actions is generally the same for significant violators discovered
by EPA as for those discovered by a State, regardless of which
agency takes the initial lead. The only exception is for the
unusual situation in which EPA assumes the lead from a State. If
EPA does take over the lead, it receives up to an additional 100
days to address the SV. .
A separate (new) timeline will be established for any
additional violations discovered at an existing SV before it has
been fully resolved.
A. Day Zero
The clock starts (i.e., day zero) 30 days after the
discovering agency first receives information concerning a
Federally enforceable violation (e.g., date of inspection, stack
test or Continuous emission monitoring system report). If, during
this 30-day period, the enforcement agency decides that additional
monitoring or analysis is required to determine or confirm the
violation, the clock does not start until the earlier of the date
of receipt of such additional data or on the 90th day after the
This guidance provides EPA Regional Offices up to 100
additional days to address a SV after it assumes the lead
from a State. It should not need 150 days like it would in a
normal situation. This is based upon the assumptions that
EPA has closely tracked the State enforcement activity and
data gathering, and will be able to rely upon the fact that
the State’s NOV started the penalty clock. (As stipulated in
the CAAA of 1990, taking formal action, e.g., issuing an
NOV/FOV, shifts the burden of proof of continuous compliance
to the source, and TM starts the penalty clockH.)
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7
viola .ion was initially discovered. This additional period (up to
60 days) provides sufficient time for agency evaluation of the
data to determine if a Federally enforceable violation occurred.
B. Day 45 - Routine Issuance of NOV/FOV and EPA Trackj,rip
Unless the State agency requests that EPA issue the notice,
by Day 45 the State acencv shall routinely is ue a 1 IOV (if
required for SIP sources), or a FOV (for non SIP sources) to the
source. .4.
If the State has not taken such action, EPA shall immediately
issue an appropriate notice. . .
Any EPA-issued NOV or FOV, in a case where the State has the
lead, will indicate that EPA is still looking to the State to
resolve the matter, and further EPA action will be required only
in the absence of an acceptable, prompt resolution by the State.
The issuing office will transmit a copy of any NOVs or FOVs
it issues to other agencies .n whose jurisdiction the source is
located. If the violation clearly impacts upon the air quality of
an adjacent State, EPA will also transmit a copy of the NOV or FOV
to that State as well.
Also, EPA should add this source to its list of SVs for
Agency tracking and reporting purposes.
C. Day 90 - Possible EPA Case ActLon
If the State has the initial lead, and none of the actions
specified in E (below) have occurred by Day 90, EPA will discuss
with the State the status of the State’s actions and its
expectations. If discussions with the State suggest that the
State is close to addressing or resolving the violation or that
further deferral is otherwise appropriate, EPA will continue to
defer to enable the State to complete its action. If EPA
determines that further deferral is not justified, it will proceed
with its own action at this point.
“Routine issuance of a NOV/FOV” is required here because this
starts the penalty clock against the violator, and shifts the
burden of proof, to demonstrate continuous compliance, to the
source, (42 U.S.C.Section 7413(e) (2)).
“Routine EPA issuance of a NOV/FOV” is specified here, not as
an indication, in any way, that State agencies are incapable
of getting the job done. This requirement is placed upon EPA
Regional Offices because it has been noted that many sources
do not seriously work to resolve their violations until after
EPA puts them on formal notice starts the penalty clock.
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8
0. EPA Responsjbil ,tj,es After It Assumes the Lead
After EPA assumes the lead in a case, it will have up to an
additional 100 days to get the source into compliance, onto a -
schedule, issue a Section 113(a) administrative order (including
administrative remedies), a Section 113(d) administrative
enforcement action, or subject the source to a Section 120 action
or judicial referral. EPA will encourage continued State
participation even in situations where EPA takes over the lead.
The possibility of a joint action should be considered as an
alternative to a unilateral EPA action where feasible.
E. Day 150 (no lead change), or Day 190 (lead change )
By Day 150 (or 190 with lead change), the source shall either
be in compliance (RESOLVED), or ADDRESSED i.e., on a
legally-enforceabl and expeditious administrative or judicial
order, or be subject to a referral to the (State) attorney general
or (Federal) Department of Justice for an adjudicatory enforcement
hearing or judicial action.
F. Resolved versus Addressed
As indicated above, the term RESOLVED shall mean that the
source is returned to COMPLIANCE. Thus after the case has been
addressed as per Part E (above), EPA and the State will continue
to track the source. Note that the source remains on the SV list
(but not carried in STARS) until it is returned to compliance
(RESOLVED). Follow-up may be required in one of the following
outcomes once the case has been addressed: if a schedule is
established, the State will monitor compliance with that schedule
and report on progress in accordance with established reporting
requirements; if a referral is made, EPA will continue to monitor
the progress of the case to and after filing; and if a case
becomes unduly delayed, EPA will discuss this with the State and
may choose to initiate a parallel Federal action. No formal
timelines are being established for this stage of the enforcement
process, however.
V. PENALTIES
EPA ’s national goal is to have all federal, State and
local enforcement actions for Clean Air Act violations assess a
penalty sufficient to achieve effective deterrence for the source
subject to enforcement and for the regulated community as a whole.
EPA assesses penalties in federal Clean Air Act actions pursuant
to the Clean Air Act Stationary Source Civil Penalty Policy .
Under the EPA penalty policy, both the economic benefit of
noncompliance and a gravity component reflecting the seriousness
of the violation are calculated. This calculated penalty may then
be adjusted where appropriate for several factors including the
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9
risks involved in litigating the enforcement action and the
violators ability to pay a penalty.
All State and local agency enforcement actions should -
also assess civil penalties of sufficient magnitude to maintain a
credible deterrent effect. To accomplish this goal, State and
local enforcement agencies should calculate (where possible) and
assess the economic benefit of noncompliance. In some cases, the
risks involved in litigating the case or the violator’s inability
to pay a penalty may justify not assessing a penalty which
recaptures the full economic benefit. Legitimate litigation risks
include adverse legal precedent and evidentiary problems. The
inability of a violator to pay a penalty must be demonstrated by
the violator through financial information analyzed-by State or
local environmental enforcement personnel.
An additional amount reflecting the seriousness of the
violation should also be assessed. This is especially important
for violations which may not have a readily calculated economic
benefit but which are critical to program integrity, such as
monitoring, reporting, recordkeeping arid testing violations. In
some eases, this additional amount may be adjusted to reflect the
violator’s history of compliance with air pollution laws and
regulations, and the source’s good faith efforts to comply. All
penalty calculations in State and local enforcement actions must
be documented in the appropriate case file.
EPA will consider overfiling when State or local penalties
fail to meet these criteria, taking into account available federal
resources and enforcement priorities.
State and local enforcement agencies are strongly encouraged
to increase the statutory maximum civil penalty authorized by
State or local law to at least $10,000 per day per violation as
required by Title V of the Clean Air Act, as amended, for an
approved operating permits program. States and municipalities
with penalty authority of less than $10,000 per day per violation
will be subject to more intensive EPA oversight and potential
overfiling.
State and local enforcement agencies are also strongly
encouraged to develop a penalty policy implementing these general
penalty criteria. EPA will then review and evaluate, but not
formally approve, these penalty policies for consistency with the
general penalty criteria. A State or local enforcement agency
which adopts a sound penalty policy implementing these penalty
criteria and demonstrates a pattern of adherence to it will
receive less case-specific EPA oversight. A State or local
enforcement agency which chooses not to develop a penalty policy
or which has a penalty policy that is not consistent with these
penalty criteria will continue to be subject to significantly more
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intensive case-specific EPA review of State and local penalties
and to potential overfiling.
State and local enforcement agencies are also encouragedto
use the BEN Computer model developed by EPA to calculate the
economic benefit of noncompliance. State and local enforcement
agencies which use the BEN computer model or a similar model to
calculate economic benefit will receive less intensive EPA case-
specific oversight.
VI. CONSULTATION AND DATA TRANSFER
A. Informal Consultation
EPA and States should conduct frequent (at least mon.thly)
informal consultations to discuss compliance efforts. During
these discussions, information exchange relative to obtaining
compliance and penalti’es should occur. This exchange should
include at least the following items:
1. The State and EPA would each identify any newly-found
violators subject to this guidance.
2. The State and EPA would each identify sources
notified of noncompliance during the month.
3. The State and EPA would each identify violators where
action had been taken.
4. The State would discuss the status of other
enforcement actions pending or in progress, if requested
by EPA.
5. EPA would identify sources for which it had completed
action and provide the status for other sources where
action is pending or in progress.
6. EPA would identify any sources it had found in
violation arid confer with the State as required above.
B. Updating EPAs Compliance Databases
The AIRS Facility (and/or NARS, as appropriate) databases
will be updated by EPA and/or the State on a monthly basis to
reflect:
1. Compliance status changes for newly-identified
violators which are in violation on the last day of the
month prior to the consultation, and which were (or are
expected to be) in that status for 7 days or more.
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2. Sources notified of noncompliance.
3. Sources with completed enforcement actions, including
any schedules nd incremental dates for returning to-
compliance. -
4. Sources found to be in compliance with final limits.
C. Provide Insoection Results
Inspection results other than those affected by the above
will be provided in accordance with current practices and EPA
accountability system requirements.
D. Sharing of Data ’
EPA and the State will share inspection results and other
monitoring reports (e.g., stack tests, CEMS) for use in
enforcement proceedings to the extent practicable. State
personnel should be encouraged to provide evidence, including
testimony, for Federal proceedings. Federal personnel should
similarly support State enforcement proceedings.
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APPENDIX A
TABLE OF CRITERIA AND ENVIRONMENTAL WEIGHTING FACTORS *
Criteria Environmental Weight
Factor/yip.
1) At least one unit at a source is (or has been) in 10
violation of a SIP, NSPS, or NESHAPS emission, per
monitoring, or procedural requirement, except for unit
asbestos D&R NESHAP
2) Violation of permitting requirements (PSD, 10
Part D, or synthetic minor)
3) Violation of a Federal Consent Decree or Adminjs- 10
trative Order, or of State Order w/emisslon viol.
4) Emission violation (1 time based on reference method; 10
or >5% of quarter based on °indicator” CENS; or
>5% no data; except for opacity, use weight of 5) 5
Add : a) Amount of excess emission (known)
o over 250 TPY 10
o 100 - 250 TPY 6-
o 25-lOOTpy 4
o 10-25Tpy 2
b) If excess emissions are known, use
size of emission point:
o over 250 TPY 10
o 100 -250 TPY 6
o 25-lOOTpy 4
o 10-25Tpy 2
C) Source is in a non-attainment area 5
d) Source is a repeat violator:
o same emission unit or cause 7
o unrelated repeat violator 3
e) Hazardous emissions under Title III 10
f) Multi-media violator 10
g) Source is part of national initiative 5
5) Source is in violation of minor procedural requirmt. (-)5
6) ** Problem source (as determined by State/EPA) 1 to 10
7) Emiss. viol’ts which occur ona 1-time or infrequent (-)50%
basis, AND <10 lbs/day or <2% of allowable emiss’s of total
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2
APPENDIX A (continued)
* Regardless of a SV’s relative priority, if the agency desires
to use a preferred remedy (e.g., Federal Adnnistrative
Penalty authority with its one year ‘look-back” provision),
and the time to do so is running out, the agency may move it
up to the “head of the line”.
A “problem source” may include such actions as a source which
fails to test, report, or install a monitoring system at all ,
or one which is totally uncooperative.
Examoles based on Table (key oarameters are underlined) :
1) A major SIP source, which has 300 TPY excess emissions ,
is a reoeat emission SO, and monitoring violator, has been in
violation for 5 months , and is violating a Federal Consent
Decree . Its total environmental weighting factor is -
calculated as follows:
((#l=lO)+ [ # 3 =lQ]+ [ #4=1O+1O]+ [ #4a=1O]=50 total
2) A NSPS source, 100 TPY in ootential emissions . fails to
test within the timeline ( 1 month late ) established by NSPS,
and it is a first time violator. Its total environmental
weighting factor is calculated as follows:
[ (#l=l0]- [ *5=5]=5 total
3) An asbestos manufacturing source reoeatedlv fails to
notify an agency about its plans to conduct compliance tests,
its latest test reoort is totally unaccettable , and the
agency considers the source to be unc000erative . Its total
environmental weighting factor is calculated as follows:
[ #l=l0]÷ [ #4=1O]÷(#4d=7]+ [ *6=7]=34 total
Clearly, the first and third violators are the worst SVS, and
the first one should be ranked the highest S , and the second one
should be ranked lowest. Thus, assuming that these were the only
three SVs for which no follow-up action had been started, the SIP
source (in the first example) should be the next SV which the
agency should initiate action against.
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ATTACHMENT II
SUNMARY AND RESPONSE TO COMXENTS
COMPLEXITY & BURDEN ISSUES :
o Cost/benefit of the ranking procedure is no favorable; e.g.,
too complex, subject to duplication and subject to confusion
among the different agencies using it (STAPPA/ALAPCO)
Resoonse :
- It is important to have “joint” decisions throughout the
process (e.g., promotion of dialogue and team-building,
and case-by-case determination of which agency takes the
lead makes the most effective use of ag ncy resources,
expertise and national priorities).
- Prioritjzation and ranking activity was simplified
(e.g., agencies which are able to address all SVs
consistent with the T&A requirements, can opt out of
using any prioritjzation procedure).
o Virtually J.j violations will be rated as major ” and thus
subject to the guidance (STAPPA/ALAPCO).
Response :
- The question suggests a little confusion about the
language contained in the document. Whether a source is
major” or not is established by the CAAA of 1990.
Therefore, by definition, JJ. SI/s must first be a
“majors source. Subjecting all major” sources with
violations to this guidance is consistent with the
mandate expressed in the CAAA of 1990. All other
violators will be addressed, as they have in the past,
in the most expeditious manner possible.
- SSCD, with assistance from the Regional Offices and
STAPPA/ALAPCO, has taken the impact of this revision
upon agencies into account as we revised it. It was our
goal to establish criteria in-a manner which fosters
agency reporting of the complete and accurate picture of
the compliance status of major stationary sources, and
which forms a quantitative basis for agency resource
consideration.
o Development of mutually agreeable definitions of SVS obviates
the need for the weighting scheme; retain the present T&A
G iidance with minor adjustments (STAPPA/ALAPCQ).
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2
Resoonse :
- The use of a lIfixedn nationally consistent definition
for SVs although expanded to include a larger number of
sources and additional emphasis on continuous compliance
(both consistent with the CAAA of 1990), has been
retained to a large degree in this revision.
TABLE, EXAMPLES & SV THRESHOLD VALUE ISSUES :
o Clarify that agencies may use either the attached ‘Table” (or
a “comparable one) to prioritize and rank their SVs
(Regional Offices).
Response ;
- SSCD, after much consideration, agreed to permit this
level of flexibility. However, it is incumbent upon all
agencies to take steps to ensure that
environmentally sionificant SVs are addressed in a
timely and appropriate manner.
o Making miscellaneous uadJustmentsu (e.g., additional
categories, different weights, changing actual excess
emissions to estimated emission rates, possibly providing
factors for violators in non-attainment areas) to the Table
of Criteria and the SV designation threshold are necessary
(Regional Offices)
Response :
- The revised text addresses the flexibility of using a
comparable table.
o Clarify and expand the “Examples” in the Attachment (Regional
Offices)
Resoonse :
- SSCD revised the text.
ENFORCEMENT ISSUES :
o Specify what a “Violation” is, e.g., similar to that on pages
- 3 and 4 of the earlier “Federally Reportable” document
(Regional Offices).
Resoonse :
- SSCD considered this possibility and decided the text
was sufficiently clear.
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3
o Insufficien emphasis was placed upon penalties required by
agencies to try to offset economic gain resulting from
delayed compliance (Air Enforcement Division of EPA).
Resoonse :
- This revision incorporated the specific recommendations
made by the “State/Federal Penalties Workgroup”.
o Insufficient emphasis was placed upon the advisability and
desirability of issuing a NOV/FOv at the earliest oossible
date (Regional Offices)
Response :
- SSCD revised the text to reflect the relevant provisions
contained in the CAAA of 1990. specifically the shifting’
of the burden of proof from an agency to the violating
source.
o Emphasize the importance of properly protecting case-relat d
and other confidential information (Regional Offices).
Response :
This is an important point.’ However, it is not germane
to the subject of this document.
o Clarify how one should address sources which drift into and
out of violation during the month. (Regional Offices).
Response :
- In addition to the line item in the Table (#5 - ‘chronic
violator’), the text was revised to use language similar
to that contained in the old ‘Federally Reportable
Guidance.’ -
o Clarify that once an agency initiates any action on a SV, it
should com 1ete it regardless if a higher ranked SV is
subsequently identified before the first one is resolved
(Regional Offices).
Response :
- SSCD revised the text accordingly.
o Emphasis upon “consultation” implies that EPA does not retain
the ultimate responsibility and authority to make decisions
relevant to federal enforcement (Regional Offices).
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4
ResDonse :
- SSCD revised the text to reflect the fact that EPA
retains the ultimate responsibility to insure compliance
with federally enforceable requirements (e.g.,
determining that a violator is a SV).
o Clarify the difference between ‘addressed” and resolved” as
it pertains to sources which come into compliance before they
are addressed (Regional Offices).
Response :
- SSCD revised the text.
o Clarify which violations require a penalty as part of its
resolution, e.g., PSVs versus SVs only (Regional Offices).
Response :
- SSCD revised the text. (Note, the PSV concept
(potentially significant violators) was dropped.)
COMPATIBILITY WITH OTHER GUIDANCES ISSUES :
o The “ranking factors” listed in this document should be
totally comoarable with those delineated in the CMS (Regional
Offices)
Res onse :
- Conceptually perhaps they should be, and over time the
two sets of factors will likely converge. The final
“example” table contains the concensus of all
commenters.
o Clarify the relationship between this guidance and field
citations (Regional Offices).
Response :
- Other than being one form of administrative penalties,
there is no direct relationship. However, as such it
could be one of the ways SVS are resolved in the future.
GENERAL CLARIFICATION ISSUES :
o Clarify how many days EPA has to address an SV after it takes
it over from a State (Regional Offices).
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5
Res onse :
-. SSCD revised the text as necessary.
o Delineate which source categories are designated “major” in
this guidance. How this relates tO: (1) “affected
facilities” in Title IV; and (2) Title III area sources?
(Regional Offices)
Response :
- All sources affected by Title IV and umajorn sources
under Title III are considered “major” for purposes of
this guidance. “Area sOurces” under Title III are not
major sources by. definition in the CAAA.
o Adequately support this guidance’s implementation, including:
(1) scheduling Regional workshops performed by SSCD; (2)
designation of Regional and HQ “SV/T&A Coordinators’; and
(3) scheduling periodic teleconferences (Regional Offices)
Response :
- SSCD recognizes the importance of providing sufficient
and timely support when we “launch’ this revised
guidance, we are contemplating how to most effectively
do this. During the last workgroup discussion, many
good suggestions were made. SSCD intends to implement
many of these.
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SECTION B DOCUMENT 23
New Criminal Enforcement Responsibilities Under 1990
Clean Air Act Amendments
04/19/93
23
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, sZ%
UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY (Ji 0
WASHINGTON, D.C. 20460 (2,1.
OFFICE OF ENFORCEMENT
9 ; 9
MORAND M
SUBJECT: New Criminal Enforcement Responsibilities Under 1990
C1e .n Air Act Amendments
FR 1: Kathleen A. Hughes, Acting Director
Criminal Enforcement Counsel Divisio
TO: Regional Criminal Enforcement Counsels, I - X
Dale Boll, Director, CID
I. INTRODUCT ION
The 1990 Clean Air Act Amendments (Pub.L. 101-549, Noveinber
15, 1990, 104 Stat. 2399), which became effective on November 15,
1990, will have a significant impact upon the number and types of
Clean Air Act criminal investigations. The primary focus of
criminal cases under the prior CAA was upon violations of the
National, Emission Standards for Hazardous Air Pollutants (NESHAP)
regulations governing asbestos removal procedures.
Regulations pursuant to the 1990 Clean Air Act Amendments
(the 1990 Act) are now final as to certain aspects of this
legislation. Others will likely be emerging from the regulatory
pipeline in an accelerated pace. CAA criminal cases will
inevitably extend beyond the present realm of asbestos violations
and involve groundbreaking and challenging investigations and
prosecutions of new statutory provisions and their progeny
regulations. The CAA was, and indisputably remains, the most
complex of the environmental statutes administered by the Agency.
A detailed’ünderstanding of the CAA regulatory schemes may only
be required’,in the context of specific investigations.
Nonetheless .it is imperative that those involved in the criminal
enforcement program be conceptually aware of these regulatory
developments in order to identify new areas appropriate for
criminal enforcement. Networking with air program personnel is
essential to facilitate expanded criminal enforcement in this
area.
II. ENHANCED CAA CRIMINAL ENFORCEMENT PROVISIONS
The enhanced criminal enforcement provisions of the 1990
Act are summarized below. (The United States Code and CAA cite
Printed on Recycled Paper
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f or the enforcement provision of the CAA is CAA § 113, 42 U.s.c.
§ 7413 et seq . A copy of this section is attached. Subsequent
CAP , cites are found in the end notes.)
(1) The 1990 A t added a felony, punishable by up to five-
years of intprisonntent, for various knowing violations,
including violations of NESHAP standards, state
implementation plans, new source performance standards,
stratospheric ozoneprotection, and acid rain control
requirements, emergency orders, and any rule or permit
issued pursuant to the CAA.’
(2) The 1990 Act added a felony, punishable by up to two
years imprisonment, for knowing falsification of
records or failure to report, or tampering with
monitoring equipment. 2 The legislative history
indicates that this provision is not intended to
penalize “inadvertent errors”. For criminal sanctions
to apply, a source owner or operator must be on notice
of the record-keeping, information, or monitoring
requirements in question, 1990 Cong. & Admin. News
3867.
(3) The 1990 Act added a felony punishable by up to fifteen
years of imprisonment for the knowing release of
certain hazardous air pollutants that knowingly
endangers a person. 3
(4) The 1990 Act added a misdemeanor, punishable by up to
one year of imprisonment, for the negligent release
into the ambient air of either CAA enumerated hazardous
air pollutants or hazardous substances designated
pursuant to Section 302 of the Emergency Planning and
Community Right-To-Know Act (42 U.S.C. § 11002) that
negligently endangers a person. 4
(5) The 1990 Act added a misdemeanor, punishable by up to
one year imprisonment, for knowingly failing to pay a
fee owed the U.S. under the CAA. 5
(6) Lastly, the 1990 Act added a citizen award provision
for information leading to a. criminal conviction, a
judicial or administrative civil penalty. 6
III. THE ELEMENT OF CRIMINAL INTENT
Some nuances of these 1990 Act provisions warrant special
mention, raising issues which counsel and Special Agents need to
consider. First, new language concerning the definition of
“operator” affects criminal liability. 7 Owners and operators of
stationary sources are assigned specific compliance
responsibilities with regard to certain CAA provisions, such as
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hazardous air pollutants and new stationary source standards of
performance. Congress wanted criminal responsibility of an
owner or operator to be limited to senior management and
corporate officers, except in instances where the criminal
violation was of a “knowing and willful” magnitude of intent.
Accordingly, the term “operator” was clarified to explicitly
include senior management personnel and corporate officers.
Excluded as “operators”, except in those instances of “willful
and knowing” violations, are lesser employees who are:
(1) stationary engineers or technicians responsible for
the operation, maintenance, repair, or monitoring of
equipment and facilities, and
(2) who often have supervisory and training duties, but who
are not senior management or a corporate officer.
New language in CAA § 113(h), 42 U.S.C. § 7413(h), qualifies
the general CAA definition of “person” for purposes of criminal
enforcement. 9 First, the section provides that only for purposes
of the CAA negligent endangerment offense, a person cannot be
convicted for a violation if:
(1) it occurred as part of the employee’s (undefined)
“normal activities” as an employee; and
(2) the employee was not a part of senior management or a
corporate officer.
For purposes of all other CAA criminal subsections, an
employee cannot be convicted unless the government can prove;
(1) the criminal violation was either conurtitted “knowingly
and willfully”; Q
(2) if the violation was conunitted only “knowingly,” the
defendant can avoid conviction if ‘it is established:
(a) that the violation occurred as part of his “normal
activities”; and
(b) that he was “acting under orders from the
employer.
The statutory history of the 1990 CA addressed the matter
of knowledge derived from self-audits. House Conference Report
No. 101-952 recon tended that the CAA criminal penalties not be
applied in a situation where a person, acting in good faith,
promptly reports the results of an audit and promptly acts to
correct any deviation. It stated, “Knowledge gained by an
individual solely in conducting an audit or while attempting to
correct any deficiencies identified in the audit or the audit
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report itself should not ordinarily form the basis of the intent
which results in criminal penalties.” 1990 Cong. & Admin. News
3879.
IV. STATUS OF IMPLEMENTING THE 1990 CAA AMENDMENTS
It is more effective in understanding the criminal
enforcement aspects of the 1990 Act to focus on the amendments in
the context of the pertinent subject matters as addressed by the
CAA:
Subchapter I, Part A, which concerns air quality and
emission limitations;
Subchapter II, which governs mobile sources;
Subchapter IV, which concerns acid rain;
Subchapter V, which sets out the permit program; and
Subchapter VI, which concerns stratospheric ozone
protection. 11
A. SUBCHAPTER I: Air Ouality Standards
The.CAA, Subchapter, Part A (Title I), entitled: “Air Quality
and Emission Limitations” warrants special criminal enforcement
attention.’ 2 There are three important subject covered here:
state implementation plans, standards of performance for
stationary sources, and hazardous air pollutants.
1. State Implementation Plans The 1990 Act allows EPA to
define the boundaries of “nonattainment” areas and classify them
according to the severity of the geographical area’s air
pollution problems. States must esta.blish state implementation
programs (SIPs) toward the attainment of National mbient Air
Quality Standards (NAAQS) for the state’s nonattainment areas.
Note that the CAA provides that any SIP requirement in effect as
of November 15, 1990 remains in effect until revised.’ 3 Congress
indicated an awareness that the 30-day notice of SIP violation
requirement should be inapplicable to criminal actions since such
notice would provide an opportunity for violators to frustrate
the purposes of the Act, for example, by leaving the jurisdiction
or by destroying evidence, 1990 Cong. & Adinin. News 3747.
Nonetheless, the notice language remained in the conference
committee bill and ultimately in the CAA as enacted.’ 4
2. Standards for Stationary Sources : The most inm ediate
impact of the 1990 Act as to criminal enforcement in this area is
the five-year felony penalty provided for violations of new
stationary source standards of performance where formerly only
misdemeanor sanctions were available’ 5
Although EPA may delegate authority to the states to enforce
performance standards, the EPA retains concurrent authority to
enforce these standards.’ 6 Regulations governing specific
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stationary sources (over 70 different types of economic activity
have standards of performance), are set ou t at 40 C.F.R. Part 60.
Congress enacted a new provision mandating that performance
standards be set for solid waste incinerators and that such
standards be incorp6rated into their operating permits.’ 7 Of
equal importance is the two-year felony now available for knowing
falsification of required compliance monitoring data and
tampering with monitoring equipment since self-reporting will be
a large part of CAA compliance monitoring.’ 8
. Hazardous Air Pollutants : Title III of the 1990 Act
specifically named 189 hazardous air pollutants (“HAPs”), which
will be the su.bject of national emission standards (NESHAPs) .j
Extensive regulations dealing with source categories of these
pollutants are in the process of being issued and finalized. 20
Note that although states may seek delegation of authority to
enforce these type of federal requirements, EPA also retains
clear authority to federally enforce HAP emission standards. 21
States may implement their own programs, but they must be at
least as stringent as federal requirements.
The objective of the HAP regulations is to identify maximum
achievab].e control technology (MACT) through a process of
regulatory development involving the regulated and environmental
community and the Agency. If EPA judges that it is not feasible
to prescribe or enforce an emission standard f or a designated
HAP, EPA may require, akin to the asbestos work practice
regulations, a work practice standard involving a specified
design, equipment, work practice, or operational standard or some
combination thereof. This further clarifies the government’s
basis to enforce work practice standards in lieu of emissions
standards, which had been an issue of contention in asbestos
NESHAP enforcement cases.
B. SUBCHAPTER II: Motor Vehicles and Fuels
CAA Subchapter II (Title II), titled, “Emission Standards
For Moving Vehicles,” deals with motor vehicles (mobile sources)
and fuels. . Although the focus is primarily on motor vehicles,
EPA is authorized to also issue regulations governing emissions
from nonroad engines and vehicles such as chain saws, dirt
motorcycles;-- and lawn mowers.
The 1990 Act continued the exclusion of Subchapter II
violations from criminal penalties. However, related
violations may warrant criminal enforcement consideration. For
instance, the 1990 Act set stringent requirements for the sulphur
content of motor vehicle diesel fuels and the benzene content of
motor vehicle gasoline. Refiners and blenders will be required
to certify that their fuels meet such standards. Previously,
falsifications of such certifications were prosecuted as
violations of the general, false statement criminal provision of
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Title 18.27 Now, they can be prosecuted on the basis of the
enhanced (a two year felony versus the old maximum of six months
imprisonment) false certification provision, which applies to all
CAA reporting and recordkeeping requirements.
Automobile dealer or repair shop tampering with automotive
air emission systems still can not be prosecuted criminally under
the CAA since the mobile source regulations impose various
compliance certification responsibilities only on automobile
manufacturers and not on the dealers. But note that dealers
and repair shops can be prosecuted, as discussed below, for
failing to comply with the new CFC air conditioning regulations.
C. SUBCHAPTER IV: Acid Rain
The 1990 Act added a new Subchapter IV (Title IV) concerning
the acid rain problem titled, “Acid Deposition Control.” 3°
Through a system of allowances for the sulfur dioxide emissions
from utilities, as well as requirements intended to reduce
nitrous oxide emissions from boilers, the 1990 Act was designed
to rectify the acid rain problem. n eventual overall national
limit (8.90 million tons) for the emission of sulfur dioxide is
set by statute. 31
Each utility is issued an annual allotment of allowances and
has the option of either lowering their sulphur emissions for
covered plants to meet their limit or of purchasing additional
“allowances” (one allowance equals authority to emit one ton of
sulfur dioxide) to cover emissions in excess of what is allotted
for the plant. Starting in 1995, 261 power plant units will be
covered and by the year 2000, smaller power plants, and other
sources will be covered. Not holding allowances for any excess
will cost a source $2,000 per ton of excess emission. If a
utility emits lower emissions than it is allotted, it can either
bank the difference between its allotment and its actual
emissions in order to cover future excesses or can sell these
earned allowances on the open market. The authority to auction
allowances, starting in March 1993, has been officially delegated
by EPA to the chicago Board of Trade. The final acid deposition
control regulations were published in the Federal Register on
January 11, 1993.
The financial incentive for falsification of emission and
other data under this new scheme is clearly heightened. Such
fraudulent violations are within the CAA felony prohibition
against knowingly making any false material statement or omitting
material information from any CAA document required by EPA or a
state to be maintained or filed. 32
D. SUBCHAPTER V: Cperptin Permits
A major change in the CAA were the 1990 amendments adding
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the new CAA Subchapter V (Title V), “Permits,” which established
an operating permits pro raxn to incorporate all applicable CAA
regulatory requirements. The C1 A’s permitting program will bs
similar to the CWA’s NPDES permitting program, which has been the
source of many good crixuinal cases. A CAA permit may incorporate
HAP emission, as well as acid rain and NAAQS SIP requirements.
Air pollution sources subject to the program must obtain five-
year permits from the state permitting authority and will have to
provide compliance certifications signed by “a responsible
off icial”. 34 The certifications will state that “based on
information and belief formed after reasonable inquiry, the
statements and information in the document are true, accurate,
and complete. ”
Enforcement focus will shift from the SIPs to violations of
specific permit conditions by permit holders since the permit
will collect in one document all of a source’s obligations under
the CAA. The final regulations prescribing the structure and
procedures for delegated state permit programs have been
finalized. They were published in the Federal Register on July
21, 1992 and will be codified in 40 CFR Part 70. The states are
now in the process of establishing permit programs. They have
until November 15, 1993 to submit their programs for EPA approval
and EPA is allowed a one year review period. When these
programs become operational, more extensive guidance on their
enforcement implications will be issued.
As noted above, a 30-day notice of violation to the state
and person is a prerequisite for criminal enforcement of a
violation of a SIP. However, since such notice is not required
for criminal enforcement of a permit condition, a violation of a
SIP requirement can be criminally prosecuted without such notice
if it is incorporated as a condition of the permit. In contrast,
a notice of a violation is required to bring an administrative or
civil enforcement action for a violation any permit condition.
E. SUBCHAPTER VI: Stratospheric Ozone Protection
The last major section of the CAA added in 1990 was designed
to deal with remedying the depletion of the stratospheric ozone
layer. The objective of this Subchapter VI (Title VI) is to
phase out use and production of ozone depleting substances,
including chiorofluorocarbons (CFCs) and any other substances
that the Administrator finds causes significant harmful effects
on the stratospheric ozone The CFC regulatory program
will be akin to the TSCA regulatory program to eliminate PCB5
from the envirormient. There are CFC labeling regulations
(published in the Federal Register on February 11, 1993),
regulations for recycling motor vehicle CFCs (issued on July 14,
1992), and for residential and cotr iercial appliances (to be
issued by the end of April 1993), and safe disposal regulations
are in the process of being finalized by the Agency.
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CA § 608, 42 U.S.C. § 7671g, governs’the release of
regulated ref rigerants in the course of maintenance, ser.rice,
repair, or disposal of appliances or industrial process
refrigeration. Propbsed regulations implementing Section 608
were published on December 10, 1992. The first step of what is
designated the National Recycling and Emission Reduction Program
is the statutory prohibition, as of July 1, 1992, of the knowing
venting of ozone depleting ref rigerants from appliances and
industrial process refrigeration systems into the environment. 40
The Interim Enforcement Guidance on this prohibition, which is
attached, sets out factors in identifying possible knowing
violations of CAA Section 608 (C). Although this section
prohibits the disposal of CFCs “in a rn nner which permits such
substance to enter the environment,” the disposal of
refrigerators or other appliances containing ozone depleting
refrigerants will not be the subject of enforcement actions until
appropriate regulations are issued.
Motor vehicle air conditioners are addressed by a separate
CAA provision. 4 ’ As part Of this statutory scheme, regulations
have been issued governing the servicing of automotive air
conditioners. 42 The object of the regulations is to prevent the
release to the environment of refrigerants used in motor vehicle
air conditioners (MVACs) that contain CFCs in either a liquid or
gaseous state. Accordingly, the regulations require all persons
who are paid to perform service (“do-it-yourself” repairs are
excluded) on MVACS to use EPA approved recovery equipment so that
the refrigerant can be contained and can be sent off-site for
reclamation or recycled on-site. Technicians working on MVACs
are required to be trained and certified as to the proper use of
approved refrigerant recycling equipment. Each MVAC facility
will have to certify to EPA that their training and equipment
meets applicable regulatory standards.
cc: Earl E. Devaney, Director, OCE
OB Air Enforcement Division Attorneys
John B. Rasnic, Director, OAR
Stationary Source Compliance Division
E DNOTES
1. CAA § 113(c) (1), 42 U.S.C. § 7413 (c)(1).
2. CAA § 113(c) (2), 42 U.S.C. § 7413(c) (2).
3. CAA § 113(c) (5), 42 U.S.C. § 7413(c) (5).
4. CAA § 113(c) (4), 42 U.S.C. § 7413(c) (4).
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5. CAA § 113(c) (3), 42 U.S.C. § 7413 (C) (3). See also CAA
§ 113(c) (1), 42 U.S.C. § 7413(c) (1), ‘hich makes it a felony
offense to knowingly violate a requirement for the payment of
any fee owed the U.S. under the CAA.
6. CAA. § 113(f), 42 U.S.C. § 7413(f).
7. CAA § 113(h), 42 U.S.C. § 7413(h).
8. CAA § 112, 42 U.s.c. § 7412, which includes NESHAPS and CAA
§ 111, 42 U.S.C. § 7411, which deals with stationary sources.
9. CAA, § 302(e), 42 U.S.C. § 7602(e).
10. In other words, if the government can prove the violation
was knowing and willful, it does not have to negate either
of these two elements. But if proof shows only a knowing -
violation, then a factual issue arises involving whether the
conmission of the crime was pursuant to company orders and
whether such environmental misconduct was part of the
defendant’s normal work routine.
