CLEAN AIR ACT
COMPLIANCE!
ENFORCEMENT POLICY
COMPENDIUM
1996
Volume 6
J-17-

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Section J Document 17
Manufacturers Programs Branch
Inteflm PenaltY policy
Appendix I: Manufacturers programs Branch MFB
Imports program penaltY Policy
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: 1/r i
MANUFACTURERS PROGRAMS BRANCH
INTERIM PENALTY POLICY
MARCH 32., 1993’
I. INTRODUCTION
This document establishes the Manufacturers Programs Branch
(MPB) interim policy for assessing civil penalties for violations
of certain Clean Air Act,provisions. The policy adheres to the
Environmental Protection Agency’s (EPA) Policy on Civil
Penalties , dated February 16, 1984. Accordingly,-the purposes of
this policy are to deter potential violators, to ensure that MPB
assesses fair and equitable civii penalties, and to resolve
environmental problems swiftly. Because this policy may be too
general for violations of the MPB Imports Program, separate
guidance for Imports Program Penalty assessments is included in
Appendix I.
MPB enforces several provisions under Title II of the Clean
Air Act (Act) and associated regulations to assure that motor
vehicles and motor vehicle engines conform with Federal emission
requirements. Section 203(a) (1) of the Act prohibits
manufacturers of new motor vehicles or new motor vehicle engines
from selling, offering for sale, introducing or delivering into
commerce, or (in the case of any person, except as provided by
regulation of the Administrator) importing into the United States
such vehicles or engines, unless such vehicles or engines are
covered by a certificate of conformity. Section 203(a) (2) of the
Act prohibits, among other things, any person from failing or
refusing to permit access to or copying of records or failing to
make reports or provide information required under section 208 of
the Act. Finally, MPB enforces section 203(a) (4) of the Act
which in certain circumstances prohibits manufacturers from
selling or leasing any motor vehicle or motor vehicle engine
unless a label or tag is affixed to such motor vehicle or motor
vehicle engine in accordance with section 207(c) of the Act.
The Act was amended on November 15, 1990. Under section
205(a) of the Act, a violator of section 203(a) (1) or (4) is now
Thjs policy will not apply to penalty assessments for
violations that occurred prior to November 15, 1990.

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liable for a civil penalty of not more than $25,000, with each
motor vehicle or motor vehicle engine constituting a separate
offense. A violator of section 203(a) (2) is now liable for a
civil penalty of not more than $25,000 p’er day of violation.
Section 205(b) of the Act provides the Administrator authority to
commence a civil action in district court to assess and recover
any civil penalty under section 2 )5(a). -
The amended Act also provides the Administrator with the
authority to issue administrative penalty orders under section
205(c) of the Act except that the maximum penalty amount sought
against a violator in an administrative penalty assessment
proceeding shall not exceed $200,000.
MPB will use this policy to calculate settlement-amounts
during the course of an investigation. This policy will also
serve as guidance in calculating administrative penalties under
Section 205(c) of the Act.
This document is not meant-t. control the penalty amount
requested in judicial actions. It is EPA’s policy to ask the
court for the maximum penalty allowable under the Act in a
complaint filed in U.S. District Court. After a case has been
referred to the Department of Justice, use of this policy is
limited to pre-trial settlement.
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 this policy and to change it at any time without public
notice.
II. PRELIMINARY DETERRENCE AMOUNT
The Policy on Civil Penalties states that deterrence is an
important goal of penalty assessment. It states that at a
minimum , a penalty should remove any significant benefits
resulting from noncompliance. In addition, it should include an
amount beyond removal of the economic benefit to reflect the
seriousness of the violation. The portion of the penalty which
removes the economic benefit of noncompliance is the “economic
benefit component”; the part of the penalty which reflects the
seriousness of the violation is the “gravity component”.
Combined, these components make up the “preliminary deterrence
amount”. This section provides guidelines for calculating the
benefit component and the gravity component.
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A. TEE BENEFIT COMPONENT
The “economic benefit component” should be calculated and
added to the gravity-based penalty compoflent when a violation
results in “significant” economic benefit to the violator. The
economic benefit will include the benefit of delayed costs,
avoided costs, and competitive advantage.
1. Delayed Costs
Delayed costs are expenditures which have been deferred by
the violator’s failure to comply with the requirements. By
deferring these one-time nonrecurring costs until EPA takes
enforcement action, the violator has achieved an economic
benefit.
For example, a manufacturer makes a motor vehicle
configuration change during production that may affect emissions,
but fails to notify EPA as required. Several months later, the
production change is discove ed during an EPA audit and the
manufacturer subsequently submits the required notification to
EPA. In this situation, the affected motor vehicles introduced
into commerce after the production change, but prior to the
manufacturer’s notification were not covered by a certificate ot
conformity in violation of section 203(a) (1) of the Act.
Moreover, the manufacturer may have experienced an economic
benefit by delaying EPA notification. Generally, the
manufacturer delayed the expenditure of resources necessary to
compile the requested information. In addition, the manufacturer
may have delayed the expenditure of resources necessary to
perform the required engineering evaluation or motor vehicle
testing to determine that the production change did not affect
the motor vehicle’s ability to meet the applicable emission
standards.
A detailed economic analysis may be computed using the
Guidance for Calculating the Economic Benefit of Noncompliance
for a Civil Penalty Assessment , November 5, l9 4.
2. Avoided costs
Avoided costs are expenditures completely averted by the
violators’ failure to comply. Several examples of avoided costs
are discussed below.
A misbuild violation may reflect significant costs avoided
by the manufacturer. Specifically, a misbuild occurs when the
manufacturer produces vehicles which do not conform in all
material respects to the prototype vehicle described in the
manufacturer’s application for a certificate of conformity.
Misbuild violation savings may be estimated by assessing the cost
savings the manufacti rer realizes from not having quality control
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procedures or from having deficient quality control procedures,
if, in fact, the inisbuild occurred because of quality control
problems. The assessment may also include any net profits,
benefits, or the difference in cost of p oducing a vehicle in a
certified configuration versus a inisbuilt configuration. The net
profit figure should be adjusted to reflect the present value of
net profits dc’rived in the past. -
A violation of section 208 of the Act may also result in
costs savings to the manufacturer. Section 208 of the Act
requires every manufacturer and other regulated persons to
establish and maintain records, perform tests, make reports, and
provide information to the EPA to determine compliance with Title
II of the Act. Specifically, a violator of this section realizes
costs savings from avoiding the expenditure of resources
necessary to compile the information requested or to maintain the
required records. The costs include the labor necessary to
retrieve and compile the information.’
Any indirect benefits from a section 208 reporting violation
should also be recovered. For example, a violator submits an
application for a certificate of conformity which incluaes false
or misleading information. Subsequently, the Administrator
issues a certificate of conformity for a nonconforming engine -
family based on that false or misleading information. Although
the manufacturer may not realize any significant savings in
clerical costs from false reporting, the manufacturer may realize
a substantial benefit from avoiding compliance with the emissions
requirements. The cost of avoiding compliance should therefore
be recovered.
A detailed economic analysis may be computed using the
Guidance for Calculating the Economic Benefit of Noncompliance
for a Civil Penalty Assessment , November 5, 1984. The EPA BEN
computer model may be used to calculate the economic benefit of
noncompliance.
3. Competitive Advantage
Removing the savings which accrue from noncompliance will
usually be sufficient to remove the competitive advantage the
violator has gained. However, in some cases, the noncompliance
allows the violator to provide goods or services which are not
available elsewhere or are more attractive to the consumer.
For example, a manufacturer may experience a competitive
advantage by incorrectly reporting its actual production volume
in its end-of—year report for the purpose of obtaining credits in
EPA’s averaging, trading, and banking program. The competitive
advantage may include any profit the manufacturer received for
credits it traded to other manufacturers before the violation was
discovered. The value of any competitive advantage the violator
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gained from noncompliance should be recouped in the economic
benefit component.
4. Settling For Less Than The Economic Benefit
To avoid encouraging industry to avoid or delay compliance,
the Agency will almost always seek to recover an amou’t equal to
or more than the economic benefit component. Accordi. gly, any
action to settle a case for less than the economic benefit should
be infrequent. Further, such settlements should include a
detailed justification in the case file. Three instances that
may warrant settling a case for less than the economic benefit
are discussed below.
It is clear that assessing the benefit component and
negotiating over it will often represent a substantial commitment
of resources. Such a commitment of resources may not be
warranted in cases where the magnitude of the benefit component
is likely to be insignificant or de minimus, (e.g. not likely to
have a substantial impact on the violator’s competitive
positions). For this reason, MPB will use its discretion not to
seek the benefit component where it appears that the amount of
the component is less than $10,000. When making the
determination, MPB should consider the impact on the violator,
the size of the gravity component, and the certainty of the
magnitude of the benefit component.
In other instances there may be compelling public concerns
that would be penalized if a defendant has this penalty component
assessed against it. Relevant public concerns may include
adverse precedent or extreme financial burden to the defendant
resulting in bankruptcy or plant closings. As such it may become
necessary to consider settling a case for less than the economic
benefit component.
Finally, there may be certain cases in which it is highly
unlikely that MPB will be able to recover the eccnoinic benefit in
litigation. This may be due to applicable precedent, competing
public interest considerations, or the specific facts, equities,
or evidentiary issues pertaining to a particular case. In such a
situation it is unrealistic to expect MPB to obtain a penalty in
litigation which would remove the economic benefit. Accordingly,
MPB should pursue a lower penalty amount.
B. THE GRAVITY COMPONENT
EPA must consider the gravity of a violation in assessing
civil penalties. The gravity of a violation may be determined by
assessing: 1) the potential for harm; and 2) the extent of
deviation from the statutory or regulatory requirement.
1. Identifying the potential for Harm
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The Federal emission standards and regulatory requirements
were promulgated to prevent harm to human health and the
environment. Certain regulatory requirement violations may
create a risk of such harm by jeopardizing the integrity of the
Federal emission program. Thus, noncompliance with any Clean Air
Act emission standard or regulatory requirement may result in a
situation where there is potential for harm to human health or
the environment.
Accordingly, the assessment of the potential for harm
resulting from a violation should be based on: 1) the risk of
human or environmental exposure to emissions and/or constituents
posed by noncompliance; and 2) the risk of adverse effect on
statutory or regulatory purposes or procedures implementing the
emissions program posed by noncompliance.
2. Ranking the Potential Harm
Enforcement personnel should evaluate whether the potential
harm is major, moderate, or minor for each violation. Each
category is defined below.
Malor - The violations pose or may pose a substantial risk
of exposure of humans or the environment to harmful exhaust
emissions or constituents; and/or the violations have or may have
a substantial adverse effect on the statutory or regulatory
purposes or procedures implementing the emissions program.
An example of a violation in this category is an instance
where a manufacturer introduces into commerce a motor vehicle or
engine that does not comply with Federal certification
requirements and as a result the motor vehicle or engine exceeds
emission standards. Another example of a violation in this
category is an instance where a manufacturer introduces vehicles
or engines into commerce without a certificate of conformity
(including instances where a manufacturer fails to submit or
submits an inaccurate certificate of conformity application).
Moderate — The violations pose or may pose a significant
risk of exposure of humans or the environment to harmful exhaust
emissions or constituents; and/or the violations have or may have
a significant adverse effect on statutory or regulatory purposes
or procedures implementing the emissions program.
An example of a violation in this category is an instance
where a manufacturer introduces a motor vehicle or engine into
commerce that meets Federal emission standards, but fails to
conform to the specifications as listed in the certificate of
conformity application. Another example of a violation in this
category is an instance where a manufacturer fails to comply with
reporting requirements.
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Minor — The violations pose or may pose a relatively low
risk of exposure of humans or the environment to harmful exhaust
emissions or constituents; and/or the violations have or may have
an adverse effect on the statutory or regulatory purposes or
procedures implementing the emissions program.
An example of a violation in --his category is an instance
where a manufacturer introduces in .0 commerce a motor vehicle or
a motor vehicle engine that fails to comply with labeling
requirements.
3. Ranking the Extent of Deviation
The extent of deviation from a statutory or regulatory
requirement relates to the degree of noncompliance with that
requirement. Enforcement personnel should evaluate whether the
extent of deviation is major, moderate, or minor for each
violation. Each category is defined below.
Malor — The violator deviates from requirements of the
regulation or statute to such an extent that many (or important
aspects) of the requirements are not met resulting in substantial
noncompliance.
An example of. a violation in this category is an instance
where a manufacturer introduces into commerce a motor vehicle or
engine that fails to comply with many Federal certification
requirements. Another example of a violation in this category is
an instance where a manufacturer submits a certificate of
conformity application that is substantially inaccurate. Another-
example is an instance when a manufacturer introduces into
commerce motor vehicles/engines, but does not affix Federal
emission labels to such motor vehicles/engines.
Moderate — The violator significantly deviates from the
requirements or statute.
An example of a violation in this category is an instance
where a manufacturer introduces into commerce a motor vehicle or
engine that fails to comply with several Federal certification
requirements. A similar example of a violation in this category
is an instance where a manufacturer submits a significantly
inaccurate certificate of conformity application or a
significantly late or incorrect running change report or defect
report. Another example is when a manufacturer iitroduces into
commerce motor vehicles/engines but affixes incorrect Federal
emission labels to such motor vehicles/engines.
Minor — The violator deviates from the regulatory or
statutory requirements but most (or all important aspects) of the
requirements are met:
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An example of a violation in this category is an instance
where a manufacturer introduces into commerce a motor vehicle or
engine that fails to comply with one Federal certification
requirement. Another example of a viola ’tion in this category is
an instance where a manufacturer submits a slightly inaccurate
certificate of conformity application or slightly late or
incorrect running change report or defect report. Another -
example is when a manufacturer introduces into commerce motor
vehicles/engines but fails to affix or affixes an incorrect
Federal emission labels to such motor vehicles/engines, but the
violation is remedied prior to sale to the final purchaser.
4. Dollar amount Matrix Assessment
The potential for harm and extent of deviation form the axes
of the penalty assessment matrix. The matrix has nine cells,
each containing a penalty range. The specific cell is chosen
after determining which category is appropriate for the potential
for harm factor, and which category is appropriate for the extent
of deviation factor. The lowest cell contains a penalty range
from $100 to $499. The highest cell is limited by the maximum
statutory penalty allowance of $25,000 per day of violation.
Enforcement personnel must select the penalty amount within
each cell in each case. The dollar amount range within each cell
allows enforcement personnel to assess an initial
gravity component figure that adapts the general gravity of the
violation to case specific facts. The matrix is illustrated
below.
TABLE 1
EXTENT OF DEVIATION VALUE
POTENTIAL
HARM
VALUE
MAJOR
MODERATE
MINOR
MAJOR
25,000—
20,000
19,999—
15,000
14,999—
11,000
MODERATE
10,999—
7,999—
4,999—
8,000
5,000
3,000
MINOR
2,999—
1,499—
499—
1,500
500
100
A matrix containing case specific examples is attached
(Attachment 1).
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5. MULTIPLE VIOLATION PENALTIES
a. Multiple Violations
A separate penalty should be sought in a complaint and
obtained in a settlement for each separate violation that results
from a violator’s independent act (or failure to act) that is
substantially distinguishable from any other charge in the
complaint. A charge is independent of, and substantially
distinguishable from, any other charge when it requires a
distinct element of proof. Generally, violations of different
sections of the regulations constitute independent and
distinguishable transgressions. For example, introducing a motor
vehicle into commerce not covered by a certificate of conformity
and failing to submit a defect report are violations which can be
proven only if the Agency substantiates different sets of factual
allegations.
Sections 205(a) of the Act states that violations of section
203(a) (1) shall constitute a separate offense for each motor
vehicle or motor vehicle engine. Consequently, there are
instances where a manufacturer’s failure to satisfy one statutory
or regulatory requirement either necessarily or generally leads
to numerous separate motor vehicle or motor vehicle engine
violations. For example, a manufacturer installs a catalyst for
an entire engine family that does not conform to the applicable
certificate application and as a result, introduces numerous
motor vehicles into commerce not covered by a certificate of
conformity. In cases like this where multiple vehicle violations
result from a single initial transgression, the calculation in
Table 2 below should be added to the appropriate matrix dollar
amount from Table 1:
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TABLE 2
Vehicle Violation value (Mvvv)
vehicles/engines:
$3,000 per vehicle/engine
vehicles/engines add:
.
$1,000 per vehicle/engine
vehicles/engines add:
$500 per vehicle/engine
vehicles/engines add:
$400 per vehicle/engine
vehicles/engines add:
vehicles/engines
$300 per vehicle/engine
,
$100 per, vehicle/engine
To ensure that a violator committing only a minor infraction
for numerous vehicles and a violator committing an especially
egregious violation for only a few vehicles are penalized in
proportion to the violation’s relative harm, the sum of the
appropriate matrix dollar amount from Table 1 and the multiple
vehicle violation dollar amount from Table 2 should be multiplied
by the appropriate factor listed in Table 3 below for the total
gravity component amount:
TABLE 3
IF
MODERATE /MODERATE
MAJOR/MINOR
MINOR/MAJOR
.5
MULTIPLY kvvv
BY:
Please note tha t, in rare instances,
a violation may involve
MULTIPLE VEHICLE VIOLATION FACTOR
IF MAJOR/MAJOR
MAJOR/MODERATE
MODERATE/MAJOR
MULTIPLY lbtvvv BY:
ASSIGNED
MATRIX
CATEGORY FOR
VIOLATION
1.0
IF MINOR/MODERATE
MODERATE/MINOR
MINOR/MINOR
MULTIPLY MVVV BY:
.25
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unusually large numbers of motor vehicles. In these cases, the
multiple vehicle value/violation calculation in Table 3 may
produce a disproportionately high penalty. Accordingly, in very
limited situ .tions, MPB may use discretion to forego assessing a
per vehicle dollar amount based on Tables 1 through 3 for the
violation provided the total penalty for the violation is
appropriate given the gravity of the offense nd sufficient to
deter similar future behavior. -
b. Penalties for Multi-Day Violations
The Act provides EPA authority to seek civil penalties of
not more than $25,000 per day of non-compliance for each
violation of section 203(a) (2) of the Act. This language
explicitly authorizes the Agency to consider the duration of each
violation as a factor in determining an appropriate total penalty
amount.
However, under a straight $25,000 per day assessment, a
manufacturer that fails to submit a running change report to EPA
until 30 days after the change was implemented, could be liable
for a disproportionately high penalty. Therefore, the assessment
of $25,000 per—day penalties should be reserved for repeated or
considera ly harmful acts.
Generally, reasonable recordkeepthg oversights resulting in
violations of section 203(a) (2) of the Act will be assessed on a
one—day basis according to the appropriate penalty matrix dollar
amount in Table 1. For violations continuing for one month or
more, however, the appropriate dollar amount listed ir Table 4
below should be added to the dollar amount in Table 1. To
estimate the length of time of the violation, violations should
be assumed to be continuous from the first provable date of
violation until the date of the compliance.
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TABLE 4
MULTI-DAY VIOLATION VALUE
$8,000
$1(’,OOO
$13,000
$16,000
$20,000
$24,000
$29,000
$34,000
$40,000
$48,000
However, when a viola ion of section 203(a) (2) poses a risk
of significant harm to the environment or the integrity of the
Federal emission program, MPB may consider assessing per—day
penalties. An example of such a yiolation is a defendant’s
refusal to answer a request for information made pursuant to
section 208 of the Act. Per-day penalties are calculated by
multiplying the one-day matrix dollar amount in Table 1 by the
number of days the violator is in noncompliance.
IV ADJUSTING THE GRAVITY COMPONENT
To promote equitable penalties among violators, penalty
assessments must have enough flexibility to consider unique facts
in specific cases. Accordingly, EPA’S Policy on Civil Penalties
allows adjustments to the initial gravity penalty amount for
legitimate differences between cases. Upward or downward
adjustments apply only to the gravity component not the economic
benefit. In addition, such adjustments should be made prior to
the commencement of negotiations thereby establishing the initial
settlement amount. However, if during the course of
negotiations, the litigation team receives new information
impacting the assessment, the gravity component may be adjusted
upward or downward as applicable to yield an adjusted minimum
settlement amount.
MPB should base any adjustment to the gravity component on
the factors listed below and to carefully document justification.
Gener ally, adjustments shall be 0-20 percent and within the
absolute discretion bf MPB. A 21-30 percent adjustment is only
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appropriate in unusual circumstances. Finally an adjustment over
30 percent is only appropriate in extraordinary circumstances.
Relevant adjustment factors are discussed below.
A. Degree of Willfulness or Negligence
Knowing or willful violations can give rise to crimiiial
liability while a force majeure or accident may indicate no
penalty is appropriate. Between these two extremes, the
violator’s willfulness and/or negligence should be reflected in
the penalty amount. The following points should be considered in
assessing the degree of willfulness or negligence adjustment:
(1) the degree of control the violator had over the events
constituting the violation; (2) the foreseeability of the events
constituting the violation; (3) 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); and (4) the extent to which
the violator in fact knew of the legal requirement which was
violated. Finally, lack of knowledge is not a basis to reduce
the penalty; rather, knowledge should only enhance the penalty.
B. Degree of Cooperation
The degree of cooperation of the violator in remedying the
violation is an appropriate factor to consider in adjusting the
penalty. Mitigation based on this factor is appropriate in the
situations disc .issed below.
1. Prompt reporting of noncompliance
The gravity component may be mitigated when a violator
promptly reports its noncompliance to EPA if there is no legal
requirement to do so. The fact that EPA may have discovered the
violation later requires less mitigation.- Conversely, if the
violator avoids revealing violations to EPA, an aggravated
adjustment may be appropriate.
2. Prompt correction of environmental problems
The gravity component may also be mitigated if the violator’
thakes extraordinary efforts to avoid violating an imminent
requirement or to come into compliance after learning of the
violation. Such efforts may include implementing additional
administrative procedures to avoid future violations or recalling
motor vehicles or motor vehicle engines that were introduced into
commerce not covered by a certificate of conformity to correct
the excess emissions. In general, the earlier the violator
instituted corrective action after discovery of the violation and
the more complete the corrective action instituted, the larger
the penalty reduction EPA will consider.
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C. History of Noncompliance
The gravity component may also be adjusted if a violator has
violated an environmental requirement previously that resulted in
a formal enforcement action. For purposes of this adjustment, a
previous formal enforcement action may include a delivered
penalty letter, delivered letter informing defendant of -
noncompliance, a judicial complaint filed in Federal district
court or an administrative complaint filed with the hearing
clerk, a consent decree signed by EPA and the defendant, a
consent agreement signed by EPA and the defendant, or a final
order by the district court judge or magistrate or administrative
law judge. In determining the exact adjustment percentage, the
following points should be considered: (1) the similarity of the
violation in question to prior violations; (2) the time elapsed
since the prior violation; (3) the number of previous violations;
and (4) the violator’s response to prior violation(s) with regard
to correcting the previous infractions and efforts to avoid
future violations.
The following guidelines for gravity component adjustments
based on a violator’s history of noncompliance should be applied.
For relatively few dissimilar violations, MPB has discretion to
raise the penalty amount 20 percent. For relatively large -
numbers of dissimilar violations, the gravity component can be
increased up to 30 percent. If the violation pattern is one of
similar violations, MPB has discretion to raise the penalty
amount up to 30 percent for the first repeat violation and higher
for further repeated similar violations.
For the purposes of this section, 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 that indicate a “similar
violation” was committed may include: 1) the same statutory or
regulatory provision was violated; or 2) a similar act or
omission.
V. SIZE OP THE VIOLATOR
The size of the violator should be considered in assessing a
total penalty amount. The appropriate figure from each assigned
violator value should be added to the proposed penalty only once
f or all violations.
In rare instances, an investigation may involve so few
violatiohs that the size of violator factor may result in a
dollar amount higher than the maximum allowable penalty under the
Act. Accordingly, in these very limited situations, MPB may use
discretion to forego assessing a size of violator value based on
Table S provided the total penalty for the violation is
appropriate given the gravity of the offense and is sufficient to
deter similar futur&behavior.
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TABLE 5
SIZE OP THE VIOLATOR IVALUE
NET WORTH/CORPORATIONS OR
NET CURRENT ASSETS/PARTNERSHIPS A ND SOLE
PROPRIETORSHIPS
VALUE
$2,000
UNDER $500,000
$500,000 — $1,000,000
$5,000
$i .,000,00i.—$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
$100,000
VI. LITIGATION RISKS -
The preliminary deterrence amount, both economic benefit and
gravity components, may be mitigated in appropriate circumstances
based on litigation risk. Evidentiary problems, or an indication
from the court, or Administrative Law Judge during settlement
negotiations that he or she is prepared to recommend a penalty
below the minimum settlement amount presents a litigation risk.
In determining whether mitigation is appropriate in this
instance, specific facts, equities, evidence or legal issues
should be considered.
When the basis for mitigation is litigation risk, the case
attorney should document the probable outcome of litigation along
with the legal and factual analysis which supports such a
conclusion. Specific documentation of the evidentiary problems,
adverse legal precedent, or other relevant legal issues should be
addressed in the file documentation. For cases filed in district
court, any adjustments to the penalty on this basis should be
made in consultation with the Department of Justice.
VII. ABILITY TO PAY
MPB will generally not request penalties that are clearly
beyond the means of the violator. Accordingly, MPB should
consider the ability to pay a penalty in arriving at a specific
final penalty assessment. At the same time, it is important that
the regulated community not see the violation of environmental
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requirements as a way of aiding a financially troubled business.
Therefore, EPA reserves the option, in appropriate circumstances,
of seeking a penalty that might put a company out of business.
The ability to pay adjustment will normally require a
significant amount of financial information specific to the
violator. If this information is available prior to commencenrent
of negotiations, it should be assessed as part of the initial
penalty target figure. If it is not available, MPB should assess
this factor after commencement of negotiation with the defendant.
The burden to demonstrate an inability to pay, as with the
burden of demonstrating the presence of any mitigating
circumstances, rests on the defendant. If the violator fails to
provide sufficient information, then MPB should disregard this
factor in adjusting the penalty.
A defendant’s ability to pay should be determined according
to the December 16, 1986 Guidance on Determinin a Vio1ator’s
Ability to Pay a Civil Penalty (GM-56) along with any other
appropriate means. In addition, the National Enforcement
Investigative Center (NEIC) has developed the capability to
assist in determining a defendant’s ability to pay. The EPA ABEL
computer program ‘may provide assistance in determining a
defendant’s ability to pay. If ABEL indicates that the defendant
may have an inability to pay, amore detailed financial analysis
verifying the ABEL results may be done prior to mitigating the
penalty.
When it is determined that a violator cannot afford the
penalty prescribed by this policy, the following options should
be considered:
1. Consider a delayed payment schedule : Such a schedule may
be contingent upon an increase in sales or some other
indicator of improved business. This approach is
administratively burdensome for NPB and should only be
considered in unusual cases; or
2. Consider binder of the violator’s individual owners :
This is appropriate if joinder is legally possible and
justified under the circumstances; or
3. Consider straight penalty reductions as a last recourse :
If this approach is necessary, the reasons for
reduction should be made a part of the formal
enforcement file and the memorandum accompanying
settlement.
VIII. SUPPLEMENTAL ENVIRONMENTAL PROJECTS
EPA’S Office of EnforcemeT1t (OE) has issued guidance
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addressing the use of supplemental enforcement projects (SE?) in
EPA settlements entitled, Policy on the Use of Supplemental
Enforcement Projects in EPA Settlements , dated February 12, 1991.
MPB should follow the OE policy in detei’mining appropriate
environmental projects to mitigate settlement amounts.
IX. DOCUMENTATION
To insure that MPB imposes fair and equitable penalties, it
is intended that a proposed penalty be consistent with previous
MPB penalty assessments. While this policy establishes
systematic methods of calculating penalties, it also allows
considerable flexibility. Accordingly, to facilitate consistent
enforcement results, all penalty calculations should be
documented in the case file.
Case file documentation should include how the economic
benefit and the gravity component amounts were calculated with
any adjustments made to that amount. This penalty policy and all
relevant case specific facts should be cited to justify any
penalty mitigation. A penalty worksheet is attached (Attachment
2).
During the course of an enforcement action or during pre-
filing negotiations, MPB should document any agreed upon changes
to the bottom line penalty based upon new information or
circumstances which arise during the course of the enforcement
action. This documentation should include the factual basis for
any mitigation, the recalculated gravity and economic benefit
components, and the penalty policy justification.
To assist NPB enforcement attorneys, program staff, and
management further in making consistent penalty assessments, MPB
has established a case tracking computer program and a central
enforcement case file. Upon determining that an investigation is
appropriate, MPB should open a file in the case tracking system.
The file will be assigned a case number and computer tracked for
the duration of the investigation. Upon completion, the file
should include all relevant documentation and be formally closed
and logged out of the computer tracking system. MPB’s central
file and tracking systems will provide resources to MPB staff to
assess consistent penalties and ensure that all investigation
files contain written penalty calculation and mitigation
justifications in the event of internal or external audits.
Attachments
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APPENDIX I
MANUFACTURERS PROGRAMS BRANCE
MPB IMPORTS PROGRAM PENALTY POLICY
MARCE 31, 1993k
I. INTRODUCTION
EPA’s Manufacturers Programs Branch Interim Penalty Policy
(“MPB’s General Policy”) applies generally to manufacturers of
new motor vehicles or new motor vehicle engines that violate
requirements under sections 203 (a) (1) and 203(a) (2) of the Act.
That general policy does not, however, specifically address
violations of the Manufacturers Programs Branch Imports Program
Regulations.
This document outlines a penalty policy which applies to
violations of the Imports Program Regulations. The “Imports
Penalty Policy” was originally issued in January, 1990. This
revised policy reflects the new Clean Air Act Amendments of 1990.
MPB enforces several provisions under Title II of the Clean
Air Act (Act) and associated regulations to assure that motor -
vehicles and motor vehicle engines conform with Federal emission
requirements. Section 203(a) (1) of the Act prohibits
manufacturers of new motor vehicles or new motor vehicle engines
from selling, offering for sale, introducing or delivering into
commerce, or (in the case of any person, except as providedby
regulation of the Administrator) importing into the United States
such vehicles or engines, unless such vehicles or engines are
covered by a certificate of conformity. Section 203(a) (2) of the
Act prohibits, among other things, any person from failing or
refusing to permit access to or copying of records or failing to
make reports or provide information required under section 208 of
the Act. Finally, NPB enforces section 203(a) (4) of the Act
which in certain circumstances prohibits manufacturers from
selling or leasing any motor vehicle or motor vehicle engine
unless a label or tag is affixed to such motor vehicle or motor
vehicle engine in accordance with section 207(c) of the Act.
Pursuant to section 203(b) (2) of the Act, EPA promulgated
regulations governing the importation of new motor vehicle which
do not meet the applicable Federal emission standards and
requirements (nonconforming motor vehicles). The regulations are
entitled, “Air Pollution Control: Importation of Nonconforming
Motor Vehicles and Motor Vehicle Engines”, and are located at 40
CFR Part 85, Subpart P. The regulations first became effective
on November 15, 1972, 37 . g. 24314, and were revised on
September 25, 1987, 52 . g. 36136, (“Imports Regulations”).
‘This policy will not apply to penalty assessn ents for
violations that occurred prior to november 15, 1990.