It has not been unconmion for defendants to offer such
arguments to justify envjronmental wrongdoing. The 1990 Act
represents an instance where Congress gave statutory
recognition to such issues. The practical effect’of this
new language will have to await judicial interpretation
since the terms “knowing” and “knowing and willful” are not
defined in the United States criminal code, but are
distinguished through extensive case law.
The terms “knowing and willful” have been interpreted in the
context of other federal statutes (for instance, the
odometer tampering statute, 15 U.S.C. § 1990(a)) and the
Presidential threat statute, 18 U.S.C. § 871, as meaning an
intentional violation of a known legal duty, United States
v. Studna , 713 F.2d 416, 418 (8th Cir. 1983). The Supreme
Court interpreted the term “willfully” alone as requiring
the government to prove actual knowledge of the pertinent
legal duty and to negate a defendant’s claim of a good faith
belief that he was not violating the law due to a
misunderstanding of its requirements,
Cheek v. United States , 498 U.S. —, 112 L.Ed.2d 617, 111
S.Ct. 604 (1991). Although the holding was limited to
criminal tax violations because the proliferation of tax law
and regulations has made it difficult for the average
citizen to know and comprehend the extent and duties imposed
by tax laws, a similar argument might be made with reference
to environmental statutes and regulations.
11. Since agents and attorneys most often rely on the CAA as
codified in the United States Code, in particular as
published by the West Publishing Company, the sections of
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- 10 -
the CAA-are referred to by the code headings, e.g. , the CAA
is Chapter 85 of the code and the different subject areas
are addressed in subchapters, rather than the statutory
headings, e.g., 1 titles.
12. CAA §5 101 - 131, 42 U.S.C. §5 7401 - 7431.
13. CAA § 110(n), 42 U.S.C. § 7410(n).
14. CAP § 113 Cc) (1), 42 U.S.C. § 7413 (c) (1).
15. CAA § 111, 42 U.S.C. § 7411.
16. CAP § 111(c), 42 U.S.C. § 7411(c).
17. CA? § 129, 42 U.S.C. § 7429.
18. CA § 113(c) (2), 42 U.S.C. § 7413(c) (2).
19. CAA § 112(b), 42 U.S.C. § 7412(b).
20. For example one type of HAP (Perchorethylene) generated by
one source category (dry cleaning facilities) are the
subject of this type of regulation. Other forthcoming
regulations have a broader focus such as emissions of
several hazardous air pollutants by the entire chemical
manufacturing industry, which will added to Part 63 of 40
C.F.R.
21. CAA § 112(1) (1), 42 U.S.C. § 7412(1) (1) provides delegated
state enforcement authority. CAA § 112 (1) (7), 42
U.S.C. § 1 12(1) (7) provides concurrent federal
enforcement authority.
22. CAA. § 112(h) (1), 42 U.S.C. § 7412(h) (1).
23. CAA §5 202 - 250, 42 U.S.C. §5 7521 - 7590.
24. CAA. § 213, 42 U.S.C. § 7547.
25. CAA § 202, 42 U.S.C. § 7521, is not among the sections
enumerat d as being covered by the CAA criminal provision,
CAà § 113(c)(1), 42 U.S.C. § 7413(c) (1).
26. CAA § 211(i),(k), 42 U.S.C. § 7545(i),(k).
27. 18 U.S.C. § 1001.
28. CAA § 113(c) (2), 42 U.S.C. § 7413(c) (2).
29. 40 C.F.R. § 86 et seq .
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- 11 -
30. CAA § 401 - 416, 42 U.S.C. § 7651 -‘ 7651o
31. CAA § 403(a) (1), 42 U.S.C. § 7651b(1)
32. CAA § 113(c) (2), 42 U.S.C. § 7413 Cc) (2).
33. CAA § 50]. - 507, 42 u.s.c. § 7661 - 7661f.
34. 40 C.F.R. § 70.6(c) (1).
35. 40 C.F.R. § 70.5(d).
36. States agencies administering EPA approved CAA permit
programs are required to have adequate enforcement
authority. Acceptable state criminal penalties can be as
little as a maximum $10,000 fine, however, with no
imprisonment, 40 C.F.R. § 70.11.
37. CAA § 113(a) (1), 42 U.S.C. § 7413(a) (1).
38. CAA § 601 - 618, 42 U.S.C. § 7671 -7671q.
39. Pursuant to CAA § 602(c), 42 U.S.C. § 7671a(c), the EPA
Administrator on January 18, 1993 added methyl bromide to the
list of Class I ozone-depleting chemicals. This chemical
substance is the principal ingredient of a extensively used
pesticide. Its production and importation will be phased out
by the year 2000. Indicative of the multi-media approach to
environmental protection, the use of this pesticide will be
phased out under the CAA rather than canceling its
registration because of its adverse effects on the environment
under FIFRA, § 6(b), 7 U.S.C. § 136d(b).
40. CAA § 608(c), 42 U.S.C. § 7671g(c).
41. CAA § 609, 42 U.S.C. § 7671h.
42. 40 C.F.R. Part 82.
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SECTION 8 DOCUMENT 24
Options for Limiting the Potential to Emit (PTE) of a
Stationary Source Under Section 112 and Title V of the
Clean Air Act (Act)
01/25/95
24
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C 20460 ,,
JAN25 1995
ME (OP. RDUM
SUBJECT: Options for Limiting the Potential to it (PTE) of a
Stationary Source Under Section 112 and Title V of the
Clean Air Act (Act)
FROM: . John S. Seitz, D:
Off ice of Air (MD—b)
Robert I. Van
Off ice of Regulatory Enforcement (2241)
TO: Director, Air, Pesticides and Toxics
Management Division, Regions I and IV
Director, Air and Waste Management Division,
Region II
Director, Air, Radiation and Toxics Division,
Region III
Director, Air and Radiation Division,
Region V
Director, Air, Pesticides and Toxics Division,
Region VI
Director, Air and Toxics Division,
Regions VII, VIII, IX, and X
Many stationary source requirements of the Act apply only to
“major” sources. Major sources are those sources whose emissions
of air pollutants exceed threshold emissions levels specified in
the Act. For instance, section 112 requirements such as MACT and
section 112(g) and title V operating permit requirements largely
apply only to sources with emissions that exceed specified levels
and are thus major. To determine whether a source is major, the
Act focuses not Only on a source’s actual emissions, but also on
its potential emissions. Thus, a source that has maintained
actual emissions at levels below the major source threshold could
still be subject to major source requirements if it has the
potential to emit major amounts of air pollutants. However, in
situations where unrestricted operation of a source would result
in a potential to emit above major—source levels, such sources
may legally avoid program requirements by taking federally-
enforceable permit conditions which limit emissions to levels
below the applicable major source threshold. Federally—
enforceable permit conditions, if violated, are subject to
enforcement by the Environmental Protection Agency (EPA) or by
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2
citizens in addition to the State or Local agency.
As the deadlines for complying with MACT standards and
title V operating permits approach, industry and State and loca .
air pollution agencies have become increasingly focused on the
need to adopt and implement federally-enforceable mechanisms to
limit emissions from sources that desire to limit potential
emissions to below major source levels. In fact, there are
numerous options available which can be tailored by the States to
provide such sources with simple and effective ways to qualify as
minor sources. Because there appears to be some confusion and
questions regarding how potential to emit limits may be
established, EPA has decided to: (1) outline the available
approaches to establishing potential to emit limitations,
(2) describe developments related to the implementation of these
various approaches, and (3) implement a transition policy that
will allow certain sources to be treated as minor for a period of
time sufficient for these sources to obtain a federally—
enforceable limit.
Federal enforceability is an essential element of
establishing limitations on a source’s potential to emit.
Federal enforceability ensures the conditions placed on emissions
to limit a source’s potential to emit are enforceable by EPA and
citizens as a legal and practical matter, thereby providing the
public with credible assurances that otherwise major sources are
not avoiding applicable requirements of the Act. In order to
ensure compliance with the Act, any approaches developed to allow
sources to avoid the major source requirements must be supported
by the Federal authorities granted to citizens and EPA. In
addition, Federal enforceability provides source owners and
operators with assurances that limitations they have obtained
from a State or local agency will be recognized by EPA.
The concept of federal enforceability incorporates two
separate fundamental elements that must be present in all
limitations on a source’s potential to emit. First, EPA must
have a direct right to enforce restrictions and limitations
imposed on a source to limit its exposure to Act programs. This
requirement is based both on EPA’S general interest inhaving the
power to enforce “all relevant features of SIP’s that are
necessary for attainment and maintenance of NAAQS and PSD
increments” (see 54 FR 27275, citing 48 FR 38748, August 25,
1983) as well as the specific goal of using national enforcement
to ensure that the requirements of the Act are uniformly
implemented throughout the nation (see 54 FR 27277). Second,
limitations must be enforceable as a practical matter.
It is important to recognize that there are shared
responsibilities on the part of EPA, State, and local agencies,
and on source owners to create and implement approaches to
creating acceptable limitations on potential emissions. The lead
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3
responsibility for developing limitations on potential emissions
rests primarily with source owners and State and local agencies.
At the same time, EPA must york together with interested parties,
including industry and States to ensure that clear guidance is
established and that timely Federal input, including Federal
approval actions, is provided where appropriate. The guidance in
this memorandum is aimed towards continuing and improving this
partnership.
AvpilabieApproaches _ f r creatinayederallv-enforceable
Limitations on the Potential to EmJ .t
There is no .single “one size fits all” mechanism that would
be appropriate for creating federally-enforceable limitations on
potential emissions for all. sources in all situations. The
spectrum of available mechanisms should., however, ensure that
State and local agencies can create federally—enforceable
limitations without undue administrative burden to sources or the
agency. With this in mind, EPA views the following types of
programs, if submitted to and approved by EPA, as available to
agencies seeking to establish federally—enforceable potential to
emit limits:’
1. Federally-enforceable State o eratina permit proq rams
kFESOPs) (non-title V ) • For complex sources with numerous and
varying emission points, case-by-case permitting is generally
needed for the establishment of limitations on the source’s
potential to emit. Such case-by-case permitting is often
accomplished through a non—title v federally—enforceable State
operating permit program. This type of permit program, and its
basic elements, are described in guidance published in the
Federal Rectister on June 28, 1989 (54 FR 27274). In short, the
program must: (a) be approved into the SIP, (b) impose legal
obligations to conform to the permit limitations, (c) provide for
limits that are enforceable as a practical matter, (d) be issued
in a process that provides for review and an opportunity for
comment by the public and by EPA, and (e) ensure that there is no
re1a ca.tion of otherwise applicable Federal requirements. The EPA
believes that these type of programs can be used for both
criteria pollutants and hazardous air pollutants, as described in
the memorandum, “Approaches to Creating Federally—Enforceable
Emissions Limits,” N ovember 3, 1993. This memorandum (referred
to below as the November 1.993 memorandum) is included for your
information as Attachment 1. There are a number of important
clarifications with respect to hazardous air pollutants
subsequent to the November 1993 memorandum which are discussed
1 This is not an exhaustive list of considerations affecting
potential to emit. Other federally-enforceable limits can be
used, for example, source-specific SIP revisions. For brevity,
we have included those which have the widest applicability.
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4
below (see section entitled “Limitations on HazardoUS Air
pollutants”).
2. Limitations established by rules For less complex
plant sites, and for source categories involving relatively few
operations that are relatively similar in nature, case-by-Case
permitting may -not be the most administratively efficient
approach to establishing federally—enforceable restrictions. One
approach that has been used is to establish a general rule which
creates federally-enforceable restrictions at one time for many
sources (these rules have been referred to as “exclusionary”
rules and by some permitting agencies as “prohibitory” rules). A
specific suggested approach for volatile organic compounds (VOC)
limits by rule’ was described in EPA’S memorandum dated Oct%.ber
15, 1993 entitled “Guidance for State Rules for Optional
Federally—Enforceable Emissions Limits Based Upon Volatile
Organic Compound (VOC) Use.” An example of such an exclusionary
rule is a model rule developed for use in California. (The
California model rule is attached, along with a discussion of its
applicability to other situations-—see Attachment 2).
Exclusionary rules are included in a State’s SIP and generally
become effective upon approval by EPA.
3. General permits . A concept similar to the exclusionary
rule is the establishment of a general permit .for a given source
type. A general permit is a single permit that establishes terms
and conditions that must be complied with by all sources subject
to that permit. The establishment of a general permit provides
for-conditions limiting potential to emit in a one—time
permitting process, and thus avoids the need to issue separate
permits for each source within the covered source type or
category. Although this concept is generally thought of as an
element of a title V permit program, there is no reason that a
State or local agency could not submit a general permit program
as a SIP submittal aimed at creating potential to emit limits for
groups of sources. Additionally, general permits can be issued
under the auspices of a SIP-approved FESOP. The advantage of a
general permit, when compared to an exclusionary rule, is -that
upon approval by EPA of the State’s permit program, a
general permit could be written for one or more additional source
types without triggering the need for the formal SIP revision
process.
4. Construction permits . Another type of case—by-case
permit is a construction permit. These permits generally cover
new and modified sources, and States have developed such permit
programs as an element of their SIP’s. As described in the
November 1993 memorandUm, these State major and minor new source
review (NSR) construction permits can provide for federally—
enforceable limitations on a source’s potential to emit. Further
discussion of the use of minor source NSR programs is contained
in EPA’s letter to Jason Grumet, NESCAUM, dated November 2, 1994,
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5:
which is contained in Attachment 3. As noted in this letter, the
usefulness of minor NSR programs for the creation of potential to
emit limitations can vary from State to State, and is somewhat
dependent on the scope of a State’s program.
5. Title V Dermits . Operating permits issuedunder the
Federal title V operating permits program can, in some cases,
provide a convenient and readily available mechanism tá create
federally—enforceable limits. Although the applicability date
for part 70 permit programs is generally the driving force for
most of the current concerns with respect to potential to emit,
there are other programs, such as the section 112 air toxics
program, for which title V permits may themselves be a useful
mechanism for creating potential to emit limits. For example,
many sources will, be considered to be major by virtue of
combustion emissions of nitrogen oxides or sulfur dioxide, and
will, be required to obtain part 70 permits. Such permits could
be used to establish federally—enforceable limitations that could
ensure that the source is not considered a major source of
hazardous air pollutants.
Practicable Enforceability
If limitations--whether imposed by SIP rules or through
individual or general permits--are incomplete or vague or
unsupported by appropriate compliance records, enforcement by the
States, citizens and EPA would not be effective. Consequently,
in all cases, limitations and restrictions must be of sufficient
quality and quantity to ensure accountability (see 54 FR 27283).
The EPA has issued several guidance documents e cplaining the
requirements of practicable enforceability (e.g., “Guidance on
Limiting Potential to Emit in New Source Permitting,” June 13,
1989; memorandum from John Rasnic entitled “Policy Determination
on Limiting Potential to Emit for Koch Refining Company’s Clean
Fuels Project,” March 13, 1992). In general, practicable
enforceability for a source—specific permit means that the
permit’s provisions must specify: (1) A technically—accurate
limitation and the portions of the source subject to the
limitation; (2) the time period for the limitation (hourly,
daily, monthly, and .annual limits such as rolling annual limits);
and (3) the method to determine compliance including appropriate
monitoring, recordkeeping, and reporting. For rules and general
permits that apply to categories of sources, practicable
enforceability additionally requires that the provisions:
(1) identify the types or categories of sources that are covered
by the rule; (2) where coverage is optional, provide for notice
to the permitting authority of the source’s election to be
covered by the rule; and (3) specify the enforcement consequences
relevant to the rule. More specific guidance on these
enforceability principles as they apply to rules and general
permits is provided in Attachment 4.
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6
Limitations On HaZatdoUS Air Pollutants (HAPI
There are a number of important points to recognize with
respect to the ability of existing State and local programs to’ -.
create limitations for the 189 HAP listed in (or pursuant to)
section 112(b) of the Act, consistent with the definitions of
“potential to emit” and federally—enforceable” in -40 CFR 63.2
(promulgated Xarch 16, 1994, 59 FR 12408 in the part 63 General
Provisions). The EPA believes that most State and local programs
should have broad capabilities to handle the great majority of
situations for which a potential to emit limitation Ofl HAP is
needed.
First, it is useful to note that the definition of potential
to emit for the Federal air toxics program (see the subpart A
“general provisions,” section 63.2) considers, for purposes of
controlling HAP emissions, federally—enforceable limitations on
criteria pollutant emissions if “the effect such limitations
would have on “(hazardous air pollutant) . . . emissions” is
federally-enforceable (emphasis added). There are many examples
of such criteria pollutant emission limits that are present in
federally—enforceable State and local permits and rules.
Examples would include a limitation constraining an operation to
one (time limit specified) shift per day or limitations that
effectively limit operations to 2000 hourS per year. Other
examples would include limitations on the amount of material
used, for example a permit limitation constraining an operation
to using no more than 100 gallons of paint per month.
Additionally, federally-enforceable permit terms that, for
example, required an incinerator to be operated and maintained at
no less than 1600 degrees would have an obvious “effect” on the
HAP present in the inlet stream.
Another federally-enforceable way criteria pollutant
limitations affect HAP can be described as a “nested” HAP limit
within a permit containing conditions limiting criteria
pollutants. For example, the particular VOC’s within a given
opefation may include toluene and xylene, which are also HAP. If
the VOC-limiting permit has established limitations on the amount
of toluene and xylene used as the means to reduce VOC, those
limitations would ha.ve an obvious “effect” on HAP as well.
In cases as described above, the “effect” of criteria
pollutant limits will be straightforward. In other cases,
information may be needed on the nature of the HAP stream
present. For example, a limit on VOC that ensured total voc’s of
20 tons per year may not ensure that each HAP present is less
than 10 tons per year without further investigation. While the
EPA intends to develop further technical guidance on situations
for which additional permit terms and conditions may be needed to
ensure that the “effect” is enforceable as a practical matter,
the EPA intends to rely on State and local agencies to employ
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7
care’ in drafting enforceable requirements which recognize obvious
environmental and health concerns.
There are, of course, a few important pollutants which are-
HAP but are not criteria pollutants. Example of these would
include methylene chloride arid other pollutants which are
considered nonreactive and therefore exempt from coverage as
VOCSS. Especially in cases where such pollutants are the only
pollutants present, criteria pollutant emission limitations may
not be sufficient to limit HAP. For such cases, the State or
local agency will need to seek program approval under section
112(1) of the Act.
Section 112(1) provides a clear mechanism for approval of
State and local air toxics programs for purposes of establishing
HAP—specific PTE limits. The EPA intends, where appropriate,
that in approving permitting programs into the SIP, to add
appropriate language citing approval pursuant to section 112(1)
as well. An example illustrating sectioxt 112(1) approval is the
approval of the State of Ohio’s program for limiting potential to
emit (see 59 FR 53587, October 25, 1994). In this notice, EPA
granted approval under section 112(1) for hazardous air
pollutants aspects of a State program for limiting potential to
emit. Such language can be added to any federally—enforceable
State operating permit program, exclusionary rule, or NSR program
update SIP approval notice so long as the State or local program
has the authority to regulate HAP and meets other section 112(1)
approval criteria. Transition issues related to such
section 112(1) approvals are discussed below.
Determination of Maximum Capacit i
While EPA and States have been calculating potential to emit
for a number of years, EPA believes that it is important at this
time to provide some clarification on what is meant in the
definition of potential to emit by the “maximum capacity of a
stationary source to emit under its physical and operational
des4gn.” Clearly, there are sources for which inherent -physical
limitations for the operation restrict the potential emissions of
individual emission units. Where such inherent limitations can
be documented by a source and confirmed by the permitting agency,
EPA believes that States have the authority to make such
judgements and factor them into estimates of a stationary
source’s potential to emit. -
The EPA believes that the most straightforward examples of
such inherent limitations is for single—emission unit type
pperations. For example, EPA does not believe that the “maximum
capacity” language requires that owner of a paint spray booth at
a small auto body shop must assume that (even if the source could
be in operation year-round) spray equipment is operated 8760
hours per year in cases where there are inherent physical
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8
limitations on the number of cars that can be painted within any
given period of time. For larger- sources involving multiple
emissions units and complex operations, EPA believes it can be
more problematic to identify the inherent limitations that may’—
exist. -
The EPA intends, within its resource constraints, to issue -
technical assistance inthis area by providing information on the
type of operational limits that may be considered acceptable to
limit the potential to emit for certain individual small source
categories.
Transition Guidance for Section 112 and Title V pjicability
Most, if not all., States have recognized the need to develop
options for limiting the potential emissions of sources and are
moving forward with one or more of the strategies described in
the preceding sections in conjunction with the submission and
implementation of their part 70 permit programs. However, EPA is
aware of the concern of States and sources that title V or
section 112 implementation will move ahead of the development and
implementation of these options, leaving sources with actual
emissions clearly below the major source thresholds potentially
subject to part 70 and other major source requirements. Gaps
could theoretically occur during the time period it takes for a
State program to be designed and administratively adopted by the
State, approved into the SIP by EPA, and implemented as needed to
cover individual sources.
The EPA is committed to aiding all States in developing and
implementing adequate, streamlined, and cost—effective vehicles
for creating federally—enforceable limits on a source’s potential
emissions by the ti ae that section 112 or title V requirements
become effective. To help bridge any gaps, EPA will expedite its
reviews of State exclusionary rules and operating permit rules
by, among other things, coordinating the approval of these rules
with the approval of the State’s part 70 program and by using
exped.itious approval approaches such as “direct final” Federal.
Register notices to ensure that approval of these programs does
not lag behind approval of the part 70 program.
In addition, in such approval notices EPA will affirm any
limits established under the State’s program since its adoption
by the State but prior to Federal approval if such limits were
established in accordance with the procedures and requirements of
the approved program. An example of language affirming such
limits was recently used in approving an Illinois si revision
(see 57 FR 59931, included as Attachment 5).
The EPA remains concerned that even with expedited approvals
and other strategies, sources may face gaps in the ability to
acquire federally-enforceable potential to emit limits due to
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9
delays - in State adoption or EPA approval of programs or in their
implementation. In order to ensure that such gaps do not create
adverse consequences for States or for sources, EPA is announcing
a transition policy for a period up to two years from the date’-o
this memorandum. The EPA intends to make this transition policy
available at the discretion of the State or local agency to the -
extent there are sources which the State believes can benefit
from such a transition policy. The transition period viii extend
from now until the gaps in program implementation are filled, but
no later than January 1997. Today’s guidance, which EPA intends
to codify through a notice and comment rulemaking, provides
States discretion to use the following options for sat4.sfying
potential to ,emit requirements during this transition period.
1. Sources maintainina emissions below 50 ,ercent of all
appitcable !naior source requirements For sources that typically
and consistently maintain emissions significantly below major
source levels, relatively few benefits would be gained by making
such sources subject to major source requirements under the Act.
For this reason, many States are developing exclusionary rules
and general permits to create simple, streamlined means to ensure
that these sources are not considered major sources. To ease the
burden on States’ implementation of title V , and to ensure that
delays in EPA’S approval of these types of programs will not
cause an administrative burden on the States, EPA is providing a
2—year transition period for sources that maintain their actual
emissions, for every consecutive 12—month period (beginning with
the 12 months immediately preceding the date of this memorandum),
at levels that do not exceed 50 percent of any and all of the
major stationary source thresholds applicable to that source. A
source that exceeds the 50 percent threshold, without complying
with major source requirements of the Act (or without otherwise
limiting its potential to emit), could be subject to enforcement.
For this 2-year period, such sources would not be treated as
major sources and would not be required to obtain a permit that
limits their potential to emit. To qualify under this transition
policy, sources must maintain adequate records on site to
demonstrate that emissions are maintained below these thresholds
for the entire as major sources and would not be required to
obtain a permit that limits their potential to emit that would be
considered to be adequate during this transition period.
Consistent with the California approach, EPA believes it is
appropriate for the amount of recordkeeping to vary according to
the level of emissions (see paragraphs 1.2 and 4.2 of the
attached rule).
2. Larger sources with State limits For the 2—year
transition period, restrictions contained in State permits issued
to sources above the 50 percent threshold would be treated by EPA
as acceptable limits on potential to emit, provided: (a) the
permit is enforceable as a practical matter; (b) the source owner
submits a written certification to EPA that it will comply with
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10
the limits as a restriction on its potential to emit; and (c) the
source owner, in the certification, accepts Federal and citizen
enforcement of the limits (this is appropriate given that the
limits are being taken to avoid otherwise applicable Federal
requirements). Such limits will be valid for purposes of
limiting potential to emit from the date the certification is -
received by EPA until the end of the transition period. States
interested in making use of this portion of the transition policy
should work with their Regional Office to develop an appropriate
certification process.
3. Limits for noncriteria HAP . For noncriteria RAP for
which no existing federally—approved program is available for the
creation of federally-enforceable limits, the 2—year transition
period provides for sufficient time to gain approval pursuant to
section 112(1). For the 2—year transition period, State
restrictions on such noncriteria pollutants issued to sources
with emissions above the 50 percent threshold would be treated by
EPA aslimiting a source’s potential to emit, provided that:
(a) the restrictions are enforceable as a practical matter;
(b) the source owner submits a written certification to EPA that
it will comply with the limits as a restriction on its poten.tial
to emit; and (C) the source owner, in the certification, accepts
Federal and citizen enforcement of the limits. Such limits will
be valid for purposes of limiting potential to emit from the date
the certification is received by EPA until the end of the
transition period. -
- The Regional Offices should send this memorandum, including
the attachments, to States within their jurisdiction. Questions-
eoncerning specific issues and cases should be directed to the
appropriate Regional Office. Regional Office staff may contact
Timothy Smith of the Integrated Implementation Group at
919-541—4718, or Clara Poffenberger with the Air Enforcement
Division at 202—564—8709.
Att chments
cc: Air Branch Chief, Region I-X
Regional Counsels
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/ 9
UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON.DC. 20460
\t pq 0 Ct’
JAN 22 1996
MEMORANDUM
SUBJECT: Release of Interim Policy on Federal Enforceability of
Limitations on Potentia Em t -
FROM: John S. Seit , Directo
Office of Air Quality P n ng and Stan44’ ds (MD-lu)
Office of Air and Radi io I -’
Robert I. Van Heuvelen,
Office of Regulatory Enforcement (22 1A)
Office of Enforcement and Compliance Assurance
TO: Regional Office Addressees (see below):
The purpose of this memorandum is to notify you that the
Agency is today releasing detailed guidance (referred to below as
the “Interim Policy”) clarifying the immediate impacts of two
recent decisions by the U.S. Court of Appeals for the D.C.
Circuit regarding EPA regulations requiring federal
enforceability of limitations on a source’s potential to emit
(“PTE”) under certain CAA programs. This cover memorandum
brief ly summarizes the court decisions, and briefly summarizes
the immediate impacts of the decisions on current regulations. A
more detailed discussion of the impacts of the two court
decisionB is attached. The policy will remain in place until
January 1997, but may be extended if necessary to coincide with
the promulgation of revised regulations.
The Court Decisions
In National Mining Association v. EPA , 59 Y.3d 1351 (D.C.
Cir. 1995), the court addressed hazardous air pollutant programs
under section 112. The court found that EPA had not adequately
explained why only federally enforceable measures should be
considered as limits on a source’s potential to emit.
Accordingly, the court remanded the section 112 General
Provisions regulation to EPA for further proceedings. EPA must
either provide a better explanation as to why federal
enforceability promotes the effectiveness of state controls, or
remove the exclusive federal enforceability requirement. The
court did not vacate the section 3.12 regulations, that is, the
court did not declare the regulations null and void. The
regulations remain in effect pending completion of new
rulemaking.
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—2—
In Chemical Manufacturers Ass’n y. EPA , No. 89—1514 (D.C.
dr. Sept. 15, 1995), the court, in light of National Mining ,
remanded the PTE definition in the PSD and NSR regulations to
EPA. The court also vacated the federal enforceability
requirement of the PTE definitions in the PSD and NSR
regulations.
Summary of Immediate Impacts of the Court Decisions
EPA plans to propose rulemaking amendments in spring 1996
that would address the federal enforceability issue as it relates
to section 112, title V, and Prevention of Significant
Deterioration & New Source Review (“PSD/NSR”) regulations.
Pending this rulemaking, the immediate impacts are as follows:
Effects on Section 112 . Because the court did not vacate
the rule, the current part 63 regulations, requiring federal
enforceability, remain in effect.
Effects on title V . Although neither court case addressed
the title V regulations, industry challenges to the part 70
requirements are pending. Because the federal enforceability
provision of the title V regulations are closely related to the
regulations addressed in the two decided cases, EPA will ask the
court to leave part 70 in place as the rulemaking amendments are
being developed.
Effects on PSD/NSR . Because the court vacated the rules,
the requirements in the nationwide rules for PSD and major source
NSR concerning federal enforceability are not in effect. In many
cases, however, individual State rules implementing these
programs have been individually approved in the State
Implementation Plan (SIP). The court did not vacate any
requirements for federal enforceability in these individual State
rules, and these requirements remain in place. As discussed in
detail in the Interim Policy, the immediate practical !.mpacts on
the PSD/NSR programs are not substantial for newly constructed
major sources. Greater impacts may exist for existing major
sources seeking to avoid review by demonstrating a net emissions
decrease.
Effects on January 25, 1995 Transition Policy . The
transition policy remains in effect with one change. For sources
emitting more than 50% of the major source threshold, and holding
State-enforceable limits, EPA is no longer requiring that the
source submit a certification to EPA.
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Distribution/Further Information
The Regional Offices should send this memorandum to States
within their jurisdiction. Questions concerning specific issues
and cases should be directed to the appropriate Regional Office.
Regional Office staff may contact Tim Smith of the Integrated
Implementation Group at 919-541—4718, Adan Schwartz of the Office
of General Counsel at 202-260-7632, or Julie Domike of the Office
of Enforcement and Compliance Assurance at 202—564-6577. The
document is also available on the technology transfer network
(TTN) bulletin board, under “Clean Air Act, Title V, Policy
Guidance Memos.” (Readers unfamiliar with this bulletin board may
obtain access by calling the TTN help line at 919—541—5384).
Attachment
Addressees:
Director, Office of Ecosystem Protection, Region I
Director, Air and Waste Management Division, Region II
Director, Air, Radiation, and Toxics Division, Region
‘II
Director, Air, Pesticides, and Toxics Management
Division, Region IV
Director, Air and Radiation Division, Region V
Director, Multimedia Planning and Permitting Division,
Region VI
Director, Air, RcRA, and TSCA Division, Region VII
Assistant Regional Administrator, Office of Pollution
Prevention, State and Tribal Assistance, Region VIII
Director, Air and Toxics Division, Region IX
Director, Office of Air, Region X
Regional Counsels, Regions I-X
Director, Office of Environmental Stewardship, Region I
Director, Division of Enforcement and Compliance
Assurance, Region II
Director, Enforcement Coordination Office, Region III
Director, Compliance Assurance and Enforcement
Division, Region VI
Director, Enforcement Coordination Office, Region VII
Assistant Regional Administrator, Office of
Enforcement, Compliance and Environmental Justice,
Region VIII
Enforcement Coordinator, Office of Regional Enforcement
Coordination, Region IX
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EPA INTERIM POLICY ON FEDERAL ENFORCEABILITy REQUIREMENT
FOR LIMITATIONS ON POTENTIAL TO EMIT
January 1996
This document provides guidance clarifying the immediate
impacts of recent court decisions related to federal
enforceability of limitations on a source’s potential to emit
(“PTE”). In brief, most current regulatory requirements and
policies regarding PTE, including the interim policy recognizing
state-enforceable limits under section 112 and Title V in some
circumstances, remain in effect while EPA conducts expedited
rulemaking to address these iBsues in detail. However, at
present, certain netting transactions involving PTE limits under
new source review programs may now take place without federal
enforceability. Today’s guidance will be superseded upon
completion of the new rulemaking.
Background
Several important Clean Air Act programs apply to only major
sources, i.e., those that “emit or have the potential to emit”
amounts exceeding major source thresholds listed in the Act. The
EPA has promulgated regulations defining the term potential to
emit” for most of these programs. In particular, five sets of
regulations are in place implementing the major source prevention
of significant deterioration (PSD) and nonattaininent area new
source review (NSR) permitting programs (40 CFR 51.166, 40 CFR
52.21, 40 CFR 51.165, Appendix S of 40 CFR Part 51, and 40 CFR
52.24). Regulations governing approvability of state operating
permit programs under Title V of the CAA are contained in 40 CFR
Part 70, and EPA has proposed regulations implementing a federal
operating permits program that are to be promulgated at 40 CFR
Part 71. Regulations implementing the requirements of section
112 of the Act related to major sources of hazardouà a .r
pollutants are contained in 40 CFR Part 63, subpart A.
For each of the above Clean Air Act programs, the EPA
regulations provide that “controls” (i.e., both pollution control
equipment and operational restrictions) that limit a source’s
maximum capacity to emit a pollutant may be considered in
determining its potential to emit. Historically, large numbers of
new or modified sources that otherwise would be subject to PSD
and NSR permitting requirements have limited their PTE in order
to obtain “synthetic minor” status and thereby avoid major source
requirements. With the advent of operating permit programs under
Title V and the MACT program under section 112, many sources that
otherwise would be subject to these new requirements under the
Clean Air Act Amendments of 1990 also have obtained, or plan to
obtain, PTE limits to avoid coverage. For each of these
programs, EPA regulations have required that PTE limits be
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“federally enforceable” in order to be considered in determining
PTE.
These federal enforceability requirements were the subject
of two recent decisions of the D.C., Circuit Court of Appeals.
The first decision, National Mining Association v. EPA , 59 F.3d
1351 (D.C. Cir. July 21, 1995), dealt with the potential to emit
definition under the hazardous air pollutant programs promulgated
pursuant to CAA section 112. In this decision, the Court
implicitly accepted EPA’S argument that only “effective” state-
issued controls should be cognizable in limiting potential to
emit. In addition, the court did not question the validity of
current federally enforceable mechanisms in limiting PTE.
However, the court found that EPA had not adequately explained
why only,federally enforceable measures should be considered in
assessing the effectiveness of state—issued controls.
Accordingly, the Court remanded the section 112 General
Provisions regulation to EPA for further proceedings. Thus, EPA
must either provide a better explanation as to why federal
enforceability promotes the effectiveness of state controls, or
remove the exclusive federal enforceability requirement. The
court did not vacate the section 112 regulations, and they remain
in effect pending completion of EPA rulemaking proceedings in
response to the court’s remand.
The second decision, Chemical Manufacturers Ass’n V. EPA ,
No. 89-1514 (D.C. Cir. Sept. 15, 1995), dealt with the potential
to emit definition in the PSD and NSR programs. Specifically,
this case challenged the June 1989 rulemaking in which the EPA
reaffirmed the requirement for federal enforceability of PTE
limits taken to avoid major source permitting requirements in
these programs. In a briefly worded judgment, the court, in
light of National Mining , remanded the PSD and NSR regulations to
EPA. In addition, in contrast to its disposition of t e section
112 regulations in National Mining , the court in Chemical
Manufacturers vacated the federal enforceability requirement of
the PTE definitions in the PSD and NSR regulations.
In a third set of cases, industry challenges to the federal
enforceability requirements in Part 70 are pending before the
D.C. Circuit. The Title V cases have not been briefed. However,
since the federal enforceability provisions of these Title V
regulations are closely related to the regulations addressed in
the two decided cases, EPA plans to ask the court to remand the
regulations to EPA for further rulemaking, and to leave Part 70
in place during the new rulemaking.
Plans for Rulemaking Amendments
EPA plans to hold discussions with stakeholders and propose
rulemaking amendments by spring 1996, and to issue final rules by
spring 1997, that would address the court decisions impacting
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—3-.
regulations promulgated pursuant to section 112 and the PSD/NSR
regulations. At the same time, EPA will propose a parallel
approach to cognizable PTE limits for major sources subject to
title V. EPA currently plans to açidress the following options,
after discussions with stakeho]ders:
(a) An approach that would recognize “effective” State-
enforceable limits as an alternative to federally
enforceable limits on a source’s potential to emit. Under
this option, a source whose maximum capacity to emit without
pollution controls or operational limitations exceeds
relevant major source thresholds may take a State or local
limit on’ its potential to emit. In such circumstances, the
source must be able to demonstrate that the State-
enforceable limits are (1) enforceable as a practical
matter, and (2) being regularly complied with by the
facility.