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The Act was amended on November 15, 1990. Under section
205(a) of the Act, a violator of section 203(a) (1) or (4) is now
li able for a civil penalty of not more than $25,000, with each
motor vehicle or motor vehicle engine constituting a separate
offense. A violator of section 203(a) (2) is now liable for a
civil penalty of not more. than $25,000 per day of violation.
Section 205(b) of he Act provides the Administrator authorityto
commence a civil a. tion in district court to assess and recov3r
any civil penalty under section 205(a).
The amended Act also provides the Administrator with the
authority to issue administrative penalty orders under section
205(c) of the Act except that the maximum penalty amount sougrit
against a violator in an administrative penalty assessment
proceeding shall not exceed $200,000.
MPB will use this policy to calculate settlement amounts
during the cc urse of an investigation. This policy will also
serve as guidance in calculating administrative penalties under
Section 205(c) of the Act. MPB will also use this policy as
guidance in imposing sanction’s provided for in the Imports
regulations.
This document is not meant to control the penalty amount
requested in judicial actions. It is EPA’s policy to ask the
court for the maximum penalty allowable under the Act in a
complaint filed in U.S. District Court. After a case has been
referred to the Department of Justice, use of this policy is
limited to pre—trial settlement.
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 this policy and to change it at any time without public
notice.
II. APPLICATION OF SANCTIONS
Section 40 CFR 85.1513(e) provides that; (a) current Id
certificates of conformity may be suspended or revoked; (b) new
certificates may be denied for up to three years; and (c) an Id
may be ineligible to import mod/test vehicles. Grounds for the
above sanctions include: (a) actions or inaction by an Id or lab
used by the ICI which result in fraudulent, deceitful or grossly
inaccurate representation of any fact or condition which affects
a vehicle’s eligibility for admission; (b) failure of a
significan€ number of vehicles to comply with Federal emission
requirements upon inspection or retest; or (c) failure to comply
with the imports recjulations.
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The Manufacturers Programs Branch (“MPB”) may seek sanctions
for the following violations of the imports regulations:
A. Suspension of certificate (s) or a period of less
than the remainder of the Id’s model year —— may be
imposed for failure to correct vehicle noncompliances
in a timely manner after notification or failure of
relatively small number of vehicles imported by the _CI
to comply with requireme’nts of 40 CFR Part 85, Subpart
B. Revocation of certificate (s) plus denial of
certificates for up to one year -- may be imposed for
failure of a significant number of vehicles imported by
the ICI to comply with the requirements of 40 CFR Part
85,subpart P or action or inaction by the Id, the
laboratory employed by the ICI or ‘any agent of the Id
that results in fraudulent, deceitful or grossly
inaccurate representation which affects the eligibility
of any vehicle for importation under 40 CFR Part 85,
Subpart P;
C. evocation of certificate Cs) plus denial of
certificates for up to two years -- may be imposed for
action or inaction bythe Id, the laboratory employed
by the ICI or any agent of the Id that results in
fraudulent, deceitful or grossly inaccurate
representations which affects the eligibility for
importation under 40 CFR Part 85, Subpart P, of a
significant number of vehicles; and
D. Revocation o certificate Cs) plus denial of
certificates for up to three years -- may be imposed
for action or inaction by the Id, the laboratory
employed by the Id or any agent of the Id which
results in fraudulent, deceitful, or grossly inaccurate
representations which affects vehicle eligibility for
importation under 40 CFR Part 85, Subpart P, for a
significant number of vehicles for a substantial amount
of time.
III. APPLICATION OF CIVIL PENALTIES
Penalties for violations of the MPB Imports Program
regulations should be calculated in accordance with the following
specific guidelines in conjunction with MPB’s General Penalty
Policy. It is important to note that there is no multiple
vehicle violation value in the Imports Penalty Policy assessment.
A. THE BENEFIT COMPONENT
The “economic b enef it component” should be calculated and
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added to the gravity-based penalty component when a violation
results in “significant” economic benefit to the violator. The
economiC benefit will include the benefi,t of delayed costs,
avoided costs, and competitive advantage.
1. Delayed Costs
Delayed costs are expenditures which have been deferred by
the violator’s failure to comply with the requirements. By
deferring these one—time nonrecurring costs until EPA takes
enforcement action, the violator has achieved an economic
benefit.
For example, an importer delays necessary motor vehicle
configuration changes that may affect emission. Several months
later, EPA discovers the discrepancy during an EPA audit and the
manufacturer subsequently makes the necessary changes. In this
situation, the affected motor vehicles were not in compliance
with the certificate of conformity application specifications in
violation of section 203(a) (1) of the Act. Moreover, the
manufacturer may have experienced an economic benefit by delaying
compliance. Generally, the manufacturer delayed the expenditure
of resources necessary to perform the required engineering
evaluation or motor vehicle testing to determine that the -
production change did not affect the motor vehicle’s ability to
meet the applicable emission standards.
A detailed economic analysis may be’ computed using the
Guidance for Calculating the Economic Benefit of Noncompliance
for a Civil Penalty Assessment , November 5, 1984.
2. Avoided costs
Avoided costs are expenditures completely averted by the
violators’ failure to comply. Several examples of avoided costs
are discussed below.
For example, costs may be avoided i the importer fails to
modify the vehicle in compliance with Federal emission standards.
An importers savings may be estimated by assessing the cost
savings realized from not performing the necessary modifications.
The assessment may also include any net profits, or benefits the
importer gained. The profit figure should be adjusted to reflect
the present value of net profits derived in the past.
A violation of section 208 of the Act may also result in
costs savings to the manufacturer. Section 208 of the Act
requires every manufacturer and other regulated persons to
establish and maintain records, perform tests, make reports, and
provide information to the EPA to determine compliance with Title
II of the Act. Specifically, a violator of this section realizes
costs savings from áTvoiding the expenditure of resources
4

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necessary to compile the information requested or to maintain the
required records. The costs include the labor necessary to
retrieve and compile the information. /
Any indirect benefits from a section 208 reporting violation
should also be recovered. For example, a violator submits an
application for a certificate of confomity which includes false
or misleading information. Subsequent .y, the Administrator
issues a certificate of conformity for a nonconforming engine
family based on that false or misleading information. Although
the manufacturer may not realize any significant savings in
clerical costs from false reporting, the manufacturer may realize
a substantial benefit from avoiding compliance with the emissions
requirements. The cost of avoiding compliance should therefore
be recovered.
A detailed economic analysis may be computed using the
Guidance for Calculating the Economic Benefit of Noncompliance
fcr a Civil Penalty Assessment , November 5, 1984. The EPA BEN
computer model may be used to calculate the economic benefit of
noncompliance.
3. Competitive Advantage
Removing the savings which accrue from noncompliance will
usually be sufficient to remove the competitive advantage the
violator has gained. However, in some cases, the noncompliance
allows the violator to provide goods or services which are not
available elsewhere or are more attractive to the consumer.
For example, an importer may experience a competitive
advantage by improperly importing a motor vehicle not normally
available in the United States market because it is
technologically infeasible to bring the vehicle into conformity
with Federal emission standards. The competitive advantage may
include any profit the importer gained before the violation was
discovered. The value of any competitive advantage the violator
gained from noncompliance should be recouped in the economic
benefit component.
4. settling For Less Than The Economic Benefit
To avoid encouraging industry to avoid or delay compliance,
the Agency will almost always seek to recover an amount equal to
or more than the economic benefit component. Accordingly, any
action to settle a case for less than the economic benefit should
be infrequent. Further, such settlements should include a
detailed justification in the case file. Three instances that
may warrant settling a case for less than the economic benefit
are discussed below.
It is clear tha t assessing the benefit component and
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negotiating o er it will often represent a substantial commitment
of resources. Such a commitment of resources may not be
warranted in cases where the magnitude of the benefit component
is likely to be insignificant or de minixnus, (e.g. not likely to
have a substantial impact on the violator’s competitive
positions). For this reason, MPB will use its discretion not to
seek the benefit component where it appears that-the amount of
the component is less than $10,000. When making the
determination, MPB should consider the impact on the violator,
the size of the gravity component, and the certainty of the
magnitude of the benefit component.
In other instances there may be compelling public concerns
that would be penalized if a defendant has this penalty component
assessed against it. Relevant public concerns may include
adverse precedent or extreme financial burden to the defendant
resulting in bankruptcy or plant closings. As such it may become
necessary to consider settling a case for less than the economic
benefit component.
Finally, there may be certain cases in which it is highly
unlikely that MPB will be able to recover the economic benefit in
litigation. This may be due to applicable precedent, competing.
public interest considerations, or the specific facts, equities,
or evidentiary issues pertaining to a particular case. In such a
situation it is unrealistic to expect MPB to obtain a penalty in
litigation which would remove the economic benefit. Accordingly,
MPB should pursue a lower penalty amount.
B. THE GRAVITY COMPONENT
1. Identifying the Potential for Harm
The Federal emission standards and regulatory requirements
were promulgated to prevent harm to human health and the
environment. Certain regulatory requirement violations may
create a risk of harm by jeopardizing the integrity of the
Federal emission program. Thus, noncompliance with any Clean Air
Act emission standard or regulatory requirement can result in a
situation where there is potential for harm to human health or
the environment.
Accordingly, the assessment of the potential for harm
resulting from a violation should be based on: 1) the risk of
human or environmental exposure to exhaust emissions and/or
constituents posed by noncompliance; and 2) the risk of adverse
effect on statutory or regulatory purposes or procedures
implementing the emissions program posed by noncompliance.
2. Ranking the Potential Harm
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Enforcement personnel should evaluate whether the potential
harm is major, moderate, or minor for each violation. Each
category is defined below.
Major — The violations pose or may pose a substantial risk
of exposure of huinans pr the environmeht to harmful exhaust -
emissions or consttuents; and/or the violations have or may have
a substantial adve.:se effect on the regulatory purposes or
procedures implementing the emissions program.
An example of a violation in this category is an instance
where an entity imports a nonconforming motor vehicle into the
United States without obtaining a certificate of conformity or
without complying with the certificate of conformity application
specifications.
Moderate — The violations pose or may pose a significant
risk of exposure of humans or the environ nent to harmful exhaust
emissions or constituents; and/or the violations have or may have
a significant adverse effect on statutory or regulatory purposes
or procedures implementing the emissions program.
An example of a violation in this category is an instance
where an entity releases an imported nonconforming motor vehicle
during the conditional admission period or the 15-day hold
period. Another example of a violation in this category is an
instance where an entity fails to respond to an EPA inquiry under
Section 208 of the Act.
Minor — The violations pose or may pose a relatively low
risk of exposure of humans or the environment to harmful exhaust
emissions or constituents; and/or the violations have or may have
an adverse effect on the statutory or regulatory purposes or
procedures imp1ementing - the emissions program.
An example of a violation in this category is an instance
where an entity fails to comply with recordkeeping requirements
under 40 CFR Part 85, Subpart P.
3. Ranking the Extent of Deviation
The extent of deviation from a statutory or regulatory
requirement relates to the degree of noncompliance with that
requirement. Enforcement personnel should evaluate whether the
extent of deviation is major, moderate, or minor for each
violation. Each category is defined below.
Major - The violator deviates from the 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.
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Examples of a violation in this category include: 1)
importing a nonconforming motor vehicle into the United States
without obtaining a certificate of confo,rmity; 2) releasing an
imported nonconforming motor vehicle during the conditional
admission period, but prior to the 15—day hold period; and 3)
failing to maintain many records required under 40 CFR Part 85,
Subpart P. Another example of a violation in this category is an
instance where an entity fails to respond to an EPA inquiry under
Section 208 of the Act.
Moderate — The violator significantly deviates from the
requirements of the regulation or statute, but some of the
requirements are implemented as intended.
Examples of violations in this category include: 1)
importing a nonconforming motor vehicle into the United States
under a certificate of conformity, but failing to comply with
many certificate of conformity application specifications; 2)
releasing an imported nonconforming motor vehicle during the 15—
day hold period; and failing to maintain several records required
under 40 CFR Part 85, Subpart P. Another example of a violation
in this category is an instance where an entity response to an
EPA inquiry under Section 208 of the Act is significantly late.
Minor — The violator deviates somewhat from the regulatory
or statutory requirements but most (or all important aspects) of
the requirements are met.
Examples of violations in this category include: 1) -
importing a nonconforming motor vehicle into the United States
under a certificate of conformity, but failing to comply with one
or several certificate of conformity application specifications;
2) releasing a nonconforming motor vehicle during the conditional
admission period or the 15-day hold period, but maintaining
control over the vehicle. Another example of a violation in this
category is an instance where an entity response to an EPA
inquiry under Section 208 of the Act is minimally late.
4. Dollar amount Matrix Assessment
The potential for harm and extent of deviation form the axes
of the penalty assessment matrix. The matrix has nine cells,
each containing a penalty range. The specific cell is chosen
after determining which category is appropriate for the potential
for harm factor, and which category is appropriate for the extent
of deviation factor. The lowest cell contains a penalty range
from $100 to $499. The highest cell is limited by the maximum
statutory penalty allowance of $25,000.
Enforcement personnel must select the penalty amount within
each cell in each case. The dollar amount range within each cell
allows enforcement p ersonne1 to assess an initial gravity
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component figure that adapts the general gravity of the violation
to case specific facts. This matrix is illustrated below.
TABLE 1.
II
II EXTENT OF DEVIATION VALUE -
POTENTIAL
HARM
VALUE
-
MAJOR
MODERATE
MINOR
MAJOR
25,000—
20,000
19,999—
15,000
14,999—
11,000
MODERATE
10,999—
8,000
7,999—
5,000
4,999—
3,000
MINOR
2,999—
1,500
1,499—
500
499—
100
A matrix containing case specific examples is attached
(Attachment 2).
a. Vehicle violation categories
For purposes.of this policy, imports program violations
should be grouped into two categories: vehicle compliance
violations and recordkeeping violations. Vehicle compliance
problems include requirements concerning vehicle modifications to
meet certification specifications, vehicle testing vehicle
labeling, the 15-day hold period, and warranty coverage. All
compliance problems associated with one vehicle should be
considered one violation. Recordkeeping violations include
requirements concerning records that the Id is required to
retain for EPA inspection. All recordkeeping violations related
to one vehicle should be treated as one violation.
b. Penalties for Multi—Day Violations
The Act provides EPA with the authority to seek civil
penalties in court or an administrative hearing not more than
$25,000 per day of non-compliance for each violation of a
requirement under 203(a) (2) of the Act. This language explicitly
authorizes the Agency to consider the duration of each violation
as a factor in determining an appropriate total penalty amount.
MPB’s General Penalty Policy provides guidance for calculating
this component.
IV. ADJUSTMENTS, MITIGATION, AND DOCUMENTATION GUIDANCE
Finally, MPB’s General Penalty Policy provides guidance for
adjusting the gravity component, determining the size of violator
value, assessing any litigation risks, calculating the
defendant’s ability ‘ to pay, the use of supplemental environmental
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projects, and case documentation. An Imports Program Penalty
Worksheet is attached. (Attachment 3)
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Section J Document 18
1993 Diesel Desulfurization Question
and Answer Document
08/05193

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f1 ’
1993 DIESEL DESULFURIZATION
QUESTION AND ANSWER DOCUMENT
Washington, DC
August 5, 1993

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PREFACE
This edition of the Diesel Desulfurization — Questions and Answers replaces the
Diesel Desulfurization interim document issued on May 20, 1993 and responds to
additional questions raised through approximately July 15, 1993, concerning the -
manner in which the United States Environmental Protection Agency intends to
implement and enforce the diesel desulfurization regulations at 40 CFR § 80 and 86.
It was prepared by the Field Operations and Support Division of the Office of Mobile
Sources, United States Environmental Protection Agency.
Regulated parties may use this document to aid in achieving compliance with
the diesel desulfurization regulations. However, it does not in any way alter the
requirements of the diesel desulfurization regulations. While the answers provided in
this document represent the Agency’s interpretation and general plans for enforcement
at this time, some of the responses may be changed as additional information becomes
available or as the Agency reconsiders certain issues.
We will attempt to respond to any additional questions on this subject. Please
send any such questions in writing to Director, Field Operations and Support Division
(6406J), United States Environmental Protection Agency, 401 M Street, S.W.,
Washington, D.C. 20460.
Field
Washington, D.C.
August 5, 1993
Support Division

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TABLE OF CO 1ENTS
Page
APPLICABILiTY OF THE REGULATIONS: ... 1
TESTING AND SAMPLING METHODOLOGIES . 4
TESTING TOLERANCE 8
DYEING OF DIESEL FUEL 10
LIABILITY AND DEFENSES 15
MISFUELING 25
INSPECTIONS 28
NOTWICATION OF VIOLATIONS ... 30
REMEDIAL ACTION -31