(b) An approach under which the EPA would continue to require
federal enforceability of limits on a source’s potential to
emit. Under this approach, in response to specific issues
raised by the court in National Mining , EPA would present
further explanation regarding why the federal enforceability
requirement promotes effective controls. Under this
approach, EPA would propose simplifying changes to the
administrative provisions of the current federal
enforceability regulations.
The remainder of this guidance memorandum addresses the
immediate impacts of the court decisions on each of the three
programs, in light of the upcoming rulemaking.
Effects on PSD/NSR
EPA interprets the court’s decision to vacate the’PSD/NSR
federal enforceability requirement in the Chemical Manufacturers
case as causing an immediate change in how EPA regulations should
be read, although EPA expects that the effect of this change will
be limited. Specifically, provisions of the definitions of
“potential to emit” and related definitions requiring that
physical or operational changes or limitations be “federally
enforceable” to be taken into account in determining PSD/NSR
applicability, the term “federally enforceable” should now be
read to mean “federally enforceable or legally and practicably
enforceable by a state or local air pollution control agency.” 1
1 Both National Minin.g and Chemical Manufacturers directly
addressed only the definition of potential to emit, and not
related definitions that also employ the federal enforceability
requirement, in particular, those related to netting. (See,
e.g., 40 CFR S 52.21(b) (3) (vi) (b) providing that an emissions
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For the reasons discussed below, however, the practical effects
of the vacatur will be limited during the period prior to
completion of new EPA rulemaking on this issue. During this.
interim period, federal enforceability is still required to
create “synthetic minor” new and m ified sources in most
circumstances pending completion of EPA’S rulemaking.
First, EPA interprets the order vacating certain provisions
of EPA regulations as not affecting the provisions of any current
SIP, or of any permit issued under any current SIP. Thus,
previously issued federally enforceable permits, such as permits
issued under federally enforceable state operating permit
programs under Title I (“FESOPPS”) remain in effect. Likewise,
EPA-approved state PSD and NSR SIP rules requiring that all
pollution controls or operational restrictions limiting potential
to emit be federally enforceable remain in place, even though
such provisions may have been based on the now-vacated terms of
EPA regulations. 2
decrease is creditable only if it is “federally enforceable.”)
The court’s concerns regarding the adequacy of EPA’S rationale,
however, appear to extend to these netting provisions;
consequently, EPA interprets the vacatur as extending to them as
well. Conversely, EPA reads the vacatur as not extending to
aspects of the PTE definition other than the federal
enforceability provision. Such other aspects (e.g., determining
a source’s “maximum capacity” to emit in the absence of controls)
were not at issue in the litigation and not addressed by the
court decisions. In addition, EPA interprets Chemical
Manufacturers as not addressing the regulatory requirements for
federal enforceability of offsets used to comply with NSR
requirements. CAA § 173(a) expressly requires that any emissions
reductions required as a precondition to the issuance tf a
nonattainment NSR permit to be “federally enforceable” before the
permit may be issued. This requirement is not affected by the
court decisions.
2 The situation is somewhat different in the several states
lacking approved PSD programs, which are governed instead by the
federal PSD program at 40 CFR S 52.21. (In most instances, these
states have been delegated authority to issue PSD permits under
the federal program pursuant to S 52.21(u).) Since these states
do not have an EPA—approved PSD program, their SIPS presumably
also lack state rules containing a blanket requirement that new
or modified sources use only federally enforceable limits on PTE
when seeking synthetic minor status to avoid PSD. Rather,
sources in these states have been subject to the federal
enforceability requirements of S 52.21. As noted above, Chemical
Manufacturers vacated the requirements in S 52.21 that physical
or operational changes be “federally enforceable” to be taken
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Second, a new or modified source that seeks to lawfully
avoid compliance with the “major” source requirements of either
PSD or nonattainment NSR by limiting its potential to emit to
achieve synthetic minor status must still obtain a general or
“minor” NSR preconstructjon permit under section 110(a) (2) (C) of
the Act and 40 C.F.R. S 51.160—164. Every SIP contains a minor
NSR program that applies generally to new or modified sources of
air pollutants, without regard to whether those sources are
“major.” Permits under such programs are, like all other SIP
measures, federally enforceable. gg CAA section 113(b) (1); 40
CFR S 52.23. The requirement under section 110(a) (2) (C) to
obtain a federally enforceable minor NSR permit was not at issue
in the Chemical Manufacturers case, and is unaffected by the
court’s ruling.
As noted above, the court’s action does not affect FESOPPs
that many states have adopted as an additional mechanism for
avoiding PSD/NSR or for creating an emissions reduction credit
that may be tradeab].e to another source. Permits issued under
such programs continue to be valid for purposes of limiting PTE.
States are free to submit SIP revisions to remove such provisions
in light of the vacatur, and to substitute mechanisms that are
legally and practicably enforceable by the state for limiting
potential to emit in some circumstances under the PSD/NSR
program. However, we expect few states to do so pending the
into account in determining the applicability of PSD to a
proposed new source or modification. Accordingly, in states
governed by S 52.21, a limit that is either “federally
enforceable or legally and practicably enforceable by a state or
local air pollution control agency” may now be used in
determining PSD applicability in some circumstances. The effect
of the vacatur in these states is limited, however, be ause as
discussed below, new and modified sources in these states are
still subject to the requirement to obtain federally enforceable
minor source permits.
3 Consider, for example, an existing source in a moderate
ozone nonattaininent area that plans to add a new emissions unit
that would have the potential to emit 100 tons per year (“TPY”)
of VOC if uncontrolled, and would therefore be considered a major
modification subject to major NSR requirements, including a
requirement to install pollution controls representing LAER that
would reduce emissions in this instance by 90%. The source may
instead seek to avoid major NSR by installing cheaper controls
that reduce emissions by 61% and thereby limit the emissions
increase to 39 TPY - - just below the “major” modification
threshold. Such a source would still need to obtain a minor NSR
permit to construct the new unit, and that permit would be
federally enforceable.
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outcome of new EPA rulemaking on the broader federal
enforceability issue.
Likewise, states conceivably might now seek to reduce the
scope of SIP—approved minor NSR programs where they are presently
broader than minimum federal requirements (e.g., to no longer
cover changes at existing emissions units that reduce emissions
to create a netting credit or tradeable emission reduction
credit), and to substitute state-enforceable mechanisms. Here
also, however, EPA does not expect states to seek such changes
pending the outcome of EPA rulemaking. In addition, regarding
the minimum scope of minor NSR programs, section 110(a) (2) (C)
provides that state minor NSR programs must regulate all new or
modified sources “as necessary” to insure consistency with air
quality planning goals. Given the central role of new and
modified synthetic minor sources in the overall PSD/NSR
regulatory scheme, and the adverse environmental consequences if
controls were not effective in limiting PTE, it is unlikely that
states would have the legal ability to exclude from such programs
transactions that are intrinsic to the avoidance of major NSR
permitting requirements.
The principal immediate impact of the vacatur of the PSD/NSR
federal enforceability regulations likely will occur in cases
involving “netting” exercises at existing sources, where a source
seeks to internally offset an emissions increase at a new or
modified emissions unit by installing pollution controls or
accepting operational limitations at another unit within the
plant. For the reasons discussed above, in such cases the new or
modified unit would still need to obtain a federally enforceable
minor NSR permit. In contrast, the vacatur ordered by the court
may allow the unit that is limiting its emissions to rely in some
circumstances on controls that are legally and practicably
enforceable by the state. 4 Note, however, that under he terms
of many state minor NSR programs, the unit undergoing an
4 consider, for example, an existing source like the one
addressed above in Footnote 3, that also plans to install a new
unit that would have the potential to emit 100 tons per year of
VOC per year if uncontrolled. In contrast to the earlier
example, however, this source plans to avoid major NSR not by
controlling the new unit, but instead by installing controls at
another emissions unit at the plant whose baseline emissions are
100 TPY that will reduce actual emissions by 61 TPY. The overall
result of this netting transaction is the same as in the earlier
example: a net emissions increase of 39 TPY at the plant. The
new unit would still need to obtain a minor NSR permit, and that
permit would still be federally enforceable. In light of the
vacatur in Chemical 1 anufacturers , however, the existing unit
that is adding controls now may be able to limit its PTE using a
state-enforceable permit.
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emissions reduction would still need to be included in the minor
NSR permit. Also, if the state’s SIP has a general requirement
that PTE limits be federally enforceable, the unit reducing
emissions would still need a federally enforceable limit. Such
programs would not be affected by he court’s ruling. In sum,
the precise impact of the vacatur on PSD/NSR applicability in any
state can be definitively established only by reviewing the
provisions of a particular sip.
Effects on Section 112 and Title V
The National Mining decision did not vacate the current
definition of a major source under section 112 program in the
General Provisions to Part 63, and neither of the court decisions
addressed the definition of a major source for the title V
program in 40 CFR part 70. Both of these current definitions,
therefore, remain in effect. As discussed above, however, these
regulations will be affected by the rulemaking EPA is conducting
in response to the court decisions.
EPA today reiterates that independent from the decision in
National Mining , current EPA policy already recognizes State-
enforceable PTE limits under section 112 and Title V in many
circumstances under a transition policy intended to provide for
orderly implementation of these new programs under the Clean Air
Act Amendments of 1990. This policy is set forth in a
memorandum, “Options for Limiting the Potential to Emit (PTE) of
a Stationary Source Under Section 112 and Title V of the Clean
Air Act” (January 25, 1995). The transition policy is summarized
below; as noted, EPA is now making one significant change in that
policy in light- of National Mining .
In recognition of the absence in some states of suitable
federally enforceable mechanisms to limit PTE applicab) e to
sources that might otherwise be subject to section 112 or Title
V 1 EPA’s policy provides for the consideration of State-
enforceable limits as a gap—filling measure during a transition
period that extends until January 1997. Under this policy, for
the 2-year transition period, restrictions contained in State
permits issued to sources that actually emit more than 50
percent, but less than 100 percent, of a relevant major source
threshold are treated by EPA as acceptable limits on potential to
emit, provided: (a) the permit and the restriction in particular
are enforceable as a practical matter; (b) the source owner
submits a written certification to EPA accepting EPA and citizen
enforcement. In light of National Mining , EPA believes that the
5 Since PSD and nonattainment NSR are mature programs, minor
NSR permits to limit PTE were available in all states well prior
to enactment of the Clean Air Act Ainendi ents of 1990. Hence,
EPA’s transition policy does not extend to those programs.
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certification requirement is no longer appropriate as part of
this policy. Accordingly, EPA hereby amends the January 1995
transition policy by deleting th. certification requirement.
In addition, under the transition policy, sources with
consistently low levels of actual emissions relative to major
source thresholds can avoid major source requirements even absent
any permit or other enforceable limit on PTE. Specifically, the
policy provides that sources which maintain their emissions at
levels that do not exceed 50 percent of any applicable major
source threshold are not treated as major sources and do not need
a permit to limit PTE, so long as they maintain adequate records
to demonstrate that the 50 percent level is not exceeded.
Under the terms of EPA’s transition policy, the transition
period is to end in January 1997. In addition, completion of
EPA’s rulemaking in response to the recent court decisions, which
EPA anticipates will occur by early 1997, may render the
transition policy unnecessary after that time. However, in
conjunction with the rulemaking, EPA will consider whether it is
appropriate to extend the transition period beyond January 1997.
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i O S7 4 ,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
RESEARCH TRIANGLE PARK NC 27711
4( OFFICE OF
AIR QUALITY PLANNING
AND STANDARDS
SEP 61995
MEMORANDUM
SUBJECT: Calculating Potential to Emit (PTE) for Emergency
Generators
FROM: John S. Seitz, Director
Office of Air Quality Pla 10)
TO: Director, Air, Pesticides nd Toxics
Management Division, Regions I and IV
Director, Air and Waste Management Division,
Region II
Director, Air, Radiation and Toxics Division,
Region III
Director, Air and Radiation Division,
Region V
Director, Air, Pesticides and Toxics Division,
Region VI
Director, Air and Toxics Division,
Regions VII, VIII, IX, and X
The purpose of this guidance is to address the determination
of PTE for emergency electrical generators.
Background
In a memorandum dated January 25, 1995, the Environmental
Protection Agency (EPA) addressed a number of issues related to
the determination of a source’s PTE under section 112 and title V
of the Clean Air Act (Act). One of the issues discussed in the
memorandum was the term “maximum capacity of a stationary source
to emit under its physical and operational design,” which is part
of the definition of “potential to emit.” The memorandum
clarified that inherent physical limitations, and operational
design features which restrict the potential emissions of
individual emission units, can be taken into account. This
clarification was intended to address facilities for which the
theoretical use of equipment is much higher than could ever
actually occur in practice. For such facilities, if their
physical limitations or operational design features are not taken
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2
into account, the potential emissions could be overestimated and
consequently the source owner could be subject to the Act
requirements affecting major sources. Although such source
owners could in most cases readily accept enforceable limitations
restricting the operation to its designed level, EPA believes
this administrative requirement for such sources to be
unnecessary and burdensome.
On the topic of “physical and operational design,” the
January 25 memorandum provided a general discussion. In
addition, EPA committed to providing technical assistance on the
type of inherent physical and operational design features that
may be considered acceptable in determining the potential to emit
for certain individual small source categories. The EPA is
currently conducting categ ry-specif Ic analysas in support of
this effort, and hopes as a result of these analyses to generate
more general guidance on this issue as well.
The purpose of this memorandum is to address the issue of
PTE as it relates specifically to emergency generators. There is
a significant level of interest in this source category because
there are many thousands of locations for which an emergency
generator is the only emitting source. Moreover, based on a
review of this source category, there exists a readily
identifiable constraint on the operational design of emergency
generators. Hence, the EPA believes it would be useful to
provide today’s guidance before the entire effort is complete.
The policies set forth in this memorandum are intended
solely as guidance, do not represent final Agency action, and
cannot be relied upon to create any rights enforceable by any
party.
Guidance for Emergency Generators
For purposes of today’s guidance, an “emergency generator”
means a generator whose sole function is to provide back-up power
when electric power from the local utility is interrupted. The
emission source for such generators is typically a gasoline or
diesel—fired engine, but can in some cases include a small gas
turbine. Emissions consist primarily of carbon monoxide and
nitrogen oxides. Other criteria pollutants, and hazardous air
pollutants, are also emitted, but at much lower levels.
Emissions occur only during emergency situations (i.e., where
electric power from the local utility is interrupted), and for a
very short time to perform maintenance checks and operator
training.
The EPA believes that generators devoted to emergency uses
are clearly constrained in their operation, in the sense that, by
definition and design, they are used only during periods where
electric power from public utilities is unavailable. Two factors
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3
indicate that this constraint is in fact “inherent.” First,
while the combined period for such power outages during any one
year will vary somewhat, an upper bound can be estimated which
would never be expected to be exceeded absent extraordinary
circumstances. Second, the duration of these outages are
entirely beyond the control of the source, and when they do occur
(except in the case of a major catastrophe) rarely last more than
a day.
For emergency generators, EPA has determined that a
reasonable and realistic “worst-case” estimate of the number of
hours that power would be expected to be unavailable from the
local utility may be considered in identifying the “maximum
capacity” of such generators for the purpose of estimating their
PTE. Consequently, EPA does not recommend the use of 8760 hours
per year (i.e., full-year operation) for calculating the PTE for
emergency generators. Instead, EPA recommends that the potential
to emit be determined based upon an estimate of the maximum
amount of hours the generator could operate, taking into account
(1) the number of hours power would be expected to be unavailable
and (2) the number of hours for maintenance activities.
The EPA believes that 500 hours is an appropriate default
assumption for estimating the number of hours that an emergency
generator could be expected to operate under worst-case
conditions. Alternative estimates can be made on a case-by-case
basis where justified by the source owner or permitting authority
(for example, if historical data on local power outages indicate
that a larger or smaller number would be appropriate). Using the
500 hour default assumption, EPA has performed a number of
calculations for some typically-sized emergency generators.
These calculations indicate that these generators, in and of
themselves, rarely emit at major source levels. (Of course,
there may be unusual circumstances where these calculations would
not be representative, for example where many generators are
present that could operate simultaneously).
Cautions
Today’s guidance is only meant to address emergency
generators as described. Specifically, the guidance does not
address: (1) peaking units at electric utilities; (2) generators
at industrial facilities that typically operate at low rates, but
are not confined to emergency purposes; and (3) any standby
generator that is used during time periods when power is
available from the utility. This guidance is also not intended
to discourage permitting authorities from establishing
operational limitations in construction permits when such
limitations are deemed appropriate or necessary. Additionally,
this memorandum is not intended to be used as the basis to
rescind any such restrictions already in place.
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4
Distribution/Further Information
The Regional Offices should send this memorandum, including
the attachment, to States within their jurisdiction. Questions
concerning specific issues and cases should be directed to the
appropriate Regional Office. Regional Office staff may contact
Tim Smith of the Integrated Implementation Group at 919—541—4718.
The document is also available on the technology transfer network
(TTN) bulletin board, under “Clean Air Act” - “Title VI’ — “Policy
Guidance Memos”. (Readers unfamiliar with this bulletin board
may obtain access by calling the TTN help line at 919—541—5384).
Attachments
cc: Air Branch Chief, Region I—X
Regional Air Counsels, Region I-X
Adan Schwartz (2344)
Tim Smith (MD-12)
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United States
Environmental Protection Agency 0cto r 1995
Superfund Administrative Reforms
Overview
A. Make smarter cleanup choices that protect public health at less cost.
Control Remedy Costs and Promote Cost-Effectiveness
Establish Cost-Effectiveness Thresholds and New “Rules of Thumb”
Establish a new EPA National Remedy Review Board, composed of senior Agency experts, to review
proposed high cost remedies at specific sites to ensure that costs are not disproportionate to cleanup
benefits. EPA will develop additional “Rules of Thumb” to further ensure the appropnate review of the
cost-effectiveness of remedies.
• Update Remedy Decisions at Select Sites
Revisit remedy decisions at certain sites where significant new scientific information or technological
advancement will achieve the same level of protectiveness of human health and the environment.
• Clarify the Role of Cost Throughout the Remedy Development Process
Clarify the role of costs in developing clethnup options and selecting remedies, and promote consistent use
of policies and guidances on land use, ground water, and presumptive remedies to assure cost-
effectiveness.
• Clarify Information Regarding Remedy Selection Decisions
Require a summary sheet clearly demonstrating the basis for remedy selection at each site The
summary will present the relationship between site risks and response actions, including the costs and
benefits of cleanup alternatives.
2, Ensure All Risk Assessments are Grounded In Reality
• Institute New Role for Stakeholders in Designing Reasonable Risk Assessments
Solicit early stakeholder input to identify and make consistent use of current information about the site and
site inhabitants Reaffirm EPA’s commitment to allow parties at a site to perform nsk assessments under
the proper circumstances.
• Ensure Reasonable and Consistent Risk Assessments
Standardize those components of the risk assessment process that vary little from site to site, and issue
national cntena to the Regions for the review, approval, and reporting of Superfund nsk assessments
Utilize Expert Workgroups on specific contaminants to ensure application of developing risk information
3. Foster Integration of Overlapping Cleanup Programs
• Establish a read regulator at each site undergoing cleanup activities under competing Federal and State
authonties to eliminate overlap and duplication.
4. Reform LJstlng and Deletion PolIcies
• Ensure that response actions that have been taken up to the time of listing are considered when listing
sites on the National Priorities List.
• Delete “clean” parcels of certain Superfund sites from the National Pnorit,es List.
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5. Conduct National Risk-Based Priority Setting
• Establish formal national pnonty-settipg systems for funding federal facility and Superfund cleanups
based on the principle of ‘ worst problems first. These systems would incorporate input from States ana
other stakeholders in determining the appropnate pnonty.
B. Reduce litigation by achieving common ground instead of conflict
Increase Fairness In the Enforcement Process
• Compensate Settlors for a Portion of Orphan Share
Seek to compensate parties for a portion of the costs attnbutable to insolvent parties (orphan share) at
sites where parties agree to perform the cleanup, subject to the adequacy of funding for the cleanup
program.
• Ensure Settlement Funds are Dedicated to Specific Sites
Direct settlement funds designated for future site costs to be placed in site-specific accounts.
• issue Cleanup Orders to Parties in an Equitable Manner
Ensure that issuance of cleanup orders is not limited to a few responsible parties but includes all
appropriate parties where there is a sufficient basis to include them
2. Reduce Transaction Costs
• Increase Number of Protected Small Contributors
EPA will not seek costs from thousands of additional small volume contnbutors ( mis parties) by, at
a minimum, doubling the level previously identified for small party protection. If a party is threatened with
litigation by private parties, EPA will settle with that party for one dollar.
• Adopt Allocations Proposed by Parties at a Site
Adopt private party allocations, including those that identify an orphan share, as the basis for settlement,
where such allocations are approved by EPA. Compensation for a portion of the orphan share may be
provided, subject to the adequacy of funding for the cleanup program.
• Reduce Oversight for Cooperative Parties
Reward parties at sites that consistently perform high quality work by significantly reducing or tiering
oversight.
C. Ensure that States and communities stay more informed and involved in cleanup
decisions.
EstablIsh Greater Stakeholder Role In Remedy Selection
• Shift Remedy Selection Process to Selected States
Implement a process whereby qualified States and Tribes (at Tribal sites) would select remedies at certain
Superfund sites, consistent with applicable law and regulations governing cleanups.
• Pilot New Community-Based Remedy Selection Process
Assist community groups, site parties, local governments and other stakeholders in achieving consensus
to proposd protective remedies at select sites
2. Provide a Meaningful Forum for Stakeholder Concerns
• Establish an Ombudsman in each Region to serve as a point of contact to facilitate resolution of
stakeholder concerns at the Regional level
• Use tools such as electronic bulletin boards and private and educational institutions to improve
communication between all Superfund stakeholders
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SUPERFUND ADMINISTRATIVE REFORMS:
REFORM INITIATIVES
A. Make smarter cleanup choices that protect public health at less cost.
1. Control Remedy Costs and Promote Cost-Effectiveness
EPA believes significant cost savings can be obtained through the institution of a
combination of management and policy measures without jeopardizing a remedy’s
reliability or protection of human health and the environment.
• Establish Cost-Effectiveness Thresholds and New “Rules of Thumb”
EPA will establish a National Remedy Review Board to help control costs of
future remedy decisions. Composed of senior experts from EPA’s
Headquarters and Regional offices, the Board would review proposed cleanup
actions at sites where: (1) estimated costs for the preferred alternative are over
$30M; or (2) proposed remedy costs are over $1OM and 50% greater than the
costs of the least-costly, protective, ARAR-compliant remedy (i.e., choosing
among remedies that meet statutory requirements for Superfund remedy
selection). This 50% “cost-effectiveness yardstick” will reflect the Agency’s
desire to select remedies that fall within this cost-control measure. The Board
would consider the nature of the site, the accuracy of the cost estimate, the
risk posed by the site, and additional relevant factors. The Board would make
recommendations of an advisory nature, although Regional decisionmakers will
be expected to give the Board’s recommendations substantial weight in making
their final remedy selection decisions following public comment. Additional
measures (“rules of thumb”) will be developed by EPA during the winter and
spring of 1996 to highlight potentially “controversial” cleanup decisions for
senior management review to ensure that the preferred option is not
disproportionately costly to other proposed options.
• Update Remedy Decisions at Select Sites
Cleanup decisions made in the early years of the Superfund program were
based on the “state-of-the-knowledge-and-practice” available at that time.
Though these cleanup decisions were designed to provide appropriate levels of
protection of human health and the environment, new technologies are making
their way into the market that allow for more efficient and cost—effective
cleanups, while achieving the same level of protection for human health and
the environment. As such, some cleanup systems that were selected and
constructed in the past might not be the cleanup method EPA would propose
today under similar circumstances. Accordingly, the Agency intends to
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entertain requests by parties to update earlier decisions such as those discussed
below where significant new scientific information or technological
advancement will achieve the same level of protectiveness.
EPA has seen the most dramatic increase in understanding of the factors
affecting cleanup decisions in the field of ground water restoration. By the
early 1990s, experience indicated that sites contaminated with dense
nonaqueous phase liquids (DNAPLs) could require an inordinate amount of
time to restore the ground water to drinking water levels using conventional
pump and treat technology alone. Updating these older decisions could
incorporate current policy for, dealing with sites with DNAPLs (current policy
is to isolate and contain the DNAPL source, removing that source only to the
degree practicable). Updates to these remedies to allow for more attainable
cleanup goals will occur only where the same level of protectiveness of human
health and the environment will be achieved. In less common instances, new
technologies may now also be available that could greatly improve the cost-
effectiveness of ground water source control cleanups. In addition, EPA may
consider changes in technology for source control cleanups in limited cases.
• Clarify the Role of Cost Throughout the Remedy Development Process
This year, EPA will issue two new directives aimed at ensuring rigorous
attention to cost throughout the formulation of cleanup alternatives. The first
directive will highlight the role of cost and cost-effectiveness in the remedy
selection process as established in the Superfund law and the National
Contingency Plan. This directive will outline how cost factors into the
screening of alternative remedies as well as how cost factors into the balancing
of tradeoffs among options in remedy selection. The directive will also
describe how selected remedies must be determined to be “cost-effective,” as
required by statute, and emphasize how disproportionately costly remedies are
to be avoided.
The second directive will promote consistency among EPA Regional offices in
the application of current national policies and technical guidance. These
include policies on. land use that encourage early community involvement
(including local land use authorities) in the development of assumptions about
what future land use may be reasonable to anticipate. These assumptions
should provide a practical foundation for the baseline risk assessment, the
development of cleanup alternatives and the detailed analysis of those
alternatives. Also, recent ground water guidance calls for the evaluation of the
restoration potential of contaminated ground water prior to establishing fmal
cleanup objectives, which may involve combinations of containment and
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restoration. In addition, the directive will foster use of presumptive remedy
guidances that identify frequently selected, proven effective and cost-effective
response actions for common categories of sites (e.g., municipal landfills) and
are powerful tools which dramatically improve the efficiency of the remedy
selection process and the cost-effectiveness of the remedies resulting from it.
I Clarify Information Regarding Remedy Selection Decisions
Summary sheets for Records of Decision (RODs) will accomj any each ROD
and will provide, in a standardized format, the nature of the threats
encountered and the cleanup actions taken to address these threats. This brief,
easily understandable “summary” would be developed to describe clearly and
concisely the tradeoffs that were balanced in choosing the selected remedy
from available options, i.e., the judgments that were made to link the risk
posed by the site to the remedy EPA selected. The summary sheet will be
designed to foster greatei transparency in EPA’s remedy selection decisions
and to facilitate the input of data intà the technical data base that will become
part of CERCLIS’ ifi, EPA’s national Superfund data system.
2. Ensure All Risk Assessments are Grounded in Reality
The following projects are designed to ensure that both the design and conduct of all
Superfund risk assessments are sound and consistent by making good use of “real
world” information about the site and site inhabitants. Ultimately, stakeholder input
on the likelihood that people may be exposed to hazardous substances can ensure a
more realistic context for decision making.
• Institute New Role for Stakeholders in Designing Reasonable Risk
Assessments -
Two projects will be conducted to empower stakeholders to participate in the
design and implementation of Superfund site risk assessments. The first
involves piloting a process that solicits early stakeholder input on land use
assumptions, (e.g., for homes, retail stores, parking lots, playgrounds),
reasonable exposure pathways, (e.g, drinking water from a well, eating fish
from the stream), and characteristics of affected populations (e.g., workers,
young children at play). For Superfund risk assessments scheduled this fiscal
year (FY ‘96), the site manager would seek input up front on which exposure
pathways are most likely to occur and which human behaviors and activities
are most reasonably expected (or are not expected) at this site. This up-front
discussion provides both the “blueprint” for conducting the risk assessment,
and a realistic foundation on which to build cleanup options. The second
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project will reaffirm EPA’s commitment to allowing PRPs to conduct risk
assessments under proper circumstances as part of the overall site study
(RJ/FS).
• Ensure Reasonable and Consistent Risk Assessments
There will be three initiatives aimed at developing reasonable exposure
pathways and assumptions on a consistent basis. The first project will
establish, in FY 96, national criteria for the Regions to revieW, approve, and
report Superfund risk assessments which promote consistency, transparency,
clarity, and reasonableness. Standard review practices, checklists, and formal
sign off by appropriate Agency personnel will ensure that unlikely exposure
scenarios are eliminated from consideration. Standard reporting requirements
will facilitate review of assessments for consistency and reasonableness at the
national level.
The second project seeks to standardize those !Ipj II of the risk assessment
process that vary little from site to site (e.g., exposure models or assumptions
that may be appropriate for most sites). This longer term project includes
developing reasonable default assumptions about expected pathways and routes
of human exposure for different types of land uses or activities. Other parts of
the risk assessment for a site will require the collection and use of site-specific
information from that site.
The third project utilizes an expert workgroup to ensure application of
consistent approaches for lead-contaminated Superfund sites. Lead is one of
the most commonly occurring contaminants at Superfund sites. It is also a
contaminant of great concern because of its potential to affect neurological
development in children, and its prevalence in economically disadvantaged and
minority-populated areas. This project employs an inter-Agency workgroup of
experts in lead toxicity and exposure assessment to provide timely and
consistent analyses, reviews or advice to Regional staff on the most current
methods for assessing lead health risks. The Workgroup is available now to
provide information and advice on a wide range of issues, though it will
generally focus on sites with complex or nationally-precedent-setting lead
issues.
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3. Foster Integration of Overlapping Cleanup Programs
• Establish a lead regulator at each site undergoing cleanup activities
under competing Federal and State authorities to eliminate overlap
and duplication
Some cleanups, particularly.those at federal facilities, are often subject to
multiple regulatory authorities such as Superfund or RCRA Corrective Action,
as well as State laws. This is more often true for Federal age ncies due to
EPA’s policy to continue listing Federal Facilities on the National Priorities
List, regardless of their RCRA status. Although the end goal of the various
regulatory authorities is to achieve protectiveness, the specifics of achieving
that end may be slightly different. Clearly identifying the roles of the various
regulators should help simplify the required cleanup process as well as provide
for more efficient staffmg.
The Agency is developing a guidance, targeted for issuaiice in early 1996, that
will specify roles and outline the general principles and guidelines that the
Federal and State partners should assume in regulating cleanup respones that
are being undertaken under multiple legal authorities. The guidance will be
developed by an interagency workgroup chaired by EPA, including States as
co-implementers.
4. Reform Listing and Deletion Policies
• Ensure that response actions that have been taken up to the time of
listing are considered when listing sites on the National Priorities List
Current policy established a “cutoff date” for information used to evaluate
sites for the Superfund National Priorities List (data from the EPA/State site
investigation is used to score and rank NPL candidates). Revising the
guidance by early 1996 would allow EPA to take current or recent response
actions into consideration when determining whether a site should be placed on
the National Priorities List. EPA would determine a site’s status based on
whether site contamination after such response action is at a level protective of
human health and the environment. EPA would consult with the State, tribe
(where appropriate), ATSDR, and the potentially affected community in
making thisdecision. EPA expects that this will have a positive effect by
providing incentives for voluntary cleanup, and. encouraging reuse or
redevelopment of the property.
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• Delete “clean” parcels of certain Superfund sites from the National
Priorities List
As part of efforts to encourage redevelopment of contaminated sites (EPA’s
Browniields Initiative) and in support of the President’s Five Point Plan, the
EPA NPL Partial Deletion Workgroup is developing a pilot program to delete
“clean” portions of sites on the NPL. Presently, EPA’s policy is to delete
entire sites from the NPL when no further CERCLA response is appropriate at
the entire site. This pilot program will begin in 1995 in response to the
concerns of some potential homeowners, investors or developers who may be
reluctant to undertake economic activity at a site on the NPL. EPA believes.
that remediated portions of closing military bases may make excellent
candidates for a partial deletion program.
5. Conduct National Risk-Based Priority Setting
• Establish formal national priority systems for funding federal facility
and Superfund cleanups based on the principle of “worst problems
first.” These systems would incorporate input from States and other
stakeholders in determining the appropriate priority.
Federal agencies are encountering resource limitations in their cleanup
budgets. Until recently, no systematic tool for comparing risks across large
numbers of sites and facilities existed to help in the process of building an
Agency budget and distributing available funding appropriately. EPA will
issue guidance to the EPA Regions affirming the use of federal agency-
developed risk-based priority setting systems to evaluate federal agency
cleanup sites. The guidance will address the use of risk-based priority setting
for determining federal facility cleanup milestones. It also will discuss the
role of regulators and stakeholders in identifying the priority projects.
As to non-federal facility sites, individual Regions have established the relative
priority of their cleanup projects and Headquarters has issued Superfund
monies to each Region’s highest priorities on a first-come, first-served basis.
In the face of significant budget shortfalls, this initiative will ensure that
available funds in FY ‘96 are directed to the highest priority response projects
on a national basis. The national priority of projects will be assessed by an
expert panel of senior HQfRegional program managers in consideration of
documented information on five criteria: (1) Risks to Humans, (2) Ecological
Risks, (3) (In)Stabiity of Contaminants, (4) Contaminant Characteristics, and
(5) Economic, Social and Program Management considerations.
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B. Reduce litigation by achieving common ground instead of conflict.
1. Increase Fairness in the Enforcement Process
• Compensate Settlors for a Portion of Orphan Share
To promote a fairer distribution of the cost of cleanups that parties agree to
perform, EPA will seek to compensate performing parties for a limited portion
of the known shares attributable to nonviable parties (orphan share) in future
cleanup negotiations. This compensation may be in the form of forgiveness of
past costs, provision of proceeds from other settlements at the site, or a
reduction in oversight costs. Any such compensation will necessarily be
subject to the adequacy of funding for the cleanup program.
Where these mechanisms are not available at a site, EPA-will look to what
limited funds may be available to provide payments to the parties performing
the work (mixed funding) or to perform some severable portion of the work
(mixed work). EPA’s mixed funding policy and regulations will be revisedto
appropriately reflect the priority of this initiative. EPA will commit to
providing additional orphan share funding in the event Congress specifically
appropriates additional dedicated funds for orphan share funding. EPA may
provide limited compensation for some portion of the orphan share at other
appropriate sites, depending on the availability of resources for cleanup, size
of the orphan share, the degree of cooperation shown by the parties, and other
relevant factors.
• Ensure Settlement Funds are Dedicated to Specific Sites
At some sites, parties have criticized EPA’s practice of placing settlement
proceeds for future work received from certain parties at the site, such as
settlements with small volume contributors (de minimis parties), into the
general Superfund. Although these settlement proceeds are intended for use in
future cleanup activities at the site, there is no guarantee that the funds will not
be expended from the Superfund at another site. To remedy this situation,
EPA plans to utilize site-specific special accounts, in which all settlement
funds designated for future costs will be placed. EPA is in fmal discussion
with the Department of Treasury and the Office of Management and Budget to
ensure that these accoUnts will be interest-bearing. These monies will then be
available exclusively at that site.
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• Issue Cleanup Orders to Parties in an Equitable Manner
There has been much criticism by industry that EPA routinely issues cleanup
orders under section 106 (unilateral administrative orders or UAOs) only to a
subset of the parties that have been identified for a particular site. EPA’s
1990 guidance on orders (“Guidance on CERCLA Section 106(a) Unilateral
Administrative Orders for Remedial Designs and Remedial Actions” (OSWER
Directive No. 98 33.0-la)) explicitly directs enforcement staffto issue orders to
the largest manageable number of parties following consideration of the
adequacy of evidence of the party’s liability, the party’s financial viability, and
the party’s contribution to the site. EPA believes that, consistent with this
guidance, order issuance generally has been reasonable and fair and that
decisions not to include parties at a site have related to legitimate matters of
enforceability. EPA recognizes, however, that at some sites, order issuance
may have not been to the “largest manageable number” due to resource
constraints.
EPA is committed to ensuring that orders are issued to all appropriate parties
(other than small volume contributors such as de minimis and de micromis),
where there is a sufficient basis to include them. EPA will identify, for
internal management review purposes only, parties excluded from any order
proposed to be issued. Enforcement staff in the Region will ensure that
information sufficient for the regional decisionmaker to review the issuance
decision is placed in the package sent to him or her for approval. Specifically,
enforcement staff will identify the total number of parties EPA has discovered
at a site. Where enforcement staff recommend that an order not include
certain parties, they will include an explanation of the basis for such exclusion
in the package.
2. Reduce Transaction Costs
S Increase Number of Protected Small Contributors
In previous administrative reforms, EPA issued policies providing that EPA
will not bring enforcement actions against the smallest waste contributors for
response costs, and will enter into settlements with these parties — commonly
referred to as de micromis parties -- if they are threatened with litigation by
“ other private parties. This policy resulted in the avoidance of hundreds of
small volume contributors being brought into the Superfünd process by private
parties. Building on this success, EPA plans to increase this cut-off to protect
thousands of additional parties. At a minimum, EPA will double the level
8
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previously identified for small waste contributor protection and will continue to
explore other potential levels. If any of these parties are threatened by private
parties with litigation, EPA will settle with these parties for one dollar to
protect them from such suits.
I Adopt Allocations Proposed by Parties at a Site
In some instances, parties at sites have taken the initiative in conducting an
allocation of the shares that can be attributed to each party at a site. EPA
seeks to reward the initiative of such parties by adopting allocations that meet
certain standards as the basis for settlement. EPA will review private party
allocations that have attributed shares to all participating parties, including an
identified “orphan share,” (i.e., the known shares of insolvent parties) looking
at factors such as methodology, inclusion of all parties, and fairness. If EPA
accepts the private party allocation, the Agency will try to provide
compensation for a portion of the orphan share, through .-the same mechanisms
considered in compensating parties at future cleanup negotiations, subject to
the adequacy of funding for the cleanup program.
• Reduce Oversight for Cooperative Parties
As the Superfund program has matured, parties have developed a considerable
body of experience in conducting response activities at sites. Some not only
have used this experience to perform high quality work but have acted
cooperatively with EPA throughout the cleanup and enforcement processes. In
recognition of this development, and to promote further cooperati ieness, EPA
will reward such parties by significantly reducing or tiering oversight while
continuing to exercise sufficient oversight to ensure that the work is performed
properly and in a timely manner. Reduction of such oversight will result in
decreased transaction costs for EPA and cooperating parties.
C. Ensure that States and communities stay more informed and involved in
cleanup decisions.
1. Establish Greater ‘ Stakeholder Role in Remedy Selection
I Shift Remedy Selection Process to Selected States
EPA and selected, qualified States would enter into agreements during FY ‘96
through which those States would conduct the remedy selection process,
consistent with applicable law and regulations (the National Contingency Plan),
at certain National Priorities List sites. Participating States would supervise
9
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the entire remedy selection process with minimal EPA oversight or
involvement, giving the State significantly more control than usual over NPL
site cleanups.
• Pilot New Community-Based Remedy Selection Process
EPA and States have had a variety of experiences in recent years empowering
local citizens and other stakeholders to arrive at their own mutually acceptable
proposals for aspects of remedy selection decisions. EPA wotild like to build
on these experiments to bring meaningful community and stakeholder
involvement to life at select additional site through similar or related
techniques. Guidelines would be developed during the first-half of FY ‘96
presenting various options for empowering affected parties to play a direct role
in finding a protective, cost-effective remedy at their sites that meets statutory
requirements and makes common sense. Under CERCLA, EPA will retain
ultimate decisionmaking authority for remedy decisions. - However, the
Agency would hope to equip participants in consensus-based decision pilots
with a clear understanding of statutory, regulatory and policy objectives such
that EPA would expect to be able and willing to select a stakeholder supported
remedy.
2. Provide a Meaningful Forum for Stakeholder Concerns
• Establish an Ombudsman in each Region to serve as a point of contact
to facilitate resolution of stakeholder concerns at the Regional level
EPA will establish a facilitator in each Region during the first-half of FY ‘96
to serve as a direct point of Contact to address stakeholder concerns which
reside at the Regional level. The Ombudsman would report to a top regional
management official, e.g., Regional Administrator or Deputy Regional
Administrator, and would facilitate resolution of these concerns which cannot
be resolved between Regional personnel and the stakeholder through informal
means. The Ombudsman also could serve as a repository for information
related to recurring Superfund concerns.
• Use tools such as electronic bulletin boards and private and
educational institutions to improve communication among all
Superfund stakeholders
This reform would create, during the first-half of FY ‘96, a bulletin board via
the Internet to allow communication among all Superfund stakeholders. The
bulletin board would also include an easily accessible guide to current State
l0
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and Federal guidances. The bulletin board would promote consistency among
site cleanup decisions, and provide access to information for organizations that
maintam site information repositories and administrative records within
communities. Entities such as universities and the Hazardous Substance
Research Centers may be utilized to provide additional information, technical
expertise, and support to communities located close to Superfund sites.
11
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United States Communications Educanon,
Environmental Protection And Public Aflairs i? 2
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Some of the new reforms will aim to control costs while protecting public health by
assuring more consistency, streamline processes to save time and money, create new choices for
cost-effective cleanup options, and encourage economic redevelopment. Among these reforms
will be the establishment of cost-effectiveness “rules of thumb” and an EPA National Remedy
Review Board that will ensure costs are appropriate to cleanup needs; setting criteria for
reopening remedy decisions at select sites where new and better science will achieve the same
level of protection with potential cost savings; directives to ensure rigorous attention to costs in
the development of cleanup options and remedy selection; and national risk-based priority
setting to select sites for funding based on the principle of cleanup of “worst sites first.”
The cost-effectiveness reforms also include specific efforts to ensure appropriate health.
protection in the decisionmaking process, through involving stakeholders in designing accurate,
site-specific risk assessments. To make Superfiind sites more attractive for economic
redevelopment, the reforms include an effort to pilot the deletion of “clean” parcels of Superfiind
sites and establishing guidance to ensure that all cleanup actions are considered when listing
sites on the Superflind National Priorities List — which is expected to keep some sites off the list,
a factor that will help make them more attractive for redevelopment.
Reforms that aim to reduce litigation and reduce both costs and conflict delays include
efforts to increase fairness in the enforcement process by compensating settling parties for a
portion of the “orphan shares,” or cleanup costs that are attributable to insolvent parties; and
efforts to reduce transaction costs by doubling the number of “small party” entities — typically
small businesses and individuals whose contribution to pollution at Superfiind sites is small —
who are protected from lawsuits. To provide a positive incentive to reduce litigation, EPA also
will reward cooperative parties at sites that consistently perform high quality work by
significantly reducing EPA oversight.
A third set of reforms aims to provide more and better information and opportunities for
involvement to citizens, state and local governments, and industry in cleanup decisions, to
encourage responsible cleanup choices that reflect local needs and prefei et ces. Among these
reforms will be efforts to establish greater roles for states and tribes in remedy selection;
providing clearer information on remedy selection decisions through simple suxnmaly sheets;
promoting pilot efforts to create consensus on cleanup options in communities; and providing
forums for stakeholder concerns by establishing an ombudsman in each Region to help resolve
stakeholder concerns and increasing use of tools such as electronic bulletin boards to improve
communications among stakeholders.
As a followup to previously announced reforms, EPA also has issued a new policy that
adopts as guidance the provisions of the lender liability rule; and issued model de minimis
settlement agreements designed to further streamline the de minimis settlement process.
R-1 78
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NEW COMMON-SENSE REFORMS MAKE SUPERFUND PROGRAM
FASTER, FAIRER AND MORE EFFICIENT
Continuing its commitment to make the Superiiind program faster, fairer and more efficient for
the one in four Americans who live near a toxic waste site, the Clinton Administration is
announcing a package of 20 new, common-sense administrative reforms. These reforms
culminate the Clinton Administration’s EPA’s two-year effort to fundamentally redirect the
Superfiind program under the current law. These new reforms will help governments,
communities and industry in three important ways:
1) Make common-sense, cost-effective cleanup choices that protect public health and the
environmenL Lowering the costs of cleanup makes both economic and environmental sense for
communities, state and local governments, and businesses involved in cleanup settlements. The
new reforms will assure consistency; streamline processes to save time and money, create, new
opportunities for choosing cost-effective cleanup options; and do more to protect public health
and encourage economic redevelopment, including plans to:
• Control Remedy Costs and Promote Cost-Effectiveness by establishing cost-
effectiveness “rules of thumb” and establishing an EPA National Remedy Review BoardT
to ensure that costs are appropriate to the cleanup needs; revisiting remedy decisions at
select sites where new and better science will achieve the same level of protection, with
potential cost savings; issuing directives to ensure rigorous attention to costs in
developing cleanup options and selecting remedies; and promoting consistent use of the
most up-to-date policies and guidance to assure cost effectiveness.
• Ensure Risk Assessments are Grounded in Reality by soliciting stakeholder input in
designing accurate, consistent site-specific assessments, including reasonable exposure
pathways, and reaffirming EPA’s commitment to allow parties at a site to perform risk
assessments under the proper circumstances.
• Conduct National Risk-Based Priority Setting by establishing formal priority-setting
systems for funding federal facility and Superfund cleanups based on the pñnciple of
“worst sites first,” and involving States and other stakeholders in setting those priorities;
and issuing guidance to promote risk-based priority setting in determining federal facility
cleanup milestones.
• Reform Listing and Deletion Policies by piloting the deletion of “clean parcels of
certain Superfund sites; and establishing guidance to ensure that all cleanup actions that
have been taken up to the time of a listing decision are considered when listing sites on
the Superfund National Priorities List -- with the result that some sites will not warrant
listing, helping to make them more attractive for redevelopment.
2) Reduce litigation through reforms so that more time is spent on cleanups and less on
lawyers. In thousands of communities, toxic waste cleanups have prompted litigation as some of
those responsible for pollution at a site have sued or threatened to sue many small businesses and
individual citizens over even the smallest possibility of involvement. In other cases, responsible
parties argue over “orphan shares” of responsibility -- cleanup obligations of companies
responsible for past pollution who are insolvent. The new reforms will expedite cleanups by
providing solutions to these and other common conflicts, including commitments to.
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• Increase Fairness in the Enforcement Process by compensating settling parties for a
portion of “orphan shares,” the costs that are attributable to insolvent parties; ensuring
that settlement funds are dedicated to specific sites by placing them in site-specific
accounts; and, where settlement can’t be reached, working with regions to ensure that
cleanup orders are issued to all appropriate parties (but not to parties whose contribution
to the pollution at the site is small — de minimis and de micromis parties) where there is a
su cient basis to direct them to conduct a cleanup.
• Reduce Transaction Costs by adopting private party cost allocations, including those
identif ’ing an orphan share, as the basis for a settlement after EPA review and approval;
increasing by thousands the number of parties who contribute vely small volumes of
waste that will be protected — at a minimum, doubling the level previously identified for
small party protection; and rewarding cooperative parties at sites that consistently
perform high quality work by significantly reducing EPA oversight.
3) Help governments, communities, and industry become more informed and involved so that
cleanup decisions make the most sense at the community leveL EPA is committed to making
Superfiind work better for the communities that rely on it to cleanup the toxic waste sites
threatening their public health and economic well-being. A lack of good information about site
conditions and cleanup options has often led to cynicism and distrust of the Superfund program.
These reforms will harness the power of information to take full advantage of the willingness of
all involved at a site to arrive at responsible cleanup decisions.
• Establish Greater Slate/Tribal Role in Remedy Selection by implementing a process
allowing States and Tribes (at Tribal sites) to select remedies at certain Superfiind sites,
consistent with applicable law and regulations governing cleanups.
• Provide Clear Information on Remedy Selection Decisions through a simple summary
sheet explaining the cleanup plan and the reh:ionship between risk, cost, and other
tradeoffs that were balanced in selecting a remedy from among the available options.
• Promote Consensus in Choosing Cleanup Options by developing and ithiating pilot
projects in which EPA empowers and assists citizens, PRPs, and other stakeholders in
devising a mutually acceptable, protective cleanup plan.
• Provide a Meaningful Forum for Stakeholder Concerns by establishing an Ombudsman
in each Region to facilitate resolution of stakeholder concerns at the Regional level; and
using tools such as electronic bulletin boards and grants to private and educational
institutions to improve communication among all Superfiind stakeholders.
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624
UPDATE ON EPA’S PREVIOUS ADMINISTRATIVE REFORM EFFORTS
October 2, 1995
EPA initiated two prior rounds of initiatives (June 1993 and February 1995) focused on fundamentally
reforming the Superfund program by maximizing and refining the use of the authorities that exist in the
current law
Promoting Economic Development
EPA has awarded 18 Brownfields pilots and plans to award 50 pilots, at up to $200,000 each by
the end of 1996. In February of this year, EPA gave a boost to property owners, bankers, developers and
others concerned that their property was a potential Superfund by removing 24,000 or about two-thirds of
the sites from the CERCLIS Inventoiy to help clarify that the Agency has no further interest in these sites.
• EPA issued a revised policy arid a model settlement agreement in May of 1995 aimed at
providing protection from lawsuits to parties planning on purchasing Superfund properties. Today, EPA
announces the issuance of a new policy that adopts the provisions of the previously-promulgated “Lender
Liability Rule”
Protecting Small Volume ontributors
• EPA has protected well over 10.000 small volume contnbutors of hazardous waste at
approximately 162 Superfund sites by entering into de minimis settlements. EPA indirectly provided
relief to untold numbers of even smaller contributors (de m:croms parties) by issuing a guidance in July
1993 clearly stating EPA’s intention not to pursue such parties. In addition, EPA is today issuing Model
De Minim is settlement agreements designed to further streamline the de minimis settlement process
Streamlining Remedy Selection
• EPA drastically streamlined the remedy selection process by issuing “presumptive remedy”
guidances for municipal landfill sites and sites with volatile organic compounds in soil. To address
concerns that remedy selection consider “reasonably” anticipated future land uses at sites, EPA has
established a policy to solicit early community involvement in determining the future uses of the
properties to be cleaned up. In September 1993, EPA issued guidance for evaluating technical
impracticability for ground water restoration and, in January 1995, issued guidance for consistent
implementation.
Promoting the Use of Allocations
• In the second round of reforms, EPA is ‘test-driving’ an allocation process outlined in last year’s
legislation to reauthorize Superfund in which a neutral party will conduct a streamlined out-of-court
allocation and will assign shares of responsibility for cleanup costs among all the parties at a site.
Increasing the Role of the States
• EPA instituted pilots that deferred 22 sites to States for appropriate response activity under the
first round of administrative reforms. In May 1995, EPA issued guidance for deferring the consideration
of sites for listing on the NPL while qualified States and Tribes oversee PRP response actions.
Fostering Community Involvement and Environmental Justice
• The Agency for Toxic Substances and Disease Registry (ATSDR) is funding the Del Amo
medical assistance project in Torrance, California, which is a pilot program for providing health services
assistance to citizens in proximity to Superfund sites.
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j2
LAS. Err,’fronmer,IQI Proiecflon Agency
September 29, 1995
MEMORANDUM
SUBJECT: Issuance of “Model CERCLA Section 107 Consent Decree
for Recovery of Past Response Costs” and “Model CERCLA
Section 122(h) (1) Agreement for Recovery of Past
Response Costs”
FROM: Jerry Clifford, Direct
Off ice of Site Remed’ ti En orcement
U.S. Environmental ote tion Agency
Bruce S. Gelber, Acting Chief / I i
Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice
TO: Regional Counsel, Regions I - X
Regional Waste Management Division Directors,
Regions I - X
Financial Management Officers, Regions I — X
Assistant Chiefs, Environmental Enforcement
Section
We are pleased to issue the final versions of two model
CERCLA cost recovery settlement documents: 1) “Model CERCLA
Section 107 Consent Decree for Recovery of Past Response Costs”
(“Model CD”); and 2) “Model CERCLA Section 122(h) (1) Agreement
for Recovery of Past Response Costs” (“Model Agreement”). The
Model CD is to be used as guidance for EPA and DOJ staff when
negotiating CERCLA Section 107 judicial consent decrees for
recovery of past response costs. The Model Agreement is to be
used as guidance for EPA and DOJ staff when negotiating CERCLA
Section 122(h) administrative agreements for recovery of past
response costs. Both models are designed for resolution of
purely past cost claims and are not intended to be used to
resolve claims for future work or payment of future response
costs (“cashout” settlements). Cashout settlement terms will be
provided in subsequent models.
We encourage our staffs to adhere as closely as possible to
the terms of these models, subject to modifications needed to
reflect site-specific circumstances. We believe use of these
models will reduce negotiation timeframes, achieve nationally
consistent settlements, proDote compliance with current
eparftnent of Ju f ice
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2
settlement practices and procedures, and increase the speed of
management review and approval. When seeking approval of any
settlement based upon one of these models, staff should identify
any significant deviation from the relevant model and the basis
for the departure. For DOJ staff, these models are available
electronically on the Section’s work product directory, EESINDEX,
as N: \NET\SS52\UDD\EESINDEX\CERNODEL\PASTCOST CD or PASTCOST.AOC.
We would like to thank all EPA and DOJ staff who assisted in
the development of these models. If you have any questions about
these models, please contact Janice Linett of the Regional
Support Division at (703) 978-3057 or Tom Mariani of the
Environmental Enforcement Section at (202) 514-4620.
Attachments
cc: Lawrence E. Starfield, Acting Associate General Counsel,
Solid Waste and Emergency Response Division,
Stephen D. Luftig, Director, Office of Emergency and
Remedial Response
Jack L. Shipley, Director, Financial Management Division
Letitia Grishaw, Chief, Environmental Defense Section
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UNITED STATES ENVIRONMENTAL PROTEC nON AGENCY
WASHINGTON, D C 20460
U.S. Department of Justice
H .shLngso I. DC 2 V
SEP 221995
iEMORANDtJM
SUBJECT: Policy on CERCLA Enforcement Against Lenders and
Government Ent , e that Acquire Property Involuntarily
FROM: Steven A. Her ’4 ’ jstant Administrator
Office of En fo& thënt and Compliance Assurance
United States Environ-nental Protection Agency
Lois J?’ 4 r, Assistant Attorney General
Environmth’it and Natural Resources Division
United States Departmei t of Justice
TO: Regional Administrators, Regions I - X, EPA
Regional Counsel, Regions I - X, EPA
Waste Management Division Directors, Region I - X, EPA
Chief, Environmental Enforcement Section, DOJ
Assistant Section Chiefs, Environmental Enforcement
Section, DOJ
This memorandum sets forth the Environmental Protection
Agency’s (“EPA ) and the Department of Justice’s (‘DOJ”) policy
regarding the government’s enforcement of the Comprehensive
Environmental Response, Compensation and Liability Act (“CERCLA’)
against lenders and against government entities that acquire
property involuntarily. As an enforcement policy, EPA, and DOJ
intend to apply as guidance the provisions of the “Lender Liability
Rule’ promulgated in 1992, thereby endorsing the interpretations
and rationales announced in the Rule. See “Final Rule on Lender
Liability Under cERcLAI,’ 57 Fed. Reg. 18,344 (April 29, 1992).’
(This rule has been vacated by a court, as described below in the
“Background’ section).
‘ This guidance does not address lender liability under any
statutory or regulatory authority, rule, regulation, policy, or
guidance, other than CERCLA. Specifically, this guidance does not
cover lender liability determinations as they relate to, the
Resource Conservation and Recovery Act (“RCRA”) and RCRA’s
Underground Storage Tank program.
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—S
Q <9 Pvt sd Wi SoyiCwda k* on paper th
r1 5O%rucØ d
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ADDRESSES Add:: cnai copies of this Doilcy statement ca:.
obtained from the Superfund Docket, :ocated a: Room 2427 at
rj.g nv1ronmerLLa.L Protection Agency, 40: M Street, S W
4asn:ngtori, D C 204 0 (telephone nu cer 202-260-3046 ) between :ne
nours of 9 00 a.rn and 4:00 p.m. Monday through Fr dav, excluding
ederal hol:days As provided Ln 40 C.F.R. Part 2, a reasona je
fee av be cr.arged for copying services. Paper copies of :n:s
documer.: ay also be ordered from the National Tecnn cal
Information Service NTIS) , U.S. Department of Commerce, 5285 Port
Royal Rd., Sprin;f eld, VA 22161. Orders must reference NTIS
accession number PB95-234498. For telephone orders or further
information on placing an order, call NTIS at 703487-4650 for
regular service or 800-553-NTIS for rush service. For orders via
email/Internet send to the following address:
orders@ntis. fedworld.gov.
FOR FURTEER INFORMATION CONTACT: Lisa E. Corner, Office of Site
mediation Enforcement (2273-G) , U.S. Environmental Protection
Agency, 401 M Street, S.W., Washington, D.C. 20460 (703-603-8900),
or the RCRA/Superfund Hotline at 800-424-9346 (in the Washington,
D.C. area at 703-412-9810) : -
I Background
This policy guidance establishes EPA’s and DOJ’s positio
regarding possible enforcement actions against lenders ar
government entities who are associated with property that may b
subject to a CERCLA• response action. EPA and DOJ recognize
CERCLA’s unintended effects on lenders and government entities and
the relative concern from these parties regarding the consequences
of potential enforcement. In light of these concerns, lenders may
refuse to lend money to an owner or developer of a contaminated or
potentially contaminated property or they may hesttate in
exercising their rights as secured parties if such loans are made.
Additionally, government entities that involuntarily acquire
property may be reluctant to perform certain actions related to
contaminated or potentially contaminated property.
The language of Section 101(20) (A) leaves lenders and other
interested parties uncertain as to which types of actions - - such
as monitoring vessel or facility operations, requiring compliance
with applicable laws, and refinancing or undertaking loan workouts
- - they may take to protect their security interests without
risking EPA enforcement under CERCLA. Courts have not always
agreed on whe n a lender’s actions are “primarily to pratect a
security interest,” and what degree of “participation in the
management” of the property will forfeit the lender’s eligibility
for the exemption. This uncertainty was heightened by dicta in the
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Fleet Factors 2 opinion, where the circuit court suggested that a
lender participating iri the management of a vessel or facility “to
a degree indicating a capacity to influence the corporat:on’s
treatment of hazardous waste” could be considered liable under
CERCLA.
The lack of legislative history on arid consistent court
treatment of the CERCLA Section 101(20) (A) security interest
exemption prompted EPA to address potential lenaer liability for
cleanup costs at CERCLA sites in the Lender Liability Rule, which
was promulgated in April 1992.
Regarding the exemption for government entities, neither the
legislative history of CERCLA Sections 101(20) (D) and 101(35) (A)
nor the case la provide sufficient explanation of when a property
acquisition or transfer is considered involuntary. Thus, in the
Rule, EPA a1 o clarified the language of these sections, describing
when a government entity was exempted frr’m CERCLA enforcement as an
owner or operator or was protected from third party actions.
However, in Kellev v. EPA, 4 the Circuit Court- of Appeals for
the District of Columbia vacated the Rul on the g ound that EPA
lacked authority to issue the Rule as a binding regulation.
Nevertheless, the Ke].ley decision did not preclude EPA and DOJ from
following the provisions of the Rule as enforcement policy, and the
agencies have generally done so.
II. Policy Statement
This memorandum reaffirms EPA’s and DOj’e intentions to follow
the provisions of the Lender Liability Rule as enforcement policy.
EPA and DOJ endorse the interpretations and rationales announced in
the Rule and its preamble. The purpose of this memorandum is to
provide guidance within EPA and DOJ on the exercise of enforcement
discretion in determining whether particular lenders and’ government
entitles that acquire property involuntarily may be subject to
CERCLA enforcement actions. In making such determinations, EPA and
DOJ personnel should consult both the regulatory text of the Rule
and the accompanying preamble language in exercising their
2 United States v. Fleet Factors Corp. , 901 F.2d 1550, 1557
(11th Cir. 1990), cert. denied, 111 S. Ct. 752 (1991).
Fleet , 901 F.2d at 1557.
15 F.3d 1100 (D.C . Cir. 1994), reh. denied, 25 F.3d 1088
(D.C. dr. 1994), cert. denied, American Banicere Ass’n V. Kelly ,
115 S.Ct. 900 (1995)
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enforcement dlscret:on under CERC as to lenders and government
entities that ac u:re property invoiuntar ly.
After the promulgation of the Lender Liability Rule, but prior
to its invalidation, several district and circuit courts adhered to
the terms of the Rule or interpreted the statute in a manner
consistent with the Rule. 5 Moreover, notwithstanding the Rule’s
invalidation in Kelley , since that decision several courts have
also interpreted the statute in a way that is consistent with the
Rule. EPA and DOJ believe that this case law is further evidence
of the reasonableness of the agencies’ interpretation of the
statute, as embodied formerly ir. the Rule and now in this policy
statement.
III. Use of T1 is Policy
The policies and procedures established iz i this document and
any interr’al procedures adopted for its implementation are intended
solely as guidance for employees of EPA and DOJ. They do not
constitute rulemaking and may not be relied on to create a right or
benefit, substantive or procedural, enforceable at law, or in
equity, by -ny person. EPA and DOJ ’ reserve the right to act at
variance with this guidance or its internal implementing
procedures.
See 57 Fed. Reg. 18,344 (April 29, 1992) (text and preamble).
6 See Northeast Doran. Inc. v. Key Bank of Maine , 15 F.3rd 1
(let Cir. 1994); Unite& States v. McLamb , 5 F.3d 69 (4th Cir.
1993); WatervilleIndus.. Inc. v. Finance Authority of Maine , 984
F. 2d 549 (let Cir. 1993); United States v. Fleet Factors , 901 F.2d
1150 (11th Cir. 1990), on remand , 821 F. Supp. 07 (S.D. Ga. 1993);
Kel].ev v. Tiscornia , 810 F. Supp. 901 (W.D. Mich. 1993); Grantors
to the Sjlrepjm Site Trust v. State Street Bank & Trust Co., , 23 ELR
20428 (D. Mass. Nov. 24, 1992)
See I & Z Leasing. Inc. v. Grayina Reel. Inc. , 873 F.SUpp.
51 (E.D. Mich. 1995); Ken Industries. Inc. v. Safety Light Core. ,
857 F.Supp. 373 (D.N.J. 1994).
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY AND
UNITED STATES DEPARTMENT OF JUSTICE
MODEL CERCLA SECTION 107 CONSENT DECREE FOR
RECOVERY OF PAST RESPONSE COSTS
This model and any internal procedures adopted for its
implementation and use are intended as guidance for employees of
the U.S. Department of Justice and the U.S. Environmental
Protection Agency. They do not constitute rulemaking by the
Department or Agency and may not be relied upon to create a right
or a benefit, substantive or procedural, enforceable at law or in
equity, by any person. The Department or Agency may take action
at variance with this model or its internal implementing
procedures.
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MODEL CERCLA SECTION 107 CONSENT DECREE
FOR RECOVERY OF PAST RESPONSE COSTS
TABLE OF CONTENTS
I. BACKGROUND.... 3
II. JURISDICTION 4
III. PARTIESBOUND 4
IV. DEFINITIONS 4
V. REIMBURSEMENT OF RESPONSE COSTS 7
VI. FAILURE TO COMPLY WITh REQUIREMENTS OF CONSENT
DECREE
VII. COVENANT NOT TO SUE BY PLAINTIFF [ s ] 10
VIII. COVENANT NOT TO SUE BY SETTLING DEFENDANTS . . 11
IX. EFFECT OF SETTLEMENT/CONTRIBUTION PROTECTION . 12
ISITE ACCESSj 13
— . I ACCESS TO INFORMATION ] 15
X. RETENTION OF RECORDS • 16
XI. NOTICES AND SUBMISSIONS 18
XII. RETENTION OF JURISDICTION 18
XIII. INTEGRATIONI/APPENDICES ] 18
XIV. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT . . 19
XV. EFFECTIVE DATE 19
XVI. SIGNATORIES/SERvIcE . . . . . . . . • 19
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF [ ]
_J DIVISION
)
UNITED STATES OF AMERICA, )
)
[ and )
)
THE STATE OF ___________I )
Plaintiff [ s),
) Civil Action No.
v.
) Judge ___________
[ DEFENDANTS] )
)
)
Defendants.
)
CONSENT DECREE
(NOTE: If the complaint includes causes of action which are not
resolved by this consent decree, or names defendants who are not
signatories to this consent decree, the title should be “Partial
Consent Decree.]
I. BACKGROUND
A. The United States of America (“United States”), on
behalf of the Administrator of the United States Environmental
Protection Agency (“EPA”), filed a complaint in this matter
pursuant to Section 107 of the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, 42 U.S.C. §
9607, as amended (“CERCLA”), seeking reimbursement of response
costs incurred and to be incurred for response actions taken at
or in connection with the release or threatened release of
hazardous substances at the [ insert Site Name] in [ insert City,
County, State) (“the Site”).
[ [ _. The State of _______ (the “State”) also filed a
complaint against the defendants in this Court alleging that the
defendants are liable to the State under Section 107 of CERCLA,
42 U.S.C. S 9607, and [ list State laws cited in the State’s
complaint]. The State in its complaint seeks [ insert relief
1 Follow local rules for caption format.
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sought).])
B. The defendants that have entered into this Consent
Decree (“Settling Defendants”) do not admit any liability to
Plaintiff(s) arising out of he transactions or occurrences
alleged in the complaint(s).
C. The United States and Settling Defendants agree, and
this Court by entering this Consent Decree finds, that this
Consent Decree has been negotiated by the Parties in gqod faith,
that settlement of this matter will avoid prolonged and
complicated litigation between the Parties, and that this Consent
Decree is fair, reasonable, and in the public interest.
THEREFORE, with the consent of the Parties to this Decree,
it is ORDERED, ADJUDGED, AND DECREED:
II. JURISDICTION
1. This Court has jurisdiction over the subject matter of
this action pursuant to 28 U.S.C. SS 1331 and 1345 and 42 U.S.C.
SS 9607 and 9613(b) and also has personal jurisdiction over
Settling Defendants. Settling Defendants consent to and shall
not challenge entry of this Consent Decree or this Court’s
jurisdiction to enter and enforce this Consent Decree.
III. PARTIES BOUND
2. This Consent Decree is binding upon the United States
(and the State),’ and upon Settling Defendants and their (heirs,]
successors and assigns. Any change in ownership or corporate or
other legal status,. including but not limited to, any transfer of
assets or real or personal property, shall in no way alter the
status or responsibilities of Settling Defendants under this
Consent Decree.
IV. DEFINITIONS
3.. T. ii .Iess ot hEt jse expressly provided herein, terms used
in this Cc tpent ctee which are defined in CERCLA or in
regulat i s p o ulqat4d under CERCLA shall have the meaning
assigned to thea i uCERCLA or in such regulations. Whenever
terms listed’ below are used in this Consent Decree or in any
appendix attached hereto, the following definitions shall apply:
2 In situations where the court has entered summary
judgment as to liability, we normally should preserve that result
in a subsequent settlement by deleting this Paragraph B and
replacing it with one that describes the summary judgment
decision.
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a. “CERCLA” shall mean the Comprehensive Environmental
Response, COmpensation, and Liability Act of 1980, as amended, 42
U.S.C. S 9601,
b. “Consent Decree” shall mean this Consent Decree and
all appendices attached hereto. In the event of conflict between
this Consent Decree and any appendix, the Consent Decree shall
control.
c. “Day” shall mean a calendar day. In computing any
period of time under this Consent Decree, where the last day
would fall on a Saturday, Sunday, or federal holiday, the period
shall run until the close of business of the next working day.
d. “DOJ ” shall mean the United States Department of
Justice and any successor departments, agencies or
instrumentalities of the United States.
e. “EPA” shall mean the United States Environmental
Protection Agency and any successor departments, agencies or
instrumentalities of the United States.
f. “EPA Hazardous Substance Superfund” shall mean the
Hazardous Substance Superfund established by the Internal Revenue
Code, 26 U.S.C. § 9507.
g. “Interest” shall mean interest at the current rate
specified for interest on investments of the Hazardous Substance
Superfund established by 26 U.S.C. § 9507, compounded annually n
October 1 of each year, in accordance with 42 U.S.C. S 9607(a).
f [ _. “Owner Settling Defendants” shall mean (insert
names].
h. “Paragraph” shall mean a portion of this Consent
Decree identified by an arabic numeral or an upper or lower case
letter.
i. “Parties” shall mean the United States(, the State
of __________,) an9 the Settling Defendants.
The Superfund currently is invested in 52-week MK bills.
The interest rate for these MK bills changes on October 1 of each
year. To obtain the current rate, contact Vince Velez, Office of
Administration and Resource Management, Financial Management
Division, Superfund Accounting Branch, at (202) 260-6465.
This definition is needed if the optional paragraph on
Notice of Obligations to Successors-in-Title is used. See infra
p. 14.
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j. “Past Response Costs” shall mean all costs,
including but not limited to direct and indirect costs, that EPA
or DOJ on behalf of EPA has paid at or in connection with the
Site through [ insert date), plus accrued Interest on all such
costs through such date.
“Record of Decision” or “ROD” shall mean the EPA
Record of De ision relating to the (Site or Operable Unit at
the Site] signed on (insert date] by the Regi al Administrator,
EPA Region , or his/her delegatee, and all attachments
thereto.))
k. “Plaintiff(s)” shall mean the United States (and
the State].
1. “Section” shall mean a portion of this Consent
Decree identified by a roman numeral.
m. “Settling Defendants” shall mean (insert names of
settling parties, or only if very numerous, “those parties
identif led in Appendix A.”]
n. “Site” shall mean the ________ Superfund site,
encompassing approximately acres, located at [ insert address
or description of location) in (insert City, County, State), and
(insert either “depicted more clearly on the map included in
If the past costs settlement is partial, it may be
necessary to continue the definition with a brief description of
the past response action(s) which are being paid for or
compromised, such as: “. . . for the response action described
in the Record of Decision for the First Operable Unit at the Site
dated “ or “for the removal action described in the
action memorandum for the Site dated _______.“ Exercise care in
describing the activities covered, as this description may affect
the scope of the covenant not to sue and contribution protection.
For clarity, the description of the past response action may need
to indicate which response actions are not included within the
definition of Past Response Costs. Check to be sure that the
date used iJ th d f nition of Past Response Costs does not
inadvertent y incfudt-costs that are outside the scope of the
definjtjone fn some cases, it may be useful to attach a
standard, Regionally-prepared cost summary listing the costs that
are within the scope of the definition. This may be done: 1) to
be sure that no confusion arises as to which costs are being
compromised; or 2) to indicate which outstanding past cost claims
are being resolved through the settlement, j ., to indicate that
the recovered costs are to be applied to particular portions of
the debt.
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Appendix B” or”designated by the following property description:
(. “State” shall mean the State (or Commonwealth]
of . 1
“State Past Response Costs” shall mean all
costs, incluaing but riot limited to direct and indirect costs,
together with accrued interest, that the State of _________ has
paid through (insert date] in response to the release or
threatened release of hazardous substances at or in connection
with the Site, but not including amounts reimbursed to the State
by EPA.))
o. “United States” shall mean the United States of
America, including it departments, agencies and
instrumentalities.
V. REIMBURSEMENT OF RESPONSE CO8TS
[ NOTE: If the amount to be paid is $10,000 or greater, payment
should be made by electronic funds transfer using the following
Paragraph 4.]
4. Payment of Past Response Costs to the EPA Hazp dous
Substance Superfund . Within 30 days of entry of this Consent
Decree, Settling Defendants shall pay to the EPA Hazardous
Substance Superfund $_________ in reimbursement of Past Response
Costs, plus an additional sum for Interest on that amount
calculated from the date set forth in the d finitjon of Past
Response Costs through the date of payment. Payment shall be
made by FedWire Electronic Funds Transfer (“EFT”) to the U.S.
Department of Justice account in accordance with current EFT
procedures, referencing USAO File Number ___________, the EPA
Region and Site Spill ID Number ______ (insert 4-digit number,
first 2 numbers represent the Region (01-10), second 2 numbers
represent the Region’s Site/Spill Identification number], and DOJ
Case Number ___________. Payment shall be made in accordance
with instructions provided to Settling Defendants by the
Financial Litigation Unit of the U.S. Attorney’s Office in the
District of __________ following lodging of the Consent Decree.
Any payments received by the Department of Justice after 4:00
6 As an alternative to calculation and payment of interest
from the Past Response Costs date through the date of payment,
settling defendants may agree to place the amount agreed upon
into an interest-bearing escrow account to be disbursed to EPA
upon entry of the consent decree. If this method is used,
accrued interest from the Past Response Costs date through the
date the escrow account is created should be calculated and
included in the escrow deposit.
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p.m. Eastern Time shall be credited on the next business day.