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APPLICABILITY OF ThE REGULATIONS
1. Question: What is the definition of diesel fuel?
Answer: “Diesel fuel means any fuel sold in any State and suitable for use in
diesel motor vehicles and diesel motor vehicle engines, and which is commonly oi
commercially known or sold as diesel fuel.” 40 CFR § 80.2(x).
2. - Question: What is the definition of motor vehicle?
Answer: “The term ‘motor vehicle’ means any self-propelled vehicle designed
for transporting persons or property on a street or highway.”• Clean Air Act § 216(2).
3. Question: Does the on-highway diesel fuel requirement extend to other fuels
such as heating fuels, kerosene, jet fuel, and marine or railroad diesel?
Answer: Any petroleum distillate product, produced and distributed -
commercially or exclusively for the military, that is suitable for use in diesel motor
vehicles or diesel motor vehicle engines will be treated as diesel fuel. This includes,
but is not limited to, any diesel fuel, fuel oil, furnace oil, heating oil, kerosene, jet
fuel, JP-4, JP-5, JP-8, marine diesel or railroad diesel that is suitable for use as a
diesel motor vehicle fuel, or is suitable for blending with diesel motor vehicle fuel.
Any such product should comply with the requirements for on-highway diesel, or,
with the exception of the fuels listed below, must be dyed.
Certain fuel grades will be considered exempt from the dyeing requirement.
First, EPA will not require that high sulfur jet fuel be dyed, because of the confficting
dyeing scheme used to distinguish between aviation gasoline and jet fuel. Under that
scheme, aviation gasoline is dyed blue while jet fuel is undyed, in order to ensure that
jet aircraft are not fueled with aviation gasoline, and that piston-driven aircraft are not
fueled with jet fuel. EPA will not require that heavy petroleum distillate products be
dyed. These heavier fuels are not suitable for dyeing, due to their normal dark color,
or suitable for use in on-highway diesel motor vehicles or on-highway diesel motor
vehicle engines because of their high viscosity and instability. Heavy distillate
products that will be exempt from the dyeing requirement are Fuel Oils Grades No. 4,
No. 5, arid No. 6, Diesel Fuel Oil Grade No. 4-D, Marine Fuels Grades DMB,
DMC, and RMA-lO through RML-55, and Gas Turbine Fuel Oils Grades No. 3-GT
and No. 4-GT.
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The exception for jet fuel is strictly limited to the dyeing requirement in 40 CFR §
80.29(b) to fuels maintained in a segregated distribution system and not available at
any time for on-highway use. Any jet fuel or kerosene that is blended with diesel
fuel, for use in diesel motor vehicles must meet the sulfur and cetane (or aromatic)
requirements of 40 CFR § 80.29(a).
4. Question: May parties continue to blend jet fuel with diesel fuel for certain
seasonal performance requirements?
Answer: EPA recognizes that it has been the practice in the industry to blend
various jet fuels or kerosenes with diesel fuel, in order to improve diesel engine
performance during certain times of the year. All regulated parties involved in the
production, distribution or use of such blends must ensure that final products comply
with the regulations. This may necessitate the use of a low sulfur jet fuel or kerosene,
or the use of a very low sulfur diesel fuel to accommodate the blending of current jet
fuels.
5. Question: Will off-highway users of diesel fuel such as farmers and
construction site operations doing predominantly on-premise field work be required to
use low sulfur diesel to transport equipment from Point A to Point B if on state,
county, or federal roads and highways, or to transport agricultural products from
Point A to Point B prior to transfer to a second party?
Answer: These regulations apply to fuels used by motor vehicles. Diesel
powered trucks and other equipment that meet the definition of motor vehicles are
required to use low sulfur diesel fuel, even if used only in a farm or construction site
setting.
6. Question: What are examples of vehicles or equipment that do not meet the
definition of motor vehicle, and therefore are not required to use low-sulfur’diesel
fuel?
Answer: For the purpose of determining the applicability of the motor vehicle
definition, Clean Air Act § 216(2), 40 CFR § 85.1703 states a vehicle which is self-
propelled and capable of transporting a person or persons or any material or any
permanently or temporarily affixed apparatus shall be deemed a motor vehicle, unless
any one or more of the criteria set forth below are met, in which case the vehicle
shall not be deemed a motor vehicle and excluded from the operation of the Act:
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(1) The vehicle cannot exceed a maximum speed of 25 miles per hour over level,
paved surfaces; or
(2) The vehicle lacks features customarily associated with safe and practical street
or highway use, including, but not limited to, a reverse gear (except in the case of
motorcycles), a differential, or safety features required by state and/or federal law; or
(3) The vehicle exhibits features which render its use on a street or highway
unsafe, impractical, or highly unlikely, including, but not limited to, tracked road
contact means, an inordinate size, or features ordinarily associated with military
combat or tactical vehicles such as armor and/or weaponry.
Examples of vehicles which do not meet the motor vehicle definition include, but
are not limited to, agricultural tractors, combines, backhoes, excavators, and
bulldozers. EPA’s Manufacturers Operations Division (MOD) makes determinations
of the applicability of the Act’s motor vehicle definition upon written request. MOD
also maintains a list of vehicles that have been determined to be excluded from the
motor vehicle definition. That list or an exclusion determination may be obtained by
writing MOD at:
Manufacturers Program Branch
Manufacturers Operations Division (6405J)
U.S. Environmental Protection Agency
Washington, D.C. 20460
(202) 233-9250
Requests for determinations of exclusion must contain, ata minimum,
descriptions, dimensions and photographs or drawings of the vehicle.
Manufacturers often propose the use of speed limiting devices such as governors
to meet the criterion at 85. 1703(a)(1) described above. MOD evaluates governors for
their permanence, likelihood of tampering and resistance to tampering.
Any person who modifies an excluded vehicle into a configuration that meets the
definition of “motor vehicle ” may be considered to be a manufacturer of new motor
vehicles. The Clean Air Act provides for substantial civil penalties for the
introduction into commerce of new motor vehicles that are not certified to comply
with federal emission requirements.
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7. Question: Do the regulations apply to all 50 states, U.S. possessions and
territories?
Answer: The requirements of § 80.29 apply to all fifty states, U.S.
possessions,. and territories. Under Clean Air Act § 21 1(i)(4) the States of Alaska and
Hawaii may petition for an exemption from these requirements, and such petition
may be ified under Clean Air Act § 325 on behalf of Guam, American Samoa, the
Virgin Islands, and the Northern Mariana Islands. Thus far, only American Samoa
has been granted a waiver. The state of Alaska has petitioned for a waiver and EPA
expects to act on this petition before October 1, 1993. In addition, on May 12, 1993,
Guam- submitted a waiver petition to the Agency.
8. Question: Would EPA consider an enforcement policy during the first month
of the program that would, in effect, “stagger” enforcement down the distribution
system?
Answer: All regulated parties will be expected to be in compliance on October
1, 1993 since the industry will have received over three years of lead time before the
regulations go into effect. However, EPA recognizes that dyed high-sulfur diesel fuel
may not be readily available until August. If a regulated party is able to demonstrate
that it is customary to stock up on diesel fuel over the summer for fall and/or winter
needs, EPA may exercise its enforcement discretion when clear high sulfur diesel fuel
is discovered at a wholesale purchaser-consumer facility during October and
November, 1993. The regulated party will have to demonstrate that storage of large
quantities of high sulfur diesel is customary, that the undyed product was purchased
prior to September 1, 1993, that this is the normal time of year that such product is
purchased, and that the product is intended exclusively for off-highway purposes only.
However, EPA will not “stagger” enforcement or use enforcement discretion
regarding the sulfur and cetane or aromatics standards for on-highway diesel fuel.
TESTING AND SAMPLING METHODOLOGIES
9. Question: In its analysis of comments on testing of fuel sulfur levels (55
Federal Register 34130, August 21, 1990), EPA states that the Agency will use the
ASTM D 2622 (Standard Test Method for Sulfur in Petroleum Products by X-Ray
Spectrometry) test method for enforcement purposes. EPA received comments during
the rulemaking that the equipment necessary to complete ASTM D 2622 is costly, and
EPA should therefore allow use of ASTM D 4294 (Standard Test Method for Sulfur
4

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in Petroleum Products by Energy-Dispersive X-Ray Fluorescence Spectroscopy),
which is essentially as accurate as ASTM D 2622 but costs significantly less. EPA
decided that for the purposes of establishing a defense to an alleged violation for the
sulfur percentage, a regulated party may use D 4294, ,provided that the party has
evidence from the manufacturer or others that it reliably produces results substantially
equivalent to ASTM D 2622. What would EPA consider an appropriate methodology
and/or documentation to validate an alternative analytical technique? -
Answer: EPA intends to use the results of tests using D 2622 as the basis for
enforcement of any sulfur content violations. In a case where a refiner or importer is
presumed liable for a violation of the sulfur standard, one defense element is the
results of tests on the product in question performed using D 2622. The regulations
provide that an alternative sulfur test method is D 4294, provided that the refiner or
importer is able to properly perform this test method, .o support its data with a quality
control plan, and has data from the manufacturer or a qualified independent or in-
house laboratory that the method reliably produces results substantially equivalent to
the D 2622 method. Only methods D 2622 and D 4294 may satisfy a refiner’s or
importer’s sulfur test result defense element.
If asked to support sulfur test results generated using the D 4294 method, a
refiner or importer should be prepared to submit the following: a copy of the actual
analytical procedure used; a copy of the quality assurance/quality control plan that was
used by the laboratory and records demonstrating the actual conduct of this plan;
records that describe the interferences to which the procedure used is subject, if any,
and the corrections which were made to correct for any interferences that are present;
and records which reflect that all standards were prepared in the same matrix as the
sample in question. “Evidence from the manufacturer or others” to show equivalency
of the D 4294 method with D 2622 would consist of a data correlation program
conducted an independent and impartial party in accordance with sound laboratory
and engineering principles. This correlation program should include information and
data regarding the preparation of samples, instrument calibration, quality control, and
data analysis.
Parties other than refiners and importers may use sulfur test methods other than
D 2622 or D 4294 in establishing a defense provided the party is able to demonstrate
that the method was properly performed and correlated with the D 2622 method.
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10. Question: Will EPA approve ASTM D 5186 in place of, or as an alternative
to D 1319 for purposes of measuring the aromatic content of diesel fuel?
Answer: EPA has approved only ASTM method D 1319 for measuring the
aromatic content of diesel fuel, and this is the only method that wiil be used by EPA
for enforcement purposes. Refiners and importers are required by 40 CFR -
§ 80.30(g)(2)(ii) and (g)(4)(i) to use method D 1319 when establishing a defense.
Parties other than refiners and importers are free to use any test procedure for
determining aromatic content when establishing a defense, so long as the procedure is
approved by ASTM, and the procedure is performed properly and is correlated with
method D 1319.
11. Question: Is EPA willing to participate in round-robin correlation programs?
If so, how must regulated parties participating in such programs incorporate
correlation results?
Answer: EPA is presently unable to participate in round-robin and correlation
programs due to budget constraints.
12. Question: How will the upcoming ASTM round robin study for the proposed
new ASTM DXXX test method for sulfur in petroleum products affect EPA’s
endorsement of D 2622?
Answer: if a new testing method for sulfur content is developed that, produces
results equivalent to ASTM D 2622, EPA will consider adopting the new method as
the approved method. Such a change would be accomplished through rulemaking that
would give all interested parties an opportunity to comment. Because notice and
comment rulemaking is a lengthy process, however, EPA does no anticipate any
changes in the near future.
13. Question: Is EPA aware of any other source of certified di-normal butyl
sulfide other than Phillips Petroleum?
Answer: Phillips Petroleum is the only source of certified di-normal butyl
sulfide (CH 3 (CH 2 ) 3 -S-(CH 2 ) 3 CH 3 ) of which EPA is aware.
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14. Question: Will EPA allow butyl sulfide as a substitute for di-normal butyl
sulfide?
Answer: The D-2622 method specifies use of,certified di-normal butyl sulfide.
It is not the intention of EPA to require calibration using an unavailable standard
material, however. It is EPA’s interpretation that any similar sulfur containing
hydrocarbon with a normal boiling point lying within the distillation range of dies 1
fuel may be used as a standard material, provided that the selected compound is of
sufficient purity. A source of non-certified di-normal butyl sulfide is Aldrich
Chemical Company.
15. Question: Will the EPA laboratory make any corrections for the difference in
matrices between mineral oil and diesel fuel? If so, will EPA allow the use of NIST
fuel oil standards in calibration, sucli as is allowed in ASTM D 4294?
Answer: D 2622 requires that calibration standards be prepared in white oil.
EPA does not expect a shift in the result of the tests, provided that the API gravity of
the white oil used is similar to the gravity of me fuel being tested. If a white oil
cannot be found meeting this requirement, EPA believes it is satisfactory to substitute
any sulfur-free petroleum-based oil with a distillation range similar to the diesel fuel
being tested. EPA also encourages the use of the NIST sulfur in fuel oil Standard
Reference Materials in verifying the accuracy of the test method. These NIST
Standard Reference Materials may also be used for calibration. NIST standards may
be purchased from:
National Institute of Standards and Technology (NIS1’)
Standard & Reference Materials Program Division
Customer Sales Office
Building 202, Room 204
Gaithersburg, MD 20899
Telephone: 301-975-6776
FAX: 301-948-3730
16. Question: How does a regulated party show equivalency with ASTM D 2622
when using on-line analyzers?
Answer: If the analyzer is hard plumbed into a pipeline, it is reasonable to pull a
sample, for example, once per shift, and analyze the sample on a laboratory version of
ASTM D 4294 for an ongoing comparison. As with all ASTM D 4294 instruments, a
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sample should occasionally be checked against an ASTM D 2622 instrument. It is
also advisable in such a situation to have an alternate inlet to allow an occasional
NIST standard to be injected for further confidence. -
EPA decided that for the purposes of establishing a defense to an alleged violation
for the sulfur percentage, a regulated party may use D 4294, provided that the party
has evidence from the manufacturer or others that it reliably produces results
substantially equivalent to ASTM D 2622.
17. Question: What brand and type of equipment will EPA use in the field for
determining the sulfur content, cetane index, and aromatics content in diesel fuel?
Answer: EPA is presently investigating the use of various types of field testing
equipment for measuring sulfur content, cetane index and aromatic content. EPA has
not selected any particular instruments at this time, but intends to do so in the near
future:
TESTING TOLERANCE
18. Question: What is the maximum measured sulfur content that EPA plans to
allow, above which possible enforcement action may be taken? -
Answer: As a matter of enforcement discretion, EPA will take enforcement
action only when its diesel sulfur test results are 0.055 weight percent or greater.
19. Question: Can test reproducibility for sulfur content of highway diesel fuel be
handled in a manner similar to that for gasoline vapor pressure, whereby the pipeline
may average its test result with that of the refiner’s. For example, a refiner tests a
batch of diesel fuel to be below 0.05 weight percent and transfers the product to a
pipeline.; the pipeline tests the fuel with a result that is greater than 0.05 weight
percent. If the average of the two tests is equal to or less than 0.05 weight percent,
can the shipment be accepted by the pipeline?
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Answer: If any party downstream of the refiner/importer facility, including a
pipeline, tests the sulfur content of diesel fuel to be 0.055 weight percent or greater,
the product should be considered in violation of the diesel sulfur standard, regardless
of any contradictory test results by the refiner.
20. Question: The regulations state that on-highway diesel must be 0.05 weight
percent sulfur maximum and meet either the 40 cetane index minimum or 35 volume
percent aromatic maximum. Assuming one batch meets the sulfur maximum and
cetane index minimum, and another batch meets the sulfur and aromatic maximum, it
is conceivable that a blend of two complying fuels will not meet the cetane index
minimum or the aromatic maximum. Will EPA allow mixtures of complying batches?
Answer: EPA is aware of the theoretical potential that when two complying
batches of diesel sulfur fuel are combined, the resulting mixture might not meet all
applicable standards for diesel fuel. EPA believes there is small. likelihood that such
mixtures will in fact occur. Only certair mixtures of diesel fuel produced to the
cetane standard and diesel fuel produced to the aromatic standard will yield this
antagonistic result, and the volume of diesel fuel that will be p oduced to the aromatic
standard likely will be very small.
In the case where diesel fuel is discovered that violates the aromatic and cetane
standard, it is a violation of the regulations. However, EPA may exercise its
enforcement discretion and not pursue an enforcement action where the responsible
party clearly demonstrates that the violation is the result of mixing diesel fuel that met
the standards for cetane with diesel fuel that met the standard for aromatic content.
Furthermore, EPA does not believe there would be a significant environmental impact
resulting from such a mixture, as there clearly is under the volatility regulations when
10% ethanol gasoline is blended with clear gasoline.
21. Question: What is the minimum measured cetane index that EPA plans to
allow, below which possible enforcement action may be taken?
Answer: As a matter of enforcement discretion, EPA will take enforcement
action only as a result of a calculated cetane index of less than 39.5.
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22. Question: Many refiners blend a chemical additive into diesel fueL to improve
the fuel’s cetane rating. The use of such additives does not change the calculated
cetane index. Would EPA consider a modification to the diesel regulations to adjust
the cetane index for the purpose of compliance with minimum cetane index
requirement to recognize use of such cetane improvers?
Answer: EPA will evaluate compliance with the diesel sulfur cetane
requirement only using the methodology specified in 40 CFR § 80.2(w).
DYEING OF DiESEL FUEL
23. Question: Is 1,4 - diallcylamino-anthraquinone the only blue dye that is
approved for use? -
Answer: Ye
24. Question: Is there a minimum blue dye concentration required, or is there a
recommended concentration?
Answer: EPA will not recommend specific dye concentrations to be used.
Regulated parties bear the burden of adding sufficient dye to accomplish the goal of
the dyeing program or risk fuel being tested as on-highway fuel. Some darker colored
fuels may require that additional dye be added in order for the dye to be visible. Any
diesel fuel which does not show visible evidence of being dyed will be considered to
be available ror use on-highway, and subject to the regulations.
25. Question: Since some high sulfur diesel has a yellow-like color, blue dye will
produce a green tint in some high sulfur diesel. Will this color be recognized as
visible evidence of the presence of blue dye?
Answer: EPA is aware that the specific dye required by the regulations will
not normally be blue after being added to some diesel fuels. Due to its characteristic
yellowish color, diesel fuel will often appear green after being dyed. Therefore, EPA
will consider such product as having been dyed, absent any indication to the contrary.
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26. Question: Import terminal operators frequently receive un-dyed, high-sulfur
diesel fuel from abroad. At what point must the required dye be added?
Answer: Importer facilities must add the required dye to the non-complying,
high-sulfur diesel fuel before it is introduced into commerce . Thus, the dye may be
added to the high-sulfur diesel fuel at the truck rack if one is available or prior to
release if it is to be sold in bulk. Before the dye is added, importer facilities should
also label the fuel as high sulfur, not for on-highway use and have available
documentation to substantiate that the high-sulfur diesel fuel did not leave the facility
without being dyed.
27. Question: Will high sulfur diesel loaded for shipment to non-U.S. locations
require dye?
Answer: EPA will assume that all diesel fuel found in the United States is
intended for domestic sale and is subject to the requirements of 40 CFR § 80.29.
However, EPA will exercise enforcement discretion for diesel fuel that is clearly
intended for export only, provided that the product is segregated, is clearly marked as
product for export only that does not comply with federal motor vehicle diesel fuel
standards, and supporting documentation substantiates it is for export only. This
exception would not apply if any of the fuel in question is in fact being sold or offered
for sale, supplied or offered for supply, or is dispensed in any U.S. marketplace.
28. Question: If a low sulfur highway diesel fuel is accidentally dyed blue, can it
still be sold as low sulfur if the sulfur level is documented? What if low sulfur diesel
fuel is accidentally mixed or contaminated with high sulfur diesel fuel and the blend is
found to still be less than 0.05 weight percent sulfur? What procedth must be
followed to recertify as a low sulfur diesel fuel?
Answer: Although the presence of dyed fuel will be an indicator of off-
highway, or potentially non-complying diesel fuel, it will not be the basis for
enforcement action if the presence of the dye is inadvertent. Enforcement will be
based on actual analysis of diesel fuel samples for compliance with the applicable
requirements according to the ASTM test methods specified in the regulations. Thus,
for example, even if diesel fuel being sold or offered for sale for use in motor
vehicles contains some visible evidence of the blue dye as a result of commingling
dyed and non-dyed product, the fuel will not be in violation if it otherwise complies
with the regulations. It is incumbent upon each party in the distribution system to
ensure that any on-highway diesel fuel meets the applicable requirements.
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29. Question: If off-road diesel must be dyed blue, may on-road diesel be dyed
any color except blue?
Answer: Assuming that the on-road fuel complies with the sulfur percentage
and cetane index requirements, the practice of adding any color dye that would not be
confused with blue would not be prohibited. In any case, any alleged violations will
be based on suifur and cetane analysis, not on color.
30. Question: Certain fuel suppliers currently market an on-highway diesel fuel
which is dyed green. Can this product continue to be marketed ur der the regulations?
Answer: As stated previously, enforcement of the on-highway fuel
requirements will be based on tests to determine compliance with the sulfur and cetane
or aromatics standards and not fuel color. Since the dye requirement is intended to
identify non-complying product for downstream purchasers, it is up to the suppliers
and their customers to determine whether or not to market this product.
31. Question: If low sulfur diesel fuel is intended to be used for off-highway
purposes only, may it be dyed blue despite the fact that it complies with the standards?
Answer: Yes.
32. Question: Does heating fuel or furnace oil which meets commercial
specifications for those products but does not meet specifications fur diesel fuel as
defined in the regulations need to be dyed blue?
Answer: Any heating fuel or furnace oil that is suitable for use as a fuel for
diesel motor vehicles will be considered a diesel fuel, and subject to the requirements
of 40 CFR § 80.29, and if high sulfur must be dyed.
33. Question: Does high sulfur diesel fuel for railroads need to be dyed blue if it
does not meet the specifications for diesel fuel as defined in the regulations?
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Answer: Any railroad diesel fuel that is suitable for use as a fuel for diesel
motor vehicles will be considered a diesel fuel, and subject to the requirements of 40
CFR § 80.29, and if high sulfur must be dyed.
34. Question: Does marine diesel fuel need to be dyed if it does not meet the
specifications for diesel fuel as defined in the regulations?
Answer: Any marine diesel fuel that is suitable for use as a fuel for diesel
motor vehicles will be considered a diesel fuel, and subject to the requirements of 40
CFR § 80.29, and if high sulfur must be dyed.
35. Question: Does high-sulfur kerosene or Jet-A have to be dyed if intended for
use as a jet fuel?
Answer: High-sulfur kerosene or Jet-A will not have to be dyed provided that:
1) the fuel meets the specification for jet fuel; 2) the fuel is supplied to a customer as
jet fuel; 3) it is reasonable for the supplier to believe the customer has a need for jet
fuel; and 4) the supplier has no reason to believe the customer is using the fuel for use
in diesel motor vehicles. If any of the above are not met, then any party that
supplies, transfers or offers for sale, kerosene or Jet-A could potentially be liable if
EPA discovers such un-dyed high sulfur product available for use in diesel motor
vehicles.
36. Question: Does high-sulfur kerosene or Jet-A, that meets the specification for
jet fuel, have to be dyed if used for purposes other than as a jet fuel?
Answer: Since kerosene and Jet-A are clearly suitable for use in diesel motor
vehicles, they are subject to the regulations and, with the exception for jet fuel use as
described above, should meet the regulatory requirements, or be dyed. High-sulfur
kerosene or Jet-A that meets the specification for jet fuel, will be allowed to remain
undyed provided that: 1) the fuel is delivered to end users for aviation purposes; or 2)
the fuel was part of a fungible batch with published specifications, and parts of the
fungible batch are delivered to end users for aviation purposes.
Each party in the distribution chain will be held responsible for obtaining
reasonable assurance that there is a valid downstream market for aviation fuel, which
permits the fuel to remain undyed. At the first level in the distribution system that
13