Settling Defendants shall send notice to EPA and DOJ that payment
has been made in accordance with Section XI (Notices and
Submissions) and to (insert names and mailing addresses of the
Regional Financial Management Officer and any other receiving
officials at EPA).
(NOTE: If the amount to be paid is less than $10,000, payment
should be made by check using the following alternative Paragraph
4.]
4. Payment o Past Response Costs to the EPA Hazardous
Substance Superfund . Within 30 days of entry of this Consent
Decree, Settling Defendants shall pay to the EPA Hazardous
Substance superfund $________ in reimbursement of Past Response
Costs, plus an additional sum for Interest on that amount
calculated from the date set forth in the definition of Past
Response Costs through the date of payment. Payment shall be
made by certified check or checks or cashier’s check or checks
made payable to “U.S. Department of Justice,” referencing the
name and address of the party making payment, the EPA Region and
Site Spill ID Number ______ [ insert 4-digit number, first 2
numbers represent the Region (01-10), second 2 numbers represent
the Region’s Site/Spill Identification number], USAO File Number
__________ and DOJ Case Number __________. Settling Defendants
shall send the check [ s) to:
(Insert address of Financial Litigation Unit of U.S.
Attorney’s Office for the District in which the Consent
Decree will be entered)
Settling Defendants shall send notice that such payment has been
made to EPA and DOJ in accordance with Section XI (Notices and
Submissions) and to (insert names and mailing addresses of the
Regional Financial Management Officer and any other receiving
officials at EPA].
(NOTE: If pa mont i$ to be made to a State, insert th. following
optional paragr1pI .J
(L... . Payment of Past Response Costs to the State . Within
30 days of mntry of this Consent Decree, Settling Defendants
shall pay tothe State $ , in the form of a certified
check or checks or cashier’s check or checks, in reimbursement of
State Past Response Costs. The check(s) shall be made payable to
_______ and shall reference (insert- name of case). Settling
Defendants shall send the check(s) to:
(Insert address provided by State]]
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VI. FAILURE TO COMPLY WIPE REQUIREMENTS OP CONSENT DECREE
5. Interest on Late Payments . In the event that any
payment(s) required by Section V (Reimbursement of Response
Costs) or Section vi, Paragraph 6 (Stipulated Penalty), are not
received when due, Interest shall continue to accrue on the
unpaid balance through the date of payment.
6. StiDulated Penalty .
a. If any amounts due to EPA (or to the State] under
this Consent Decree are not paid by the required date, Settling
Defendants shall pay to EPA [ , or to the State if the delayed
payment is for State Past Response Costs,] as a stipulated
penalty, in addition to the Interest required by Paragraph 5,
$_______ per violation per day that such payment is late.
((_. If Settling Defendants do not comply with
Section (Site Access), Section — (Access to Information),
or Section [ insert cross-reference to any other non-payment
requirements for which a stipulated penalty applies], Settling
Defendants shall pay to EPA, as a stipulated penalty, $______ per
violation per day of such noncompliance.]]
(NOTE: Escalating payment schedules may be used in Paragraph
6(a) and in the optional paragraph immediately above concerning
stipulated penalties for violations of non-payment requirements
of the consent decree.]
b. Stipulated penalties are due and payable within 30
days of the date of the demand for payment of the penalties by
EPA [ or the State). All payments to EPA under this Paragraph
shall be made by certified or cashier’s check made payable to
“EPA Hazardous Substance Superfund” and shall be sent to:
[ Insert Regional Lockbox number and address)
All payments shal ±x djcate that the payment is for stipulated
penalties and sh 1l reference the name and address of the party
making paymen ,/’-the EPA Region and Site Spill ID Number ______
(insert 4—digit number, first 2 numbers represent the Region (01-
10), second 2 nuithers represent the Region’s Site/Spill
Identification number], USAO File Number _________, and DOJ Case
Number __________. Copies of check(s) paid pursuant to this
Paragraph, and any accompanying transmittal letter(s), shall be
sent to EPA and DOJ as provided in Section XI (Notices and
Submissions) and to [ insert title and address of Regional
Financial Management Officer and any other receiving official at
EPA].
[ NOTE: If applicable, insert State payment instructions for
stipulated penalties for failure to pay State Past Response
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Costs,]
c. Penalties shall accrue as provided in this
Paragraph regardless of whether EPA [ or the State) has notified
Settling Defendants of the violation or made a demand for
payment, but need only be paid U Ofl demand. All penalties shall
begin to accrue on the day after complete performance is due or
the day a violation occurs, and shall continue to accrue through
the final day of correction of the noncompliance or completion of
the activity. Nothing herein shall prevent the simultaneous
accrual of separate penalties for separate violations of this
Consent Decree.
7. If the United States (or the State) brings an action to
enforce this Consent Decree, Settling Defendants shall reimburse
the United States [ and the State] for all costs of such action,
including but not limited to costs of attorney time.
8. Payments made under Paragraphs 5-7 shall be in addition
to any other remedies or sanctions available to Plaintiff [ s] by
virtue of Settling Defendants’ failure to comply with the
requirements of this Consent Decree.
9. The obligations of Settling Defendants to pay amounts
owed the United States (and the State] under this Consent Decree
are joint and several. In the event of the failure of any one or
more Settling Defendants to make the payments required under this
Consent Decree, the remaining Settling Defendants shall be
responsible for such payments.
10. Notwithstanding any other provision of this Section,
the United States may, in its unreviewable discretion, waive
payment of any portion of the stipulated penalties that have
accrued pursuant to this Consent Decree.
VII. COVENANT NOT TO SUB BY PLAIWrIPF(s1
11. Covenant Not to Sue by United States . Except as
specifica l]?y provided in Paragraph 12 (Reservation of Rights by
United Statea) t e United States covenants not to sue Settling
Defendants p 1rsuant to Section 107(a) of CERCLA, 42 U.S.C. S
9607(a), to rqcover Past Response Costs. This covenant not to
sue shall take effect upon receipt by EPA of all payments
required by Section V, Paragraph 4 (Payment of Past Response
Costs to the United States) and Section VI, Paragraphs 5
(Interest on Late Payments) and 6(a) (Stipulated Penalty for Late
Payment). This covenant not to sue is conditioned upon the
satisfactory performance by Settling Defendants of their
obligations under this Consent Decree. This covenant not to sue
extends only to Settling Defendants and does not extend to any
other person.
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12. Reservation of Rights by United States . The covenant
not to sue set forth in Paragraph ii. does not pertain to any
matters other than those expressly specified therein. The United
States reserves, and this Consent Decree is Without prejudice to,
all rights against Settling Defendants with respect to all other
matters, including but not limited to:
a. liability for failure of Settling Defendants to
meet a requirement of this Consent Decree;
b. liability for damages for injury to, destruction
of, or loss of natural resources, and for the costs of any
natural resource damage assessments;
c. criminal liability;
d. liability for injunctive relief or administrative
order enforcement under Section 106 of CERCLA, 42 U.S.C. S 6906;
and
e. liability for costs incurred or to be incurred by
the United States that are not within the definition of Past
Response Costs.
(NOTE: If the State is a co-plaintiff, insert separate
paragraphs for the State’s covenant not to sue settling
defendants and reservation of rights.]
VIII. COVENANT NOT TO SUE BY SETTLING DEFENDANTS
13. Settling Defendants covenant not to sue and agree not
to assert any claims or causes of action against the United
States [ or the State], or its [ their] contractors or employees,
with respect to Past Response Costs [ and State Response Costs] or
this Consent Decree, including but not limited to:
a. any direct or indirect claim for reimbursement from
the Hazardous Substance Superfund based on Sections 106(b) (2),
107, 111, 112, or 1l ,of CERCLA, 42 U.S.C. SS 9606(b) (2), 9607,
9611, 9612, or 9613, or any other provision of law;
b. .any clarth arising out of response actions at the
Site for wh4ch t1 paet Response Costs were incurred; and
c. any claim against the United States pursuant to
Sections 107 and 113 of CERCLA, U.S.C. SS 9607 and 9613,
relating to Past Response Costs.
The settlement should, wherever possible, release or
resolve any claims by settling defendants against the United
(continued...)
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14. Nothing in this Consent Decree shall be deemed to
constitute approval or preauthorjzatjon of a claim within the
meaning of Section 111 of CERCLA, 42 U.S.c. S 9611, or 40 C.F.R.
300.700(d).
IX. EPPECT OP SETTLE lIT/CONTRIBUTION PROTECTION
15. Nothing in this Consent Decree shall be construed to
create any rights in, or grant any cause of action to, any person
not a Party to this Consent Decree. Each of the Parties
expressly reserves any and all rights (including, but not limited
to, any right to contribution), defenses, claims, demands, and
causes of action which each Party may have with respect to any
matter, transaction, or occurrence relating in any way to the
Site against any person not a Party hereto.
16. The Parties agree, and by entering this Consent Decree
this Court finds, that Sett1ir g Defendants are entitled, as of
the effective date of this Consent Decree, to protection from
contribution actions or claims as provided by Section 113(f) (2)
of CERCLA, 42 U.S.C. S 9613(f) (2), for “matters addressed” in
this Consent Decree. The “matters addressed” in this Consent
Decree are Past Response Costs.
17. Each Settling Defendant agrees that, with respect to
any suit or claim for contribution brought by it for matters
related to this Consent Decree, it will notify EPA and DOJ (and
the State] in writing no later than 60 days prior to the
initiation of such suit or claim. Each Settling Defendant also
agrees that, with respect to any suit or claim for contribution
brought against it for matters related to this Consent Decree, it
will notify EPA and DOJ [ and the State] in writing within io days
of service of the complaint or claim upon it. In addition, each
Settling Defendant shall notify EPA and DOJ (and the State)
within 10 days of service or receipt of any Motion for Summary
7(• . .continued)
States related to the site. Where a claim is asserted by a
potentially responsible party, or the Region has any information
suggesting federal agency liability, all information relating to
potential federal liability should be provided to the affected
agency and DOJ as soon as possible in order to resolve any such
issues in the settlement. Settlement of any federal liability
will require additional revisions to this document, and model
language will be provided separately. Only in exceptional
circumstances where federal liability cannot be resolved in a
timely manner in the settlement should this provision be deleted
and private parties be allowed to reserve their rights.
8 In exceptional situations, different coverage may apply.
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Judgment, and within 10 days of receipt of any order from a court
setting a case for trial, for matters related to this Consent
Decree.
18. In any subsequent administrative or judicial proceeding
initiated by the United States [ or the State) for injunctive
relief, recovery of response costs, or other relief relating to
the Site, Settling Defendants shall not assert, and may not
maintain, any defense or claim based upon the principles of
waiver, res iudicata , collateral estoppel, issue preclusion,
claim-splitting, or other defenses based upon any contention that
the claims raised by the United States (or the State] in the
subsequent proceeding were or should have been brought in the
instant case; provided, however, that nothing in this Paragraph
affects the enforceability of the Covenant Not to Sue by
Plaintiff(s] set forth in Section VII.
[ _. BITE ACCESS) 9
[ (_. Commencing upon the date of lodging of this Consent
Decree, Settling Defendants agree to provide the United States
C, the State,] and its (their] representatives, including EPA and
its contractors, access at all reasonable times to the Site and
to any other property owned or controlled by Settling Defendants
to which access is determined by EPA (or the State) to be
required for the implementation of this Consent Decree, or for
the purpose of conducting any response activity related to the
Site, including but not limited to:
a. Monitoring of investigation, removal, remedial or
other activities at the Site;
b. Verifying any data or information submitted to the
United States (or the State);
c. Conducting investigations relating to contamination
at or near the Site;
d. Obtaining samples;
e. Assessing the need for, planning, or implementing
Include this section if 1) access to the site is needed
and 2) the site owner is a settling defendant or other settling
defendants control access to the site or to any other property to
which access is needed. Renumber sections and paragraphs as
necessary. If any of the settling defendants will need to
provide institutional controls as part of any response action,
include such a provision within this section and change the name
of this section to Site Access/Institutional Controls.
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response actions at or near the Site; (and)
f. Inspecting and copying records, operating logs,
contracts, or other documents maintained or generated by Settling
Defendants or their agents, consistent with Section — (Access
to Information).
(NOTE: If institutional controls or any other provisions
requiring monitoring are included in the decree, also include the
following subparagraph g.
[ g. Assessing Settling Defendants’ compliance with
this Consent Decree.]
Notwithstanding any provision of this Consent Decree,
the Ui ited States (and the State] retain(s) all of its (their)
access authorities and rights, including enforcement authorities
related thereto, under CERCLA, the Resource Conservation and
Recovery Act, 42 U.S.C. S 6927, and any other applicable statutes
or regulations.
—. Notice of Obligations to Successors-in-Title .
a. Within 15 days after entry of this Consent Decree,
[ Owner Settling Defendants) shall record (insert either “a
certified copy of this Consent Decree” or “a notice of the entry
of this Consent Decree”) with the Recorder’s Office [ or Registry
of Deeds or other appropy ate office), ___________ County,
State of ______________. Thereafter, each deed, title, or
other instrument conveying an interest in the property included
in the Site shall contain a notice stating that the property is
subject to this Consent Decree (and any lien retained by the
United States) and shall reference the recorded location of the
Consent Decree and any restrictions applicable to the property
under this Consent Decree.
b. The obligations of each (Owner Settling Defendant]
with respect to the provision of access under Section (Site
Access) (and the implementation of institutional controls under
Paragraph ___} shall be binding upon any and all Settling
Defendant and upon any and all persons who subsequently acquire
any such interest or portion thereof (hereinafter “Successors-
in-Title”). Within 15 days after the entry of this Consent
Decree, each (Owner Settling Defendant] shall record at the
10 If an institutional controls provision is included in
this section, this paragraph should be amended to require the
owner settling defendants to record in the chain of title a
restrictive covenant that specifies the institutional controls.
The institutional controls to be implemented should be described
in an appendix to this decree.
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Recorder’s Office (or Registry of Deeds or other appropriate
office where land ownership and transfer records are maintainted
for the property) a notice of obligation to provide access under
Section (Site Access) and related covenants, if any. Each
subsequent instrument Conveying an interest to any such property
included in the Site shall reference the recorded location of
such notice and covenants applicable to the property.
c. Any (Owner Settling Defendant] and any Successor-
in—Title shall, at least 30 days prior to the conveyance of any
such interest, give written notice of this Consent Decree to the
grantee and written notice to EPA (and the State) of the proposed
conveyance, including the name and address of the grantee, and
the date on which notice of the Consent Decree was given to the
grantee. In the event of any such Conveyance, the Settling•
Defendants’ obligations under this Consent Decree, including
their obligation to provide or secure access pursuant to Section
___ (Site Access), shall continue to be met by Settling
Defendants. In no event shall the conveyance of an..interest in
property that includes, or is a portion of, the Site release or
otherwise affect the liability of Settling Defendants to comply
with this Consent Decree.))
(_. ACCESS TO IN FOR MAT ION ’ 1 ]
[ (_. Settling Defendants shall provide to EPA [ and the
State], upon request, copies of all documents and information
within their possession or control or that of their contractors
or agents relating to activities at the Site (or to the
implementation of this Consent Decree), including, but not
limited to, sampling, analysis, chain of custody records,
manifests, trucking logs, receipts, reports, sample traffic
routing, correspondence, or other documents or information
related to the Site.
—. Confjdentip]. Business Information and Privileged
Documents .
ao Settli q Defendants may assert business
confiden ia)i ty claims covering part or all of the documents or
informatjoi ’ u itted to Plaintiff [ s] under this Consent Decree
to the extent perm1tted by and in accordance with Section
104(e) (7) of CERCLA, 42 U.S.C. § 9604(e) (7), and 40 C.F.R.
2.203(b). DocumentS or information determined to be confidential
by EPA will be accorded the protection specified in 40 C.F.R.
Include this section only if settling defendants have
been or will be involved in cleanup efforts at the site or if
they may possess information which may assist the Agency in its
cleanup or enforcement efforts.
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Part 2,.Subpart B. If no claim of confidentiality accompanies
documents or information when they are submitted to EPA [ and the
State), or f EPA has notified Settling Defendants that the
documents or lntorinatjon are not confidential under the standards
of Section 104(e) (7) of CERCLA, the public may be given access to
such documents or information without further notice to Settling
Defendants.
b. Settling Defendants may assert that certain
documents, records or other information are privileged under the
attorney-client privilege or any other privilege recognized by
federal law. If Settling Defendants assert such a privilege in
lieu of providing documents, they shall provide Plaintiff(s) with
the following: 1) the title of the document, record, or
information; 2) the date of the document, record, or information;
3) the name and title of the author of the document, record, or
information; 4) the name and title of each addressee and
recipient; 5) a description of the subject of the document,
record, or information; and 6} the privilege asserted. However,
no documents, reports or other information created or generated
pursuant to the requirements of this or any other consent decree
with the United States shall be withheld on the grounds that they
are privileged. If a claim of privilege applies only to a
portion of a document, the document shall be provided to
Plaintiff(s) in redacted form to mask the privileged information
only. Settling Defendants shall retain all records and documents
that they claim to be privileged until the United States has had
a reasonable opportunity to dispute the privilege claim and any
such dispute has been resolved in the Settling Defendants’ favor.
No claim of confidentiality shall be made with respect
to any data, including but not limited to, all sampling,
analytical, monitoring, hydrogeologjc, scientific, chemical, or
engineering data, or any other documents or information
evidencing conditions at or around the Site.))
I. RETENTION OF RECORDp’ 2
19. Until years after the entry of this Consent Decree,
each Settling Defendant shall preserve and retain all records and
documents now in its possession or control, or which come into
its possession or control, that relate in any manner to response
actions taken at the Site or the liability of any person for
response actions conducted and to be conducted at the Site,
regardless of any corporate retention policy to the contrary.
20. After the conclusion of the document retention period
12 Renumber this section and all following section headings
and paragraph numbers if either of the optional sections on Site
Access or Access to Information is included.
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in the preceding paragraph, Settling Defendants shall notify EPA
and DOJ [ and the State) at least 90 days prior to the destruction
of any such records or documents, and, upon request by EPA or DOJ
[ or the State)., Settling Defendants shall deliver any such
records or documents to EPA [ or the State). Settling Defendants
may assert that certain documents, records, or other information
are privileged under the attorney-client privilege or any other
privilege recognized by federal law. If Settling Defendants
assert such a privilege, they shall provide Plaintiff(s) with the
following: 1) the title of the document, record, or information;
2) the date of the document, record, or information; 3) the name
and title of the author of the document, record, or information;
4) the name and title of each addressee and recipient; 5) a
description of the subject of the document, record, or
information; and 6) the privilege asserted. However, no
documents, reports, or other information created or generated
pursuant to the requirements of this or any other consent decree
with the United States shall be withheld on the grounds that they
are privileged. If a claim o privilege applies only to a
portion of a document, the document shall be provided to
Plaintiff(s) in redacted form to mask the privileged information
only. Settling Defendants shall retain all records and documents
that they claim to be privileged until the United States has had
a reasonable opportunity to dispute the privilege claim and any
such dispute has been resolved in the Settling Defendants’ favor.
21. By signing this Consent Decree, each Settling Defendant
certifies individually that, to the best of its knowledge and
belief, it has:
a. conducted a thorough, comprehensive, good faith
search for documents, and has fully and accurately disclosed to
EPA, all information currently in its possession, or in the
possession of its officers, directors, employees, contractors or
agents, which relates in any way to the ownership, operation or
control of the Site, or to the ownership, possession, generation,
treatment, transportation, storage or disposal of a hazardous
substance, pollutant or contaminant at or in connection with the
Site;
b. not altered, mutilated, discarded, destroyed or
otherwise disposed of any records, documents or other information
relating to its potential liability regarding the Site, after
notification of potential liability or the filing of a suit
against the Settling Defendant regarding the Site; and
c. fully complied with any and all EPA requests for
information regarding the Site pursuant to Sections 104(e) and
122(e) of CERCLA, 42 U.S.C. § 9604(e) and 9622(e) [ insert, if
applicable, “, and Section 3007 of RCRA, 42 U.S.C. S 6927”).
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XI. NQTICES AND 8UBXI8SIONS
22. Whenever, under the terms of this Consent Decree,
notice is required to be given or a document is required to be
sent by one party to another, it shall be directed to the
individuals at the addresses specified below, unless those
individuals or their Successors give notice of a change to the
other Parties in writing. Written notice as specified herein
shall constitute complete satisfaction of any written notice
requirement of the Consent Decree with respect to the Tjnited
States, EPA, DOJ, (the State,) and Settling Defendants,
respectively.
As to the United States:
As to DOJ :
Chief, Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice (DJ # _________)
P.O. Box 7611
Washington, D.C. 20044-7611
As to EPA :
(Insert names and addresses of EPA Regional
contacts, usually the ORC attorney and the
RPM or Project Coordinator)
fAs to the State :
Insert name and address of State contact if the
State is a party to the Consent Decree)
As to Settling De endpntg :
[ Insert name of one person who will serve as
the contact for all Settling Defendants]
XII. RE NTIopj OF JURI8DICTION
23. This Court shall retain jurisdiction over this matter
for the purpose of interpreting and enforcing the terms of this
Consent Decree.
XIII. INTEGRATION I /APPENDICEB ]
24. This Consent Decree and its appendices constitute the
final, complete and exclusive agreement and understanding among
the Parties with respect to the settlement embodied in this
Consent Decree. The Parties acknowledge that there are no
representations, agreements or understandings relating to the
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settlement other than those expressly contained in this Consent
Decree. (The following appendices are attached to and
incorporated into this Consent Decree: “Appendix A” is the
complete list of Settling Defendants; and “Appendix B” is the map
of the Site.)
XIV. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT
25. This Consent Decree shall be lodged with the Court f or
a period of not less than 30 days for public notice and comment.
The United States reserves the right to withdraw or withhold its
consent if the comments regarding the Consent Decree disclose
facts or considerations which indicate that this Consent Decree
is inappropriate, improper, or inadequate. Settling Defendants
consent to the entry of this Consent Decree without further
notice.
26. If for any reason this Court should decline to approve
this Consent Decree in the form presented, this agreement is
voidable at the sole discretion of any party and the terms of the
agreement may not be used as evidence in any litigation between
the Parties.
XV. EFFECTIVE DATE
27. The effective date of this Consent Decree shall be the
date upon which it is entered by the Court.
XVI • BIGNATORIE8/BERVICE
28. Each undersigned representative of a Settling Defendant
to this Consent Decree and the (Assistant Attor y General for
the Environment and Natural Resources Division) of the United
States Department of Justice (insert State official] certifies
that he or she is authorized to enter into the terms and
conditions of this Consent Decree and to execute and bind legally
such Party to this document.
29. Each Settling Defendant hereby agrees not to oppose
entry of this Consent Decree by this Court or to challenge any
provision of this Consent Decree, unless the United States has
notified Settling Defendants in writing that it no longer
supports entry of the Consent Decree.
13 Substitute Chief, Environmental Enforcement Section,
where the case involves less than $1 million and at least
$500,000 is being recovered by settlement. Note also that
Associate Attorney General approval is required if the difference
between the total amount of the claim and the amount of the
settlement exceeds $2 million or 15% of claim (whichever is
greater). See 28 CFR 0.160.
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30. Each Settling Defendant shall identify, on the attached
signature page, the name and address of an agent who is
authorized to accept service of process by mail on behalf of that
Party with respect to all matters arising under or relating to
this Consent Decree. Settling Defendants hereby agree to accept
service in that manner and to waive the formal service
requirements set forth in Rule 4 of the Federal Rules of Civil
ProcedUre and any applicable local rules of this Court, including
but not limited to, service of a summons.
SO ORDERED THIS _______ DAY OF _______________, 19_.
United States District Judge
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THE UNDERSIGNED PARTIES enter into this Consent Decree in the
matter of [ insert case name and civil action number], relating to
the __________ Superfund Site.
FOR THE UNITED STATES OF AMERICA
Date: _______________ _______________________________
[ Name)
Assistant Attorney General 1
Environment and Natural Resources
Division
U.S. Department of Justice
Washington, D.C. 20530
[ NAME)
United States Attorney
[ Address]
[ NAME]
Attorney
Environmental. Enforcement Section
Environment and Natural Resources
Division
U.S. Department of Justice
P.O. Box 7611
Washington, DC 20044—7611
14 See supra n. 13.
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[ Name)
Assistant Administrator for
Enforcement and Compliance
Assurance
U.S. Environmental Protection
Agency
401 M Street, S.W.
Washington, D.C. 20460
[ Name)
Regional Administrator, Region [ ]
U.S. Environmental Protection
Agency
[ Address) -
[ Name ]
Assistant Regional Counsel
U.S. Environmental Protection
Agency
[ Address)
Include AA-OECA signature block only if he or she has a
concurrence role under Delegation No. 14-13-B.
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[ [ THE UNDERSIGNED PARTY enters into this Consent Decree in the
matter of (insert case name and civil action number], relating to
the _________________ Superfund Site.
FOR THE STATE OF ( ]
Date: __________________ ________________________________
[ Names and addresses of State
signatories))
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THE UNDERSIGNED PARTY enters into this Consent Decree in the
matter of (insert case name and civil action number), relating to
the ________________ Superfund Site.
FOR DEFENDANT [ )
Date: _________________
[ Names and address of Defendant’s
signatories)
Agent Authorized to Accept Service on Behalf of Above—
signed Party:
Name:
Title:
Address:
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UNITED STATES ENVIRoNNE)JTh PROTECTION AGENCY
MODEL CERCLA SECTION 122(h) (1) AGREEMENT
FOR RECOVERY OF PAST RESPONSE COSTS
This model and any internal procedures adopted for its
implementation and use are intended as guidance for employees of
the U.S. Environmental Protection Agency. They do not constitute
rulemaking by the Agency and may not be relied upon to create a
right or a benefit, substantive or procedural, enforceable at law
or in equity, by any person. The Agency may take action at
variance with this model or its internal implementing procedures.
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MODEL CERCLA 8ECTION 122 (h) (1) AGREEMENT
FOR RECOVERY OF PAST RESPONSE COSTS
TABLE OF CONTENTS
I. JURISDICTION
II. BACKGROUND . 3
III. PARTIESBOUND 4
IV. DEFINITIONS . 4
V. REIMBURSEMENT OF RESPONSE COSTS 6
VI. FAILURE, TO COMPI. 1 WITH AGREEMENT 7
VII. COVENANT NOT TO SUE BY EPA 8
VIII. RESERVATIONS OF RIGHTS BY EPA 8
IX. COVENANT NOT TO SUE BY SETTLING PARTIES . . . . 9
X. EFFECT OF SETTLEMENT/CONTRIBUTION PROTECTION . . 9
XI. RETENTION OF RECORDS 10
XII . NOTICES AND SUBMISSIONS 12
XIII. INTEGRATIONF/APPENDICE S ] 12
XIV. PUBLIC COMMENT 12
{ATTORNEY GENERAL APPROVAL 1 12
XV. EFFECTIVEDATE 13
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MODEL CERCL.A SECTION 122(h) (1) AGREEMENT
FOR RECOVERY OF PAST RESPONSE COSTS
IN THE MATTER OF: ) AGREEMENT FOR RECOVERY
) OF PAST RESPONSE COSTS
[ Site Name)
(City, County, State) ) U.S. EPA Region ____
CERCLA Docket ! o.
(Names of Settling Parties]
SETTLING PARTIES ) PROCEEDING UNDER SECTION
122(h) (1) OF CERCLA
_________________________________ 42 U.S.C. § 9622(h) (1)
I. JURISDICTION
1. This Agreement is entered into pursuant to the authority
vested in the Administrator of the U.S. Environmental Protection
Agency (“EPA”) by Section 122(h) (1) of the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980,
as amended (“CERCLA”), 42 U.S.C. S 6922(h) (1), which authority
has been delegated to the Regional Administrators of the EPA by
EPA Delegation No. ].4-14-D. (NOTE: Also reference any internal
Regional redelegations of authority under 14-14-D.]
2. This Agreement is made and entered into by EP and the
[ insert names or reference attached appendix listing settling
parties] (“Settling Parties”). Each Settling Party consents to
and will not contest EPA’s jurisdiction to enter into this
Agreement or to implement or enforce its terms.
II. BACKGROU ID
3. This Agreement concerns the [ insert Site name] (“Site”)
located in [ insert Site location). EPA alleges that the Site is
a “facility” as defined by Section 101(9) of CERCLA, 42 U.S.C. §
9601(9). -
4. In response to the release or threatened release of
hazardous substances at or from the Site, EPA undertook response
actions at the Site pursuant to Section 104 of CERCLA, 42 U.S.C.
S 9604. (NOTE: A brief description of the release or threatened
release and of the response actions undertaken may be included.)
5. In performing this response action, EPA incurred
response costs at or in connection with the Site.
6. EPA alleges that Settling Parties are responsible
parties pursuant to Section 107(a) of CERCLA, 42 U.S.C. §
9607(a), and are jointly and severally liable for response costs
incurred at or in connection with the Site.
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(NOTE: If Attorney General approval is not required for this
settlement because total past and projected response costs of the
United States at the site are not expected to exceed $500,000,
excluding interest, insert the following paragraph and renumber
all subsequent paragraphs.]
(. The Regional Administrator of EPA Region ____, or
his/her delegatee, has determined that the total past and
projected response costs of the United States at or in connection
with the Site will not exceed $500,000, excluding interest.]
7. EPA and Settling Parties desire to resolve Settling
Parties’ alleged civil liability for Past Response Costs without
litigation and without the admission or adjudication of any issue
of fact or law.
III. PARTIES BOW
8. This Agreement shall be binding upon EPA and upon
Settling Parties and their fheirs), successors and assigns. Any
change in ownership or corporate or other legal status of a
Settling Party, including but not limited to, any transfer of
assets or real or personal property, shall in no way alter such
Settling Party’s responsibilities under this Agreement. Each
signatory to this Agreement certifies that he or she is
authorized to enter into the terms and conditions of this
Agreement and to bind legally the party represented by him or
her.
IV. DEFINITIONS
9. Unless otherwise expressly provided herein, terms used
in this Agreement which are defined in CERCLA or in regulations
promulgated under CERCLPI shall have the meaning assigned to them
in CERCLA or in such regulations. Whenever terms listed below
are used in this Agreement or in any appendix attached hereto,
the following definitions shall apply:
a. “CERCLA” shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended, 42
U.S.C. S 9601, §& .
b. “Agreement” shall mean this Agreement and any
attached appendices. In the event of conflict between this
Agreement and any appendix, the Agreement shall control.
c. “Day” shall mean a calendar day. In computing any
period of time under this Agreement, where the last day would
fall on a Saturday, Sunday, or federal holiday, the period shall
run until the close of business of the next working day.
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5
d. “EPA” shall mean the United States Environmental
Protection Agency and arty successor departments, agencies or
instrumentalities of the United States.
e. “Interest” shall mean interest at the current rate
specified for interest on investments of the Hazardous Substance
Superfund established by 26 U.S.C. S 9507, compounded annually
October 1 of each year, in accordance with 42 U.S.C. S 9607(a).
f. “Paragraph’ t shall mean a portion of this .Agreement
identified by an arabic numeral or a lower case letter.
g. “Parties” shall mean EPA and the Settling Parties.
h. “Past Response costs” shall mean all costs,
including but not limited to direct and indirect costs, that EPA
or the U.S. Department of Justice on behalf of EPA has paid at or
in connection with the Site through [ insert d teJ, plus accrued
Interest on all such costs through such date.
1 The Superfund currently is invested in 52-week MX bills.
The interest rate for these MX bills changes on October 1 of each
year. To obtain the current rate, contact Vince Velez, Office of
Administration and Resource Management, Financial Management
Division, Superfund Accounting Branch, at (202) 260-6465.
If the past costs settlement is partial, it may be
necessary to continue the definition with a brief description of
the past response action(s) which are being paid for or
compromised, such as: “. . . for the response action described
in the Record of Decision for the First Operable Unit at the Site
dated It or “for the removal action described in the
action memorandum for the Site dated _______.“ Exercise care in
describing the activities covered, as this description may affect
the scope of the covenant not to sue and contribution protection.
For clarity, the description of the past response action may need
to indicate which response actions are not included within the
definition of Past Response Costs. Check to be sure that the
date used in the definition of Past Response Costs does not
inadvertently include costs that are outside the scope of the
definition. In some cases, it may be useful to attach a
standard, Regionally-prepared cost summary listing the costs that
are within the scope of the definition. This may be done: 1) to
be sure that no confusion arises as to which costs are being
compromised; or 2) to indicate which outstanding past cost claims
are being resolved through the settlement, ., to indicate that
the recovered costs are to be applied to particular portions of
the debt.
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6
i. “Section” shall mean a portion of this Agreement
identified by a roman numeral.
j. “Settling Parties” shall mean Einsert names of
settling parties, or if very numerous, “those parties identified
in Appendix “1
k. “Site” shall mean the ________ Superfund site,
encompassing approximately acres, located at (insert address
or description of location] in (insert City, county, State], and
(insert either “depicted more clearly on the map included in
Appendix “ or “designated by the following property
description: ___________
1. “United States” shall mean the United States of
America, including it departments, agencies and
instrumentalities.
V. REIMBURSEMENT OF RESPONBE COSTB
10. Within 30 days of the effective date of this Agreement,
the Settling Parties shall pay to the EPA Hazardous Substance
Superfund $______ in reimbursement of Past Response Costs, plus
an additional sum for Interest on that amount calculated from the
date set forth in th definition of Past Response Costs through
the date of payment.
11. Payments shall be made by certified or cashier’s check
made payable to “EPA Hazardous Substance Superfund.” Each check
shall reference the name and address of the party making payment,
the Site name, the EPA Region and Site/Spill ID Number ______
(insert 4-digit number, first 2 numbers represent the Region (01-
10), second 2 numbers represent the Region’s Site/Spill
Identification number), and the EPA docket number for this
action, and shall be sent to:
EPA Superfund
(Insert Regional Superfund lockbox number and address)
12. At the time of payment, each Settling Party shall send
notice that such payment has been made to:
As an alternative to calculation and payment of interest
from the Past Response Costs date through the date of payment,
settling parties may agree to place the amount agreed upon into
an interest-bearing escrow account to be disbursed to EPA upon
the effective date of the Agreement. If this method is used,
accrued interest from the Past Response Costs date through the
date the escrow account is created should be calculated and
included in the escrow deposit.
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Insert name and address of Regional Attorney and/or
Remedial Project Manager]
VI. FAILURE TO COMPL’ WITH AGREEMENT
13. In the event that any payment required by Paragraph 10
is not made when due, Interest shall continue to accrue on the
unpaid balance through the date of payment.
14. If any amounts due to EPA under Paragraph 10 are not
paid by the required date, Settling Parties shall pay to EPA, as
a stipulated penalty, in addition tc the Interest required by
Paragraph 13, $____ per violation per day that such payment is
late.
(((NOTE: If the Agreement includes any non-payment obligations
for which a stipulated penalty is due, insert, “If Bettling
Parties do pot comply with (referenc. sections containing non-
payment obligations], Settling Parties shall pay to EPA, as a
stipulated penalty, $____ per violation per day of such
noncompliance.” Escalating penalty payment schedules may be used
for payment or non-payment obligations.]]
15. stipulated penalties are due and payable within 30 days
of the date of demand for payment of the penalties. All payments
to EPA under this Paragraph shall be identified as “stipulated
penalties” and shall made in accordance with Paragraphs 11 and
12.
16. Penalties shall accrue as provided above regardless of
whether EPA has notified the Settling Parties of the violation or
made a demand for payment, but need only be paid upon demand.
All penalties shall begin to accrue on the day after performance
is due, or the day a violation occurs, and shall continue to
accrue through the final day of correction of the noncompliance
or completion of the activity. Nothing herein shall prevent the
simultaneous accrual of separate penalties for separate
violations of this Agreement.
17. In addition to the Interest and Stipulated Penalty
payments required by this Section and any other remedies or
sanctions available to EPA by virtue ‘f Settling Parties’ failure
to comply with the requirements of t Agreement, any Settling
Party who fails or refuses to comply :th any term or condition
of this Agreement shall be subject tc- enforcement action pursuant
to Section 122(h) (3) of CERCLA, 42 U. .C. 9622(h)(3). If the
United States, on behalf of EPA, brin;s an action to enforce this
Agreement, Settling Parties shall reimburse the United States for
all costs of such action, including but not limited to costs of
attorney time.