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there are no longer any aviation destinations out of a common stream, the dye
must be added.
For example, a iefiner transporting high-sulfur kerosene or Jet-A in a pipeline,
which meets specifications for jet fuel, intended for use as a jet fuel and other non-
highway purpc es, would not have to dye the fuel. The terminal receiving the fuel
would dye the fuel upon receipt if there were no aviation customers. In the case
pipelines, product in a fungible batch meeting the specifications for jet fuel would not
have to be dyed. Terminals receiving this fungible product would have to add dye
into th tank unless they have aviation users loading at their racks. In that case,
terminals would have to dye at the rack all non-aviation loads and have documentation
available upon inspection which demonstrate controls and procedures used for loading
the product.
In any of the above cases, any undyed high-sulfur kerosene or Jet-A should
AT ALL TIMES be segregated from any low-sulfur diesel fuel used on-highway and
supported by appropriate documentation that clearly demonstrates that its intended use
is as an off-highway fuel that does not comply with the regulations.
37. Question: Diesel fuels sometimes are blended with kerosene or jet fuel for
use in extremely cold areas. If inadequate supplies of low sulfur kerosene exist, will
an allowance be made for the use of 51 grade (0.12 weight percent sulfur) kerosene in
diesel fuel blending?
Answer: Any blends of kerosene or jet fuel and diesel fuel will be considered
diesel fuel, as defined in 40 CFR 80.2(x), and will be subject to the requirements of
40 CFR § 80.29. No exceptions will be made for diesel fuel used in cold climates.
38. Question: If a regulated party purchases kerosene and uses it in its bus fleet, is
it a violation if the kerosene is above the 0.05% sulfur limit? Is the supplier liable for
the misuse of the product?
Answer: Kerosene that is used as a fuel for buses, which are diesel motor
vehicles, is considered diesel fuel that must meet the requirements of 40 CFR § 80.29.
Use of high sulfur kerosene to fuel buses would constitute a violation of the diesel
sulfur requirement, for which the fleet operator and the supplier would be presumed
liable.
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39. Question: In all instances where compliance fuel contains some 1,4 -
dia1kylamino anthraqUiflOne dye, is this to be reported in the EPA “Fuel
Manufacturers Quarterly Report for Motor Vehicle Diesel Fuel?”
Answer: Any low sulfur diesel fuel that is inadvertently dyed with 1 ,4-
dialkylamino-anthraquiflOfle should have already been included in the overa!l low
sulfur, on-highway diesel fuel production figures that are reported to EPA each
quarter.
40. - Question: Are properly coded blendstocks and/or feedstocks moving between
refineries (that meet diesel fuel specifications except for sulfur) required to be dyed?
Answer: Non-complying distillate intermediates and distillate blendstocks that
are ONLY transported between refineries for further processing do not have to be
dyed provided the product will be segregated and documented throughout the
distribution system as being an intermediate or blendstock, not a finished fuel and not
suitable for use on-highway. The following restrictions apply:
(A) The source location and the ultimate destination must both be refineries.
(B) The product must be shipped segregated.
(C) The pipeline product codes must identify the material as unfinished
distillate intermediate or distillate blendstock, which s not suitable for
on-highway diesel use (e.g., “Unfinished distillate - not suitable for sale
or use as an on-highway diesel fuel”). Product codes for intermediates
and distillate blendstocks must be distinctively different from current
finished middle distillate codes.
(D) If the product is delivered into holding tanks for further shipment, it
must not be available to a truck loading rack. The responsibility for
making sure that this does not happen would rest with the owner of the
product and holding tanks.
LIABILITY AND DEEENSES
41. Question: Where one refiner supplies diesel fuel to its branded retail outlet
15

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which was obtained in exchange from a terminal operated by another refiner, and a
violation is detected at the retail outlet, who is liable?
Answer: The regulations provide for presumptive liability on the part of both
parties to the exchange, one party as the “branded” refiner and the other as a
distributor.
42. Question: For violations found at branded or unbrarided distributor facilities,
will EPA seek to hold liable only the distributor in custody of the product at the time
of the violation or will all distribUtors in the prior chain of title be considered
vicariously liable?
Answer: All distributors will be presumed liable.
43. Question: For violations found at branded or unbranded retail outlets or
wholesale-purchaser consumer facilities, will EPA presume liable all distributors in the
prior chain of title to that product?
Answer: Yes, all parties in distribulion are presumed liable.
44. Question: In a situation where a violation is detected at a branded retail outlet
which is supplied from a branded distributor which, in turn, receives diesel fuel
through a pipeline which transports the commingled product of the refiner whose
brand appears, plus one or more other refiners, are all the refiners liable? How could
the refiners-establish a defense? -
Answer: The refiner whose brand name appears at the retail outlet would be
liable. In order to establish a defense, it would have to show each of the elements of
the refiner’s branded facility defense in,40 CFR § 80.30(g)(4). The other refiner(s)
whose commingled product was delivered to the retail outlet may be liable if they
meet the definition of another regulated party (e.g., distributor).
45. Question: If a violation is found at a terminal, where the terminal operator
does not own the diesel fuel, who would be liable?
Answer: The owner or operator of a terminal which stores diesel fuel without
taldng title to or otherwise owning the fuel and without altering either the quality or
16

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e quantity of the fuel, is defined by the regulations as a “canier’ (see 40 CFR
80.2(t)). Asa carrier, this party would be presumed liable because the high sulfur
diesel fuel was found at that carrier’s facility. In addition; the refiner or importer.
who pfodüáed or imported the diesel fuel would be presumed liable.
46 Question: What should a carrier do if it would be in breach of a contract with
the company’ supplying the product, by refusing to transport or stc:e product that does
not meet the standard?
Answer: Where high sulfur diesel fuel is found at a carrier facility (including a
terminalwhich does not take title to the product), the carrier is presumed liable for
violating the regulations. We believe carriers can, and should, negotiate contracts
which are drafted in such ‘a way that the carrier is not obligated to transport or store
product in violation of the regulations.
47. Question: In a case where more than one party is presumed liable for a
violation, and more than one of the parties is unable to establish a defense, is each
party liable for a separate penaly?
Answer:’ ‘Each party who is liable for a violation, and who is unable to
establiSh a defense, is liable for a separate penalty.
48 Question What documentation is needed to prove that a diesel fuel is not
intended for highway use?
Answer. Any diesel fuel that is not dyed blue ‘will be considered to be
available for use in diesel motor vehicles and motor vehicle engines and subject to the
provisions of 40 CFR 80 29(a) In the case of diesel fuel that does not meet the on-
highway standards and is dyed blue, it is also prudent to retain commercial
documentation such as invoices and bills of lading that indicate the diesel fuel is “for
off-highway use” only and that the product is only being sold to customers for non-
highway use.. “‘
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49. Question: What kind of documentation or other evidence must a party provide
to establish that it (or its employees or agents) did not cause a violation?
Answer: All factors cannot be listed because factual circumstances differ and
because EPA cannot anticipate all the types of evidence that may show non-causation.
For all parties, however, in meeting the non-causation portion of their defense, the
regulations provide that the party must show, by reasonably specific showings, by
direct or circumstantial evidence, that the party (or the party’s employee or agent) did
not cause the violation. In many instances the cause of the violation will be evident
from the inspection results and related documentation.
In the case of a refiner or importer, providing results of the sampling and
testing of the diesel fuel in question, conducted in accordance with the approved test
methods, before it left the refinery or importer’s facility would be a strong factor in
determining whether the refiner or importer caused the violation. However, because
the refiner or importer could have caused the violation despite acceptable test results,
additional evidence may be required. For example, a refiner could ship to its own
downstream terminal two products with different sulfur levels intended for different
purposes. If these products become commingled after leaving the refinery, the
product intended for low sulfur use could be out of compliance. The refiner thus
could have “caused” this violation even though the product was in compliance when it
left the refinery. -
For distributors, resellers, and carriers, the best evidence to show they did not
cause the violation is evidence of who caused the violation and how. Other strong
evidence would be test results showing the particular fuel in question met the
standards when it was delivered from these parties t the next person in the -
distribution chain. Evidence consisting of the other defense elements (e.g., receipt of
product which was in compliance, an oversight program (as discussed in greater detail
in the next question) with periodic test results, etc.) would assist in showing the
violation must have been caused by another, but this is not necessarily conclusive.
Where no cause can be established for a violation, and no person in the distribution
chain will accept responsibility, the showing necessary for each person in the chain to
establish it did not cause the violation will be more difficult.
It is not sufficient for a distributor to show that it did not handle the diesel fuel,
because there are ways to cause a violation without actually touching the fuel (e.g., by
misrouting high sulfur diesel fuel to a location where it is ultimately used in a motor
vehicle). Moreover, other elements of the defense still must be met.
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In the case of a retailer, the following types of evidence are examples of
relevant factors relating to whether the retailer caused a violation:
1) records evidencing whether or not all diesel fuel purchased by the retailer
complied with the standard;
2) any evidence regarding whether the retailer knew or had reason to belie e
that the diesel fuel did not meet the standard; e.g. the fuel sold at the station is dyed
blue;
3) any evidence regarding alteration of diesel fuel stored in his tanks by the
retailer;
4) any evidence that the retailer may have received fuel from another
supplier(s).
50. Question: What criteria will EPA use to evaluate oversight programs; is
sampling and testing required, and if so how much? What type of service station
monitoring is considered acceptable? Is there a minimum percentage of shipments
which must be tested? What constitutes an acceptable oversight program for a diesel
manufacturer supplying (1) branded jobbers selling under that manufacturer’s brand,
(2) another independent or unbranded jobber? As part of its oversight program, must
a branded refiner perform periodic sampling and testing at their non-owned terminals
which supply the branded refiner’s dealers pursuant to an exchange agreement, where
the non-owned terminals carry out their own periodic sampling and testing program?
Is a retail sampling program required for an adequate defense against an incident of
noncompliance at a branded retail outlet? If so, what is an adequate retail sampling
program’? Please detail oversight responsibilities for jobbers.
Answer: For a distributor, reseller or carrier (when the violation is found at
the carrier facility) to establish a defense, these parties must show (in addition to other
elements) an oversight program such as periodic sampling and testing to monitor the
product being sold, supplied, or transported by that party. This program would thus
monitor the quality of product in the possession or ownership of the party, and not of
product which has passed downstream. The diesel regulations do not require that an
oversight program consist of sampling and testing, but EPA is not aware of an
effective oversight program which would not include some periodic sampling and
testing.
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The frequency of periodic testing which would satisfy this requirement will
depend upon several factors, including the following: a) the results of previous
sampling; b) the volume of product in a particular batch (the larger the volume, the
greater the justification for sampling and testing that L atch); c) the degree of
confidence in the quality of the product which was received; and d) the opportunity
for increased sulfur content while the product is in the possession of the party (e.g.,
higher sulfur product present which could be commingled). -
In the case of refiners, two types of sampling and testing are required (in
addition to other requirements) in order to establish a defense where a violation is
found downstream and they are presumed liable. The refiner is required to show
jhrough the approved sampling and testing methodologies that the diesel fuel in
question was in compliance with the standard when transported from the refinery.
This generally would require that all product be tested. In addition, when the
violation is found at a branded facility downstream, the refiner also must show a
quality assurance program at its downstream branded facilities, such program to
include periodic sampling and testing. The frequency of periodic sampling and testing
which would satisfy this requirement will depend upon factors such as the following:
a) the volume of product being handled at a particular facility; b) the opportunity for
violations to occur (e.g., the presence of high sulfur product which could cause a
violation through commingling); c) the results of previous sampling at that facility and
at facilities upstream and downstream from the facility found in violation; d) there is
reason to believe the downstream facilities may not be in compliance with the
contractually imposed requirements designed to prevent violations; and e) the results
of sampling and testing in the market area where the violation occurred. A branded
refiner may use other parties to conduct periodic sampling and testing downstream.
However, if the branded refiner is to meet the oversight portion of its defense, it
cannot simply rely on another party’s oversight; the refiner must have an appropriate
contract with the party and maintain oversight with regard to that party’s program. If
the other party’s sampling or testing is inadequate, the branded refiner will not be able
to meet its defense.
51. Question: What must a refiner do to meet the “contract defense,” as set forth
in 40 CFR § 80.30(g)(4)?
Answer: The defenses set forth in 40 CFR § 80.30(g)(4) relate to violations
discovered at branded distributor or reseller facilities (40 CFR § 80.30(c)) and at
branded retail outlets and wholesale purchaser-consumer facilities
(40 CFR § 80.30(e)).
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In such cases the refiner must meet all the elements of the defense in 40 CFR
§ 80.30(g)(4)(i) and (ii), and must meet one of the additional elements in 40 CFR
§ 80.30(g)(4)(iii).
First, the refiner must demonstrate the existence of a contract with the
appropriate entity. This contract must have been designed to prevent the specific
circumstances which caused the particular violation. -
Second, there must be an adequate oversight program, such as periodic
sampling and testing, to ensure compliance with the contractual obligation. This
oversight defense element has been discussed in response to other questions in this
section.
With regard to the contract itself, we feel it is inappropriate for EPA to set
forth specific requirements regarding the necessary provisions of such contracts.
Rather, such contracts will be evaluated on a case-by-case basis. However, the
following is a partial list of broad areas that a contract should address:
1) The amount of sampling and testing that must be done by the entity with
whom the contract is in place (e.g., distributor).
2) Specific procedures and other specific requirements to ensure that high
sulfur diesel fuel or blendstock is not commingled with low sulfur diesel fuel. The
specific requirements must be aimed at the circumstances as they exist with each
entity. They must be more than mere recitals that the entity must avoid violating the
diesel regulations.
3) Required training regarding the regulations, product handling and any other
procedures and requirements outlined in the contract to prevent violations.
4) Appropriate responses if diesel fuelhaving excessive sulfur or an
insufficient cetane ir dex is identified by periodic sampling and testing or by any other
means, including (where appropriate) reporting, corrective actions, steps to prevent
future violations, steps to identify the cause of the violation, resampling and testing,
increased sampling and testing, retraining, etc.
5) Appropriate responses if it is discovered that a person with whom a contract
is in place is not in compliance with the contract provisions. Such responses should
include affirmative actions which are reasonably calculated to compel the person to
comply with the contract provisions.
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52. Question: How long will records have to be saved?
Answer: The regulations do not mandate record retention. However, it is in
the regulated party’s best interests to maintain records for five years in case it
becomes necessary to establish a defense if a violation is discovered.
53. Question: How long must regulated parties retain diesel samples taken in
conjunction with an oversight program?
Answer: The Agency’s policy with regard to sample retention has not
changed. As in the past, the Agency will evaluate the adequacy of a refiner’s test data
and any party’s oversight program on the basis of records of sampling and testing,
rather than by evaluation of samples of diesel. A retained sample could conceivably
be useful in resolving a discrepancy between a company’s and EPA’s test results.
54. Question: Can a party rely on tests done by another party or by an
independent laboratory? Will a third party company assMme any liability if their
actions lead to violations?
Answer: Under certain circumstances tests performed by another party or
laboratory may be acceptable, especially where the reliability of the tests is high (e.g.,
where a carrier contracts to have a supplier sample and test product immediately after
delivery). Liability is not transferred to the third party who conducts the tests,
however; the burden remains on the regulated party to demonstrate that any testing is
performed in accordance with the regulatory requirements, and that sampling methods
and frequency are adequate.
55. Question: Among the defenses available toa carrier found to be in violation is
the ability to provide “any other evidence that shows that care was taken to avoid
blending the diesel fuel with anything which would change its cetane index or sulfur
percentage”. What, in EPA’s view, might constitute such evidence? For example,
would copies of field operating instructions requiring operators to make “clean t ’
pipeline cuts constitute such evidence? What about clearly stated product codes
requiring shippers to ship only complying fuel (i.e., max. .05 % sulfur, mm 40 cetane
only) under a specified product code reserved solely for on-highway diesel?
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- Answer: The two examples of evidence given in the above question would
constitute evidence which would be relevant to a carrier’s defense. Other examples of
steps a carrier can take to ensure the quality of diesel fuel in its possession include the
following: contractual agreements between the carrier and other parties that include..
requirements that are designed to preserve the quality of diesel fuel; and product
handling procedures that are reasonably calculated to preserve the integrity àf dieiel
fuel, together with employee training on the procedures and measures to ensure the
procedures are followed. EPA looks at these matters on a case-by-case basis.
56. Question: What must a diesel fuel retailer do to establish a defense against
presumptive liability if non-complying fuel is detected at a retail outlet?
Answer: In a case where high sulfur diesel is discovered at a retail outlet, the
retailer must show it did not cause the violation in order to establish a defense. If the
diesel fuel is dyed blue, the retailer will normally not be able to escape liability,
because it is incumbent upon a retailer to check the color of any diesel fuel that is
delivered (or of th fuel in the storage tank following delivery of new product). If the
violating diesel fuel is not dyed blue, the retail outlet would be expected to have bills
of lading that represent all of the diesel in the storage tank, and that represent that the
diesel fuel complies with the standards.
57. Question: If a retailer also owns/operates a bulk plant for heating oil (but does
not supply the retail outlet from the bulk plant), does this place any additional burden
on the retailer to establish a defense against presumptive liability for a violation at a
retail outlet?
Answer: Since this situation creates a significant potential for violations, the
retailer should maintain thorough records to demonstrate that the heating oil is not
being supplied or offered for sale for on-highway use.
58. Question: Is it necessary for regulated parties to keep pipeline tickets, bills of
lading and other pertinent documents on shipments of high-sulfur jet fuel and
kerosene, which could be blended into diesel fuel?
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Answer: EPA does not mandate any specific record retention. In establishing
a defense, however, a regulated party should have documents available to demonstrate
compliance, particularly regarding the destination of any high sulfur products which
could be used as diesel fuel. It would also be impoijant for any high sulfur fuel
shipping documents to clearly state “for off-highway use only.”
59. Question: If EPA determines that noncomplying fuel has been sold, but cannot
determine the number of sale transactions, how will EPA determine the number of
violations?
Answer: EPA is in the process of developing a penalty policy for these
regulations, which will likely consider similar factors as provided in the RVP penalty
policy.
60. Question: Are there any additional measures that a distributor can take
(beyond sampling and testing and certifications on each bill of lading) to strengthen its
defense if a retail outlet is found to be selling high sulfur diesel at motor vehicle diesel
pumps? -
Answer: If it is determined that a distributor provided high sulfur fuel to a
motor vehicle diesel pump where a violation is discovered, then there is no defense
that would absolve the distributor of liability. However, other distributors or
terminals that supply fuel to that retailer are also potentially liable. For those parties,
ensuring that all high sulfur diesel fuel that leaves a terminal is dyed blue, so that
downstream parties can visibly identify non-complying diesel fuel and marking all
high sulfur product delivery documents as “off-highway use only” will further
strengthen a defense if a violation is alleged. In addition, distributors should routinely
review invoices and bills of lading to identify any suspect deliveries that might result
in high-sulfur fuel being used on-highway and take appropriate actions if violations
seem likely.
61. Question: What should a distributor do if a retailer wishes to purchase off-
highway diesel fuel?
Answer: If a retail outlet requests delivery of off-highway diesel, the
distributor should deliver the product only if the retailer has a legitimate need for off-
highway fue’ and the retailer has procedures in place to prevent off-highway diesel
fuel from being used in motor vehicles. The primary means of pr ventir .g misfueling
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violations would be to ensure that the pumps dispensing high sulfur product are clearly
labelled for off-highway use only or display appropriate warnings regarding the
federal prohibition for misfueing diesel motor vehicles. In addition, any off-highway
diesel should be dyed and the product transfer document should clearly identify the
product as “off-highway fuel, not legal for motor vehicle use.” If the above are not in
place, the distributor would be risking liability for misfueling if EPA discovers a
violation. -
MLSFUELING
62. Question: How does EPA plan to enforce the misfueling prohibition?
Answer: EPA will enforce the misfueling prohibition primarily through
inspections at retail outlets and wholesale purchaser-consumer facilities, samples from
vehicles, and records checks at wholesale purchaser-consumer facilities.
63. Question: In a case where a wholesale purchaser-consumei uses high sulfur
diesel to fuel motor vehicles, who would be liable for this violation?
Answer: The use of diesel fuel that does not meet the on-highway standard to
fuel a motor vehicle is prohibited by 40 CFR § 80.29(a), which states that no person
may dispense any diesel fuel for use in motor vehicles unless the fuel meets the on-
highway standards. In addition, diesel misfueling is specifically prohibited by Clean
Air Act § 211(g), which provides as follows:
Beginning October 1, 1993, no person shall introduce or cause or
- allow the introduction into any motor vehicle of diesel fuel which such
person knows or should know contains a concentration of sulfur in
excess of 0.05 percent (by weight) or which fails to meet a cetane index
minimum of 40 or such equivalent alternative aromatic level as
prescribed by the Administrator....
In a case where diesel fuel that does not meet the requirements of 40 CFR
§ 80.29 is used by a wholesale purchaser-consumer (WPC) or its employee to fuel a
motor vehicle, this party would be liable for the violation. The only possible defense
would be proof that the WPC ordered and paid for on-highway diesel fuel, but the
distributor instead delivered un-dyed high sulfur diesel fuel which was documented as
on-highway diesel fuel.
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If the WPC’s employee knowingly misfueled a motor vehicle with high sulfur
diesel, that employee also would be individually liable.
In such a WPC misfueling case, the diesel fuel distributor or reseller might also
be liable for a misfueling violation. In order to establish a defense, the distributor or
reseller would be required to show it did not cause the violation. EPA believes the
distributor or reseller would be unable to establish this “did not cause” defense -
element if the distributor or reseller either knew, or should have known that the WPC
was misfueling, yet failed to take reasonable steps to stop the violations.
For example, a distributor would know, or should know, that misfueling
violations are occurring if the distributor, or its employee, actually sees motor vehicles
being fueled from the WPC’s pump that is supplied with high sulfur diesel by the
distributor. Similarly, in a case where a distributor has historically supplied a WPC
with diesel fuel used to fuel fleet motor vehicles, such as a bus fleet, and subsequent
to October 1, 1993 the WPC orders a similar volume of high sulfur diesel, the
distributor would, or should, know of the high potential for misfueling violations.
In the situation where a distributor or reseller knows or should know of an
occasional misfueling by a WPC, it would be reasonable for the distributor or reseller
to inform the WPC of the violations. A pattern of misfueling violations might require
the distributor to refuse to supply high sulfur fuel to the WPC until appropriate
assurances are made and measures are undertaken to ensure misfueling violations will
not recur.
The same responsibilities would apply to a truck carrier that supplies high
sulfur diesel to a WPC, where the carrier knows or should know of misfueling
violaticns.
64. Question: What penalties will be sought for misfueling violations?
Answer: The Clean Air Act specifies a penalty of up to $25,000 per day per
violation plus any economic benefit or savings resulting from the violation(s). EPA is
in the process of developing a penalty policy which will specify the proposed penalties
for various types of violations, including misfueling.
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65. Question: Must retail pumps be labelled at facilities that carry both low-sulfur
and high-sulfur diesel products?
Answer: If a retailer elects to sell both low-s ilfur and high-sulfur diesel fuel,
the retailer must be particularly careful because of the heightened chance of
misfueling, and the resulting exposure to liability. While the regulations do not
mandate pump labeffing, it normally would be essential to avoict m sfueling. Oth r
steps include, but are not limited to, selling high-sulfur diesel fuel from part of the
station different from other fuels and monitoring of each sale that takes place. EPA
believes that it would be very difficult for a retailer to establish any defense against
liability for a inisfueling violation that occurs from an “off-highway” pump at the
retailer’s facility.
In addition, a distributor that delivers high sulfur diesel fuel into a retail outlet
storage tank that supplies a pump not properly labeled would be liable for misfueling
violations that occur at that pump.
66. Question: May persons other than retailers, wholesale purchaser-consum as,
distributors, resellers, carriers, and refiners be held liable for misfueling motor
vehicles with high sulfur diesel fuel.
Answer: Section 211(g) of the Clean Air Act prohibits y person from
introducing into a motor vehicle diesel fuel which the person knows or should know
does not meet the on-highway diesel standards. As a result, any individual who fuels
a motor vehicle from a pump that is labeled as containing off-highway diesel, or who
otherwise should know the fuel is off-highway diesel, would be liable. For example,
this prohibition clearly would apply to operators of motor vehicles or trucks.
67. Question: Are there any implications for Canadian or Mexican based trucks
entering the U.S. with non-U.S. grade diesel fuel?
Answer: As long as the vehicle entering the United States is only being
powered by high sulfur diesel fuel purchased outside the United States, there will be
no liabIlity. However, if high sulfur diesel fuel is being transported for any of the
purposes outlined in the regulations, then that person/entity must comply with the
regulations.
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68. Question: Since foreign 3ased trucks are registered out of the United States,
will these trucks be able to refuel in the United States using non-highway grades of
fuel?
Answer: No.
69. Question: If a U.S. based truck delivering goods into Canada purchases non-
U.S. grade diesel fuel in Canada, and then returns to the U.S. with that fuel in his
tank, will he be subject to the misfueling provisions outlined in the final rule?
Answer: The purchase of non-U.S. grade diesel fuel in Canada by a U.S.
based truck and used by the same truck in order to return to the U.S. is not a
violation of the misfueling provisions of 40 CFR § 80.29 and Clean Air Act
§ 21 1(g)(2). However, the introduction of high-sulfur diesel fuel could void the
manufacturer’s warranty.
70. Question: Will EPA be primarily taking samples from on-road diesel vehicles
for enforcement purposes?
Answer: EPA will be collecting samples from all regulated parties that supply
or use diesel fuel, however, the specifics of EPA’s enforcement strategy have not yet
been mapped out.
INSPECTIONS
71. Question: Where will EPA focus its enforcement efforts; how will EPA target
particular facilities for inspection; and who will conduct EPA sampling?
Answer: EPA conducts inspections at all regulated facilities; including -
refineries, terminals, WPCs, retail outlets and trucks. Inspections are conducted
primarily by authorized contractor personnel and EPA staff on a random basis,
however, inspectors will respond’ to complaints that suggest a violation.
72. Question: Will EPA conduct audits of upstream facilities, including pipeline
terminals? Will refineries be audited first?
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Answer: Sampling and testing by EPA and its contractors is the primary
means of monitoring compliance. EPA will supplement the field inspections with
audits of any regulated facility during investigations of noncompliance to determine
the full extent and source of violations, or based on any other indications of possible
violations.
73. Question: How are EPA inspections conducted?
Answer: The authorized EPA inspectors will clearly identify themselves,
present their credentials and state the purpose and nature of the inspection before
beginning their procedure. Inspectors will make all reasonable efforts not to impede
the normal conduct of business at the facility and will adhere to any local safety
procedures if so requested. Generally, one sample per storage tank of finished
product will be screened in the field for compliance. If the field screening test
indicates a potential violation, a laboratory sample will be collected and analyzed in
accordance with the regulatory procedure.
74. Question: What information can refiners and other regulated parties provide to
expedite inspections?’
Answer: At the start of an inspection, a party can advise EPA concerning-
applicable safety requirements for obtaining samples from the storage tanks. It can
also provide information concerning the location, product quantities and type of
storage tanks in which the finished product is stored (e.g., floating roof tank or fixed
roof tank) and the type of gauge tubes that are used (perforated or solid). At the time
of the inspection, a- party should provide documentation and other evidence indicating
whether product is blendstock or finished diesel fuel and the intended destination of
the product.
75. Question: How will EPA inspect unmanned terminals that are entered with
“keys” by various purchasers lifting products from common storage?
Answer: EPA will coordinate with the terminal owner/operator to gain access
to the terminal and records relating to product stored at the terminal.
76. Question: Will EPA cooperate with other federal agencies when enforcing the
diesel desulfurization regulations?
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Answer: Yes. In the past, EPA has cooperated with other federal, state and
local agencies when enforcing other motor vehicle fuels rules, such as under the lead
phasedown and gasoline volatility programs. For example, EPA has conducted joint
investigations, including search warrant inspections, with the Internal Revenue
Service. EPA has also conducted joint inspections and audits with the U.S. Customs
Service. EPA intends to use the same types of cooperative efforts, where possible,
when enforcing the diesel desulfurization regulations.
NOTIFICATION OF VIOLATIONS
77. Question: What procedure will EPA follow to notify companies of violations;
to resolve violations?
Answer: EPA generally will inform all identifiable parties who have potential
liability when a field test indicates diesel fuel may be in violation of the standard.
Inspectors will provide the person(s) in charge with fact sheets that address the
specific findings and advise appropriate actions for the parties involved. If laboratory
analysis confirms a violation, EPA will subsequently issue a Notice of Violation to the
presumptively liable party(s) identifying the violation and setting forth a proposed
penalty amount. Each party then may present additional facts and/or evidence to
establish that the violation did not occur or to support a defense as set forth in the
regulations. If a party meets its defense, EPA will drop the action. If not, EPA will
attempt to negotiate a settlement with the party. If negotiations for settlement fail,
depending on the nature and magnitude of the case, EPA will either initiate an
administrative action, which affords the liable party an opportunity for a hearing
before an administrative law judge, or refer the case to the Department of Justice with
a recommendation that a complaint be filed in federal district court to recover the
maximum statutory penalty.
78. Question: How quickly will EPA notify parties of violatiors?
Answer: EPA will inform the operator of the inspected facility immediately
when field test results indicate noncompliance. If parties request, EPA will provide
the results of laboratory tests as soon as completed. The Notice of Violation is issued
as soon as possible after laboratory verification of the violation.
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79. Question: What are the penalties for a diesel violation? Will the amount of a
penalty take into account the sulfur level, cetane index and volume of produ t in
violation?
Answer: The statutory penalty for violations of § 211 of the Clean Air Act,
under the authority of which the diesel regulations are promulgated, is up to $25,000
per day per violation and the amount of the economic benefit or savings resulting from
the violations. Although not yet complete, EPA’s diesel penalties will likely be based
upon the gravity of the violation (amount of sulfur over the standard or degree of
deficiency in cetane index), the volume of product in violation, business size, and in
certain cases, any history of prior violations.
REMEDIAL ACTION
80. Question: What should a party do if it discovers product not complying with
the regulations during the course of an oversight program? How may a party remedy
such a violation? Can the high sulfur fuel be transported or sold? Will EPA allow r
require reblending? Will EPA close the facility? Will EPA initiate an enforcement
action based upon the violation? Is the party required to notify EPA? What if the
product is already downstream?
Answer: If at any time, whether in the course of an oversight program or
through any other means, a regulated party discovers non-complying product, it
should promptly take steps to remedy both the violation and the conditions which
caused the violation. The nature of the remedial action will depend on the location
and circumstances of the non-compliance. For example, if non-compliance is found at
a retail outlet or a WPC facility, the product should immediately be removed from
sale or no longer dispensed for use in diesel motor vehicles. It would be appropriate
to contact the fuel supplier and make arrangements to have the product removed or
reblended into compliance. Similar actions would be appropriate if non-compliance
were discovered at a terminal loading rack. The tank should be immediately closed
from the loading rack, or the pumps turned off, and signs should be posted clearly
identifying the tank as off-spec and unavailable for sale as on-highway fuel. The
violation should be remedied by blending lower sulfur product with the high sulfur
fuel and the tank then sampled to ensure that the product is in compliance before the
tank is reopened for sale. If the tank cannot be blended into compliance, the product
should be shipped to another facility, and/or designated for use as an off-highway fuel,
and dyed in accordance with the regulations. If the non-compliance is discovered at a
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bulk storage facility, arrangements should be made to blend the product into
compliance if feasible or the product redesignated as an off-highway fuel and dyed in
accordance with the regulations. In any of the above scenarios, the regulated party
should ascertain the cause of the violation and make efforts to prevent reoccurrence or
its éontinuance. If any non-complying product has already been transported to a
downstream facility, the regulated party should inform the downstream recipients .of
the non-coniplying product and take steps to recover the non-complying product or -
rebleaid it into compliance. Any efforts to remedy non-compliance should be
documented and retained for review by EPA if necessary. At no time should a
regulated party continue to transport or offer for sale or dispense a non-complying
product as an on-highway fuel. The above are intended to be general guidelines,
each case should be assessed individually.
Regulated parties are not required under the regulations to inform EPA of self-
identified non-compliance. However, if EPA discovers a violation such as those
described above, and a regulated party has not initiated remedial actions, EPA will
consider such inaction in determining the proposed penalty in any Notice of Violation.
EPA has no authority to require any of these remedial actions, or to close a
facility. EPA may exercise its discretion and not initiate an enforcement action on the
basis of high sulfur diesel fuel discovered by a regulated party if it has completely
corrected the violation.
81. Question: What should a company do if it is notified that EPA has discovered a
violation? Will any remedial action affect the penalty?
Answer: The company should immediately take remedial actions to correct the
- -violaion and the conditions which caused the violation (as described jn the previous
question). Such actions will be considered by EPA in partially mitigating any penalty
imposed because of the violation. -
82. Question: What will the Agency’s procedure be for allowing (or not allowing)
diesel sales when high sulfur fuel is indicated by the field test instrument?
Answer: When EPA inspectors inform a company that a diesel field test shows
diesel fuel exceeds the sulfur standard, the Agency views this as notice to the
company of a possible violation of the regulations. While the regulations do not give
EPA the authority to stop the sale of non-complying product, if the EPA laboratory
confirms the diesel fuel does not meet the standard, the company will be entitled to
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partial penalty mitigation only if appropriate remedial action was taken as soon as the
company was told of the failed field test.
83. Question: What is the procedure to verify that a tank is back in compliance
once corrective action has been taken?
Answer: Appropriate sampling and testing in accordance with the regulatory
methods is the only means of ensuring compliance.
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Section J Document 19
Interim Diesel Civil Penalty Policy
02/08194

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O
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
_____ WASHINGTON, D.C. 20460
eo
FEB 81994 -
OFFICE OF
AIR AND RADIATION
MEMORANDUM
SUBJECT:
FROM:
Field
TO: Field
I. INTRODUCTION
This memorandum describes the Field Operations and Support
Division’s (FOSD) policy for determining penalties for violations
of the diesel desulfurization regulations. See 40 CFR sections
80.29 and 80.30 (promulgated at 57 FR 19535 (May 7, 1992)). This
policy also provides penalties for any person that violates
section 211(g) (2) of the Clean Air Act. The policy follows the
guidelines of the Agency’s Policy on Civil Penalties and
Framework for Statute—Specific Approaches to Penalty Assessments
(EPA General Enforcement Policies # GM - 21 and 22) (the “EPA
Policy”).
Parties covered by these regulations include refiners,
importers, carriers, resellers, distributors, retailers,
wholesale purchaser—consumers and individuals.
II. OVERVIEW
A. The Framework of the EPA Policy
The EPA Policy establishes deterrence as the primary goal of
penalty assessment. In addition, it recognizes that penalty
assessment should provide for fair and equitable treatment of the
regulated community and for swift resolution of environmental
problems.
The EPA Policy specifies that penalties should be
established and adjusted based upon a number of factors,
including the gravity of the violation and economic benefit to
the violator; the violator’s degree of cooperation and
willfulness, history of noncompliance and ability to pay; and
other factors unique to the case. Under the EPA Policy,
penalties are set by first calculating the “initial penalty
target figure” (the penalty assessed in the Notice of Violation
(NOV)), which is based upon those factors which are appropriate
for consideration prior to the beginning of case negotiations.
Each of the above factors may be considered during case
LJ v Recycled/Recyclable
Printed with Soy/Canota ink on paper that
_j contains at least 50% recycled fiber
Interim Diesel
Llty Policy
SUpport Division
.ons and Support Division Personnel

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2
negotiations, which yields the “adju,sted penalty target figure” —
the Agency’s final settlement figure.
B. General Application of the EPA Policy to
Diesel Regulations
FOSD prosecutes violations of the diesel regulations by
issuing a Notice of Violation which includes a proposed penalty.
The proposed penalty is analogous to the initial penalty target
figure under the EPA Policy. Following issuance of the NOV,
settlement negotiations are conducted with the violator to reach
a final settled penalty. The final settled penalty is analogous
to the adjusted penalty target figure under EPA Policy. If no
settlement is reached, litigation is initiated either by the
filing of an administrative complaint or referral to the U.S.
Department of Justice, where additional settlement negotiations
may take place. Complaints filed either by EPA or the Department
of Justice in court generally seek the statutory penalty.
The proposed penalty for diesel violations is based upon the
gravity of the violation, adjusted for the number of prior
violations of the diesel desulfurization regulations, the
economic benefit derived from the violation, and in certain
cases, for business size. Following initiation of the
enforcement action, the proposed penalty may be reduced up to
forty percent eased upon the following factors: actions taken by
the violator both to remedy the violation and ensure future
violations will not occur; and the violator’s degree of
cooperation during the investigation and in settlement
negotiations. Unlimited adjustments are possible for financial
hardship and special circumstances.
III. CALCULATING THE PROPOSED PENALTY
The proposed penalty for diesel violations is based upon the
magnitude of the violation (the number of gallons of diesel fuel
which are in violation), the severity of the violation (the
degree to which the diesel fuel exceeds the appropriate
standard), adjusted for prior violations, and the economic
benefit derived from the violation. For certain cases where the
magnitude and severity of the violation is not known or where the
penalty calculated based upon the violation’s magnitude is not
sufficiently large to constitute an appropriate deterrent
(generally for violations found at retail outlets and wholesale
purchaser-Consumer facilities), the penalty is derived from a
table which takes into account the severity of the violation, the
history of prior violations, and the violator’s business size.
A. Gravity of the Violation
Since the reduction of sulfur in diesel fuel and maintaining
a minimum cetane index/maximum aromatics percentage are crucial

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3
components of the Agency’s effort to control and prevent excess
particulate emissions, all violations of the regulations will be
considered serious. The severity of the violation(s) will be a
function of the amount by which the sulfur content of the fuel
and or cetane index/aromatics percentage exceeds the standard(s).
Thus, the larger the excess over the standard(s), the greater
will be the environmental harm.
B. History of Prior Violations
As provided in the EPA Policy, this policy provides higher
penalties for companies with a history of prior violations of the
diesel desulfurization regulations. For the purposes of this
policy, prior violations include any NOV resolved where the case
was not dropped, or any judicial resolution where there was not a
dismissal or judgment in favor of the defendant. Previous
violations will include any violation of the regulations by a
particular company, regardless of the EPA region in which it
occurred.
C. Business Size of the Violator
Penalties under this policy are generally calculated based
upon the number of gallons of diesel fuel in violation. As a
result, a specific adjustment to reflect the size of the
violator’s business is generally not necessary. A penalty which
is exactly proportional to the magnitude of the violation is
appropriate in most cases, and need not be adjusted for the size
of the violator’s business.
In those cases where the penalty is derived from a penalty
table which does not reflect the gallons in violation (normally
for violations found at retail outlets or wholesale purchaser—
consumer facilities), penalties are different for different—sized
businesses. These distinctions are appropriate because the
business size of potential violators may range from very small
businesses to major national corporations, and the appropriate
level of deterrence will differ. For the purposes of this
policy, the size of a business entity is expressed in terms of
the violator’s gross income (i.e., total business revenues from
the business entity which gave rise to the violation or annual
operating revenues for municipalities) for the prior fiscal year.
D. Penalty Formula
Penalties are calculated in a manner which .removes the
economic benefit the violator may have received from violating
the diesel regulations, and in addition, includes a deterrent to
discourage future violations. This policy assigns the amounts of
economic benefit which are appropriate for different levels of
noncompliance (Tables 1 and 2). The amount of these benefits are

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4
based upon the most data which reflects the cost of compliance
with the diesel regulations.
Table 1. Economic benefit resulting from the
production of diesel fuel which exceeds
the diesel sulfur standard.t
Sulfur Content Assigned Economic Benefit Value
(per gallon of noncomplying
diesel fuel)
0.0550 — 0.0999 S.Ol
0.1000 — 0.1499 $.02
0.1500 — 0.1999 $.03
0.2000 and over $.04
Table 2. Economic benefit resulting from the
production of diesel fuel which
exceeds the diesel cetane/aromatics
standard.
Cetane Index Assigned Economic Benefit Value
(aroniatics percentage) (per gallon of noncomplying
diesel fuel)
38.0 — 39.4
(35.1% — 36.7%) $.01
36.5 — 37.9
(36.8% — 38.1%) $.02
35.0 — 36.4
(38.2% — 39.5%) S.03
34.9 and less
(39.5% and over) $.04
The economic benefit component (EBC) of the proposed penalty
is calculated by multiplying the number of gallons of diesel fuel
which are in violation by the appropriate economic benefit value
EPA recognizes that, as of October 1, 1993, there will be
a 24.4 cent per gallon federal tax on low sulfur diesel fuel.
The new tax law does not affect this policy and is not used to
calculate economic benefit.

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5
from the applicable tables. 2 If both standards have been
violated, the penalty calculation is to be performed as if there
are two separate v iolations, with the penalty amounts aggregated.
Except as described below, the gravity component (GC) is equal to
the economic benefit component. The proposed penalty (PP) is
equal to the sum of the economic benefit and the gravity
component. Thus, the proposed penalty is calculated using the
following formula:
PP = EBC + GC
In order to reflect the history of violations, the gravity
component will be increased where the violator has a history of
prior violations. Thus, the formula for calculating the proposed
penalty for a violator who has a history of prior violations is
as follows:
Number of Prior Violations Formula
1 PP=EBC+(GC*l.5)
2 PP=EBC+ (GC*2.0)
3 PP = EBC + (GC * 3.0)
In certain cases, the number of gallons of diesel fuel in
violation will be so small that the penalty calculated as
described above will not constitute a sufficient deterrent to
achieve the goals of the diesel regulations. For this reason,
minimum proposed penalties are provided in Table 3 of this
policy, based on the degree of non-compliance, business size and
history of compliance with the diesel regulations. The penalties
from Table 3 should be used when the penalty calculated as
described above using Tables 1 and/or 2 is less than the penalty
in Table 3. In other words, the proposed penalty should be the
greater of the calculated penalty or the penalty from Table 3.
Section 211(d) of the Clean Air Act provides for a maximum
civil penalty of $25,000 per day of violation, plus the economic
benefit or savings resulting from the violation. Where the
calculated penalty amount exceeds that amount, there must be a
reasonable basis that there were an appropriate number of
violations and/or that the violation occurred for the appropriate
number of days (e.g., at least three violations and/or three days
of violation for a $75,000 proposed penalty, before the economic
benefit is added).
2 EPA recognizes that the price difference between high and
low sulfur diesel fuel fluctuates. On November 1, 1993, the
price difference was as much as 40 cents per gallon. As such,
EPA will reassess economic benefit periodically and adjust the
economic benefit numbers accordingly.

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6
Table 3. Minimum penalty amounts for diesel
violations, adjusted for business size,
gravity of the violation, an& number of prior
violations.
Number of
Prior Violations
Size I
Size II
Size III
I
Business Size
II
o to $1,000,000
$1,000,001 to $10,000,000
$10,000,001 and greater.
III
Sulfur amount between 0.0550 and 0.0999 OR
Cetane index between 38.0 and 39.4
$1,000
1, 500
2 , 000
3, 000
$1,500
2,250
3 , 000
4,500
$3,000
4, 500
6, 000
9, 000
Sulfur amount between 0.1000 and 0.1499 OR
Cetane index between 36.5 and 37.9
1, 500
2,250
3, 000
4, 500
0
1
2
3
0
1
2
3
0
1
2
3
0
1
2
3
2,250
3,375
4, 500
6,750
4,500
6,750
9, 000
13, 500
Sulfur amount between 0.1500 and 0.1999 OR
Cetane index between 35.0 and 36.4
2 , 000
3 ,000
4 , 000
6 , 000
3 , 000
4, 500
6,000
9, 000
Sulfur amount of 0.2000 or more OR
Cetane index of 34.9 or less
6, 000
9,000
12, 000
18, 000
8 , 000
12, 000
16, 000
24,000
3 , 000
4 , 500
6, 000
12,000
4 ,500
6,750
9, 000
13, 500
Size of business categories as defined for this policy

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7
IV. MISFUELING VIOLATIONS
Section 211(g) (2) of the Clean Air Act states “no person
shall introduce or cause or allow the introduction into any motor
vehicle of diesel fuel which such person knows or should know
contains a concentration of sulfur in excess of 0.05 percent (by
weight) or which fails to meet a cetane index minimum of 40 or
such equivalent alternative aromatic level as prescribed by the
Administrator” (determined to be no greater than 35 volume
percent). The proposed penalty for violations of section
211(g) (2) will be calculated using the first grid under Table 3
(penalty amounts ranging from $1,000 to $7,000). EPA will not
consider how much the fuel exceeds the standard(s) when
calculating the proposed penalty for misfueling violations.
Individuals will be treated as business size I, and the proposed
penalty determined by the number of prior violations, if any.
Each introduction will be treated as a separate violation.
V. ADJUSTMENTS TO THE PROPOSED PENALTY
The EPA policy specifies that penalties should be evaluated
for adjustment based upon degree of cooperation/noncooperation,
ability to pay and other unique factors specific to the case.
This policy provides for these adjustments. Violators bear the
burden of justifying any adjustments in their favor. When the
penalty formula is used for the NOV amount, the adjustments only
should apply to the gravity component, and not to the economic
benefit component. Therefore, the adjusted penalty target figure
will include the sum of the economic benefit and the adjusted
gravity component. When Table 3 is used, appropriate adjustments
are based on the full proposed penalty.
A. Degree of Cooperation/Noncooperation and
Actions to Remedy the Violation
This policy allows mitigation of the proposed penalty of up
to forty percent as an incentive for the violator to cooperate in
the investigation and negotiations, and to correct the violation
promptly. The greatest mitigation should be given where the
violator cooperates fully and corrects all violations immediately
upon discovery by the violator. In general, the earlier and more
complete the cooperation and corrective action, the larger the
penalty reduction which is appropriate.
For diesel violations, correction generally means capturing
the noncomplying diesel fuel and either having it reblended to
conform to the diesel standards, or redesignating it for use for
of f-highway purposes only by adding the requisite blue dye. This
action should also include implementing a procedure to prevent

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8
such violations from occurring in the future, if uch a procedure
is not already in place. The degree of penalty mitigation will
be related to the extent to which the violation, and the -
conditions which caused the violation, are corrected.
The violator’s cooperation during the investigation,
negotiation and settlement phases of a case may result in a
penalty adjustment. A violator is expected to provide access to
records and premises and to not interfere with the investigation.
In addition, the violator should identify and provide information
about other parties who were involved in the diesel violation.
Failure to cooperate in an investigation, attempting to hide
records or evidence of violations, or not cooperating in any
continuing investigation should be reflected in the adjustment
for this factor.
B. Financial Hardship Adjustment
The Agency generally will not seek penalties which are
clearly beyond the means of the violator. However, it is
important that the regulated community not view the violation of
environmental requirements as a way of aiding a financially
troubled business. Furthermore, some violations are so
outrageous so as to render any mitigation inappropriate. For
example, it is unlikely that FOSD would reduce a penalty based
upon financial hardship where a violator refuses to correct its
violation or take steps to prevent future violations. The same
would be true for a violator with a long history of previous
violations of environmental laws, or where there are indications
that many more violations exist than those alleged in the NOV.
Therefore, FOSD reserves the option, in appropriate
circumstances, of not reducing the final penalty as a result of
financial hardship even though that penalty may put a company out
of business.
A financial hardship claim normally will require a
significant amount of financial information from the violator.
The burden of demonstrating inability to pay, like all mitigating
factors, rests on the violator. If the violator fails to provide
sufficient information in a timely manner, then the prosecution
team cannot give full consideration to this factor.
Where a financial hardship claim is adequately established,
FOSD may, at its discretion and based upon its review of all the
equities of the case, including the financial hardship, further
adjust the penalty. The preferred approach to such an adjustment
is allowing a delayed payment schedule. However, as a last
resort, FOSD may agree to an extraordinary penalty reduction for
this factor.
A case may arise in which equity cannot be served by
adjusting the penalty within the normal limits of this policy. In

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9
such a case, FOSD may grant extraordinary mitigation. The burden
of establishing the need for extraordinary adjustment of the
penalty rests on the violator. In order to meet this burden, the
violator must present evidence of: (1) the facts of the case; (2)
why the adjusted penalty is inequitable; (3) why the criteria for
adjustment are insufficient; and (4) how the public interest is
protected or served by an extraordinary adjustment in the
penalty.
VI. ALTERNATIVE PAYMENTS
It is FOSD’s policy to allow violators to resolve a portion
of their penalties by making payments to support programs which
educate the public regarding motor-vehicle—caused air pollution
and the laws for its control. Such credit projects encourage
compliance with these laws, advancing program goals beyond the
mere deterrent effect of paying penalties into the federal
treasury. The Agency’s supplemental environmental projects
program is currently undergoing review and is therefore subject
to change. Any use of alternative payments should conform with
the Agency policy on the use of Supplemental Environmental
Projects in EPA settlements.
VII. PENALTY AFTER INITIATION OF LITIGATION
When an NOV is issued and a violator fails to settle the
case, the Agency generally will either file an administrative
complaint or refer the matter to the United States Department of
Justice for prosecution in federal district court. When either
of these steps are taken, the normal recommendation is to
prosecute for the statutory penalty of $25,000 per day, plus the
economic benefit or savings resulting from the violatjon.
VIII. MISCELLANEOUS -
The policies and procedures set out in this document are
intended solely for the guidance of governmental personnel. They
are not intended and cannot be relied upon to create any rights,
substantive or procedural, enforceable by any party in litigation
with the United States. The Agency reserves the right to act at
variance with these policies and procedures and to change them at
any time without public notice.
This policy applies to civil enforcement of the diesel
regulations and does not apply in any way to potential criminal
enforcement.