18. The obligations of Settlinc Parties to pay amounts owed
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8
to EPA under this Agreement are joint and several. In the event
of the failure of any one or more Settling Parties to make the
payments required under this Agreement, the remaining Settling
Parties shall be responsible for such payments.
19. Notwithstanding any other provision of this Section,
EPA may, in its unreviewable discretion, waive payment of any
portion of the stipulated penalties that have accrued pursuant to
this Agreement.
VII. COVENANT NOT TO SUE BY EPA
20. Except as specifically provided in Paragraph 21
(Reservations of Rights by EPA), EPA covenants not to sue
Settling Parties pursuant to Section 107(a) of CERCLA, 42 U.S.C.
§ 9607(a), to recover Past Response Costs. This covenant shall
take effect upon receipt by EPA of all amounts required by
Section V (Reimbursement of Response Costs) and Section VI,
Paragraphs 13 (Interest on Late Payments) and 14 (Stipulated
Penalty for Late Payment). This covenant not to sue is
conditioned upon the satisfactory performance by Settling Parties
of their obligations under this Agreement. This covenant not to
sue extends only to Settling Parties and does not extend to any
other person.
VIII. RESERVATIONS OF RIGHTS BY EPA
21. The covenant not to sue by EPA set forth in Paragraph
20 does not pertain to any matters other than those expressly
identified therein. EPA reserves, and this Agreement is without
prejudice to, all rights against Settling Parties with respect to
all other matters, inôluding but not limited to:
a. liability for failure of Settling Parties to meet a
requirement of this Agreement;
b. liability for costs incurred or to be incurred by
the United States that are not within the definition of Past
Response Costs;
c. liability for injunctive relief or administrative
order enforcement under Section 106 of CERCLA, 42 U.S.C. S 9606;
d. criminal liability; and
e. liability for damages for injury to, destruction
of, or loss of natural resources, and for the costs of any
natural resource damage assessments.
22. Nothing in this Agreement is intended to be nor shall
it be construed as a release, covenant not to sue, or compromise
of any claim or cause of action, administrative or judicial,
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9
civil or criminal, past or future, in law or in equity, which the
United States may have against any person, firm, corporation or
other entity not a signatory to this Agreement.
IX. COVENANT NOT TO SUE BY SETTLING PARTIES
23. settling Parties agree not to assert any claims or
causes of action against the United States, or its con ractors or
employees, with respect to Past Response Costs or this Agreement,
including but not limited to:
a. any direct or indirect claim for reimbursement from
the EPA Hazardous Substance Superfund established by 26 U.S.C. S
9507, based on Sections l06(b)(2), 107, lii, 112, or 113 of
CERCLA, 42 U.S.C. 55 9606(b) (2), 9607, 9611, 9612, or 9613, or
any other provision of law;
b. any claims arising out of the response actions at
the Site for which the Past Response Costs were incurred; and
c. any claim against the United States pursuant to
Sections 107 and 113 of CERCLA, 2 U.S.C. SS 9607 and 9613,
relating to Past Response Costs.
24. Nothing in this Agreement shall be deemed to constitute
approval or preauthorization of a claim within the meaning of
Section 111 of CERCLA, 42 U.S.C. § 9611, or 40 C.F.R. 300.700(d).
X. EFFECT OF SETTLEMENT/CONTRIBUTION PROTECTION
25. Nothing in this Agreement shall be construed to create
any rights in, or grant any cause of action to, any person not a
Party to this Agreement. EPA and Settling Parties each reserve
any and all rights (including, but not limited to, any right to
contribution), defenses, claims, demands, and causes of action
which each Party may have with respect to any matter,
transaction, or occurrence relating in any way to the Site
The settlement should, wherever possible, release or
resolve any claims by settling parties against the United States
related to the site. Where a claim is asserted by a potentially
responsible party, or the Region has any information suggesting
federal agency liability, all information relating to potential
federal liability should be provided to the affected agency and
DOJ as soon as possible in order to resolve any sua issues in
the settlement. Settlement of any federal liabili -y will require
additional revisions to this document, and model language will be
provided separately. Only in exceptional circumstances where
federal liability cannot be resolved in a timely manner in the
settlement should this provision be deleted and private parties
be allowed to reserve th air rights.
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10
against any person not a Party hereto.
26. EPA and Settling Parties agree that the actions
undertaken by Settling Parties in accordance with this Agreement
do not constitute an admission of any liabil .ty by any Settling
Party. Settling Parties do not admit, and retain the right to
controvert in any subsequent proceedings other than proceedings
to implement or enforce this Agreement, the validity of the facts
or allegations contained in Section II of this Agreement.
27. The Parties agree that Settling Parties are entitled,
as of the effective date of this Agreement, to protection f torn
contribution actions or claims as provided by Sections 113(f)(2)
and 122(h) (4) of CERCLA, 42 U.S.C. SS 9613(f)(2) and 9622(h) (4),
for “matters addressed” in this Agreement. The “matters
addressed” in this Agreement are Past Response Costs.
28. Each Settling Party agrees that with respect to any
suit or claim for contribution brought by it for matters related
to this Agreement, it will notify EPA in writing no later than 60
days prior to the initiation of such suit or claim. Each
Settling Party also agrees that, with respect to any suit or
claim for contribution brought against it for matters related to
this Agreement, it will notify EPA in writing within 10 days of
service of the complaint or claim upon it. In addition, each
Settling Party shall notify EPA within 10 days of service or
receipt of any Motion for Summary Judgment and within 10 days of
receipt of any order from a court setting a case for trial, for
matters related to this Agreement.
29. In any subsequent administrative or judicial proceeding
initiated by EPA, or by the United States on behalf of EPA, for
injunctive relief, recovery of response costs, or other
appropriate relief relating to the Site, Settling Parties shall
not assert, and may not maintain, any defense or claim based upon
the principles of waiver, judicata , collateral estoppel,
issue preclusion, claim-splitting, or other defenses based upon
any contention that the claims raised in the subsequent
proceeding were or should have been brought in the instant case;
provided, however, that nothing in this Para graph affects the
enforceability of the covenant not to sue by EPA set forth in
Paragraph 20.
XI. RETENTION OF RECORDS
30. Until years after the effective date of this
Agreement, each Settling Party shall preserve and retain all
records and documents now in its possession or control, or which
come into its possession or control, that relate in any manner to
response actions taken at the Site or to the liability of any
person for response actions conducted and to be conducted at the
Site, regardless of any corporate retention policy to the
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1.1.
contrary.
31. After the conclusion of the document retention period
in the preceding paragraph, Settling Parties shall notify EPA at
least 90 days prior to the destruction of any such records or
documents, and, upon request by EPA, Settling Parties shall
deliver any such records or documents to EPA. Settling Parties
may assert that certain documents, records, or other information
are privileged under the attorney-client privilege or any other
privilege recognized by federal law. If Settling Parties assert
such a privilege, they shall provide EPA with the following: I)
the title of the document, record, or information; 2) the date of
the document, record, or information; 3) the name and title of
the author of the document, record, or information; 4) the name
and title of each addressee and recipient; 5) a description of
the subject of the document, record, or information; and 6) the
privilege asserted. However, no documents, reports, or other
information created or generated pursuant to the requirements of
this or any other judicial or administrative settlement with the
United States shall be withheld on the grounds that they are
privileged. If a claim of privilege applies only to a portion of
a document, the document shall be provided to EPA in redacted
form to mask the privileged information only. Settling Parties
shall retain all records and documents that they claim to be
privileged until EPA has had a reasonable opportunity to dispute
the privilege claim and any such dispute has been resolved in
Settling Parties’ favor.
32. By signing this Agreement, each Settling Party
certifies individually that, to the best of its knowledge and
belief, it has:
a. conducted a thorough, comprehensive, good faith
search for documents, and has fully and accurately disclosed to
EPA, all information currently in its possession, or in the
possession of its officers, directors, employees, contractors or
agents, which relates in any way to the ownership, operation or
control of the Site, or to the ownership, possession, generation,
treat nent, transportation, storage or disposal of a hazardous
substance, pollutant or contaminant at or in connection with the
Site;
b. not altered, mutilated, discarded, destroyed or
otherwise disposed of any records, documents or other information
relating to its potential liability regarding the Site, after
notification of potential liability or the filing of a suit
against the Settling Party regarding the Site; and
c. fully complied with any and all EPA requests for
information regarding the Site pursuant to Sections 104(e) and
122(e) of CERCLA, 42 U.S.C. § 9604(e) and 9622(e) (insert, if
applicable, “, and Section 3007 of the Resource, Conservation and
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12
Recovery Act, 42 U.S.C. S 6927.”]
XII. NOTICES MID SUBMISSIONS
33. Whenever, under the terms of this Agreement, notice is
required to be given or a document is required to be sent by one
Party to another, it shall be directed tothe individuals at the
addresses specified below, unless those individuals or their
successors give notice of a change to the other Parties in
writing. Written notice as specified herein shall constitute
complete satisfaction of any written notice requirement of this
Agreement with respect to EPA and Settling Parties.
As to EPA :
[ Insert names and addresses of EPA Regional -
contacts, usually the ORC attorney and the
RPM or Project Coordinator]
As to Settling Parties :
[ Insert name of one person who will serve as
the contact for all Settling Parties]
XIII. INTEGRATIONI JAPPENDICEB ]
34. This Agreement and its appendices constitute the final,
complete and exclusive agreement and understanding among the
Parties with respect to the settlement embodied in this
Agreement. The Parties acknowledge that there are no
representations, agreements or understandings relating to the
settlement other than those expressly contained in this
Agreement. [ The following appendices are attached to and
incorporated into this Agreement: “Appendix A is _____________
etc.”]
XIV. PUBLIC COMMENT
35. This Agreement shall be subject to a public comment
period of not less than 30 days pursuant to Section 122(i) of
CERCLA, 42 U.S.C. S 9622(i). In accordance with Section
122(i) (3) of CERCLA, EPA may modify or withdraw its consent to
this Agreement if comments received disclose facts or
considerations which indicate that this Agreement is
inappropriate, improper or inadequate.
—. ATTORNEY GENERAL APPROVAL
(NOTE: This section should be used if Attorney General approval
is required for this settlement because total past and projected
response costs at the site will exceed $500,000, excluding
interest, and the agreement compromises a claim (j ., recovers
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13
less than 100% of past costs, including accrued interest). If
Attorney General approval is required, the Region should consult
with DOJ during the negotiations process and should obtain
written DOJ approval of the settlement before publishing notice
of the proposed agreement in the Federal Register pursuant to
Section 122(i) of CERCLA. The Region should discuss with DOJ any
significant comments received during the public comment period.
If the Region believes that the agreement should be modified
based upon public comment, the Region should discuss with the DOJ
attorney assigned to the case whether the proposed change will
require formal re-approval by DOJ. If this section is used,
renumber the Effective Date section and paragraph.]
[ (. The Attorney General or [ his/her] designee has
approved the settlement embodied in this Agreement in accordance
with Section 122(h) (1) of CERCLA, 42 U.S.C. § 9622(h) (1).])
XV. EFFECTIVE DATE
36. The effective date of this Agreement shall be the date
upon which EPA issues written notice that the public comment
period pursuant to Paragraph 35 has closed and that comments
received, if any, do not require modification of or EPA
withdrawal from this Agreement.
IT IS SO AGREED:
U.S. Environmental Protection Agency
By: ____________________ ____________________
[ Name] [ Date]
Regional Administrator, Region
(NOTE: If the Regional Adminstrator has redelegated authority to
enter into Section 122(h) settlements, insert name and title of
delegated official.]
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14
THE UNDERSIGNED SETTLING PARTY enters into this Agreement in the
matter of [ insert U.S. EPA docket number), relating to the
[ insert site name and location):
FOR SETTLING PARTY:
[ Name]
[ Name]
[ Address]
[ Date)
By:
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SECTION B DOCUMENT -
Memorandum of Understanding Bet veen the U.S. EPA
and the U.S. Department of M t concerning the Clean
Air Act Emission Standards for Radionuclides, 40 CFR
Part 61 Including Subparts H, I, Q & I
04/05/95
25
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03’08’93 13 48 V202 336 3913 E DOE
MEMOPANDUM OF UNDERSTA!4D3N0 BE t Wjwr4
THE U.S. ENVIRONMENTAL PROTECtiON AGENCY AND
‘nit; U.S. DEPARTMENT OF ENERGY
concerning
wE CLEAN MR ACF
EMISSION flM’ DARDS FOR RADIONUCLIDES
40 Cfl PART 61 ]NCLUDING SUBPARTS H I, Q & T
The U. S. Environmental Protection Agency (EPA) and the U.S.
Department of Energy (DOE) are engaged in a mutuaL effort tâ
clarify provisions of 40 CFR Part 61, Subpart H I, Q, arid - •T,
National, Emission Standards for Hazardous Air Pollutants (NESEAP)
promulgated under the Clean Air Act (CAA) for radionucli-de
emissions from DOE facilities. This ef ton has been undertaken to
assure uniform and consistent interpretation ot- the NESHAP
provisions for radionuctides at DOE facilities and EPA regional
offices. DOE and EPA have reached an accord on certain issues and
have signed this Memorandum of Understanding (MOTJ)..: The tens and:
language of this MOU are in accordance with J the applicable
definitions found in the Ah and Comprehensive Environmental
Response, Compensation and Liability Act (CERCLA)” and- the
implementing regulations. The )‘lOU Is not intended to supersede or;
replace applicable statutes, regulations, compliance agreements or
orders reached between DOE field offices and EPA regional offices.
Nothing in this MOU is intended to restrict EPA ’s authority under
applicable statute or regulation to take an enforcement action
where appropriate.
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05 U ’
1. Monithrin Re uiremerits :
la. DOE facilities with emission points that are subjact to the
continuous monitoring ;equire.ments of 40 CIR Section 61.93(b),
but are not in compliance with these requirements, should
reach agreement as soon as possible with the relevant EPA
regional office on actions necessary to attain compliance.
The emission monitoring requirements set forth in Subpart H at
40 C R Section 61.93 (b) include the use of reference methods
for continuous monitoring at malor release points (those with
the potential for emissions that exceed 1% of the’ standard,
assuming normal operations but with no effluent controls in
place); the establishment of a periodic confirmatory
measurement program for all other release points, in
accordance with Section 61.93 (b) (4); and the implementation of
a Quality Assurance (QA) program where appropriate that meets
the requirements described in 40 CPR Part 61, Appendix B,
Method 114. The continuous, monitoring requirements present
technical and procedural difficulties which in many instances
will, require significant effort and resources to resolve.
Where DOE facilities are not in compliance with the continuous
monitoring requirements, the DOE facility and the cognizant
EPA regional office shall determine the most efficient DOE
actions needed to bring the facilities into compliance
including consideration of alternate monitoring methods under
Section 61.93(b) (3). Commitments by DOE should include a plan
and’ schedule that will result in compliance with the emission
monitoring requirements including those f or continuous
monitoring, periodic confirmatory measurements, and QA
program. -
Lb. Engineering calculations and/or representative measurements
may be used to comply with periodic confirmatory measurement
requirements.
The protocol, for periodic confirmatory measurements which is
required by 40 CFR Section 61.93(b) (4) is not specified in the
regulations. EPA and’DOE recognizethat some DOE facilities
have large’ numbers of minor release points that have similar
emissions and controls. Therefore, confirmatory nisasurements
of these types of releases would result in a large number of
redundant measurements. Development of periodic confirmatory
measurement programs is the responsibility of the facility.
For each category of release points that the facility
classifies as minor because uncontrolled emissions will not
exceed 1% of the standard, periodic confirmatory measurements
should be designed to confirm that individual release points
remain properly categorized. The facility owner or operator
should use best professional judgenent, knowledge of the
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J ,95 15.49 U. 5 6 3 15 i. DOE
radioflUclides and quantities being used in plant operations,
and the potential for their release to determine when
representative measUrein fltS should be made and/or engineering
calculations should be utilized. A pzotocol for periodic
confirmatory measurements for each, DOE facility must be
provided by DOE to the appropriate EPA regional office.
c. DOE facilities may implement continuous monitoring procedures
that differ from the reference methods of section 61.93(b)
with prior flA approval.
Section 61.93 provides for the use of alternate effluent flow
rate measurement procedures or site selection and sample
extraction procedures if all the criteria specified in Section
61.93(b) (3) (i) through (iv) are met. The criteria for
establishing “impractical t ’ pursuant to Section 61.93 (b) (3) (i)
.are site-specific and include engineering, economic, health
and safety considerations. Prior EPA approval must be granted
for each emission point for which alternate monitoring
procedures are to be used.
id. Enviremmental measurements of radioniiclide air concentrations
at critical. receptor locations may be used as an alternate to
air dispersion calculations in demonstrating compliance with
the standard, if the criteria of Section 61.93(b) (5) are net.
Prior EPA approval must be granted for use of environmental
monitoring as a substitute for air dispersion calculations
when all the requirements of Section 61.93(b)(5) are met.
This approach to demonstrating compliance is particularly
appropriate where air dispersion modeling is overly
conservative, and for facilities with minor emission point5
(of the periodic confirmatory type) and/or diffuse sources as
primary contributors to the dose. The location of the air
samplers should be selected to give an accurate representation
of the dose received by a critical receptor and should be
based on modeling results. -
2. Approval to Construct or Modify; .
2a. Facilities meeting the requirements of 40 CFR Part 61. Section
61.96(b) are exempt from filing an application for approval to
construct ernodify.
A facility is eligible for exemption from submitting an
application for any new construction or modification within
the existing facility if the effective dose equivalent to be
caused by all. emissions from the completed construction or
modification is less that 1% of the standard prescribed in
Section 61.92 and the facility was shown to be in compliance
with all provisions of the subpart in the last annual report.
As stated in Section 61.96(b), the effective dose equivalent
shall be calculated with the source term derived using
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Appendix D or other EP approved procedures as input to the
air dispersion and other computer models. DOE facilities not
subject to the continuous monitoring requirements of section
61.93(b) are eligible for this exemption once a program which
meets the periodic confirmatory measurement requirement is
implemented.
3. Hiaii Level Waste and Prajisuranic Waste Disposal an&Monitored
Retrievab1 Storag : -
3a. EPA has determined that .no NESEAP is needed for disposal
activities at the Righ Level Waste Repository and the Waste
Isolation Pilot Plant. DOE agrees, however, to implement the
requirements of 40 CPR Part 61 as they apply to any teèt phase
activity at either facility.
EPA’S analysis under source category F, High—Level Nuclear
Waste Disposal Facilities, included the proposed High—Level
Waste Repository and the Waste Isolation Pilot Plant (WIPP)
trans’uranic waste disposal site. EPA,’s finding, “since,
expected emissions are so low, no ESW P is needed” (54 YR
51672) applies to the operations and disposal activities at
both facilities. Operations are included to the extent they
are limited to activities analyzed by EPA and described in the
Background Information Document (EPA 520/1-89—006-1). 40 CFR
Part 61 would apply, however, during any test phase of
activities at either facility. Notwithstanding this finding,.
the policy of the Department of Energy will be to implement
the requirements of Subpart I for the High-Level Waste
Repository and Subpart H for WI?? until such time as the
facilities have completed closure.
3b. The Monitored Ret ievabla Storage (1 S) facility will be
licensed and regulated by the Nuclear Regulatory Commission
and therefore subject to the provisions ot Subpart I of 40 CPR
Part 61.
DOE and EPA agree that operations at the 1 S facility are.
subject to Subpart I of 40 CFR Part 63.. -
4. ubpart Compliance :
4a. Subpart Q applies to radon-222 emitting sources at DOE stärage
and disposal facilities. Compliance of sources at DOE storage
and disposal facilities with the 20 pC4/m 2 —s emission standard
of Bection 61.192 viii be addressed as part of any PPA reached
between the relevant EPA regional office and DOE. Por sources
subject to th. standard of Section 61.192, DOE viii
demonstrate compliance through direct measurement of radon -222
I lu in accordance vith Appendix 8, Method 115, or use
alternative procedures (based on best available data) that do
-------
not underestimate emissions.
where flux measurements demonstrate compliance with the 20
pCi/m 2 -s standard, no further measurements are required so
long as, the storage or disposal site remains in the condition
for which compliance was demonstrated. If flux measurements
indicate that a DOE storage and disposal facility is out of
compliance and there is no FPA in place, the DOE facility and
the relevant EPA regional office shall determine the
appropriate actions necessary to return to compliance. - If the
site condition is significantly altered by adverse weather
conditions, a natural catastrophe or other reason the DOE
facility will coordinate with the relevant EPA regional office
to determine the appropriate actions necessary. DOE will
monitor the storage and disposal sites in accordance with the
requirements of DOE 5400.5 and the ‘DOE Environmental
Regulatory Guide (DOE/E -Ol73T) and will report results in its
annual site environmental reports.
5. Miscçj,laneous Sources :
Sa. Emissions of radionuclides to the ambient air from DOE
facilities include point and diffuse source releases. Su.bpart
R provides procedures for evaluating only emissions from ppint
sources. DOE and EPA agree to the collection, analysis and
review of entissions data from diffuse sources.
EPA and DOE agree’ that the dose standard of 40 CFR Part 61,
Subpart H applies to emissions from diffuse sources such as
evaporation ponds, breathing of buildings and contaminated
soils. EPA has provided DOE with a report en candidate
methodologies for evaluating diffuse source emissions. EPA
and DOE will continua to review methodologies to arrive at
mutual guidance on procedures for evaluating these emissions.
DOE will collect data cit diffuse sources and provide this
information to EPA. Data from enviroi mental measurements and
other appropriate methods may be used to evaluate diffuse
emissions and to verify compliance with the Subpart W
standard. DOE will provide its methodology for assessing
diffuse sources to the appropriate EPA regional office. ‘Data
on diffuse sources arid the results of analyses will be
reported as part of DOE’s Annual Air Emissions Report to EPA.
Sb. current NESEAPs for radionuclide air emissions do not address
radon-220 emissions. EPA and DOE agree to collect data and
review the potential for exposure from these enissions.
Current radionuclide emission standards do not address radon-
220, which i exempt from Subpart H and not included in
Subparts Q’or T. DOE agrees to collect data at selected DOE
sites and to provide the current or previously collected data
to EPA for further analysis.
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6. R Qrtip R qJ rements - SubDart H
Ga. EPA and DOE agree that. Appendizes D and B of 40 CFR Part 61
are acceptable ‘ other procedures” relative to Section 61.93 (a)
of ubpart R.
In fulfilling the requirements of Subpart H, DOE may use
Appendixes D and E ot4O CFR Part 61.
6b. EPA and DOE agree that DOE’s annual report vii ]. contain a list
of a]i stacks, vents or other points where radioactive
materials are released to the atmosphere.
While some release points may be considered minor because the
potential discharge (assuming no effluent controls in place)
of radionuclides into the air does not cause an effective dose
equivalent in excess of 0.1 mrem/y, Section 61.94(b) requires
that these release points be listed in the annual report. EPA
and DOE recognize that many DOE facilities have large numbers
of minor release points which have similar emissions and
controls, and are similarly located. These sources may be
grouped for reporting purposes unless there is a technical
reason that would cause such grouping to be inappropriate.
The number of emission points within the group should be
indicated; Additional information, such as stack
identification numbers, types and quantities of radionuclides
emitted will be available to EPA inspectors.
7. QU _ Statu :
7a. Effective date, levision and Terminatie ø f XOU. - This XOU
viii be.. effective immediately and viii continue in effect
until revised or amended by mutual written consent of DOE and
EPA. This )tOU maybe terminated by either party upon 120 days
written notice.
7b. Public Information Coordination. - Decisions on disclosure of
information to the public regarding projects and programs
implemented under the MOU wilL be made consistent with the
rreedom of f rmation t YOIA), 5 U.S.C. 552. -
____________________________ Dated_
D Nichols
7 .ssistant Administrator
fo Air and Radiation
______________________ Dated________
I Department of Energy
Tara J. O’Toole
4 Assistant Secretary
for Environment, Safety and Uealth
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SECTION 8 DOCUMENT 26
Clarification Package: Guidance on the Timely and
Appropriate Enforcement Response to Significant Air
Pollution Violators (SVT&A Guidance) NOTE: Includes
earlier clarification memo dated 6/14/94
04/17/95 06/14/94
26
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
t 1:)
WASHINGTON, D.C. 20460 (21) /
p2R 7
OFFK E OF
MEMORANDUM ENFORCEP €NTAND
____________ COMPUANCE ASSURANCE
SUBJECT: Clarification Package: Guidance Ofl the Timely and
Appropriate Enforcement ResDonse to Significant Air
pollution Violators! (SVT
FROM: Michael N. Stahl
Deputy Assistafli
Off ice of Enf liance Assurance (2211)
TO: Karen V. Brown
Asbestos and Small Business Ombudsman
Office of Small and Disadvantaged
Business Utilization (1230C)
In my memorandum of September 21, 1994, I said that we would
respond to your concerns relative to the subject memorandum dated
June 14, 1994 (1994 clarification) and the small business
community. Your major concern was that the new guidance
memorandum added non-major National EmiSsion Standards for
Hazardous Air Pollutants (NESHAP) and New Source Performance
Standards (NSPS) sources as significant violators (SV) and that
this “redefinition of SV” would adversely impact small businesses
especially in light of new initiatives by our office to assist
small sources in achieving compliance.
We have reviewed both the subject memorandum and the
February 7, 1992 guidance on the Timely and Appropriate
Enforcement Response to significant Air Pollution Violators (1992
Guidance) in light of our office’s initiative to help small
sources achieve compliance through compliance assistance and
other means. The latter of these documents (our August 12, 1994
Enforcement Response Policy for Treatment of Information Obtained
Through Clean Air Act Section 507 Small Business Assistance
Programs) was being negotiated when you initially raised your
concerns.
The SV guidance is intended to enable EPA and the States to
focus enforcement efforts on the highest priority of noncomplying
sources and to work together in resolving violations in a timely
manner. One of the purposes of the 1994 Clarification was to
include all NESHAP and NSPS sources as,SVs as was done prior to
1992. It was our intent to include these sources in the 1992
Guidance by referencing the expanded definition of a major source
under the 1990 CA Amendments, but this definition fails to
include all of the Part 61 NESHAP or the minor NSPS sources.
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—2--
EPA does not currently plan on revising the SVT&A guidance
and considers the 1992 Guidance to be the controlling document in
cases of conflict with the 1994 Clarification. We agree,
therefore, that minor sources (including Title III air toxics
area sources) should not be classified as significant violators
at this time. While we do not plan on revising the SVT&A, it is
still our intent to track violators which pose the most
significant risk to human health and the environment. For this
reason, we encourage the Regions and States to track Part 61 -
NESHAP violators as they deem appropriate. As stated in the 1992
Guidance, “this guidance is not intended to detract from the
importance of addressing other violators and the right and
responsibilities of the States and EPA for doing so.”
While the 1992 Guidance policy does npt require inclusion of
all NESHAP sources as well as minor NSPS sources in attainment
areas as SVs, many of the formerly minor NSPS sources in
nonattairiment areas may now be classified as major sources. This
is due to the 1990 CAA Amendments, which set more stringent
annual emission limits for the serious, severe or extreme
nonattaimiierxt areas. Some of the sources within the small
business community may be classified as major sources under the
post-1990 CAA due to the new emission limits. However, Section
507(c) includes the eligibility requirement that the program
applies only to those small businesses classified as non-major
for all air programs. Therefore, by definition, the small
businesses participating in the SBAP should not be classified as
significant violators.
According to the final §507 policy, States may offer a
correction period option to small businesses in the SBAP that
allows up to 90 days to either correct or take substantial steps
to correct violations discovered during compliance assistance.
They also may be granted an additional 90 ‘days for violations
that cannot be corrected within the initial 90 days of detection.
Since only small businesses that are non—major for all air
programs are eligible to participate in the S507 program and EPA
does not include Title III area sources as SVs, we do not believe
that the SBAP sources will be entered into the Timely &
Appropriate tracking of SVs. But were this somehow to occur and
a source was given the 90 days to correct their violations, the
Timely and Appropriate (T&A) tiineclock would not begin unless the
correction period (and extension if applicable) were exceeded.
If this happens, the T&A tiineclock would begin (Day Zero) 30—90
days (according to the SVT&A guidance) after the correction
period and subsequent discovery of the violation. (We expect
that a separate tracking system may be used for SBAP participants
in order to determine the effectiveness of the compliance
assistance program, i.e., whether the sources return to
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—3—
compliance as a result of receiving compliance assistance. This
is particularly important when sources are offered a correction
period as part of compliance assistance. EPA is developing a
tracking mechanism for the States to use in overseeing those
sources offered compliance assistance.)
I trust that this clarifies your concerns. Please contact
me or Linda Lay of my staff if you have any further questions.
cc: Steve Herman
Scott Fulton
Robert Van Heuvelen (2241)
Elaine Stanley (2221)
Kathie Stein (2242)
John Rasnic (2223)
Air Division Directors, Regions I—X
Regional Counsels, Regions I—X
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UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON, D.C. 20460
JUN 1 4 1994
MEMORANDUM
SUBJECT: Clarification Package for the Guidance on the Timely and
Appropriate Enforcement Response to Significant
Air Pollution Violators (SV/T&A Guidance)
FROM: John B. Rasnic, Director9& a. . ?
Manufacturing, Energy an Transportation Division
Office of Compliance
TO: Air, Pesticides and Toxics Management Division Directots
Regions I and IV
Air and Waste Management Division Director
Region II
Air Radiation and Toxics Division Director
Region III
Air and Radiation Division Director
Region V
Air, Pesticides and ToxiCs Division Director
Region VI
Air and Toxics Division Directors
Regions VII, VIII, IX and X
This memorandum introduces the clarification package for the
Guidance on the Timely and Appropriate Enforcement Response to
Significant Air Pollution Violators. The clarification package
was developed by my staff who worked with the Air Compliance
Section Chiefs and the AIRS Facility Subsystem (AFS) managers to
reach consensus on reporting and defining aspects of the guidance
that have been unclear or interpreted differently between Regions.
The goal of the package is to encourage uniform implementation of
the guidance and to make the data generated by the guidance
consistent, hence, more representative and useful. An equally
important benefit is that the package should prove to be a useful
tool for instructing new staff on the logistics of the guidance..
If you would like to discuss this I can be reached at (703)
308—8600 or Seth Heminway can be reached at (703) 308—8716.
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SV/T&A GØIDM CE CLARIFICATION PACEAGE
/
Prepared by Seth Heminway,
Stationary Source Coznpliande Division
JUN 1 k 199k
CONTENTS
SV/T&A Guidance Clarification Outline
• Significant Violator Accounting Guidelines
Glossary
Questions and Answers
Responsibilities for States, Regions and Headquarters
Reference Documents
Goal Statement
Entering SV’s into AFS and NARS
(under development by AFS Managers)
Abbreviated Quarterly Reporting Form
Annual State-By-State Reporting Form page 1
Annual State—By—State Reporting Form pages 2+
p. 1-3
p. 4-5
p. 6-9
p. 10—12
p. 13
p. 14
p. 15
I
II
III
Attachment5:
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SV/T A Guidance Clarification Outline
This outline will be most useful when it is read in
conjunction, with the SV/T&A Guidance. Et is designed to encourage
more consistent reporting and implementation of the Guidance by
clarifying language that has been interpreted differently in
various States and Regions.
Guidance Cover letter
I. Scope arid Summary Of Guidance
A. Applicability
B. Summary of Guidance
C. General Information About the Guidance
II. Philosophy of Guidance
A. Definition of SV
Under Title VI only violations at sources subject to
Sections 604 and 606 (producers and importers of
stratospheric ozon. depleting compounds) could meet the
definition of SV. Th. majority of violations that occur
under Sections 608 and 609 at C?C sources would not meet
th. definition of Significant Violator sincs they are not
major sources. -
Th. definition should b. interpreted to includ•
violations at all NESHAP and NSPS sources.
All violators that meet th. definition of significant
violator shall be considered SV’s, as defined by the
February 7, 1992 SV/T&A Guidance, the October 27, 1993’
Asbestos NESHAP Adderidua to the SV/T&A Guidance and the
Acid - Rain Add.ndu to the SV/T&A Guidance when it is
final.
III. Processing of SV’s
A. Agency Con nunicationS Concerning SV’s
B. Processing of SV’s
6. Th. significant violator shall remain an SV
(tracked in AFS/NARS) until all violations against it have
been resolved.
C. EPA Maintaining Enforcement Authority
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2
IV. T&A Time Lines For Enforcement Actions
violations discovered in records, received from a
source shall be assigned a day zero no later than 30 days
after the records were received by the enforcing agency.
A separate day zero’ can be created for any additional
violations at a source that has unresolved violations.
However, violations that were - discovered during the sane
investigation, e.g., a series of inspections, a section
l .4 response, a record review or a quarterly report, that
occurred within 30 days of each other, should be grouped
under the same day zero, especially if th. clustered
violations will be addressed in th. same enforcement
action. When more than one air program or pollutant is
listed under on. day zero only the most serious air-
program and emission violation should be counted for
purposes of Headquarters reporting.
A. Day zero -
“The clock starts (i.e., day zero) no later than 30 days
after the discovering agency first receives information concerning
a federally reportable violation. .“ (This has been highlighted
in order to prevent timely and appropriate calculations from bein
negative, which happens when violations are addressed before a day
zero has been assigned. The day zero is not revised once a
violation has been confirmed.)
B. Day 45
C. Day 90
D. EPA Lead
E. Day 150 (no lead change), or Day 190 (lead change)
“By Day 150 (or 190 with lead change), the source shall
either be iwocmpliunoo4aZSOLVZP 0r ADDRESSED, i.e., on a
legally enforceable....” (This interpretation has been
highlighted to ensure that violations are resolved with
enforcement actions to maintain deterrence against future
violations.)
F. Resolved v. Addressed
Normally a violation is addressed first and then
resolved.
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3
V. Penalties
VI. Consultation arid Data Transfer
A. Informal Consultation
B. Update EPA’s Compliance Database
The SV flag (SVI1 field in APS) must be accurately
maintained in order to ensure that this data, which is
shared by other enforcement offices within EPA and the
States, correctly reflects the SV status for all sources
subject to the SV/T&A Guidance. (This field is becoming
increasingly more important as the agency shifts further toward
multimedia, geographic and industry specific enforcement. As
stated in the SV/T&A Guidance AFS/NARS is to be updated monthly
(SV/T&A p 10) . Headquarters will, pull. SV information quarterly
from AFS.)
SnTn ary data that is incorporated in the quarterly
report to the Office of Enforcement and Compliance
Assurance shall be used as the archived suary data for
trends analysis. (This approach will put renewed emphasis on
getting the numbers right the first time. It will prevent last
minute changes that, admittedly, may reflect the most accurate
number but that often cause confusion later since not all parties
who received the data -have accounted for the last minute changes.
If errors are made either in the reporting of data or in the
classification of an SV then corrections to M’S would be captured
in the following quarter’s report.)
C. Provide Inspection Results
D. Sharing of Data
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4
SIGNIFICANT VIOLATOR ACCOCJNTING GUIDELINES
Iote: There are two major aspects of SV accounting that need to
be recognized. One is the SVI1 flag in IRS Facility Subsystem
(A.E’S) that indicates whether or not a source is a significant
violator and it is critical for multimedi’a enforcement targeting.
The second is the T&A accounting of how Long the lead agency took
to address the violation(s), which is based on the day zero.
1. Adding SV’s to AiS: Finding agency detects violation and
enters it into APS/NARS (or reports manually if not yet direct or
upload user of AFS) . EPA and State discuss / examine violati’on(s)
and if it is a significant violation(s) EPA enters the compliance
status and the SV flag in AFS indicating that the source is a
significant violator. From this time until resolution the SVI1
flag is modified monthly to reflect the source’s SV status. For
multiple violations the SV flag shall reflect the worst compliance
status. The SV is reported as ‘added” in the quarter the source
is added to AFS. Violation(s) involving multiple pollutants or
multiple air programs should not be counted more than once.
Violations discovered during a single investigation should be
counted for purposes of headquarters T&A reporting as one
significant violator under a single day zero.
2. SV’s discovered by EPA after th. end of th. quarter:
When a significant violator is reported to EPA by a State or local
agency after the end of the quarter in which it was discovered, it
shall be reported to Headquarters as if it had occurred during the
quarter that it was reported to the EPA Regional ‘Office. Although
this may distort the exact date that violations, addressing,
resolution occurred, it ’will simplify reporting while continuing
to provide Headquarters with an indication of the level of SV
activity. The goal is to maintain a stable count for each quarter
wbile allowing SV’ s that are discovered after the quarter ended to
be added.