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10
IX. PENALTY EXAMPLE CALCULATIONS
Following are examples of application of this policy to
hypothetical factual situations.
EXAMPLE A.
EPA determines that a branded retail outlet dispensed 10,000
gallons of diesel fuel with a sulfur content of 0.1111, and a
cetane index of 40.9. The retail outlet is a Size I business and
it has no history of prior violations.
Under the penalty formula, the penalty calculations would be
as follows:
PP = EBC + GC
EBC = 10,000 gals x $0.02 = $200
GC = EBC = $200
PP= $200 + $200 = $400
Under Table 3, the penalty amount for this retail outlet would be
$1,500. Because the penalty amount from Table 3 is larger than
the calculated penalty amount, the penalty amount from Table 3
($1,500) should be assessed against this retail outlet.
Various parties upstream from the retail outlet also may be
liable for the violation. If the retail outlet is one displaying
the corporate, trade, or brand name of a diesel refiner or any of
its marketing subsidiaries, the refiner whose corporate, trade,
or brand name is displayed would be liable for the violation. In
addition, the distributor, carrier and/or reseller, would be
liable for the violation.
In this example, because the retail outlet displayed the
brand name of a refiner, EPA may assess that refiner a penalty
under Table 3 according to its business size and history of prior
violations. If, for example, the refiner is a Size III business
and it has a history of one prior violation, the calculated
penalty would be:
EBC = 10,000 X $0.02 = $200
GC = ($200 X 1.5) = $300
PP = $200 + $300 = $500
The penalty under Table 3 would be $5,000, however, so this
larger penalty would apply to the refiner. The distributor, if
any, or a carrier who caused the violation, similarly may be
assessed a penalty.

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11
EXAMPLE B.
EPA determines that an unbranded retail outlet dispensed
25,000 gallons of diesel fuel with a sulfur content of 0.2222,
and a cetane index of 37.1. The retail outlet is a Size I
business and it has no history of prior violations.
In cases where there is a violation of both the sulfur and
cetane standards, the penalty amounts are aggregated. Under the
penalty formula, the penalty calculations would be as follows:
PP=EBC+GC
EBC = (25,000 gals x $0.04) + (25,000 gals x $0.02)
1,000 + 500 = $1,500
GC = $1,500
PP = $1,500 + $1,500 = $3,000
Under Table 3, the penalty amount for this retail outlet
would be $3,000 for the sulfur violation and $1,500 for the
cetane index violation, for a total of $4,500. Because the
penalty amount for Table 3 is larger than the calculated penalty
amount, the penalty amount from Table 3 should be assessed
against this retail outlet.
EXAMPLE C.
EPA detects a violation at a unbranded distributor facility
involving 1,000,000 gallons of diesel fuel with a sulfur amount
of 0.1666, and a cetane index of 39.5. The distributor is a Size
III business and it has no history of prior violations. Under
the penalty formula, the penalty calculations would be as
follows:
PP = EBC + GC
EBC = 1,000,000 gals x $.03 = $30,000
GC = EBC = $30,000
PP= $30,000 + $30,000 = $6O,000
The calculated penalty of $60,000 is applicable in this case
because it is larger than the penalty derived from Table 3.
Parties upstream from the distributor also may be deemed in
violation. If the distributor is ,operating under the corporate,
trade, or brand name of a diesel refiner or any of its marketing
subsidiaries, the refiner under whose corporate, trade, or brand
The $60,000 proposed penalty assumes EPA can prove a
sufficient number of days of violation or sufficient economic
benefit to conform to the statutory maximum.

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12
name the distributor is operating would be liable for the
violation. If the distributor is not operating under a refiner’s
corporate, trade, or brand name, the refiner at whose refinery
the diesel fuel was produced, the importer at whose import
facility the diesel fuel was imported, or a carrier who caused
the violation is also deemed in violation.
In this example, because the distributor was not operating
under a refiner’s corporate, trade, or brand name, the refiner
who produced the diesel fuel would be liable for the penalty
amount as calculated above according to the penalty formula
(.because it is larger than the penalty derived from Table 3). If
EPA determines that a carrier ca’used the violation, it would be
liable for the calculated penalty amount.
EXAMPLE D.
EPA detects a violation at a refinery involving 3,000,000 -
gallons of diesel fuel with a sulfur content of 0.2222, and a
cetane index of 40.1. The refiner is a Size III business and it
has no history of prior violations. The penalty calculations are
as follows:
PP =EBC+GC
EBC = 3,000,000 gals x $.04 = $120,000
GC = EBC = $120,000
PP = $120,000 + $120,000 = $240,000
This calculated penalty is larger than the penalty under Table 3
and would therefore apply.
The $240,000 proposed penalty assumes EPA can prove a
sufficient number of days of violation or sufficient economic
benefit to conform to the statutory maximum.

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Section J Document 20
Tampering and Defeat Device Civil Penalty
Policy for Notices of Violation
02128/94

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U—
s €o s7 4 P
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
. \i Z WASHINGTON, D.C. 20460
0

FEB 2 8 1994
OFFICE cc
AIR AND RADIATION
MEMORANDUM
SUBJECT: Tampering and Defeat Device Civil Penalty Policy
For Notices of Violations
FROM: Mary T. Smith, Dire
Field Operations
TO: Field Operations
I • INTRODUCTION
This document describes the Field Operations and Support
Di;ision (FOSD) policy for determining r enalties for violations of
the antitampering and defeat device provisions of the Clean Air Act
as amended in 1990. This policy applies to penalties assessed
under FOSD’s pre-litigation Notice of Violation (NOV) process. The
policy follows the guidelines of the Agency’s Policy on Civil
Penalties, and A Framework for Statute-Specific Approaches to
Penalty Assessments [ EPA General Enforcement Policies # GM - 21 and
22 (The “EPA Policy”)]. This document should be read in
conjunction with the following FOSD guidance documents: Conduct of
Settlement Negotiations, drafted January 1991, and the Guidance for
the Use of Alternative Payment Terms in FOSD Settlements, drafted
August 1991. For the assessment of civil penalties under the
Consolidated Rules of Civil Procedure, 40 C.F.R. Part 22, see the
Civil Penalty Policy f or Administrative Hearings, issued
January 14, 1993.
FOSD enforces a number of provisions under Title II of the
Clean Air Act (Act), and its associated regulations. The tampering
and the defeat device prohibitions are specified under section
203(a)(3) of the Act, 42 U.S.C. § 7522(a)(3). Section 203(a)
provides that the following acts and the causing thereof are
prohibited -
“(3)(A) for any person to remove or render inoperative any
device or element of design installed on or in a motor vehicle or
motor vehicle engine in compliance with regulations ... prior to
its sale and delivery to the ultimate purchaser, or for any person
knowingly to remove or render inoperative any such device or
element of design after such sale and delivery to the ultimate
purchaser.” For ease of reference this will be known as the
“tampering prohibition”.
rt Division Personnel
Printed or’ Recycled Paper

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“(3)(B) for any person to manufacture or sell, or offer to
sell, or install, any part or component intended for use with, or
as part of, any motor vehicle or motor vehicle engine, where a
principal effect of the part or component is to bypass, defeat, or
render inoperative any device or element of design installed on or
in a motor vehicle or motor vehicle engine in compliance with
regulations ..., and where the person knows or should knowthat
such part or component is being offered for sale or installed for
such use or put to such use.” For ease of reference this will be
known as the “defeat device prohibition”.
A. STATUTORY PENALTIES
Tampering Prohibition
Under section 205 of the Act, any manufacturer or dealer 1 who
violates the tampering prohibition, “(3) (A)”, is subject to a civil
penalty of not more than $25,000 per violation. Any person other
than a manufacturer or dealer who violates the tampering
prohibition is subject to a civil penalty of not more than $2,500
per violation. Any such violation with respect to the tampering
prohibition constitutes a separate offense with respect to each
motor vehicle or motor vehicle engine. -
Def eat Device Prohibition
Also, under section 205 of the Act, any person who violates
the defeat device prohibition, “(3)(B)”, is subject to a maximum
civil penalty of $2,500 per violation. Any such violation with
respect to the defeat device prohibition constitutes a separate
offense with respect to each part or component.
1 According to section 216 of the Act, 42 U.S.C. S 7550,
a manufacturer is “any person engaged in the manufacturing or
assembling of new motor vehicles, new motor vehicle engines, new
nonroad vehicles or new nonroad engines, or importing such
vehicles or engines for resale, or who acts for and is under
control of any such person in connection with the distribution of
new motor vehicles, new motor vehicle engines, new nonroad
vehicles or new nonroad engines, but shall not include any dealer
with respect to new motor vehicles, new motor vehicle engines,
new nonroad vehicles or new nonroad engines received by him in
commerce.” A dealer is “any person who is engaged in the sale or
the distribution of new motor vehicles or new motor vehicle
engines to the ultimate purchaser.” See section 216 for
additional definitions, e.g., motor vehicle, new motor vehicle,
ultimate purchaser and commerce.
2

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II • OVKkVIEW
A. The Framework of the EPA Policy
The EPA Policy establishes deterrence as the primary goai. for
penalty assessment. The policy also recognizes that penalty
assessment should provide for fair and equitable treatment of the
regulated community and for swift resolution of environin ntal
problems.
The EPA Policy specifies that penalties should be established
and adjusted based upon a number of factors, including the gravity
of the violation, the economic benefit or savings resulting from
the violation, the willfulness of the violation, the violator’s
degree of cooperation, history of noncompliance, ability to pay,
and other factors unique to the case. Under the EPA Policy,
penalties are set by first calculating the “initial penalty target
figure” (the penalty assessed in the Notice of Violation (“NOV”)) 1
and second by calculating the “adjusted penalty target figure” (the
Agency’s final settlement figure). Each penalty assessment
includes appropriate consideration of the above factors both prior
to the beginning of the case and during case negotiations.
B. General Application of the EPA Policy to Tampering and Defeat
Device Violations
FOSD prosecutes violations of the tampering and defeat device
prohibitions by issuing a NOV which includes a proposed penalty.
The proposed penalty is analogous to the initial penalty target
figure under the EPA Policy. Following issuance of the NOV,
settlement negotiations are conducted with the violator to reach a
final settled penalty. The final settled penalty is analogous to
the adjusted penalty target figure under the EPA Policy. If no
settlement is reached, the case normally is referred to the
Department of Justice (“DOJ”), where additional settlement
negotiations may take place. Complaints filed by the DOJ in court
generally seek the maximum statutory penalty.
Also, under the Clean Air Act as amended in 1990, in lieu of
referring the case to the DOJ for litigation, the Administrator may
assess any civil penalty prescribed in section 205(a), except the
maximum amount of the penalty sought against each violator in a
penalty assessment proceeding may not exceed $200,000, unless the
Administrator and the Attorney General jointly determine that a
matter involving a larger penalty amount is appropriate for
administrative penalty assessment. See the Consolidated Rules of
Civil Procedure, 40 C.F.R. Part 80.22, and FOSD’s Civil Penalty
Policy for Administrative Hearings, issued January 14, 1993.
3

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The proposed penalty for tampering and defeat device
violations is based upon the gravity of the violation, the
violator’s history of noncompliance, and the size of the violator’s
business. Following initiation of the’ enforcement action, the
proposed penalty may be reduced up to forty percent based upon a
number of factors, including the actions taken to remedy the
violation and to prevent future violations, the violator’s degree
of cooperation in the investigation and settlement negotiations,
and the violator’s economic benefit or savings (if any) resulting
from the violation. Unlimited adjustments are possible for
financial hardships and special circumstances.
III • CALCULATING THE PROPOSED PRNILTY
A. Gravity of the Violation
The primary concern in determining the gravity of the
tampering violation or defeat device violation is the likely
increase in vehicle emissions which may result from the violation.
Acts of tampering with, or defeat devices which render inoperative,
primary emission control systems or specified major emission
control components 2 are presumed to result in the largest
increases in emissions. Therefore, under this policy, the greatest
gravity (and the largest penalties) are assigned to acts of
tampering or defeat devices which involve primary or specified
major emission control parts. A lesser gravity (and smaller
penalties) are assigned to acts of tampering or defeat devices
which involve emission related parts which are presumed to cause
smaller increases in emissions.
This policy also presumes that certain acts of tampering or
defeat devices may operate to cause a cumulative increase in
vehicle emissions. Violations involving multiple emission control
parts are presumed to cause a larger increase in vehicle emissions
than violations involving only one emission control part. In
addition, violations involving onboard emissions diagnostic systems
(“OBD—systems”) are presumed to cause a larger increase in vehicle
emissions because the disabling of the OBD—system permits a failure
in the vehicle’s emission control equipment or system to go
undetected and unfixed. Any excessive vehicular emissions due to
such failure may persist over a longer period of time. Therefore,
under this policy, the greatest gravity (and the largest penalties)
is also assigned to acts of tampering with or defeat devices which
render inoperative multiple emission control parts or the OBD—
2 Specified major emission control components means only a
catalytic converter, and electronic emissions control unit, an
onboard emissions diagnostic device, and any other pollution
control part which may be designated by the Administrator. See
section 207 of the Clean Air Act, 42 U.S.C. S 7541 as amended in
1990.
4

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system.
The following systems or parts are installed primarily for
emission control or emission control diagnostics, and tampering
with them will likely cause a large increase in emissions.
Therefore, tampering with or manufacturing or selling devices
which bypass or defeat these systems or parts is considered a level
“A” violation.
Exhaust Gas Conversion: Catalytic Converter, Oxygen Sensor
Secondary Air Injection: Air Pump, Diverter Valve,
Pulse Air Valve
Evaporative System: Evaporative Canister, Purge Valve
Exhaust Gas BGR Valve, EGH Transducers,
Recirculation System: EGR Vacuum Lines
Onboard Emissions Emission Control Diagnostics
Diagnostic Systems:
Fuel Metering System: Electronic Control Module, Fuel
Inj ectors
Tampering or defeat devices which result in only partial
deactivation of the above systems or parts, tampering which
involves any other system or part not listed above, or tampering
which involves the replacement of existing exhaust system
components where the converter had been removed previously are all
considered level “B” violations.
Partial deactivation of certain emission controls, such as
replacing a 3—way converter with a 2—way converter, will cause the
vehicle to pollute significantly less than the total deactivation
of the catalytic converter. Similarly, replacing a rusted out
single or dual exhaust system on a vehicle with the converter
already removed will have a minimal adverse effect on emissions,
however, it is still a violation under current EPA policy. The
above actions would, therefore, more appropriately be level “B”
violations based on their lesser emissions impacts while the act of
removing or totally deactivating a catalytic converter would be a
level “A”.
B. Violator’s History of Noncompliance and Size of Business
As provided in the EPA Policy, this policy provides higher
penalties for a party with a history of noncompliance with the
tampering or defeat device provisions.
5

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Where a party has previously violated the tampering or defeat
device provisions, this is usually clear evidence that the party
was not deterred by the Agency’s enfor ceinent action. Therefore,
the penalty shall be increased, unless the previous violation was
caused by factors entirely out of the control of the violator. A
prior violation is any noncompliance with the tampering or defeat
device provisions for which a formal enforcement response has
occurred, i.e., a NOV 9 warning letter, settlement agreement,
complaint, or final order, providing the enforcement response was
not dropped or judgment was not in favor of the party. Where a
party operates multiple facilities, it may be difficult to
determine whether a previous instance of noncompliance should
trigger an increased penalty. In making this determination, FOSD
shall consider who in the organization had control or oversight
responsibility for the conduct resulting in the violation. In
situations where the same person(s) or organizational unit had or
reasonably should have had control or oversight responsibility for
the violative conduct, the violation should be considered part of
the compliance history of that regulated party. FOSD shall also
consider whether a party changes operators or shifts responsibility
for compliance to different groups as a way of avoiding penalties,
and whether there is a consistent pattern of noncompliance or a
corporate—wide indifference to environmental protection. In such
instances, where there is a shifting of responsibility to avoid
liability or a pervasive indifference to the tampering or defeat
device prohibitions, the violation should be considered part of the
compliance history of that regulated party.
In order to create a fair and equitable deterrent, the
business size or operating budget of the violator must be
considered. Where the violator is a business entity (sole
proprietor or corporation), size is expressed in terms of the
violator’s annual gross income (i.e., the total business revenues
from the business entity which gave rise to the violation). Where
the prior fiscal year is not representative of the violators
historical business size, revenues or income from the prior three
to five years should be evaluated. Where the violator is a
municipal violator, size is expressed in terms of the violator’s
operating budget, instead of gross income. Municipalities, unlike
corporations, derive their income from public revenues. In
addition, only the very smallest municipalities are likely to have
an operating budget below three million dollars ($3M). Therefore,
in distinguishing the size of municipalities, only those municipal
violators with an annual operating budget of at least ten million
dollars ($1OM) are subject to the larger penalties.
6

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Table 1 reflects the foregoing factors, and specifies the
proposed penalty for violations of section 203(a) (3), except for
violations of the tampering prohibition”(3)(A)” committed by any
motor vehicle manufacturer or dealer, See Table 2. Table 1 shall
be used to the extent that it allows for deterrence and recovery of
the violator’s economic benefit. Accordingly, the lowest amount
used to calculate the penalty cannot be less than twice the
violator’s economic benefit realized for that violation, see VIII,
Penalty Example Calculations.
TABLE 3.
Proposed Penalty Per Violation
SIZE OF BUSINESS
(OR, MUNICIPAL OPERATING BUDGET)
NUMBER OF VIOLATION UNDER $ 3M $ 3M OR OVER
VIOLATIONS LEVEL PRIORS (UNDER $1OM) ($1OM OR OVER)
1st 25 A 1+ $2,000 $2,500
O $1,500 $2,000
B 1+ $1,500 $2,000
0 $1,000 $1,500
NEXT 50 A 1-f- $1,000 $1,500
0 $ 500 $1,000
B 1+ $ 500 $1,000
0 $ 350 $ 750
REMAINDER A 1+ $ 200 $ 300
0 $ 100 $ 200
- B 1+ $ 100 $ 200
O $ 50 $150
C. Proposed Penalty for Manufacturer and Dealer Tampering
Under section 205 of the Act, only motor vehicle manufacturers
and dealers are subject to a penalty of $25,000 for violating the
tampering prohibition “(3)(A)”. In addition, section 205 does not
distinguish the business size of a dealer from a manufacturer, or
when the violation was committed (prior to or after the sale and
delivery of the vehicle to the ultimate purchaser). Accordingly,
Table 2 reflects the foregoing, and specifies the proposed penalty
for acts of tampering by a motor vehicle manufacturer or dealer.
7

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TABLE 2
Motor Vehicle Manufacturer or Dealer Penalty Table
Proposed Penalty Per Violation
SIZE OF BUSINESS
NUMBER OF VIOLATION
VIOLATIONS LEVEL PRIORS UNDER $5M $5M OR OVER
1st 25 A 1+ $15,000 $20,000
0 $ 5,000 $10,000
B 1+ $10,000 $15,000
0 $ 2,500 $ 5,000
NEXT 50 A 1+ $ 3,000 $ 4,000
0 $ 1,500 $ 2,000
B 1+ $ 2,000 $ 2,500
0 $ 1,000 $ 1,500
REMAINDER A 1+ $ 1,000 $ 2,000
0 $ 500 $ 1,000
B 1+ $ 500 $ 1,250
0 $ 350 $ 750
In some instances, a violator may have violated both the
tampering and the defeat devices prohibition. Where the separate
violation is an integral part of the other violation, EPA shall
exercise its enforcement discretion in determining whether to merge
the violations or assess a penalty for both violations.
D. Penalties for Recordkeeping and Retention Violations of
EPA’S Aftermarket Catalytic Converter Policy
EPA’s enforcement policy of August 6, 1986 (ttPolicyll)
regarding the sale and use of aftermarket catalytic converters
requires proper record—keeping and retention as a condition to the
installation of aftermarket catalytic converters. Therefore, if a
shop installs afterniarket catalytic converters, it is required to
have proper documentation reflecting installation of such
converters. The lack of such accompanying documentation will
result in a violation since it is required to install an OEM
catalytic converter if all requirements of the afterniarket
catalytic policy are not satisfied.
8

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Nature of Violations
The types of potential record-keeping violations are as
follows:
1. Invoice does not include each of the following: -
customer’s name and complete address; vehicle’s make,
model year and mileage; and reason for replacement.
2. The repair facility does not have a signed statement by
the vehicle owner and installer, or state/local program
representative concerning the reason for the
replacement of the catalytic converter.
3. Copies of invoices are not retained for six months.
4. The removed converter is not retained for 15 working
days.
5. The removed converter is not properly marked to
identify the vehicle from which it was removed.
6. Required warranty card is not filled out by installer
and given to the customer (for new afterinarket
converters only).
In order to compute the penalty for record-keeping and
retention violations, it is necessary to determine the number of
aftermarket converters that were installed that did not have
accompanying proper documentation and/or were not retained as
required over the previous six month period. The following data
can be used to help ascertain the number of installations involved:
invoices reflecting converter replacement, information supplied by
an aftermarket converter supplier as to the number of converters
provided to the shop, statement(s) from employee(s) or past
employee(s) as to the number of converters installed, converters
found at the shop unmarked, etc.
Penalty Deterniinatjori
This Policy bases penalty amounts on the number of violations,
egregiousness of the violations, size of the business, and history
of prior violations.
Violations of this type are divided into two egregiousness
levels.
Level 1: The records are so deficient that it cannot be
determined with certainty either from the service invoice or by
further investigation which installations were misapplications over
the previous six month period as a result of deficiencies in
certain significant requirements (e.g., owner’s name and complete
9

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address; vehicle’s make, model year and mileage; reason for
replacement; and the warranty card completed accurately). These
include the deficiencies listed in items 1, 3, and 6 above. Every
record reflecting such converter wor c and/or every improperly
labeled converter is considered a violation for purposes of the
proposed penalty computation.
Level 2: The records reflect proper applications (i.e., the
proper catalyst types — two-way, three-way or three— iay with air —
were installed). However, there is insufficient supporting data as
required in the Policy, to demonstrate the converter was removed
under appropriate circumstances. These include the deficiencies
listed in items 2, 4, or 5 above. Every improper record-keeping
violation which is documented as having occurred during the
previous six months is considered a violation for purposes of the
proposed penalty computation.
TABLE 3
Recordkeeping and Retention Penalty Table
Violation No. of Prior Size of Business
Level Violations Under $3M $3M or Over
1 1+ $400 $500
0 300 400
2 1+ $200 $300
0 100 200
The proposed penalty amount should be determined by
multiplying the number of violations by the appropriate figure from
the above table. The proposed penalty can be a combination of
Level 1 and Level 2 violations. Penalties for new car dealers are
determined by multiplying the above calculated figure by two. The
maximum proposed penalty-for Level 2 violations is $10,000, and
$15,000 for Level 1 violations or violations that are a combination
of Level 1 and Level 2.
The scenario may exist where shop records indicate the
purchase of aftermarket catalytic converters and/or statements from
shop employees confirm the installation of such converters, but few
or none of the specific installation records exist. In this
situation it is impossible to determine that the installations were
performed properly, since records do not exist of the
installations. Therefore, the installation of afterinarket
catalytic converters in this situation are essentially level 1
violations. The inspector should document through shop records
and/or statements by the shop owner or employees that multiple
(more than one) aftermarket catalytic converter installations have
been performed by the shop. If such evidence is documented, and a
reliable number of record—keeping violations cannot be documented,
10

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then the minimum penalty amount should be $6,000 for new car
dealers and $4,000 for all other regulated parties. These
penalties would be supportable in litigation if necessary because
each is less than the maximum statutory’ penalty for at least two
violations. -
IV. DJU8T1tENT8 TO THE PROPOSED PEN LTT
The EPA Policy specifies that penalties should be evaluated
for adjustment based upon degree of cooperation/noncooperation,
ability to pay, willfulness/lack of willfulness, and other unique
factors specific to the case. This policy provides for these
adjustments. Violators bear the burden of justifying any
adjustments in their favor. All adjustments should be reflected in
the case file, adequately supported by the facts of the case and
discussed fully in the action memoranduio that accompanies the
proposed settlement agreement.
A. Degree of cooperation, Lack of Willfulness, and Actions to
Remedy the Violation
This policy allows mitigation of the proposed penalty of up to
forty percent as an incentive for the violator to cooperate in the
investigation and negotiations, and to correct the violation
promptly. The greatest mitigation should be given where the
violation is not willful, the violator fully cooperates, and the
violator corrects all violations immediately upon discovery of the
violation. An act should be considered willful if there is clear
and convincing evidence that the violator was aware of the law and
chose to ignore it.
For tampering violations, correction generally means returning
the vehicle to compliance with that vehicle’s EPA-certified
configuration with respect to the tampered system(s) or part(s)
(the violator to bear the cost), and taking action to ensure that
similar violations will be less likely to occur in the future. In
correcting the violation, new original equipment parts usually must
be installed. Where the violation is for installation of an
improper afterinarket part, such as an aftermarket replacement
converter (assuming the vehicle is eligible to have an aftermarket
converter installed), correction should include installation of the
proper aftermarket converter. The degree of penalty mitigation
will be related to the extent to which the violation and the
conditions which caused the violation are corrected.
Violators are also normally expected to identify and correct
tampering violations beyond those named in the NOV. Correction of
these additional violations normally is required n order for a
violator to qualify for a reduction under this factor.
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For defeat device violations, corrections generally means
recalling the devices and destroying or converting the devices to
some legitimate use.
The violator’s cooperation during the investigation,
negotiation and settlement phases of a case may result in a penalty
adjustment. A violator is expected to provide access to records and
premises and to not interfere with the investigation. In addition,
the violator should identify and provide information about other
parties who were involved in the violation. Failure to cooperate
in an investigation, attempting to hide records or evidence of
violations, or not cooperating in any continuing investigation
should be reflected in the adjustment for this factor.
B. Financial Hardship Adjustment
The Agency generally will not seek penalties which are clearly
beyond the means of the violator. However, it is important that
the regulated community not view the violation of environmental
requirements as a way of aiding a financially troubled business.
Furthermore, some violations are so outrageous so as to render any
mitigation inappropriate. For example, it is unlikely that FOSD
would reduce a penalty based upon financial hardship where a
violator refuses to correct its violations or take steps to prevent
future violations. The same would be true for a violator with a
long history of previous violations of environmental laws, where
there are indications that many more violations exist than those
alleged in the NOV or where the violator’s actions were clearly
willful in nature. Therefore, FOSD reserves the option, in
appropriate circumstances, of not reducing the final penalty as a
result of financial hardship even though that penalty may put a
company out of business.
A financial hardship claim normally will require a significant
amount of financial information from the violator. The burden of
demonstrating inability to pay, like all mitigating factors, rests
on the violator. If the violator fails to provide sufficient
information in a timely manner, then the prosecution team cannot
give any consideration to this factor.
Where a financial hardship claim is adequately established,
FOSD may, at its discretion and based upon its review of all the
equities of the case including the financial hardship, further
adjust the penalty. The preferred approach to such an adjustment
is allowing a delayed payment schedule, or granting an unusually
favorable alternative payments package. However, as a last resort,
FOSD may agree to an extraordinary penalty reduction for this
factor.
A case may arise in which equity cannot be served by
adjusting the penalty within the normal limits of this policy. In
such a case, FOSD may grant extraordinary mitigation.
12

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The burden of establishing the need for extraordinary
adjustment of the penalty rests on the violator. In order to meet
this burden the violator must present evidence of: (1) the facts
of the case; (2) why the adjusted penalty is inequitable; (3) why
the criteria for adjustment are insufficient; and (4) how the
public interest is protected or served by - an extraordinary
adjustment in the penalty.
C. The Adjusted Penalty Target Figure
When the above adjustments have been made to the proposed
penalty, the result is the adjusted penalty target figure. This is
the amount of money which the violator must pay to settle the case,
i.e., it is the bottom line settlement amount.
V. ALTERNATIVE PAYMENTS
It is FOSD’s policy to allow violators to satisfy a portion of
the penalty by making payments to support programs which educate
the public regarding motor vehicle caused air pollution and the
laws for its control. Such credit projects encourage compliance
with these laws, and therefore advance program goals beyond -the
mere deterrence effect of paying penalties into the federal
treasury. The Agency’s supplemental environmental projects program
is currently undergoing review and is therefore subject to change.
Any use of alternative payments should conform with the Agency
policy on the use of Supplemental Environmental Projects in EPA
settlements.
VI • ZDJUST) ’Z FrER INITIATION OF LITIGATION
When an NOV is issued and a violator fails to settle the case,
EPA may refer the case to the United States Department of Justice
(DOJ) for prosecution in federal district court, or EPA may assess
a civil penalty administratively against the violator. The
administrative complaint civil penalty is assessed under the Civil
Penalty Policy for Administrative Hearings, issued January 14,
1993. -
When a case is referred to DOJ, the normal recommendation is
to prosecute for the maximum statutory penalty; $25,000 for any
violation of S 203(a)(3)(A) by a motor vehicle manufacturer or
dealer, $2,500 for any violation of § 203(a) (3) (A) by anyone else,
and $2,500 for any violation of S 203(a) (3) (B).
The opportunity remains, however, for the parties to settle a
case at any time prior to judgment. The minimum acceptable
settlement amount after referral normally will be no lower than the
NOV proposed penalty. The minimum acceptable post-referral
settlement should be based upon consideration for all relevant
factors, including the amount of the pre—referral settlement offer,
13

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the severity of the violation, the strength of the evidence,
financial hardship to the respondent, the amount of government
resources necessary to litigate, and the likely treatment the case
would receive in the particular court with venue.
VII. XIBCELLANEOUB
The policies and 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 any rights,
substantive or procedural, enforceable by any party in litigation
with the United States. The Agency reserves the right to act at
variance with these policies and procedures and to change them at
any time without public notice.
This policy applies to civil enforcement of the tampering and
defeat device provisions of the Clean Air Act and does not apply in
any way to potential criminal enforcement.
VIII • P LTY RThWPLE cALCULATIONB
Following are examples of application of this policy to
hypothetical factual situations.
Example 1.
EPA discovers that Company X, with a business revenue of $2
million and no prior violations, manufactured 642 catalytic
converter replacement pipes. This constituted 642 violations of
the defeat device prohibition. According to the company’s catalog
and sales receipts, the pipes sell for $20 each.
Using Table 1, the penalty would be calculated as follows:
Number of Penalty
Violations Amount
25 x $1,500 = $ 37,500
50 x 500 25,000
567 x 100 56.700
Proposed Penalty = $119,200
14

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Example 2.
EPA discovers that Company A, with a business revenue of $2.5
million and no prior violations, manufactured and sold 950 defeat
devices which disabled the car’s air pump. This constituted- 950
violations of the defeat device prohibition. The devices were
manufactured and sold for a profit of $250 each.
Using Table 1, the penalty would be calculated as follows:
Number of Penalty
Violations Amount
25 x $1,500 = $ 37,500
50 x 500 = 25,000
875 x 100 87,500
$150,000
However, the penalty of $100 for the last 875 violations is
less than twice the violator’s economic benefit. Therefore, the
proposed penalty should be based on the lowest figure on the table
which exceeds twice the profit as proposed for in Table 1, i.e.
$500. Thus, the proper penalty calculation would be as follows:
25 x $1,500 = $ 37,500
925 x 500 = 462.500
Proper Proposed Penalty = $500,000
15

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Example 3.
EPA discovers that a motor vehicle manufacturer, MVM, with
business revenue of $6 million and 1 prior violation manufactured
500 defeat devices which alter the vehicle’s air fuel mixture and
cause accelerated failure of the catalytic converter. These parts
were designed to replace the stock cal pak, an element of design of
the motor vehicle. MVM replaced 150 stock cal paks with defeat
devices prior to selling the vehicles to the ultimate purchaser,
replaced 100 after selling and delivering the vehicles to the
ultimate purchaser, and sold 50 of the devices to auto parts stores
and individuals for a profit of $600 each. The remaining 200
devices are in MVM’s inventory. Assuming that this is a level “B”
violation, the penalty would be calculated as follows:
Using Table 1, the penalty would be calculated as follows:
a. Penalty for manufacturing 500 defeat devices in
violations of section 203(a) (3) (B):
Number of Penalty
Violations Amount
25 x $2,000 = $ 50,000
475 x $1,000 = $475 ,000
Proposed Penalty = $525,000
Using Table 2, the penalty would be calculated as follows:
b. Penalty for MVM replacing 250 stock cal paks with defeat
devices. -
Number of Penalty
Violations Amount
25 x $15,000 = $375,000
50 x $ 2,500 = $125,000
175 x $ 1,250 = $218,750
Proposed Penalty = $718,750
In th&s example, NVM has violated both the tampering and the
defeat device prohibition. EPA may exercise its enforcement
discretion and merge the violations, thereby, assessing a penalty
only for manufacturing 500 defeat devices.
16

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Example 4.
EPA discovers that Company A, with a business revenue of $2.5
million and rio prior violations, is installing aftermarket
converters but maintains incomplete records. That is, 65 records
do not include the vehicle make, year, converter part number, and
vehicle owners’ address. The records only include the vehicle
owners’ name and type of work performed, i.e., converter
replacement. Therefore, each of the 65 incomplete records are
considered Level 1 violations.
Using Table 3, the penalty would be calculated as follows:
Number of Penalty
Violations Amount
65 $300 = $19,500
Since this is the first offense for Company A, and no evidence
is apparent of additional tampering, other than the insufficient
record-keeping violations, the maximum proposed penalty amount
applies to the proposed penalty amount, if it is lower than the
computed proposed penalty. Therefore, since the computed proposed
penalty is greater than the maximum proposed penalty amount for
Level 1 violations, the maximum proposed penalty amount of $15,000
applies.
Example 5.
EPA discovers that Company Y, with a business revenue of $2.5
million and 2 prior violations, installed dual pipes and removed
the catalytic converter from 10 of MPD’s vehicles, and disconnected
the PCV valves on 10 of DCNG’s vehicles. This constituted 10 level
A, and 10 level B tampering violations. Neither MPD nor DCNG knew
that their vehicles had been tampered with.
Using Table 1, the penalty would be calculated as follows:
Number of Penalty
Violations Amount
10 Level “A” x $2,000 = $20,000
10 Level “B” x $1,500 = $15 ,000
Proposed Penalty = $35,000
17

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Example 6.
EPA discovers that Dennis Speed Shop, with a business revenue
of 350,000 and no prior violations, removed the PCV valve and the
Heated Air Intake tube from 25 vehicles. This constituted 25
violations of the tampering prohibition.
Using Table 1, the penalty would be calculated as follows:
Number of
Violations
25 (Level “A” 3 ) x $1,500 = $37,500
The greatest gravity and the largest penalty are also
assigned to multiple level B violations.
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Section J Document 21
Reformulated Gasoline and Anti-Dumping
Regulations Question and Answer Document
NOTE: Because these Q&As are very lengthy, and
because as of August 1995 they were still being
regularly updated and revised, the Q&As
themselves are not included in the Compendium.
Instead, the Compendium contains instructions for
accessing the Q&As from the public computer
bulletin board.
07101/94
(date of original cover memo)
21

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, 0 C 20460
JUL I 1994
Dear Interested Party:
This edition of the Reformulated Gasoline and Anti-Dumping
Regulations Question and Answer Document responds to questions we
have received concerning the manner in which the U.S.
Environmental Protection Agency (EPA) intends to implement and
assure compliance with the reformulated gasoline and anti-dumping
regulations at 40 CFR part 80. This document was prepared by
EPA’s Office of Air and Radiation, Office of Mobile Sources, and
Office of Enforcement and Compliance Assurance, Office of
Regulatory Enforcement, Air Enforcement Division. As we receive
more questions, particularly involving renewable oxygenates, a
supplement to this document will be published at a later date.
Regulated parties may use this document to aid in achieving
compliance with the reformulated gasoline (RFG) and anti-dumping
regulations. However, it does not in any way alter the -
require n a of these regulations. While the answers provided in
this docum Ttt represent the Agency’s interpretation and r eneral
plans for implementation at this time, some of the responses may
change as additional information becomes available or as the
Agency further considers certain issues. Where necessary, the
answers provided in this document address issues related to the
recent RFG direct final rule, -but answers to questions on the
renewable oxygenate rule (ROXY) are not included. •(Note: Both
the direct final rule and ROXY final rule were signed the week of
June 27, 1994). Please see the attached instructions for access
to the Technology Transfer Network Bulletin Board System which
contains this question and answer document, ‘ the direct final
rule, and the ROXY final rule.
Finally, we would like to bring to your attention that
registration forms are now available. For information on
obtaining these forms, you may contact either Peter Lidiak at
(202) 233—9026, or Mike Marmen at (202) 233—9028, of the Field
Operations and Support Division of EPA.
Chester J. 1 ’rance, Director Mar . ith, Lrector
Regulation Development and , Fi 1 0 erations and
Support Division Su o Division
Office of Mobile Sources Office of Mobi e Sources
iISiL
Kathie A. Stein, Director
Air Enforcement Division
O.ff ice of Regulatory Enforcement
Attachment
plw p Ir I.t mIag s
a S 75% mcØsd

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Instructions for getting RFG files of f the OAOPS TTN BBS
Copies of the preamble, the Final Regulatory Impact Analysis
(RIA), the Responses to Comments on EnforcementProvisions
(RCEP), the complex model, the simple model, the regulations
for the reformulated gasoline rulemaking, ROXY, the technical
amendments to the final rule, and the RFG/Anti-Dumping Question
and Answer Document are available on the OAQPS Technology
Transfer Network Bulletin Board System (TTNBBS).
The TTNBBS can be accessed with a dial-in phone line and a
high-speed modem (PH# 919-541-5742). The parity of your modem
should be set to none, the data bits to 8, and the stop bits to
1. Either a 1200, 2400, 9600, or 14400 baud modem should be
used. When first signing on, the user will be required to answer
some basic iflformational questions for registration purposes.
After ri- -p leting the registration process, proceed through the
following series of menus:
(T) GATEWAY TO TTN TECHNICAL AREAS (Bulletin Boards)
(M) OMS
(K) Rulemaking and Reporting
(3) Fuels
(9) Reformulated gasoline
A list of ZIP files will be shown, all of which are related
to the reformulated gasoline rulemaking process. The six
documents mentioned above will be in the form of a ZIP file and
can be identified by the following titles: “PREAMBLE.ZIP”
(preamble); “RIAFINAL.ZIP” (RIA); “ENFORCE.ZIP” (RCEP);
“ E A NAL.ZIP” jçp nplex model) ; “MODFINAL.ZIP” (simple model);
REGFINAL.ZIP”_(regulati fl) “DFRN.ZIP” (direct final rulemaking
Jch provides ted?1Wtca±—e ef dinents to the final rule); “ROXY-
PRE. ZIP” (renewable oxygenates preamble); “ROXY-REG. ZIP”
(regulations); “ROXY-RIA.ZIP” (RIA); and “RFGQ&A.ZIP” (RFG/Anti-
Dumping Question and Answer Document). To download these files,
type the in ructions below and transfer according to the
appropriate software on your computer:
ownload, 
rotocol, xamine, ew, ist, or -elp
Selection or  to exit: D filename.zip
You will be given a list of transfer protocols from which
you must choose one that matches with the terminal software on
your own computer. Then go into your own software and tell it to
receive the file using the same protocol. Programs and
instructions for de—archiving compressed files can be found via
ystems Utilities from the top menu, under rchivers/de—
arch ivers.

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UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON. D.C. 20460
AUG 2 1994
Dear Interested Party:
As you may know, the first meeting of the Environmental
Protection Agency’s (EPA), Reformulated Gasoline (RFG) Taskforce
was held on July 22, 1994. At this meeting, EPA committed to
find ways in which to keep interested parties better informed
concerning RFG implementation and to provide answers to specific
questions in the most timely manner possible. This is to
announce that EPA has determined to do the following in an effort
to accomplish these goals:
1) EPA will provide answers to questions ib receives
regarding implementation of the RFG/anti-dumping regulations,.
including questions on the renewable oxygenate rule (ROXY),
published on August 2, 1994, on the EPA Technology Transfer
Network Bulletin Board System (Bulletin Board) on a weekly basis.
These answers will be available on the Bull tin Board under the
title, “RFG/Anti—Dumping Questions and Answers, [ date),”
(example: “RFG/Anti-Dumping Questions and Answers,
August 29, 1994”), and will be separate from the July 1, 1994
“Reformulated Gasoline and Anti-Dumping Questions and Answers”
document, which was made a available on the Bulletin Board on
July 1. This weekly document will be put on the Bulletin Board
by close of business each Monday and, depending on the volume and
nature of the questions received, will include questions received
at least fourteen days prior to the posting date. For example,
questions received by August 29, will be answered on
September 12. Questions received by September 5, will be
answered on September 19. The documents for prior weeks will
remain on the ‘Bulletin Board and may be merged into the larger
“Questions and Answers” document at a future time. The necessity
for policy decisions and/or resource constraints may prevent some
questions from being answered within the two week period.
However, EPA is aware that timely answers to these questions are
necessary for the smooth implementation of the RFG regulations,
and, consequently, is committed to providing answers as quickly
as possible. -
The first of these weekly question and answer documents will
be available on the Bulletin Board on Monday, August 29, 1994.
Most of the questions we received by Monday, August 15, 1994,
will be included in this document. Future questions may be
submitted by FAX ormail, or via the Bulletin Board. Direct
enforcement related questions to George Lawrence, Office of
Enforcement and Compliance Assurance, Office of Regulatory
Ji RecyctedfRecyclablo
\ Pnnlod with ScylCanola ink on paper lha
C]C7 ccn ns least 50% recycled fiber

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2
Enforcement, Air Enforcement Division, 401 N Street, S.W.
(6406J), Washington, D.C. 20460 (FAX (202) 564—0015); andother
implementation questions to Marilyn Bennett, Office of Air and
Radiation, Office of Mobile Sources, Field Operations and Support
Division, 401 M Street, S.W. ‘6406J), Washington, D.C. 20460
(FAX: (202) 233-9556). When .lsing the Bulletin Board, transmit
questions to the name of the intended recipient (i.e., George
Lawrence for enforcement questions; Marilyn Bennett for other
questions).
Questions for which Confidential Business Information (CBI)
is claimed will appear on the Bulletin Board only if the
questions and answers can be written by EPA in a generalized form
that would not identify the company.
2) EPA will provide an RFG “update” on the Bulletin Board,
which will include current information concerning RFG
implementation, such as dates for upcoming meetings, summaries of
taskforce meetings, status of baselines, etc. This document will
also be put on the Bulletin Board by close of business each
Monday, and will be under the title, “RFG Upate, [ date)’
(example: “RFG Update, August 29, 1994”.)
3) EPA will provide a list of contacts for specific
RFG/anti-dumping subject areas to facilitate answering questions
that may easily be answered by a phone call. This list will be
put on the Bulletin Board under the title, “RFG Contact List.”
Please see the enclosed instructions for access to the
Bulletin Board which contains these documents.
We hope that providing these documents will facilitate a
smooth transition to the RFG/Anti-Dumping program. If you have
any questions regarding the availability of the documents
described above, please contact Marilyn Bennett or
Whitney Trulove-Cranor of the Office of Mobile Sources at
(202) 233—9006, or (202) 233—9036, respectively, or George
Lawrence of the Office of Regulatory Enforcement, at
(202) 564—1307.
Na,PV Smith, Director
F e1 çiperations and
SUpp ’9.Zk Division
Office of Mobile Sources
Kathie A, Stein, Director
Air Enforcement Division
Office of Regulatory
Enforcement
Enclosure

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Instructions for getting RPG files off the OAQPS TTN EBB
Copies of the RIG/Anti-Dumping Questions and Answers, (date), RFG
Update, (date), and RIG Contact List are available on the OAQPS
Technology Transfer Network Bulletin Board System (T’rNBBs). The
documents are in word perfect format under the file names: -
“QA(date].WPD” (RIG/Anti—Dumping Questions and Answers, (date);
example: “QA082994.WPD”); “UD(date] .WPD” (RIG Update, (date];
example: “UD082994.WPD); “CONTAcT.WPD” (RIG Contact List).
The TTNBBS can be accessed with a dial-in phone line and a high-
speed modem (PH# 919-541-5742). The parity of your modem should
be set to none, the data bits to 8, and the stop bits to 1.
Either a 1200, 2400, 9600, or 14400 baud modem shouldbe used.
When signing on for the first time, the user will be required to
answer some basic informational questions for registration
purposes. After completing the registration process, proceed
through the following series of menus:
(T) GATEWAY TO TTN TECHNICAL AREAS (Bul-letin Boards)
(N) OMS
(K) Rulemaking and Reporting
(3) Fuels
(9) Reformulated gasoline
A list of ZIP files will be shown, all of which are related to
the reformulated gasoline rulemaking process. The three
documents mentioned above will be in the form of a ZIP file and
can be identified by the following title: t1 UD(date].ZIP”
(example: “UD082994.ZIP”). To download this file, type’ the
instructions below and transfer according to the appropriate
software on your computer:
ownload, 
rotocol, xamine, ew, ist, or elp
Selection or  to exit: D filename.zip
You will be given a list of transfer protocols from which you
must choose one that matches with the terminal software on your
own computer. Then go into your own software and tell it to
receive the file using the same protocol. Programs and
instructions for de-archiving compressed files can be found via
ystems Utilities from the top menu on the TTN, under
rchivers/de—archivers.