3. Addressed: The Significant Violator is maintained dn HQ
reports as unaddressed until the violations against it are
addressed. Once an SV has been addressed it remains on the HQ SV
Summary report only until the end of the fiscal year. At the
beginning of the fiscal year only unaddressed SV’s from the
previous FY will appear on the HQ summary SV report. The Region
continues to track addressed SV’s until they are resolved and
reports them to headquarters as such in AFSJNARS.
4. Unaddr.ss.d: Uriaddressed SV’s are reported on the SV summary
report and are brought forward from the previous quarter to the
next. Similarly, the unaddressed SV’s are brought forward from
one fiscal year to the next.
5. Deletions from $17 list: If it is determined that an SV has
been incorrectly identified as an SV, for instance, if upon
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5
further examination it is determined that novi lation actually
occurred, or if the source was not in fact subject to the
requirement, then the appropriate action code “RV” is added to AFS
.by EPA and the SV is reported in the HQ summary report as being
deleted for cause, and the SVI1 flag is reset. For auditing
purposes, a note to the file in the action comment field must be
added that explains why the source is not being tracked as an SV.
6. Resolved: The resolved SV’s should be reported in the quarter
that EPA or the State discovers that the violation has been
resolved, whether or not it is the actual quarter the violation
was resolved. It is expected that the States and Regions will
monitor addressed SV’s until they are resolved. Once resolved the
SV flags in AFS/NARS are updated and the- violation is no longer
tracked. (AFS/NARS coding conventions will be modified to
accommodate SV’s resolved.)
7. Annual Reports: In order to accommodate the end of year
reports, the Timelyand Appropriate Report and the State by State
Enforcement Data Summaries , the Regions need to ensure that the
core data fields and the T&A fields in AFS are properly filled
out, otherwise manual tabulations will be required.
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6
0
- SV/T&A GLOSSARY
(This glossary of terms is designed to clarify the terminology
used by EPA in the SV/T&A Guidance and the, associated compliance
and enforcement reporting. Terms that originate with the guidance
hays been underlined and those that are legal terms have been
italicized.)
Addres ad means that one of the following actions that impose a
compliance schedule or require immediate compliance have been
taken: a notice of noncompliance that includes a penalty (section
120) issued (AFS code: 7A), an EPA civil action referred to DOJ
(IFS code: 4B), a CAA section 113(a) order issued (IFS code: BA),
EPA CIA section 167 order issued (AFS code: 7E), a CIA section
1l3(d ’ omplaint filed (AFS code: 7F), EPA criminal referral to
DCJ (AFS code: 5B), a consent decree or consent agreement filed
(IFS code: 6B), a consent decree or consent agreement filed (AFS
code: 2D), a’State civil action has been referred to AG (AFS code:
9C), a State criminal action referral to the AG (IFS code: 1D), a
State administrative order issued (AFS code: BC), or be subject to
a proposed SIP or FIP provision, which EPA staff—level review
shows is likely to be approved, will lead to compliance (IFS code:
‘2M or 2L)
additional addressing codes are listed in IFS for tracking
purposes. They are: source returned to compliance by EPA with no
further action required (IFS code: 7G) and, source returned to
compliance by State with no further action required (IFS code:
2K). For cases where penalties are required, penalties that
conform to the “Clean Air Act Stationary Source Civil Penalty
Policy” must also be assessed. -
Addre ad with Pena1ti s means appropriate penalties were
collected or are likely to be collected becaus the action or
complaint stipulates that a penalty be paid. Penalties must be
calculated in ácc rda ice ith the EPA ciiYil penalty pol cy__
Acbuipistrat.iV Order means a C IA section 113(a) or section 167
order that requires the source to comply with the CIA or a p it
prrntuigated thereunder_but does not stipulate pena1ties. A St t e
administri actiOfl (not 1viló criminàIY a ins tá source
pursuant to the State authority.
Administrative P.nalty Ord•r (APO) means a CIA Section 113 (d)
order issued by EPA that has stipulated penalties.
Civil Jud.Lcial Referral means a Federal or State case that has
been referred to the Department of Justice or the State Attorney
General for resolution in the civil judicial forum.
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7
Complaint means a written communication, alleging one or more
violations of specific rovisions of the Act, or regulations or a
permit promulgated thereunder, issued by the complainant to a
person.
Confirming a Violation/Compliance includes the following: an
on site inspection, a review of an appropriate self—monitoring
report, a stack test, a reference method compliance test, or a -
response to a CAA section 114 letter.
Consent Agreement (or Consent Decree) means any written
document, signed by the parties, containing stipu tJ-on -s-—°i _ -
conclusions of fact or laws and a p e aty or-p-r-opo-sed—
revocation or -suspension acceptable to both complainant and
respondent.
Consent Agreement / Consent Order (CACO) means a signed
document settling a CAA section 113 (d) administrative penalty
order.
In Compli&rtce means all Federal and State administrative and
judicial action against the source is complete and the source has
been confirmed to be complying with the CAA. This term, as it is
used in the SV/T&A Guidance, refers to a source being in -
compliance with all aspects of CAA requirements, not simply their
emission limit. -
Inve tigatiofl means, but is not Limited to, a series of,
inspections, review of CAA section ‘114 responses, record reviews,
review of quarterly reports, that were discovered within 30 days
of each other and that pertain to the same source.
Lead Change means the lead changes from the State to EPA because
either the State did riot address the violation by day 90 or the
State asked EPA to assume the lead. In the case of NESH.AP D&R
violators and Non—transitory NES AP violators “Lead Change” means:
the lead changes form the State because the State did not address
the violation within two months or the State asked EPA to assume
the lead. This does not include a change front EPA to the State.
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8
Major SOUZCe means a seat.onary source(s) located on one or more
contiguous or adjacent properties that have the same standard
industrial classification and are under he control of one person
or persons and that emits or has the potential to emit 100 tons
per year of VOC, SO 2 NO 2 , CO , or PM—10; or a source, regardless of
its attainment status, that emits or has the potential to emit 10
tons per year (tpy) of Hazardous Air Pollutants (HAP’s) or 25 -
(tpy) of a combination of HAP’s and other pollutants; or if the
source is located in a nonattainment area and it emits or has the
potential to emit quantities of VOC, NO 2 , CO , or PM-10 that equal
or exceed the following nonattainment status thresholds.
Nonatt inment Major Sourc.
Status (in tons per year)
OZONE (VOC / NO 2 ) Marginal/Moderate 100
Serious 50
(Ozone Transport Region) 50
Severe 25
Extreme 10
CARBON MONOXIDE Moderate 100
Serious 50
PM-b Moderate 100
Serious 70
For a detailed definition of Major Source see Part 70 — Stats
Operating Permit Programs Federpl Register vol. 57, No 140 /
Tuesday, July 21, 1992 and the CAA sections 112 & 302.
R& olv.d means that once the violation is addressed and a
closeout memo has been issued, all penalties have been-collected
and the source is confirmed to be in compliance. Once these
actions have been completed AFS should be updated with the
following: C7 (Closeout memo issued), C3 (CAA section 113(d)
penalty collected), WD (CAA section 113(d) complaint withdrawn),
VR (Violation Resolved).
Siqnifieant Violator (SV) means an NSPS, NESHAP or major SIP,
source that violates one or more: 1) emission, 2) monitoring, 3)
substantial procedural requirement, 4) provision of a State or
Federal administrative or judicial order relating to a SIP
violation and 5) any requirement of Part C or D of title I of the
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9
CAAA relating to conStruction or modification of a major source.
Also included are any synthetic minor (SM) sources whose emission
level would either classify the source as’ major or any SM source
avoiding PSD while violating an emission limit or permit condition
which effects its PSD status.
Asbestos NESHAP violations that fall under the SV definition
are: circumvention / concealment, emission control, collection,
packaging, transporting, disposal, substantive provision of a
State or Federal Judicial Order, and a substantive provision of a
Federal or State Administrative Order.
Acid Rain SV’s are defined as, any major source, as defined by
the CAA, that violates one or more of tile following: install,
certify, operate and maintain required CEMS/COMS system; have an
Acid Rain Permit; hold allowances as of the allowance transfer
deadline not less than the total SO 2 emissions for the previous
calendar year; submit a complete proposed offset plan; submit
electronic quarterly reports to the administrator; for units
governed by a Phase I extension plan, demonstrate at least 90%
reduction of SO 2 in 1997, 1998, or 1999; ensure that all
certification tests for the requiredCEMS/COMS are completed not
later than the specified dates; any provision of a Federal Consent
Decree or Federal Administrative Order; any substantive provision -
of a State Judicial Order or a State Administrative Order which
was issued for an underlying Acid Rain violation.
For a more detailed definition see the February 7, 1992
SV/T&A Guidance, the October 27, 1993 Asbestos Addendum and the
Acid Rain Addendum (not final as of June 1, 1994). Other media
offices within EPA use the term significant non—complier (SNC) to
mean significant violator. -
Significant Violation means any violation according to the
SV/T&A Guidance and its addenda that .would cause a source to be
classified as a significant violator.
Substantial Proeethiral Requirement It is EPA’S policy to
leave this definition to the discretion of the Regions.
Substantial procedural requirements may include the procedural
requirements that form the foundation of the compliance program,
e.g., conduct a performance test, conduct a monitor certification
test, maintain records, or submit a CAAA required Title V
compliance certification.
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10
SIGNIFICANT VIOLATOR GUIDANCE QUESTIONS AND ANSWERS
Siqnificant Violator Definition
1) Q: Should C A Amendment Title VI violations be added to the SV
list?
A: Only Title VI violations that meet the definition of
significant violator would be added to the SV list. The vast
majority of violations under § 608 and 609 of CAAA Title VI would
not meet the definition of SV because the sources’ would rarely, if
ever, exceed the major source threshold. No violations under §S
610 and 611 would meet the definition because these sources do not
emit air pollutants. However, sources regulated by §S 604, 606,
and 612 may meet the definition because’ they could exceed the
nonattianxnent emission thresholds that would classify the source
as major.
2) Q: Are violations at non major NESH.AP and NSPS sources included
under the definition of significant violator?
A: Yes, emission, monitoring, and substantial procedural
violations at all NESHAP and NSPS sources should classify the
sources as significant violators.
3) Q: Is a non—major unit, that is in violation (i.e. spare
boiler) at a major facility considered an SV?
A: Yes, violations at all units at a major source classify the
source as. a- significant violator.
fl.adqi art.ra R.porting
4) Q: When should a Significant Violator be reported to
Headquarterz if EPA learned of the violation after the end of the
guarter in which the violation occurred?
A: When the EPA Regional Office learns of the SV after the quarter
in which it was discovered the SV shall be reported to
Headquarters during the current quarter.
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11
5) Q: If a source has an unresolved violation(s) and another
violation is discovered should another day zero be entered?
A: If another violation is discovered dur ing a Later
investigation, then a separate day zero can be assigned. Whenever
possible, violations•that were discovered during a single
investigation (or within 30 days of each other’l should be
clustered under a single day zero.
Processing of Significant Violators
6) Q: Is a violating source which has been addressed by an
addressing action considered addressed in accordance with the
Timely and Appropriate policy prior to o in lieu of a penalty
being collected?
A: An addressing action would normally assess a penalty through an
enforcement action. Once the penalty has actually been collected
then the violation can be considered resolved,.assurning that all
other stipulations have been met.
7) Q: If EPA identifies a violation, does it automatically become
a federal lead or does a State have 150 days to address
regardless?
A: Under the SV/T&A Guidance it is expected that once an SV has
been identified the State and Region will discuss which agency is
most appropriate to take the lead during the next monthly
conference call.
8) : At what time should a facility which has art entered consent
decree be considered resolved and thus removed front the SV list?
A A facility is considered a violator and should be tracked with
an SV flag even if it is on a compliance schedule. These
facilities should remain an SV until they have been confirmed to
be in compliance, met all of the requirements of the compliance
schedule and all penalties have been collected.
9) Q: At what time should a facility which has art APO issued be
considered resolved and thus removed front the SV list?
A: Once the penalty payment is received by the appropriate party
at EPA or the State agency and the source has been confirmed to be
in compliance. If the penalty is in installments, the facility
should remain on the SV list until the final penalty payment is
received.
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t2
10) Q: When should a facility’s compliance status in AFS change
from in cortipliance to in violation after a violation is confirmed?
A: The compliance status should be updated ,imrnediately or during
monthly AFS updating.
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13
SIGNIFICANT VIOLATOR RESPONSIBILITIES
(Program Specific Guidance should be referenced)
State and Local Agencies
tdentify and initiate actions to resolve significant
violations in accordance with the EPA Timely and Appropriate -
Guidance of February 7, 1992. Report to EPA via A.FS the status of
all significant violators in accordance with the guidance.
Communicate periodically, monthly conference calls, with the
Regional EPA Office to confirm reported SV’s. States are expected
to address and track all violations within their jurisdiction and
delegated authority.
Regional Offices
Quality assure State and Local SV data in AFS/NARS, enter
data as necessary to ensure that all SV’s are identified correctly
in the appropriate field. Ensure that the violation in question
meets the SV definition. Communicate periodically with the State
and Local Agencies to confirm reported SV’s and assist the State
and Local Agencies in identifying, prioritizing and resolving SV’s
in a timely and appropriate manner. Discuss lead changes or over—
filing as appropriate. In preparation for quarterly and annual
reporting cycles, check SV data reported to Headquarters to ensure
accuracy and correct accounting. Report to Headquarters on the
progress of the SV program in relation to Regional MOA commitments
and any problems that the Region or State offices may be
experiencing.
E.adquart s rs
Quality assure summary SV data for correct accounting and
ensure consistent implementation of the SV/T&A Guidance. Work
with Regional APS/NARS and/or SV coordinators tO correct
inconsistencies. Analyze Regional performance for quarterly MOARS
reports and the annual Timely and Appropriate report. Maintain
and improve national data systems for tracking and reporting on
SV’ S.
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14
SIGNITICA2 T VIOLATOR REFERENCE DOCUMENTS
I’ve attempted to list all of the documents that offer guidance on
SV’s on the policy level and the technical )SS operator level.
Ensuring that we’re all using the same guidance is essential to
our task of maintaining consistent policy and reporting.
SV/T&A POLICY DOCUMENTS
“Timely and Appropriate Enforcement Response tO Significant Air
Pollution Violators” (SV/T&A Guidance) and cover letter, Signed by
John S. Seitz, OAQPS and Robert Van Heuvelen, OE on Feb 7, 1992.
“Asbestos NESHAP Addendum to the Timely and Appropriate (T&A)
Enforcement Response to Significant Air Pollution Violators (SV)”
signed by John B. Rasnic, SSCD and Kathie Stein, CE on October 27,
1993.
An Acid Rain addendum is expected to be finalized in FY 1994.
DOCUMENTS USZD IN CONJUNCTION WITH THE SVIT&A GUIDANCE
“Clean Air Act Stationary Source Compliance Civil Penalty Policy,”
William G. Rosenberg, Edward W. Reich October 25, 1991
‘“Guidance on Implementation of the Discretionary Contractor
Listing Program,” Thomas L. Adams Jr. November 26, 1986
“Listing Asbestos Demolition and Renovation Companies Pursuant to
Section 306 of the Clean Air Act,” Michael S. Alushin, John S.
Seitz, Terrell E Hunt March 11, 1988
“Asbestos Contractor Listing,” John S. Seitz June 30, 1988
/
/ Annual Program Specific Guidance, which is issued by the program
offices.
/AIRS FACILITY SUBSYSTEM (AIS) GUIDANCE DOCUMENTS
AIRS Users Guide Vol.AF1: AFS Data Dictionary, TRC November 1992
Action Linking Users Guide , TRC October 30, 1992
AIRS Facility Subsystem (AFS) AD HOC and Milestone Reporting
(Volume XIII), TRC November 1992
“Major Sources in the AIRS Facility Subsystem (M ’S),” Mamie
Miller, SSCD April 27, 1993
“Minimum Data Requirements ( R’s) for Stationary Sources,” Mantie
Miller, SSCD December 22, 1993.
Additional guidance on adding and maintaining SV data in M’S is
being developed by the AFS managers work group.
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SV/T&A Goal State tent
The Significant Violator Timely and A propriate Guidance sets
the framework and Clarifies the relationship between Federal,
State and Local air pollution control agencies. It provides the
framework for improved cooperation between these agencies in order
to maximize the effectiveness of available ,resources for
protecting the environment. This is done by making it possible
for agencies to have the flexibility to prioritize enforcement.
actions against the most environmentally damaging sources of air
pollution. By maintaining an accurate SV census in-AFS/NARS
regulators are able to effectively target enforcement against
sources that are significant noncompliers under other
environmental statutes.
The SV/T&A guidance sets enforcement timeliness goals that
environmental regulatory agencies aim tomeet. By tracking and
analyzing the time that elapses between the time that a violation
is discovered and the day that a violation is resolved EPA can
assess how effective the enforcement response has been. A rapid
response including appropriate penalties to violations is crucial
for maintaining credible deterrence in the regulated community.
By analyzing the timeliness of the enforcement response EPA is
able to identify and correct weak or slow enforcement.
Additionally, by accounting for SV’s unaddressed EPA can
illustrate the need, in some cases, for additional resources to
properly address and resolve all significant violations.
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Attachmenl I
REGION FISCAL YEAR QUART
ER -
A
PM-b
502
o
TOTAL
QUARTERLY REPORT OF SIGNIFICANT ViOLATOR ACTIVITY
I
POLLUTANT
VOC
.
PROGRAM
B
YTO C
150 DAYS D
E
365 DAYS F
ADDRESSED (G=D+E.F) G
•
DAYS H
SUCCESS
I
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Attachment
ANNUAL SV/T arid A STATE-BY- STATE REPORT
Page 1
Evaluation of_State-fly-State SV’s In FY 199_ Region
STATE
STATE
STATE-
STATE
STATE
STATE
STATE
STATE
TOTAL
1) Total Iinaddressed SVs at BOY
2)jptal SVs Added during FY
3) Total SV’s Addressed during FY
-
4) Total SIP SVs
“
5) Total SIP SV’s Added
6) Total SIP SV’s Addressed
?. ! !P SPS SVs
.
SVs Added
9) Total NSPS SVs Addressed
10)_Total non-asbestos NESHAP SV’s
11) Total non-asbestos NESHAP SV’sAclded
12) Total non-asbestos NESHAP SV’s Addressed
13) Total Asbestos D&R SVs
! )J! estos D&R SV’s Added
15) Total Asbestos D&R SVs Addressed
16)
‘ )Ic ! PSD SVs Added -
18) Total PSO SVs Addressed
19) Tota! ! SVs ____ ___ ____ ____ ____ ____ ____ _____ _____
? c O !LNSR SVs Added ____ ___ ____ ____ ____ ____ ____ _____ _____
21) Total NSA Addressed ____ ____ ____ ____ ____ ____ ____ _____ _____
Note: in order to prevent double counting, if more than one program violation occured only the primary
emission violation should be counted for each SV. Only one program code will be counted for each day zero.
The sum of lines 4, 7, 10, 13, 16 and 19 should equal the sum of lines 1 and 2. This data should be
accessible soon In ACTS/NARS.
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AUACHMEI IT Ill
Annual SS/ State-by-State Report
Pages 2 +
TIMEFRAMES FOR ADDRESSING SV’S FY 199_ REGION_ STATE
This form needs to be filled out for each State.
EPA LEAD
STATE LEAD
LEAD CHANGE
TOTAL
2!) SV ’s Addressed w/ln 150 days
) ‘sAddressed wIln 151-240 days
24)SVsAddressedwlln 241-365 days
25) SVs Addressed beyond 365 days
26) Total SV’s Addressed (sum of
lines 2?-26IShouid equal line 3)
271 Total Unaddressed by EOY
28) Total Unaddressed Over 365 days at
EndofFY
,
.
.
29) Total of all Sources being tracked
30) Of lIne 26, the number of SV’s
addressed with enforcement actions
31) Of line 26, the number of SV’s
addressed with penalties
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SECTION B DOCUMENT 27
Initial Operating Permit Application Compliance
Certification Policy
07/03/95
27
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O Sr 4 ,
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
I Office of Air Quality Planning and Standards
Research Triangle Park, North Caro1 na 27711
I(
JUL 31995
MEMORANDUM
SUBJECT: -Initial Operating Permit Application Compliance
Certification Policy
FROM: Kathie A. Stein, Director
Air Enforcement Division, OECA (2242A)
Lydia N. Wegman, Deputy Director -
Off ice of Air Quality Planning and S andards (MD-i
TO: See Addressees
In response to the inquiries and concerns-expressed by
permitting authorities, regulated sources, and other stakeholders
in the title V process, the Office of Air and Radiation (OAR) and
the Office of Enforcement and Compliance Assurance (OECA) have
collaborated on the development of an Environmental Protection
Agency (EPA) policy on a source’s compliance certification to
accompany the initial title V permit applications. The questions
focused principally on the compliance certification requirements
under 40 CFR 70.5(c) (9) and (d). In an effort to gather more
information, OECA and OAR recently talked with industry
representatives, Regions, and State and local agencies about
their experience with the certification requirement. This
information was helpful in developing the policy.
Sources are equired to review current major. and minor new
sourcereview permits and other permits containing Federal
requirements, State implementation plans and other documents, and
other Federal requirements in order to determine applicable
requirements for emission units. .2he EPA and State and local
permitting authorities may request additional information
concerning a source’s emissions as part of the title V
application process. Companies are not federally required to
reconsider previous applicability determinations as part of their
inquiry in preparing title V permit applications. However, the
EPA expects companies to rectify past noncompliance as it is
discovered. Companies remain subject to enforcement actions for
any past noncompliance with requirements to obtain a permit or
meet air pollution control obligations. In addition, the title V
permit shield is not available for noncompliance with applicable
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2
requirementS that occurred prior to or continues after submission
of the application. -
We anticipate that implementation of this policy will
simplify the permit applicatiofl process, while maintaining the -
compliance and flexibility benefits that the operating permits
program will provide. Should you require further information
concerning this policy, please contact Julie Domike of OECA at
(202) 564-6577 or Barrett Parker of OAR at (919) 541-5635.
Addressees:
Director,
Regions
Director,
Director,
Director,
Director,
Air Pesticides, and Toxics Management Division,
I&Iv
Air and Waste Management Division, Region II
Air, Radiation, and Toxics Division, Region III
Air and Radiation Division, Region V
Air, Pesticides, and Toxics Division, Region VI
Air and Toxics Divisions, Regions VII, VIII, IX, and X
cc: Alan Eckert
Steven A. Herman
Jean C. Nelson
Mary D. Nichols
Richard D. Wil on
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SECTION B DOCUMENT 28
Clarification of the Use of Appendix I of the Clean Air Act
Stationary Source Civil Penalty Policy
07/23/95
28
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T1
UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON, D.C 20460
23
OFF CEOF
ENFORCEMENT AND
COMPLIANCE ASSURANCE
MEMORANDUM
SUBJECT: Clarification of the Use of Appendix I of the Clean Air Act Stationary Source
Civil Penalty Policy
FROM: Kathie A. Stein (
‘ 1 Air Enforcement Divis
1.) Office of Enforcement liance Assurance
TO: Regional Division Directors
Region IV recently raised questions concerning the Clean Air Act Stationary Source Civil
Penalty Policy (general policy). Specifically, the Region asked whether the Gravity Component
in Appendix I (“The Permit Penalty Policy”) should be used in addition to the general policy’s
gravity component when calculating the penalty amount, and specifically, whether “size of the
violator” is included in addition to the penalty amount as calculated using the appendix. The
policy may be confusing because of a clerical error on page 3 of Appendix I, which reads as
follows:
The economic benefit component and the gravity component are added together to
determine the preliminary deterrence amount. This initial amount should then be
adjusted, using the general stationary source civil penalty policy factors which take into
consideration individual equitable considerations (Part III of the general policy).
This paragraph applied to Part Ill of September 12, 1984 general Clean Air Act policy,
Adjusting the Gravity Component , and to the later policy revision in March 1987. The error
occurred when the table of contents was changed during the 1991 revision of the general policy.
Part III became Parts II.B.4. and 1V, but the reference was inadvertently left unchanged in the
above passage in Appendix I. The paragraph should read as follows:
The economic benefit component and the gravity component are added together to
determine the preliminary deterrence amount. This initial amount should then be
adjusted, using the general stationary source civil penalty policy Part ll.B.4., Adjusting
the Gravity Component , Part III, Litigation Risk , Part IV, Ability to Pay , and other
Recycled/Becydable
P,vUod With Scy,Cv cJa Ifl W p r th
con , n , ea l 75% rocyc ed Gb . ,
relevant adjustments.
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°v
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3
Settlement with a Federal agency is encouraged in the same circumstances as with a
private party. $ 40 C.F.R. § 22.18. EPA should use the same conference and settlement
discussion procedures with Federal agencies that it uses with private parties under Part 22.
Except where the parties have reached a settlement, a case against a Federal agency would
proceed to hearing under the provisions of Part 22 just as in a case against a private party,
including the opportunity for either party to appeal an initial decision to the Environmental
Appeals Board. Often, however, settlement discussions continue on a parallel track with the
hearing procedures. Cases that settle do not require a conference with the Administrator, as
discussed below. In settling a matter, the respondent Federal agency waives its opportunity to
confer on the settled matter.
As with private parties, any voluntary resolution or settlement of such an action shall be
set forth in a consent agreement/consent order. In addition, Federal parties have the same
opportunity to confer with the appropriate Agency official or employee provided under 40 C.F.R.
§ 22.18. Regions should not confer with the Federal agency outside of their usual procedures to
implement 40 C.F.R. § 22.18. As a result, after EPA issues the complaint, the respondent
Federal agency may confer with the complainant (EPA employee authorized to issue the
complaint) under Part 22 concerning settlement whether or not the respondent requests a hearing.
This Part 22 opportunity to confer, however, does not affect the 30-day deadline for filing an
answer under § 22.43, just as with a private party under § 22.18(a). Moreover, throughout this
administrative process, the Regions should follow Part 22’s requirements regarding ex parte
communications.
B Opportunity to Confer 5
Before a penalty becomes final, the respondent Federal agency must be afforded an
opportunity to confer with the Administrator EPA will provide the same opportunity to confer
with the Administrator prior to final assessment of a CAA administrative penalty as is currently
provided in implementing the RCRA provision, and as proposed in general for Part 22.
Although the “opportunity to confer” requirement can be satisfied by providing an opportunity to
confer with a Regional official with properly delegated authority within a reasonable period of
time following issuance of the penalty order, as a matter of practice, the Administrator will retain
the opportunity to confer personally, as set out below. This is an appropnate way to implement
EPA’s existing administrative penalty authority, thereby preserving the President’s authority to
resolve disputes within the executive branch. As a result, EPA will provide the respondent
Federal agency an opportunity to confer with the Administrator before a penalty order becomes
final. 6
5 EPA believes this guidance is consistent with Executive Order No. 12088, as it
establishes an efficient and orderly procedure for implementing an opportunity for the head of
the affected Federal agency to confer with the Administrator on disputed issues.
6 As discussed below, such opportunity will not be available for administrative penalty
orders unless the Part 22 administrative heanng procedures have been exhausted.
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4
Federal agencies will have the opportunity to meet with the Administrator only after
exhaustion of other Part 22 procedures. Placing the conference at the end of the process will
enable the Agency to proceed with their enforcement case against the Federal agency in the same
manner as they do against pnvate parties. Similarly, placing the conference at the end of the
hearing process was adopted in implementing the RCRA provision noted above, and has worked
effectively in practice. 58 E [ qg. 49044 (September 21, 1993).
Under the current Part 22 provisions, the EAB issues a final order under section 22.31,
and sets the effective date of the order. A pnvate party or a Federal agency may seek
reconsideration of the order by filing a motion with the EAB, and the EAB may, if appropriate,
stay the effective date of the final order pending such reconsideration. However, the
Administrator does not participate in a case unless the matter has been referred by the EAB to the
Administrator under section 22.04(a).
In cases involving a respondent Federal agency, the EAB will issue a final order under
section 22.31, with an effective date that is no earlier than 30 days from issuance of the order. If
a Federal agency wishes to confer with the Administrator, it must file a motion to reconsider the
LAB’s final order with the EAB under section 22.32 within 10 days of service of the EAB’s final
order (5 additional days where service is by mail). In its motion, the Federal agency must
indicate that it desires an opportunity to confer with the Administrator, either in person or
through an exchange of letters, and identify the issues which the Federal agency proposes to
discuss with the Administrator. The motion to reconsider should also raise to the EAB any
matters deemed to have been erroneously decided and the nature of the alleged errors. Upon
receipt of such a request, the LAB will refer the request for a conference to the Administrator and
stay the effective date of its final order pending the outcome of the referral and conference with
the Administrator. 7
The referral from the EAB pursuant to section 22.04(a) will authorize the Administrator,
upon completion of the conference, to either issue a final order superseding the EAB’s order, or
refer the matter back to the EAB to issue a new final order or reaffirm its previous order on
behalf of the Agency. If the matter is referred back to the LAB, the EAB shall resolve, as
necessary, those issues raised in the motion for reconsideration relating to any errors allegedly
made by the EAB.
7 Under the proposed Part 22 procedures, if the respondent Federal agency desires a
conference with the Administrator, the head of the affected Federal agency must request a
conference with the Administrator within 30 days of the LAB’s service of a final order and serve
that request on the parties of record. In that event, a decision by the Administrator shall become
the final order. A motion for reconsideration of a final order shall not stay the 30-day period to
request the conference unless specifically so ordered by the EAB.
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5
Failure to request a conference with the Administrator in this manner and within this time
frame will be deemed a waiver of the right to confer with the Administrator. If there is no timely
request for a conference with the Administrator, any motion to reconsider filed with the EAB
will be ruled on by the EAB.
The conference with the Administrator can occur directly or through an exchange of
letters. A request for a direct conference should be included in the Federal agency’s motion for
reconsideration of the EAB’s final order with a copy to the Director of the Federal Facilities
Enforcement Office (FFEO) and all parties/counsel of record. 8 The request for a direct
conference should specifically identify the issues which the Federal agency proposes to discuss
with the Administrator, and should specifically identify who will represent the respondent
Federal agency. In addition, as part of its request for a direct conference, the head of the Federal
agency should attach copies of all prior administrative decisions and substantive briefs in the
underlying proceedings Copies of these bnefs and underlying decisions also should be provided
to the Director of FFEO.
The parties/counsel of record may request to be present during the direct conference. A
request to attend the direct conference should be in writing and served on the Director of FFEO
and the parties/counsel of record. The Administrator or her designee shall notify the head of the
Federal agency who requested the direct conference and the parties/counsel of record regarding
her plan and arrangements for the direct conference.
Following the conclusion of the direct conference, a person designated by the
Administrator will provide a written summary of the issues discussed and addressed. Copies of
the written summary shall be provided to the parties/counsel of record. Within thirty (30) days
of the conference, the Administrator shall issue a written decision with appropnate instruction
regarding the finality of the order. This decision shall be filed with the Clerk of the EAB and
made part of the administrative case file.
Instead of the direct conference, the conference with the Administrator may be conducted
through an exchange of letters. If so, the head of the Federal agency should include the letter in
its motion for reconsideration of the EAB’s final order with a copy to the Director of FFEO and
all parties/counsel of record. In addition, the letter should specifically identify the issues which
the Federal agency proposes that the Administrator consider. The head of the Federal agency
should also attach copies of all prior administrative decisions and substantive briefs in the
underlying proceedings. Copies of these briefs and underlying decisions should be provided to
the Director of FFEO. Within thirty (30) days of receipt of the head of the Federal agency’s
letter in the event of a conference by letter, the Administrator shall issue a written decision with
appropriate instruction regarding the finality of the order. As in the direct conference, this
decision shall be filed with the Clerk of the EAB and made part of the Administrative case file.
8 Participation by non-Federal parties in the Administrator’s conference will be
determined on a case-by-case basis.
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6
If the Board referred the matter to the Administrator for decision under section 22 04(a)
prior to the filing of a motion to reconsider under section 22 32, and if the Federal agency wants
to request a conference with the Administrator, it must do so prior to the Administrator’s
decision To assure that Federal agencies are aware of these procedures, Regions should refer the
Federal agency to Part 22 and other relevant Agency guidance
IV COMPLiANCE ORDERS
Unlike RCRA, the CAA does not have a separate statutory provision specifically
addressing Federal agency penalty/compliance orders and requiring a conference with the
Administrator prior to an order’s becoming effective The CAA, however, does provide a
general conference opportunity under section 1 13(a)(4), prior to a compliance order’s becoming
effective CAA compliance orders to Federal agencies should follow the same procedures as for
the issuance of such orders to private parties For example, as with a private party, a Federal
agency respondent should be provided an opportunity to confer with a Regional official with the
authority to issue a compliance order before the order becomes effective Because EPA issues a
compliance order to achieve expeditious compliance with CAA requirements and not to assess a
penalty, the time period to request a conference generally should be less than the 30 days
afforded to seek a conference for penalty orders Ultimately, based on the seriousness of the
violations and the nature of the compliance activities, the Regional office will determine the time
period in which the Federal agency may request a conference, and specify that deadline in the
cover letter transmitting the compliance order or in the compliance order itself The approach of
providing an opportunity to confer before a compliance order becomes final has worked well
under the Safe Drinking Water Act
With regard to section 113 compliance orders, section 113 mandates that such orders
require the person to whom it was issued to comply within one year of the date the order was
issued, and shall be nonrenewable For private parties, EPA would most likely pursue a civil
judicial action against a violator should a schedule longer than a year be required for a return to
compliance For executive branch agencies, this option is not available to EPA Therefore, when
a Region believes that a schedule less than a year is infeasible to achieve compliance, the Region
should negotiate a Federal Facility Compliance Agreement (FFCA) which either contains an order
with a delayed issuance date to go into effect when compliance can be reached in one year or,
instead, the Region could first negotiate an FFCA and then issue a separate order when
compliance can be reached within one year FFEO strongly recommends that when the Region
uses the FFCA, it be submitted for public comment via publication in the Federal Register in order
9 As a matter of practice, while EPA will also provide such opportunity to Federal agencies
for compliance orders relating to violations of CAA section 112, 42 U S C § 7412, the
opportunity for a conference does not suggest that the Federal agency may delay taking steps to
come into compliance with these requirements or any other requirements under the CAA
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7
to ensure public awareness of the compliance order’s contents. This is similar to public comment
on judicial consent decrees. Where compliance is achievable within one year of issuance, Regions
should issue orders.
V. WAIVERS
Under the CAA Section 113(d)(1)(C), the Administrator’s administrative penalty authority
is limited to matters where the total penalty sought does not exceed $220,000 and the first alleged
date of violation occurred no more than 12 months pnor to the initiation of the administrative
action, except where the Administrator and the Attorney General jointly determine that a matter
involving a larger penalty amount or longer penod of violation is appropriate for administrative
penalty action. Where the Regions determine that a waiver should be granted in an action against
a Federal agency, the Regions should direct their request for a waiver to the Director, FFEO with a
copy to the Director, Air Enforcement Division, Office of Regulatory Enforcement. Waiver
requests should follow the same format as similar requests in cases against pnvate parties and
include reasons justifying the waiver and a fact sheet on the matter.
VI. PENALTIES
Federal agencies are liable for EPA-assessed CAA civil administrative penalties just like
any other person. ‘° If violations occurred pnor to July 16, 1997 and are ongoing, EPA could
assess penalties for the violations from July 16, 1997 until correction of the violation. Moreover,
EPA can require correction of and, in some case, may seek penalties for violations that occurred
pnor to July 16, 1997. If a Region believes that seeking penalties for violations occurring prior to
July 16, 1997 is warranted, the Region should submit a justification to the Director of the Federal
Facilities Enforcement Office. Regions should consider the size of violator when determining the
appropriate penalty against a Federal agency. In many instances, Federal agencies would be
considered large violators; in these cases, the Regions should apply the 50% formula, under which
the size of the violator component, if very large, may be reduced to 50% of the total penalty at the
discretion of the Agency.
In determining an appropriate penalty, EPA will apply its penalty policies, the October 25,
1991, CAA Stationary Source Civil Penalty Policy, and amendments thereto, and the Mobile
Source Penalty Policies , including capturing economic benefit for avoidance of costs, against a
‘° This policy does not intend to require any conduct contrary to the Anti-Deficiency Act.
“Intenm Tampering Enforcement Policy, 6/25/74, Civil Penalty Policy for Incorrect
Aftermarket Catalytic Converter Applications, 4/18/88, Sale and Use of Aftermarket Catalytic
Converters, contained in 51 . 28133 (8/5/86), Enforcement Policy for Aftermarket
Catalytic Converter Violations, 12/22/88, Volatility Civil Penalty Policy, 12/01/89, Aftermarket
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8
Federal agency for violations of the CAA in the same manner and to the same extent as against
any private party The May 1, 1998, “Supplemental Environmental Projects Policy” and any
subsequent updates also apply in this context Moreover, for settled compliance cases that require
work, stipulated penalties should be included in the Compliance Agreement
VU PRESS RELEASE FOR CAA ENFORCEMENT ACTIONS
EPA uses the publicity of enforcement activities as a key element of the Agency’s program
to promote compliance and to deter noncompliance with environmental laws and regulations
Publicizing EPA enforcement actions against private parties and Federal agencies informs both the
public and the regulated community of EPA’s efforts to ensure compliance and take enforcement
actions EPA’s decision to issue a press release and the contents of press releases are not
negotiable with Federal agencies or other regulated entities Upon the issuance of an order or the
filing of a complaint, FFEO strongly encourages Regions to issue a press release
VIII CONCLUSION
FFEO is issuing this guidance to clariFy enforcement procedures for Federal facility
enforcement under the CAA This guidance supersedes earlier guidance regarding CAA
enforcement at Federal facilities such as that found in the 1988 Federal Facilities Compliance
Strategy Should you have any concerns or questions, please have your staff call Mary Kay Lynch
at (202)564-2574 or Sally Dalzell at (202) 564-2583
IX NOTICE
This guidance and any internal procedures adopted for its implementation are intended
solely as guidance for employees of the U S Environmental Protection Agency Such guidance
and procedures do not constitute rule making by the Agency and may not be relied upon to create
a right or benefit, substantive or procedural, enforceable at law or in equity, by any person The
Agency may take action at variance with this guidance and its internal implementing procedures
Attachment
cc Air Enforcement Branch Chiefs
Federal Facility Coordinators, Regions I-X
Defeat Device Authority with regard to Catalyst Replacement Pipe Manufacturers and Sellers,
1/02/91, Civil Penalty Policy for Administrative Hearings, 1/14/93, Manufacturers Programs
Branch Interim Penalty Policy, Appendix I Manufacturers Programs Branch MFB Imports
Program Penalty Policy, 3/31/93, Interim Diesel Civil Penalty Policy, 2/08/94, Tampering and
Defeat Device Civil Penalty Policy for Notices of Violation, 2/28/94
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0 ST 41
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C 20460
(
OCT 9 i 98
OFFICE OF
ENFORCEMENT AND
COMPLIANCE ASSURANCE
MEMORANDUM
SUBJECT: Guidance on Implementation of EPA’s Penalty/Compliance Order Authority
Against Federal Ag n s Under the Cl Air Act (CAA)
FROM: Steven Flerm
Assistant Admini r
TO: Regional Counsels, Regions I-X
Air Program Directors, Regions I-X
I. INTRODUCTION
The Clean Air Act (CAA or Act) contains several provisions authorizing the Agency to
assess administrative civil penalties’ and to issue administrative compliance orders 2 for violations
of the Act and its implementing regulations. These provisions also authorize the Agency o
assess administrative civil penalties or issue compliance orders against Federal agencies. tLhis
guidance will assist in the implementation of the CAA’s administrative penalty authonty and
compliance order authonty when used against a Federal agen 7
II. BACKGROUND
In response to a proposed rulemaking concerning CAA field citations (under section
113(d)(3) of the Act), the Department of Defense took the position that EPA did not have
authority to issue citations against a Federal agency. To resolve this issue, EPA sought the
opinion of the Office of Legal Counsel (OLC) in the Department of Justice (DOJ). The OLC is
the office within the Department of Justice (DOJ) that settles legal disputes between Executive
Branch agencies pursuant to Executive Order No.12146. On July 16, 1997, OLC issued an
opinion confirming EPA’s authority to assess administrative penalties against Federal agencies
CAA sections 113(d), 205(c), 21 1(d)(1) and 213(d), 42 U.S.C. § 7413(d), 7424(c),
7545(d)(1), and 7547(d).
2 42 U.S.C. § 7413(a).
Internet Address (URL) • http I/www epa gov
RecyctedlRecyclable e Printed w h Vegetable Oil Based inks on Recyded Paper (Minimum 25% Poslconsumer)
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2
under the CAA, including field citations. 3 See attached opinion . DOJ applied a “clear
statement” rule of statutory construction, and determined that these provisions authorize the
Agency to assess administrative penalties against Federal agencies, and that separation of powers
concerns do not bar EPA from exercising this authority. 4
III CAA ADMINISTRATIVE PENALTY ACTIONS
A. Hearing Procedures/Settlement
The hearing procedures set forth at 40 C.F.R. Part 22 apply when EPA issues a penalty
order against Federal agencies in the same manner as when EPA files an administrative action
against private parties. Private parties and Federal agencies have an opportunity to challenge a
CAA penalty complaint using the 40 C.F.R. Part 22 procedures. For instance, if the Region files
an administrative penalty action against a Federal agency under CAA section 11 3(d)(l), EPA
would file pursuant to EPA’s procedural rules in Part 22 Under the Part 22 procedures, service
on an officer or agency of the United States can be accomplished in several ways. For example,
as a matter of practice, EPA has successfully served the base commander when a military service
is involved with a copy of the action to that service’s headquarters. If the case proceeded to
hearing, it would be conducted in the same manner as a case against a pnvate party.
While the OLC decision does not expressly address EPA’s penalty authority under
Section 2 13(d), EPA believes the same analysis applies to that provision.
4 lhis authonty can be exercised consistent with Articles II and III of the Constitution.
For example, the Act does not preclude the President from authonzing any process he chooses to
resolve disputes between EPA and other Federal agencies over assessment of administrative
penalties. DOJ noted that nothing in the Act prevented, and EPA intended to provide, a Federal
agency with an opportunity to confer with the Administrator before any assessment is final.
Congress has addressed this issue of providing such an opportunity to confer under other
environmental statutes. In the 1992 amendments to RCRA, Congress provided that “ [ nb
administrative order issued to such department, agency, or instrumentality shall become final
until such.. .agency. . .has had the opportunity to confer with the Administrator.” This concerned
both penalty and compliance orders. 42 U.S.C. § 6961(b)(2). A similar provision was adopted
in the 1996 amendments to the Safe Drinking Water Act concerning administrative penalties. 42
U.S.C. § 300j-6(b).
In response to the 1992 RCRA amendments, EPA revised its hearing procedures to
provide the opportunity to confer. 40 C.F.R. § 22.37(g). This provided an opportunity to confer
at the end of the administrative hearing process. EPA recently proposed to revise the Part 22
hearing procedures so that this same regulatory approach for an opportunity to confer would
apply generally to administrative hearings under Part 22 involving Federal agencies. 63. .
g. 9464, 9476, 9491 (February 25, 1998).
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B29 (1)
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07/11/97 13:06 51.4 0563
OLC
0G2
U. S. Department of Justice
Office f Legat Counsel
Offii D.C OSJt
A cI .tAI*I A ’tOI tay C r ,ciJ
July16, 1997
MEMORANDUM FOR:
3ONATRAZ Z. CA NIWN
GE’ ERAL COUNSEL
ENV1BON? NTAL PROTECTION AGENCY
m m gr r çfr
G AL CCXTh S L
D ARTh r OF D ENSE
From: Dawn E. Iohnsen )j
Acting Assis .nL A 9’rney Genetal
Office of Legal Ca ’m el
Re: Administrative Asses3ment of Civil Penalties
Against Federal Agencies Under the Cl n Air Act
You have as ced for our opinioa resoLving a dispute betWe i the Eiivironn efl .l
Prorecrion Agency , (; A”) an_d the Department of Defense (“DOD”) concerning whether
thet ir A JCthe Act”), 42 U.S.C. § 7401 .-7671qj199 4 ) , ai thorizes EPA
adrniniszi’ativeIy asse ci iFpcna1fl:5 agarnst federal agenci jOf vio1azi us of the A
or its irnplerflefltLng tejü1iii ns, and if so. whether this aiLthor [ ty can be exercised consistent
with the ConstitUtioti. t Applying the “clesr statement” nile of statutory coastructior , which
is applicable wher a particular interpretation or application of an Act of Coegress would
raise separation of powers concerns, we conclude that the Act does provide EPA such
authority. We also conclude that these separation of powers concerns do not bar EPA’
c ercise of this authotity because it can be exercised consistent with the Constitution.
Lci .zer for Walter De!Unger Auist nt Actor ey General. Ofi cø Lcgal C u cI. from !Oca 2n
Z. C cnon, Msistant Adtein1strfliC (Gencr3l C unseI). EP (Oat.. 3. 1995). c1oaing MemoI !ndU
ASfl T1t of 4minisrrativc l ic A t ei2l FaciUtk uiidcr the C1 w Air Act (Sept. 11, 1995)
CEPA 1 1Oo dwn ”i; Lcttar for Walter Dtl1L or from JUd1t . !vfilitr. Gec ra1 Ccui eI. DOD (Dec. 15.
1995). cnc1o. in DOD R .esoooi M;tt cr indLIfl A s SSfl1CO of Admflitr 1 Pe aItie A 2ipst EXcCtiti!
Br h _ AZ ncie JJader 5ectipci 113(d) of the Clean A rA 1 (Dec. 15. 1995) (“DOD Rcspoc.sc): t euer for
Chri tOphet Scbrocdcr. pLcti g Aaalstant Attorney Gcner 1. Off&c of Lcgal Coti@acl. fio ion. han Z. Caaacn
(Oct. 15. [ 996). eneIesia E P Me r ndum in ReplY to Depa ent of Det se Concernie1Ad i2 1
AsSec3cflLof Civil Peo 1ri A ifl. t F der 1 PaciIitie (1 der thc C1 w AirA 5 (Sept. 16. 1996) (“ A
RepLyTh
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07/17/97 13:07 ‘202 514 0563 OLC O03
1.
A.
EPAs authority to initiate enforcement proceedings under the Clean Air Act is
forth in- section 113 of the Act, entitled ‘Federal Enforcement,” 42 U.S.C. § 7413
(1994). As summarized in section ll3(a)(3). section 113 ptovide that when EPA finds
that “any person has vtotated. or is in violazion of’ the Act or its implementing regulations.
EPA may issue an administrative penalty order or a complianc order, bring a. cjvfl action,
or request the Attorney General to commence a criminal action. The questions presented to
us are whether the Act authcrii.es EPA to issue an administrative penalty order to a federal
agency under section 113(d), and if so, whether that authority can be exercised consistent
with the Constitution. 3
The Act authorizes EPA to issue two kinds of adrninistxaxivc penairy orders.
Section 1lJ(d)(l) authorizes EPA to issue an adrnirristratiye order against ai y pi on
assessing a civil administrative penalty of up to 525,000, per day of yicladon” when EPA
“finds that such person” has violated the Act or its implementing reguladons. 42 U.S.C.
§ 7413(d)(l) (1994). Such a penalty may be assessed only after oçporrunity for a hearing on
the record in accordance with the. Admirtistiative Procedure Act (“APA”), S U.S.C. § 554..
556 (1994). § 7413(d)(2).
In addition, secrion I 13(d)(3) authariz:5 EPA to implement a field ci .tion
program under which “persons” who commit minor violations of the Act or the-
regulations may receive field ci tions assessthg civil penalties not to exceed S.5,000 per day.
74 13(d)(3). Field citations may bc issued without a hearing, but persons who have
received citations may request a hearing. “Such hearing shall not be subject cc (the APA],
but shall provide a reasonabLe opportunity m c be heard and to present evidence.” The
Act provides for the two types of administrative penalty orders to be Litigated in the courts in
a \‘a.reLy uf ways. Persons against whom either .ind of penalty is imposed may se]c judicial
review in federal district court, and in any such pracc ding the United States may seek an
order requiring that the penalties be paid. § 74 13(d)(4). In addition. if a person faüs to
pay any penalty after receiving an order or assessment .ftom. EPA, “the Administrator shall
request the Attorney General to bring a civil action in an appropriate district court tOr ej force
the order or to recover the amount ordered or assessed:’ k ,,. § 7413(d)(5).-
See 42 U.S.C. 7413(a)( ) (1994 ) (whcre it nds a vicLaLjo;, EPA y ‘(A) issue
pcttalcy ordcr in cordanc.e wIth su e.cr oc1 ( c i) f ch ‘e t c ’u. (B) issue an ocder re uirin.g such pecso CO
comply with 3ucJ r quir oi t or prohibitioo. (C) bring . .ivU actjoa in acordanc with sub.scccian (b) of this
se:tjon or seedon 7605 of this title, or (D) r u i tho AUaV cy G ncrei to co eeec a ina1 zeda i.a
iccorci ncc with subsuetion (c) of this sect on’). -
“ W intend th21 our resolution of the que tioo coocerning section 113(d) viii alSo apply to the
ccrnpaz blc authonty pro’vided Co EP .ith rc pect to mobile sources by soction - 205(c) and 21.1(dXl)
of c E o Act. 42 U.S.C. §* 7 524 (c). 7545(d (L) (199 ). Sc A Mc orandum ac 2-3.
-2-
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07/17/9? 13:07 Z’202 514 0583 OLC I 004
B..
EPA presenr.s a swa.ighrforward po ith n thar s tion 113(d) authorizes EPA to assess
administrative penalties against federal a,gerides. That subsection au .thoriztts EPA to assess
penalties against “persons.” Although the term “person” is not deiiñed in section 113, which
is the Act’s federal enforcement section, the term is defined in the Acts general definitions
section, section 302(e) 1 which provides that the term includes “any agency, depa.rtmen, or
instn.tmentaliry of the tJnited States and any Qfficer, agent or employee thereof.” 42 U.S.C.
§ 7602(e) (1994). EPA concludes that “ [ s]ince federaL facilities ezpreisly fall within the
Act’s definition of person,. (section 113(d) .1 unambiguously demcnstrate(s] that EPA has
authority cc issue administrative penalties against federal facilities.” A Memorandum at 3.
DOD argues in response that EPA’s interpretation would raise significant separation
of powers conci-ns. because it would authorize civil litigation proceedings between federal
agencies, and ther ore it can be adopted only if there is an express statement of
congressional intent to provide such authority that is sufficient to meet the high pdard
applied by the courts arid this Office with respect to statutory in prtadon questions
involving separation of powers concerns.’ DOD argues that “ts]ection 113(d) fails to
provide clear and express authority for EPA to impOse’ administrative penalties against
Executive Branch agencies.” DOD Response at 4. DOD rejects EPA ’s argument that
the inclusion of federal agencies in thc Act’s general dcfinidnu of t’persccht coastitutea
“a sufficiently exprn , s statement to allow [ EPA] to exercise enforeetnent authority against
other Executive Branch agencies.” ar 5.
We agree with DOD chat the interpretation of the Clean Air Act advanced by EPA
— that EPA is authorized to iri.ftiate enforcement proceedings under section 113(d) against
federal agencies -- raises substantial scparazion of powers concerns, thus WatTanting
application of the clear statement principle.
In 1994, this Offic: was asked whether the Department of Housing and Urban
Development (‘HtJD”) has the authority under the Pair Housing Act to initiate enforcement
proceedings against other federal agencies. We concluded that such an interpretar.ioa o the
Fair Housing Act wouLd raise substantIal separation of powers concerns “relax [ ingj to both
the President’s authority under Article ]I of the Constitution to supervise and direct executive
DOD R spci sc u (Thc se rnr t of a4mini (ratiVc pc al ic api ic E.ecutive Branch agcneies
by EPA ia b .icd o at ory Ae me chat. no n pIatc judic iaL inrervcn o into what [ ioujJd be a pur ly
F .3ectLtIV Br ne nc.cion. thus raising si ific nc e n.uio &i scparaxio . of powers ccncnr s , warrct.&r .g
thc high sta dax ’d of review.” . citing M c*ndt i for hi ias S. GUliland, oc aL Caw3 ,cL Dcpart caL f
AZncU [ tUre. from Waflcr eL1inger, As2is at Acccrnoy Gcxicral. OFfice of L.cgal Cou.nse1 Re: Ei en it
Prc din A tiru Et. utive Branch cc .cin under the F Jr l ousia ct (May 17. t994) (1a1r Housi
Ant Opinion’).
-3-
6’JC’J HOI9IAI tDDD O LS6 t21f ’ ,r
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07/17/97 13:03 o2 32.4 0563 OLC 005
branch agencies and the Article limitation that the jurisdiction of the federal courts
extends only t cwal cases and controyersie. “ Fair Housing Act Opinion, at 6. We stated
that “Ewlith r spe t to the Article issue, this Office has consIstently said that 1awsuits
between two federal agencies are not generaily justiciable,” i L (quoting Con tutionaJii
of Nuclear Rez ijaix,rv Comniissis ii ’s Tm osjtiop of Civil Pcnaities on the Air Force , 13 Op.
O.L.C. 131, 138 (1989) (“NRC Opinion’)), and that ‘tw]ith respect to Artictefl. we have
Lrldzcated that construing a statute to authorize an execuzive.branch agency to obtain judicial
re o(urioriof a dispute with another executive branch agency implIcates the President’s
authority under Article U of the Constitution to supervise his subordinates and resolve
disputes among them . . ‘ ‘ Fair Housing Act Opinion, at 6.7 (quoting Review of Final
Order inAlin Erntilover Saiictions _ C , 13 Op. O.L.C. 370, 371 (1989)).
We observed in our Fair Housing Act opinion that these separation of powers
concerns
are the e.ssentiai backdrop for our analysis of whether the Fair Housing Act.
authorizes HTS1) to initiate enforcement proceedings against other cxe utive
branch agencies.. Like the Suprein: Court, we ar Aloath to conclude that
Congress intended to press ahead into dangerous constitutional thickets in the
absence of firm evidence that it courted those perils.”
at 7 (quoting Public Citizen v Deparrmeni..of Yustic ; 491. U.S. 440, 466 (1989)).
Accordingly, we apolied a clear statement rule and concluded chat the statute did not
provide EUD this authcthty:
Anplying the standard the Supreme Court has used when a par cular
interpretation or application of an Act of Congress would raise separation of
powers or federalism conccrns, we believe that because substanthi separation
of powers coricern.s would be raised by construing the Act to authorize ETJD
to initiate enforcement proc— dings against other- executive branch agencies,
wo cannot so cons ue the Act unless it contains an express statement that
Congress intended RtJD to have such authority. Because the Act does not
contain such an express statement, we conciude dint it does not grant HUD
this authority.
at1.
Our insistence in the Fair Housing Act Opinion that the statute must “conra .inO an
expntss statement that Congress intended HUD to have such authority” was cOnsistent with
a long line of opinions of the Supreme Cr,urt and this Office that require a clear statement
of congressional intent when separation of powers or federalism concerns would be rnised_
Many of these opinions are cited in an opinion that we issued si.ibsequent to the FaLr HousLng
Act Opinion. Memorandum for Jack Quinn, Counsel to the President, from Walter
DeUinger, Assistant Attorney General, Office of Legal Counsel. Re: Applicanon of 2
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U.S.C S 4 8 to presidential Apvointments of Federal Iucfee (Dec. 18, 1995) (concluding
that 28 U.S.C. § 458 (1994), which prohibits appointnicnt or employment of relatives of
judges in same court, does not apply to prsidential appointments of judgesj. We stated in
that opinion that “(g]iven the central position chat the docr.rines of federalism and separation
of powers occupy in the Consdtutio&s design. [ the dear statement rule) serves to ‘assureO
chat the legi .s [ atur has in fact faced. and intended to bring into issue, the critical ma ers’
of the balance of power between the three branches of the federal government, in the conta t
of separation of powers, and betweeii the federaL and state goYernmerits, in the context of
federalism.” . at 4 (quoting re eorv v. Athcroft . 501 U.S. 452, 461 (1991)). See aL n
Will v. Michi nDep ’t of Stare Poljee , 491 U.S. 58, 65 (l989 ; ! Jnite&Szalesv. Bafl ,
404. U.S. 336, 349 (1971).
ased on the foregoing discussion, we must nd a clear statement of congressional
intent before w c ri coflelude chat the Clean Air Act nuthoriz:s EPA to initiate e forcement
proceedings against ether executive branch agencies. As discussed below, we believe that
the statutory text provides a strong basis for finding a clear statenlent of such intent and
that this conclusion. is fully supported by the legislati i’e history of the Act, particularly the
1977 amendment of the definition of “person” to include federal agencies.
A straigh ’orward review of the relevant provisions of the Clean Air Act’s staxuzqry
text supports EPA’s position that the statute gives EPA authority to assess civil penalties
against fcdtral agencies administratively. EPA’s authority under secrion 113(d) is available
with respect to “persons” who violate the Act! The term “person” is defined in section
302(e): “Whcn used in [ the Clean Air Acri . . . (t)he term ‘person’ includes an individual,
corporation, partnership, association, Scaze, municipality, political subd vLsion of a State,
and anvagenc department. or instrumentality of the United St xoa and any officer, agent,
or employee thereof.” 42 U.S.C. § 7602(e) (1994) (emphasis added).
EPA rests its argument on the plain meaning of these two provisions. EPA does
so with good justification, because reid together sections 113(d) and 302(e) expre.csly.
provide thai EPA may issue administrative penalty asse sments against t’cderal agencies.
We have also reviewed the evolution of the relevant provisions of.the Clean Air Act s,
reflected by various amendments to the Act over the years. Aa discussed below, char history
S .tion 13(d)(l) prcvidea for assessew. of ci .U p altie . çiin. c “pcr o ’ “The AdmiI isu2tor ay
adrn.istn ci’.’c ardor &gzi i any pcr c . . . •‘ 2 U.S.C. 7413(d)(t) (1994). Secttoa 113(dX3)
tho t c re u1t, but ues indireet !angui.ge: ‘The Mmini .ttaccr ay ipLa ent.. . a citar oa
pr1’ .rn. . . (under] which field citations. . . ay be issuc by or c r or cznpt yeci dc.s ated by the
Administrator ,a.ny person to whom a field cjt tlofl is assessed y. . . deer to psy the pen 1ty icat
or to request a he.aring on th. field cicatic . ” 7413(d)(3). The pLain la.aguagc of these provisicas roftL(.
DOD’s po iciort chat thjs Language cannoc airIy be read to cart ct e an *ffls aCi e grant of iutharity to issue
1 field citation against ‘aay pcno . ” DOD Responic at 5.
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fully supports the conclusion that Congress contemplated EPA entorcarnent against other
federal agencies.
The enforcement provisions set forth in section 113(d) were enacted
as part of the Clean Air Act Anicndmcnts of 1990 (“the 1990 Arnendrnents), Pub. L.
No. 101-549 , § 701. 104. Scat. 2399, 2677-79. We have reviewed the legislative history
of the 1990 Amendments end have found no discussion of the application of those provisions
to federal agencies. We have not Limited CUT legislative history review to the 1990
Amendments, however. beeaus the administrative enforcement anthoriries provided by those
amendments merely supplcxncnccd the enforcement authorities EPA already had ‘with resp t
to persons’ under the other provisions of section 113. Thus, Congress’s intent in providing
EPA those other auchoriues is controlling.
E PA .c other enforcement authorities under section 113 originated with the Cl .a Air
Act Amendments of 1970 (“the 1970 Amendments”), Pub. L. Na. 91-604, § 4(a), 34 Stat.
1676, 1686-87. As with the current version of section 113. the 1970 version authox z:d
federal enforcement against “persons.” However, at that time the Act’s de19nition cf
‘person” did riot include agencies of the fcders.I government. 8 The 1970 Amendments
aiso revised section 1 IS of the Act to make federal agencies subject to the substantive
requirements of the Act: “ [ Federal agenciesj shall comply with Federal, State, intex te,
and Io J requtrrnents respecting control and abatement of air pol.lution Co the same extent
that any person is subject to such requirements.” . § , 84 Stat. at l689. Thus, the
1970 version of section 11.8 referred only to federal agencies complying with substantiVe
requiremenrs it did not contain any language subjecting federal agencies to enforcement
authority.
In 1977, the definition of “person” wa expanded to include “any agency, deparnneflt ,
or instn.tmentaiity of the United State .’ CL n Air Act Amendments ot 1977 (the 1977
Amcndmcnu ), Pub. L. No. 95-95, § 301(b), 91 Stat. 685, 770. This amendment was
contained in the House-paMed version of the 1977 Amendments, wbich was accepted by
the conference committee. See 1L .. 6161, § 113(d), 95th Cong., 1st Sess. (1971) ( House
Bill”): H.R. Conf. Rep. No. 95-564, at 137, 172 (19T1 ), reprinted in 1.977 tJ.S.C.C.A.N.
1502. 15 IT-IS, 1552-53. The committee repott accompanying the House bill e cpressly
‘Fer ee 1i ic d Co i divi4u81. rpor.don. p ership. .s oeiarioe. Starf. unieipa1iCY.
and poliUcal subdivialon of £ Stare.’ ?.th. t. No. 58.06. 4 9(c), 77 Scar. 39. 4 (1963).
The pr v oU3 ver io of s cic . 113. enar.ted in 1959. merely requc. tod fr4erai ag acies to coopcraXe ’
with air pollution cnfcreom it control agencie8. .Act of Sept. 22. L95 (‘the 1959 A. ezida1efltS ”).
Pub. L No. 56-365. 2. 73 Stat. 646 (‘It is hereby declared to be the intsnt of the Congress chat z y Fedaril
depsr tenI or a e cy . . . shall, to mba oztc 1t pr cri able ind coosisceot with the knme esta of the thirted StacaS
and wicbiii any available sppropnatians. cooperaic with the Dcpastcat of Health. Education, and Wclfgic.
d with any intsrata e agency or arty Statia or local government jp pollution ccntroL agency ta preventing
r continuing the pollution of the ar. . .
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stated that the specific purpose of the expansion of the definition of “person” was to make
it clear that section 1.1.3 enforcenierit was avadable with respect to federal agencies:
Fina]iy, in defining the term “person” for the purpose of ction 113 of the act
to i.nclude Federal agencies. departments. instrumentalities, offIcers, agents,
or employees, the committee is expressing iC.s un3lnbiguous intent that the
enforcement authorities of section 113 tnay be ised to insure compliance
and/or ro impose sanctions against any Federal violator of the act.
H.R. Rep. No. 95-294, at 200 (1977). r t rintcdir 1977 U.S.C.C.A.N. 1017, 1279
(“House Report).
In sum, the expansion of the definition of “person” to include federal agencies,
together with the statement in the House Rport thai the deflnitiona change was for the
cxprcs. puroose of subjecting federal agencies to EPA enforcement under section 1.13. leave
no room for doubt thai Congress clearly indicated in 1971 its intent to author z: EPA to use
Us section 113 eri±’crcerrlenc authorities against federal agencies.
Iv.
EPA takes the position that iL , authority under the Clean Air Act to civil
penalties against federal agencies administratively can be exercised consistent with Articles
U and of the Constitution. EPA base5 its position on the view that the Act
provides sufficient discretion to the affected pasties so that complete mesoludon
of the dispute may occur within the xecutive Branch, up to and including
referral to the President of any issues that are not other’i.se resolved, and the
President is not deprived of his oppoitunity to review the mattcr in dispute.
EPA Memorandum at I • We agree with EPA ’s position. We will discuss the Article U
and Article issues separaiely.
A.
EPA asserts that it can exercise its administrative enforcement authority under the
Act in a wiy that is consistent with the President’s super’.’isory authority under Article U.
EPA emphasizes that the Act
- 1 Th quoia ion from the Rau. e Report j d caces that the Hau Bill ‘d& fi (e4] this fg •
purpcs of e .üon jj3•4 The House 3111 accompLished that purpose by az endi g the Act s gcaøral dcf iuo
of ‘person.’ not by r arir .g a sp 1al dettthtton appll able only to s ticn 113. H. . 6161.
§ 113(d).
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provides a federal facility with the right to a, hea.zing before final assessment
of a penalty, and therefore - . . provides federal facilities with sufficient
Opporo.inity to raise any dispute to the President where considered appropriate.
Nothing in the Act would prevent a federal facility from exercising this
oppcrtunity to raise any dispute to the President,
at 5 (footnote omitted). Nor are federal agencies liniied to using the hearing process
to raise a dispute to the Appropriate level Within the executive branch: federal agencies will
have the opportunity to consult with the EPA Admiriictrator before any assessment is final,
i L, and the Attorney General could seek to resolve the tharter f cithec- EPA or the
respondent federal agency sought to liti at: the tnarter, s i at 6.
The critical point for constitutional purposes is chat the Act does not preclude the
President from authorizing any process he chooses to resolve disputes between A and
other federaj agencies regarding the assessment of administrative penalties.. “lI]t is nc t
LflCoasiStenL with the Constitution for an executive agency to impose a penalty dà_another
executive agency pursuant to its statutory authority so long as the President is riot deprived
of his opportunity to review the matter.” N C Opinion, U Op. O,L.C. at 136-37.
DOD attempts to distinguish our NRC Opinion,’ which concluded that the
administrative enforcement authority of the Nuclear Reguiazory Commis ioa (“NRC”) under
the Atomic Energy Act, 42 U.S.C. § 2282 (1994), could be exereised against federal
agencies consistent with Article fl. DOD suggests that the s .tutory regimes az different,
arguing principally that they differ with respect to the Attorney General’s authority to resoLve
a dispute. It notes that the Atom.ic Energy Act contains an express authori tion to the
Attorney Geacral, in circums nces where the NRC ha requested that the Attorney General
inStitute a civil action za collect a penalty, ‘to compromise, mitigate, or re.it such civil
penalties.” 42 U.S.C. § 22 2(c) (1994). DOD emorandum at 10-11. DOD then
asserts chat the Clean Air Act is differeriL because it “limits the discretion of the Attorney
General to compromise, mitigate or remit a penalty assessment. 1 DOD apparently
bases chat assertion on the langi age in section 1 13(d)(5) stating that in any civil action
“the validity, amount, and approptiatene ss f such order or assessment shall ot be subject
to review. ’ 42 U.S.C. § 7413(d)(5) (1994).
DOD’s assertion that the Clean Air Act limits the Attorney General ’s discretion is
incorrect. Section 113(d)(5) acts as a limitation only on the authority of the courts in any
action that is brought befote the courts. It is not a limftation on the Attorney General, acting
under Executive Order 12146 or any litigation review process, or -- more to the point — the
President acting through whatever executive branch process he may authorize. The absence
of any Uniitaticu on the President’s discretion is the dispositive facrnr for consurutional
purposes, arid in that respect the two statutory regimes are the same. Neither statux
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precludes resolution within the executive branch, including resolution by the President,
of disputes between the enforcement agency and other federal agencies.
B.
EPA acknowledge.c that the civil action provisions con ined in sections I 13(d)(4) and
I L3(d)(5) of the Act, j 42 U.S.C. § 7413(d)(4), 7413(d)(5) (1994), “raise the possibdity
of one executive branch agency suing another in federal court over the administrative
penalty,” EPA Memorandum at 9, but it takes the O51üOfl that “ [ t]he constitutional concerns
• . . could be avoided by au interpretation that the general reference to review in federal
district court reasonably means only judicial review that as otherwise constitutional.”
In particu’ar, EPA emphasizes that “nothing in the Clean Air Act mandates that two
executive branch agncie.s end up in federal court. There is at most an opportunity far
an agency to se ek judicial review, and a requirement that EPA ‘reque5t’ that the Attorney
Gorieral file a collection action.” .. EPA concludes that “the mere possibility that an
interagency lawsuit might result does not invalirlare anagcncy’s ability to assess ;iVil
penalties against another executive branch agency, where the Attorney General ha a4eouaie
discretion to control the fl]ing of such a Lawsuit.” at 10.
As stated in Section of this opinion, “this Office has consistently id that ‘laW$l.Lt.5
betw n two federal agencies are not gcneraliy ju.sticiable.” Fair Housing Act Opinicu,
at 6 (quoting NRC Opinion, 13 Op. O.L.C. at 13 ). “We have r soned that federal ccur
may adjudicate only actual cases and ccn oversies, that a lawsuit involving the same rson
as bath plaintiff and defendant dees not constitute an actual controversy, and that this
principle app Ucs to suits between two agencies of the executive branch.” Id We agree
with EPA, however, that this Article barrier to use of the civil action remedies of section
113(d) is nor a barrier to EPA s exercise of its administrative e ’orcemcnt authority wider
the Act, Put another way, we agree that the administrative authority can be exercised
consistent with .A.rticle Ill. The Act dce not require that civil actions be brought in the
event of a dispute of an assessment by EPA; it merely authorizes the bringing of such
actions.
Thus, as is the case with the comparable enforcement pmvisicris contained in’thc
Atomic Energy Act, ‘which we concluded in our NRC opinion could be appLied consistent
with Article ifl. “this constitutional issue need not arise, because the framework of the’ Act
Nor doc tb CI ac Aãr Act’s citizen ault prcvisica opcz c to prccludc rc olithon wichi the ex ucivc
branch. Section 304 prcvide that ‘any p r ca may om. e .nce a civil action oi his own behalf. . . against any
person (i clu4it . . . the United Stetca. . ,) who is aJ1c ed. . . to be in vioLacio of. . . (B) an order issued
bY CEPAI . . . ‘With respect tø (an cuiission] siaiid.ard or ( m1 UQn ’ uud r tho Ac :. 42 U.S.C. 7604(a)(l)
(1994). The lilin o a citizcn a aLc during the .c idcney efad pi bexwcc EPA and aderai ec .Cy Jctild
not pr venc the Pre.qidone & directing EPA to auspeed. withdraW or rnod :fy tho aider it bad ,ssuc4 to Ibe
agency. Such dire:tion eoi.tid be provided specificaLly La indjvjdual cases or gcncm.Lly by operatton of a staztding
direcz Yc setting forth procedures for resolution of cn.fcrcmcnc pracecdings ucd r ectlon 1 L,.
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clearly permits [ a] dispute over civil penalties to be resolved within the executive branch,
and without recourse to the judiciaiy.” NRC Opinion. 13 Op. O.L.C. at l41. To the
extent char the civil action provisions of the two staruce are parallel, in that the Attorney
General rather than the enforcement agency has control over whether to bring the civil
action, our analysts tn the NRC Opinion is dire tly controlling here:
It is thezefore clear that the A orn:y General may cxercise (hen
discretion to ensure that rio [ awsujt a.r fllcd by (EPA] against other agencies
of the executive branch. If th Attorney General and the President determine
that no civil penalties should be collected, the Attorney General may simply
refrain from bringing a lawsuit.. If the Attorney General deterrnines that
certain civil penalties are ap ropriaze, however, the Attorney General . ‘ouId
still nor bring a lawsuit because of the constitutional problems noted above.
Rather, procedures internal to the executive bt nch aie artequate to resolve
the dispute through the determination that (the federal agency responsible for
the federal facility] is liable.
at 143.
The only difference betweco the two statutes that is relevant to the .A.rticle question
is that section 1 13(ô)(4) of the Clean Air Act would also aQrhorize the agency responsible for
the federal facility to initiate a civil action to contest an EPA acintinistrarive order. 42
U.S.C. § 7413(d)(4) (1994). The difference is not significent for constitutional purposes,
however, because, as we have xp(ained, the Act is permissive only and does nor require
any federal agency to bring a civil action. Moreover, the .Attcrney Gettexal and the President
possess the authority to forestall litigation between executive branch entities. The Attorney
General is responsible for coimducting licig ,dcn on behalf of most federal agencies and
therefore can ensure thar no civil action is flied by those agencies against another federal
entity. Wc would expect that the relathiely few federal agencies that have relevant
independent litiganng authority similarly would d line to tile civil actions, consistent
with the conclusions set forth in this memorandum. In any event, the President could
direct the agency head not to bring an action or to withdraw any acdoi i that might be tiled.
‘° See id. zz 143 (.Wó t u c ju4e that jjwst jc between two agencies of the e te.ugive btaach
woi.mld ij v 0 tv ub5 .a cia.1 ccc . cucioa A pr bies. but tbit thc swue r ’ zcbce pcrmit . r o1urtoa of the
ün r gccicy di puce wtthin the exe .ltjvc br tz ch.’).
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