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22

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•tC SW, .
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
Office of Air Quality Planning and Standards
______ Research Triangle Park, North Carolina 2771 1

December 6, 1999 JA — 2fl00
_________ EAD
SUBJECT: EPA Process for Responding to Public Petitions for
Title V Permit Objections
FROM: il1iam T. Harnett, Director
Information Transfer and Program
Integration Division (MD-12)
TO: Director, Office of Ecosystem Protection, Region I
Director, Division of Environmental Planning and
Protection, Region II
Director, Air Protection DivislorL Region III
Director, Ai.r, 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 Toxics Division, Region VII
Assistant Regional Administrator, Office of Partnersh p
arid Regulatory Assistance, Region VIII
Director, Air Division, Region IX
Director, Office of Air, Region X
Pursuant to title V of the Clean Air Act (Act), EPA reviews
proposed State title V permits and objects to the issuance of any
permit that is inconsistent with the Act. Also, anyone who
thinks that EPA should have objected, but did not, may directly
petition the Administrator to object to issuance of that permit.
On December 2 , 1998, we issued guidance on the practical
implementation issues associated with this petition process.
This memorandum revises and supersedes that guidance. These
revisions include the adjustment of some of EPA’S internal
administrative procedures for coordination among the various EPA
offices and provision for a notice of the Administrator’s final
action to be published in the Federal Registex .

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2
This guidance establishes the procedures that EPA will
follow in acting upon petitions to object to title V permits.
This process is flexible and informal but provides for full
participation by interested EPA offices. The Regional Office
will take the lead role in evaluating the technical issues
presented by the petitions, in consulting with the appropriate
Headquarters offices, and in preparing a draft decision document
Three Headquarters offices participate: the Office of Air
Quality Planning and Standards (OAQPS), the Office of Enforcemen:
and Compliance Assurance (OECA) and the Office of General
Counsel (OGC)
The Region’s analysis and recommendation will receive
Headquarters review before being forwarded to the Administrator’s
Office. The Regions are encouraged to consult with the
Headquarters contacts on issues arising during the preparation of
these determinations and to share working drafts by E-mail.
This process is described in detail in attachment 1. To
assist Regional staff in preparing the decision document, an
example is included as attachment 2. This document will be
accompanied by a transmittal memorandum, an example of which is
included as attachment 3. Notice of the Administrator’s decision
on a petition must be published in the Federal Register . A
suggested model format to assist in the preparation of this
notice is included as attachment 4 to this document.
This guidance reflects comments received during consultation
with the Regional Offices, 0CC, and the Administrator ’s Office.
Thank you for your assistance in developing this guidance.
Questions or comments may be directed to Kirt Cox, at (919)
541-5399. Please inform us of any suggestions that you might
have for implementing the petition process more effectively.
Attachments
cc: Bruce Buckheit, OECA Kirt Cox, OAQPS
Anna Duncan, OAQPS Robert Dresdner, OECA
Alan Eckert, OGC Greg Foote, OGC
Caroline Petti, OA Steve Hitte, OAQPS
Ed Reich, OA John Walke, OGC
Title V Contact, Regions I-X Tom Curran, OAQPS
Title V Manager, Regions I-X

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ATTAC N 1
EPA’s Process for Responding to Public Petitions for
Title V Permit Objections
I. Background
Section 505(b) (1) of the Clean Air Act (Act) provides tha:
EPA shall review proposed State Title V permits and object to the
issuance of any permit that EPA determines to be not. in
compliance with the requirements of the Act, including
requirements of a State implementation plan. The EPA has 45 days
from receipt of a proposed permit to object. In addition,
section 505(b) (2) of the Act provides that any person may, with
60 days of the expiration of the 45-day review period, petition
the Administrator tO object to issuance of a permit if the review
period has expired without EPA having objected. Section
505(b) (2) of the Act provides that the Administrator shall grant.
or deny the petition within 60 days after it is filed. This
provision expressly prohibits the Administrator from delegating
authority to act on these petitions.
Today’s guidance revises and supersedes guidance that EPA
issued on December 23, 1998, regarding the practical
implementation issues associated with the Title V petition
process. This guidance establishes the process that EPA will
follow for receiving 1 distributing, processing, and acting upon
petitions to object to Title V permits under section 505(b) (2) of
the Act. This guidance reflects comments received during
consultation with the Regional Offices, the Office of General
Counsel (OGC), the Office of Enforcement and Compliance Assurance
(OECA) and the Administrator’s Office.
II. The Administr tiVQ Process for Objection Petitions
The EPA has considerable discretion in configuring the
administrative procedures for implementing the petition
provisions of section 505(b) (2) of the Act. We have used this
authority to develop a flexible process that provides for full
participation by interested EPA offices. The Regional office
will take the lead role in evaluating the technical issues
presented by the petitions in consulting with the appropriate
Headquarters offices and in preparing a decision document for

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2
the Administrator’s signature. The following Headquarters
offices/individuals will also participate in this process: the
Office of Air Quality Planning and Standards (OAQPS) within the
Office of Air and Radiation (OAR) , the Office of Enforcement and
Compliance Assurance (OECA), the Office of General Ccunsel(OGC),
and the Administrator’s Office of the Executive Secretariat
(OEX) .‘ The contacts in these offices are currently the
following:
OAR/OAQPS - Kirt Cox
OGC - John Walke
OECA - Robert Dresdner
OEX - Barbara Zahnle
STEP 1. The initial atep in the petition response process is to
ensure that petition materials are promptly forwarded to the
appropriate Regional office, OAR/OAQPS, OGC and OECA.
A petitioner rrtay send the petition directly to the
Administrator, but also has the option of sending it to the
relevant EPA Regional Office. For petitions sent directly to the
Administrator, QEX will promptly assign and send the petition to
the appropriate Regional office for action. OEX will also send
copies to 0CC, OECA, and OAR/OAQPS for their information.
When a petitioner chooses to send a petition to the relevant
EPA Regional office, the Regional office must promptly forward
copies of the petition and support materials to the four
Headquarters contacts listed above. Upon receiving these
materials, OEX will perform the appropriate logging and
assignment to the Region.
The Region will also verify that the relevant permitting
authority and source have received copies of the petition. The
Region will provide a copy to those parties that have not already
received one.
As noted elsewhere, the Environmental Appeals Board (EAB) nay have
jurisdiction over some prevention of significant deterioration (PSD) permit
matters included in a Title V petition For this reason, the Region should
also provide a courtesy copy of any petition presenting such issues to the EAB
upon receipt (attention: Ed Reich)

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3
Step 2. The Region i8 responsible for providing technical
support in reviewing the petition and preparing a reco ended
decision package for the Administrator’s signature.
As a threshold matter, the Region must determine whether t . e
petition 13 based upon objections to the permit that were raisec
with reasonable specificity during the permitting agency’s pubi:c
comment period. There is an exception to this requirement,
however, if the petitioner can demonstrate that it was
impracticable to raise these issues during that period or if the
grounds for such an objection arose after that period.
In view of the public process involved in issuing the
permits and the fact that most petitions will be raising issues
that were raised during the permit’s public comment period, EPA
generally will act on petitions based on the information before
it without seeking further information from the petitioners
source owner or operator 1 or permitting authority. However, if
the Regions or other Agency personnel determine that EPA’s
analysis could benefit from additional information, the Regions
have the discretion to seek further information, including the
solicitation of additional facts from petitioners 1 source owner
or operator, or permitting authority. In seeking such
information, the Region has the discretion tO set schedules by
which aLl comments must be received, so long as these schedules
are consistent with the basic transmittal and decisional time
schedules described in this memorandum.
Upon completion of its technical analysis, the Regional
office will prepare:
1) A draft Order for the Administrator’s signature that
responds to the petition. The recommended decision
should generally follow the format of the example order
(Attachment 2) issued by the Administrator in response
to a petition to object tO a Title V permit tIn the
Matter of Roosevelt Regional Landfill Regional Disposal
Company (May 4, 1999)32;
2 Ir addition, Reg1ox S should aseign a number in the captiOn of
reconmended orders as a chronological record of each petition responded to by

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4
2) A draft transmittal memorandum from the Regional
Administrator to the Administrator describing the
petition, analysis performed, the recommended act:cr’- ar-c
the reasons why. This memorandum should also inciu e
the name of the Regional Office contact, should f _r:’.e:
information be needed. For illustration, the dcc ner
used for transmittal of the above-referenced order :
included as Attachment 3; and
3) A draft Federal Register (FR) Notice tO be used n
announcing the decision. Step 5 describes what this
should cover. It. will ultimately be signed by the RA
after the order is signed by the Administrator.
Attachment 4 is provided as an example.
Step 3. The Region’s draft recou endation (the draft Order) must
be provided to OAQPS, OGC and OECA for review, coent, and
concurrence before the final recou nendation package is forwarded
to the Administrator for signature.
The Region’s draft recommendation (the draft Order) should ce
provided to the OAQPS, OGC and QECA for review, comment and
concurrence no later than 35 days after the petition was filed
with EPA. If extenuating circumstances prevent meeting this
deadline, these should be raised and discussed with the
Headquarters office contacts as soon as possible.
Since the time for responding is so short, the respective
Regional and Headquarter’s office contacts responsible for these
reviews should discuss the petition informally upon receipt a d
determine whether any information beyond the initial notificac on
need be transmitted to the Headquarters office contacts. The
Regions are encouraged to consult with the Headquarters office
contacts on issues arising in the preparation of draft
recommendation and to share working drafts by e-mail. The
Regions must involve the OAQPS, OGC and OECA on all novel legal
or policy issues prior to submitting the recommended decision tc
the Region during the year. s an illustration of this num eriflg system : e
Roosevelt Landfill . petition orig .nat ng in Region X would have had a capt:On
number of X-1999-L. If a second petLtiofl ori.ginatee in Reglofl X in l999
caption will be X-1999-2.

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5
these offices for concurrence. These offices must respond
promptly to Regional requests for comments on the draft
recommendation.
By 35 days after submission of the petition, or a later date
warranted by extenuating circumstances and agreed upon mutually
by the Region and Headquarters contacts, the Region should subm:t
a recommended decision to the OAQPS, 0CC and OECA for formal
review, comment, and concurrence. Following concurrence by the
appropriate level in each of these Headquarters offices - - to be
determined by each office - - the Region should forward a final
recommended decision package to the Administrator.
Step 4. The final recotended decision package should be
transmitted through the Regional Correspondence Control Point
(RCC) to the Administrator’s Office of the Executive Secretariat
(OEX) at least 7 days prior to the 60-day deadline and marked
“RUSH.”
The Region will provide the following as the final
recommended decision package for the Administrator’s signature
and mark it “RUSH”:
1) A copy of the original petition;
2) The final transmittal memorandum from the RA (through
the Associate General Counsel for Air and Radiation) to
the Administrator, summarizing the petition, the
analysis performed and the recommended decision. An
example is included as Attachment 3.
3) The final recommended Order - both a hard copy and on a
diskette.
The final transmittal memorandum should identify the date
the petition was received, the date that the draft response was
provided to OAQPS, 0CC and OECA for concurrence, and the date of
the 60-day petition response deadline. The final transmittal
memo should also identify that OECA, 0CC and OAR were given an
opportunity to review and comment on the recommendation, that all
have concurred, and at what level concurrence was obtained (e.g.,
the Division Director or Office Director level)
The Administrator’s office has requested that the final

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6
decision package be èent through OGC for a final review and
written concurrence from the Associate General Counsel for Air
and Radiation. (This position is currently held by Alan Eckert
If an OGC staff level concurrence was previously obtained, as
required in step 3, this written concurrence by OGC on the
transmittal memo should be expeditious. After this written OGC
concurrence is obtained, the final package can be forwarded for
the Administrator’s signature.
The final package should be transmitted through the Regional
Correspondence Control Point (RCC) to the Administrator’s Office
of the Executive Secretariat (OEX) at least 7 days prior to the
60-day mark and marked “RUSH.”
Upon signature by the Administrator, OEX will send the final
signed Order to the Regional office (Attn.: Regional contact
identified) for transmission of the original signed Order to the
petitioner and copies to the State permitting authority and the
source owner or operator. OEX will also return the diskette that
the Regional office provided with the final recommendation
package. (Changes could have been made to the final Order after
receipt at EPA Headquarters, by either 0CC or the Administrator’s
office. The Region should check to confirm that the diskette
version matches the final signed version.) The Region will
retain a copy of the signed Order to be available for interested
parties contacting the Agency. The OEX will also retain a copy
of the signed Order for the Administrator’s office, and will also
provide copies to the contacts in OAR, OGC, and OECA.
Step 5. The Region will prepare a Notice of the Administrator’s
decision on a petition for publication in the Federal Register ,
and transmit the Order for posting on the OAR web site.
This responsibility can be met with a brief notice
identifying the parties and summarizing the issues presented by
the petition and the Administrator’s decision. The notice will
inform the public that interested persons may contact the
Regional office for a copy of the final Order. The Region will
prepare this notice for their Regional Administrator’s signature
within 30 days of the Administrator’s action on the petition. A
suggested model format to assist in the preparation of this
notice is included as Attachment 4 to this document.
Finally, the notice will indicate where a copy of the final

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7
Order may be obtained on OAR’s web site. The Region should
ensure that a computer file of the final Order is provided to
Kirt Cox (OAQPS) for this purpose.
III. When Petitions Address Iaeu Pending on Appeal Before
the EAB
In sortie cases, petitions will challenge permit terms that
are based on determinations made in the PSD new source review
program. The PSD program includes a process by which challenges
to the terms of certain PSD permits may be made in the form of
appeals to the EAB when a delegated State, local program, or EPA
is the permitting authority. (The EAB review is not available :r.
the case of PSD determinations under a SIP-approved PSD program.)
Although any challenges to PSD permits will usually have been
resolved by the time that the Title V permit is issued, this will
not always be the case, especially where States have merged their
Title V and preconstructjon permit programs. Thus, it is
possible that an objection petition will address issues that are
also the subject of a pending PSD appeal before the LAB
e.g., In the Matter of Kawajhae Cogeneratjpn Pro-iect (March 10,
1997]
It is important to note that the Administrator has assigned
the authority to act on PSD appeals to the LAB. In order to
protect the jurisdiction of the LAB, EPA will not address the
merits of an issue in an objection petition that is also the
subject of an LAB appeal. Accordingly, the Region must confirm
whether the issues being addressed in a petition are the subject
of a pending LAB appeal. 3 If such an appeal is pending when the
Region receives a petition, or if such an appeal is filed at any
time before the Agency acts on the petition, the Region shall
take the following measures: (1) the Region shall alert the
Headquarters contacts listed above to the pending appeal; and (2)
the Region shall prepare a recommended decision to deny the
petition as to those issues on the ground that such issues may be
Where, as in appeals of Federal PSD permit decisions, the
Administrator has assigned administrative appeals to the LAB, the failure to
file an appeal with the LAB where there is an opportunity to do so generally
should be viewed as a failure to exhaust administrative remedies regarding
such issues. For this reason, as to those issues, it generally also would
constitute a waiver to the right to file a petition to object under Title V
that would have existed in the absence of an opportunity to appeal.

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8
heard only by the EAB through direct appeal of the PSD decision.
For some of these permits, the petition may present additional
issues that are severable from the matters before the EAB. To
the extent that such issues could be usefully addressed while the
EAB process is pending, the Regional and Headquarters reviewers
should jointly confirm this so that the processing of the
petition may proceed with respect to those issues.
The recommended decision must also make clear that the Title
V permit is not effective (or not effective with respect to new
or modified emissions units, in cases involving a PSD major
modification to an existing source, as opposed to the
construction of a new major source) and that construction may not
commence until the EAB disposes of the pending appeal. It should
also indicate that EPA is expressing no view on the merits of the
permit provisions that are the subject of the EAB appeal, and
that EPA is denying the petition as to those provisions in the
permit to allow the LAB to resolve the appeal.
IV. For Further Information
Questions and comments may be addressed to Kirt Cox at
919-541-5399. Thank you for your assistance in developing this
guidance. Please inform us of any suggestions that you might
have for implementing the petition process more effectively.

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ATTAC 1ENT 2
BEFORE TEE ADMINISTRATOR
UNITED STATES ENVIROt N j,, PROTECTION AGENCY
IN THE MATTER OF
ROOSEVELT REGIONAL LANDFILL
REGIONAL DISPOSAL COMPANY ) ORDER RESPONDING TO PETITIONER’S
REQUEST THAT THE ADMINISTRATOR
Permit No. DE 98A0P-C242 ) OBJECT TO ISSUANCE OF A STATE
Issued by the Washington ) OPERATING PERMIT
Department of Ecology,
Central Regional Office
ORDER DENYING PETITION FOR OBJECTION TO PERMIT
On February 26, 1999, the Environmental Protection Agency
(“EPA”) received a petition front TPS Technologies, Inc. (“TPST”
or “Petitioner”) requesting that EPA object to the issuance to
Roosevelt Regional Landfill, Regional Disposal Company of a state
operating permit issued pursuant to title V of the Clean Air Act
(“CA.A”or “the Act”), 42 U.S.C. § 7661—7661f, CAA §S 501—507
(“Roosevelt Landfill Permit”) . The Roosevelt Landfill Permit was
issued by the Washington Department of Ecology, Central Regional
Office (“Ecology”), on December 30, 1998, pursuant to title V of
the Act, the federal implementing regulations, 40 CFR Part 70,
and the State of Washington implementing regulations, Washington
Administrative Code (“WAC”) Chapter 173-401.
The petition alleges that the Roosevelt Landfill Permit
failed to: (1) adequately identify all emissions units at the
facility; (2) adequately calculate emissions of volatile organic
compounds (“VOCs”) from the handling of petroleum contaminated
soil (“PCS”) and the use of PCS as daily cover; (3) explain the
basis for establishing different types of controls on PCS at two
similar landfill facilities; and (4) reflect the comments of
Region X’s new source review (“NSR”) personnel regarding controls
on PCS to reflect that the facility is either currently out of
compliance with NSR requirements or will be subject to NSR in two
years. The Petitioner has requested that EPA object to the
issuance of the Roosevelt Landfill Permit pursuant to section
505(b) (2) of the Act for these reasons.
1

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Based on a review of all the information before me,
including the oosevelt Landfill Permit, the permit application,
and Statement of Basis; additional information provided by the
permitting authority in response to inquiries; and the
information provided by the Petitioner in the petition, I deny
the Petitioner’s request for the reasons set forth below.
I. STATUTORY AND RZGULATORY FRAMEWORK
Section 502(d) (1) of the Act calls upon each State to
develop and submit to EPA an operating permit program to meet
the requirements of title V. EPA granted interim approval to the
title V operating permit program submitted by the State of
Washington effective December 9, 1994. 59 Fed. Rep . 55813 (Nov
9, 1994); see also 60 Fed. Rea . 62992 (Dec. 8, 1995) (final
interim approval after remand on unrelated issue); 40 CFR Part
70, Appendix A. Major stationary sources of air pollution and
other sources covered by title V are required to obtain an
operating permit that includes emission limitations and such
other conditions as are necessary to assure compliance with
applicable requirements of the Act. CA.A §S 502(a) and
504 (a)
The title V operating permit program does not generally
impose new substantive air quality control requirements (which
are referred to as “applicable requirements”), but does require
permits to contain monitoring, recordkeepirig, reporting, and
other compliance requirements to assure compliance by sources
with existing applicable requirements. 57 Fed. Reg . 32250, 32251
(July 21, 1992) . One purpose of the title V program is to enable
the source, EPA, States, and the public to better understand the
applicable requirements to which the source is subject and
whether the source is meeting those requirements. Thus, the
title V operating permits program is a vehicle for ensuring that
existing air quality control requirem ntS are appropriately
applied to facility emission units in a single document and that
compliance with these requirements is assured.
Under section 505(b)of the Act and 40 CFR § 70.8(c), States
are required to submit all operating permits proposed pursuant to
title V to EPA for review and EPA will object to permits
determined by the Agency not to be in compliance with applicable
requirements or the requirements of 40 CFR Part 70. If EPA does
not object to a permit on its own initiative, section 505(b) (2)
of the Act and 40 CFR § 70.8(d) provide that any person may
2

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petition the Administrator, within 60 days of the expiration of
EPA’s 45—day review period, to object to the permit. To justify
exercise of an objection by EPA to a title V permit pursuant to
section 505(b) (2), a petitioner must demonstrate that the permit
is not in compliance with the requirements of the Act, including
the requirements of Part 70. Petitions must, in general, be
based on objections to the permit that were raised with
reasonable specificity during the public comment period. A
petition for review does not stay the effectiveness of the perrn t
or its requirements if the permit was issued after the expirat:on
of EPA’s 45-day review period and before receipt of the
objection. If EPA objects to a permit in response to a petition
and the permit has been issued, EPA or the permitting authority
will modify, terminate, or revoke and reissue such a permit
consistent with the procedures in 40 CFR SS 7 0. 7 (g) (4) or (5) (i)
and (ii) for reopening a permit for cause.
II. ISSUES RAISED BY TEE PETITIONER
Petitioner first alleges that the Roosevelt Landfill Permit
does not adequately identify all emissions units at the facility.
TPST Petition at 2. Petitioner indicates that “even if the
transfer station area of the landfill had only fugitive VOC
emissions, those emissions needed to be identified with more
specificity as potential emissions units.” .L . The petition
references an objection to a draft title V permit by another EPA
Region on the basis that all emission units were not accounted
for in that permit. (citing Region IV objection to draft
Mississippi Department of Environmental Quality permit for First
Chemical Corporation (April 18, 1997) (“First Chemical
Objection”) ) j
With one exception, Petitioner does not specify the emission
units claimed not to be adequately identified in the permit.
EPA’s review has not uncovered any emissions units subject to
applicable requirements that should have been but were not
CAA § 505(b) (2); 40 CFR § 70.8(d). Except as noted
ir fra at page 6, Petitioner here satisfied the threshold
requirement to have commented during the public comment period on
concerns with the draft operating permit that are the basis for
this petition. Letter from David Dabroski Attorneys
for TPST, to Lynnette Hailer, Washington Dep’t of Ecology (June
11, 1998) (“TPST Comment Letter”)
3

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identified and included in the permit. Accordingly, Petitioner’s
general and Unsubstantiated claim that emissions units are not
adequately identified . .ri the permit fails to demonstrate that the
permit is not in compliance with the requirements of the Act,
including the requirements of Part 70.
The one specific example of inadequate identification of an
emission unit alleged by Petitioner is “the transfer station area
of the landfill.” TPST Petition at 2. Although it is not
entirely clear what emission unit Petitioner is referring to as
“the transfer station area of the landfill,” EPA believes that
this reference is intended to encompass the transfer of material
at the Roosevelt Intermodal Yard. This emission unit, 2 which .s
discussed in the permit’s Statement of Basis at section 11.50 on
page 41 of 54, involves the transfer of closed containers filled
with municipal solid waste (“MSW”)/PCS from railcars to trucks.
In the case of the Roosevelt Landfill Permit, EPA believes
that it is unnecessary to specifically identify the “transfer
station area of the landfill” or the Intermoda]. Yard in the
permit as a separate emission unit in order to assure compliance
with the relevant applicable requirements for these operations.
Section 5.1 of the Roosevelt Landfill Permit identifies seventeen
different requirements that apply to all emission units at the
facility, including the “transfer station area of the landfill”
or the Intermodal Yard. No specific applicable requirements
apply uniquely to the transfer station area or the Intermodal
Yard. The seventeen facility—wide requirements include a twenty
percent limit on opacity from all sources and a requirement to
use reasonable precautions to control fugitive dust.
Roosevelt Landfill Permit conditions 5.1.4. and 5.1.6. Although
a title V permit generally must identify each emission unit and
link it to its corresponding applicable requirements in order to
assure compliance with those requirements, EPA believes that the
use of generic groupings of emission units in a permit may be
used for applicable requirements that apply in the same way at
all units at a facility. e.g., White Paper for Streamlined
Development of Part 7Q Permit Applications (July 10, 1995),
2 The Part 70 regulations define “emissions unit” as “any
part or activity of a stationary source that emits or has the
potential to emit any regulated air pollutant or any pollutant
listed under section 112(b) of the Act.” 40 CE’S § 70.2;
also WAC 173—401—200(11).
4

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section 11.4 (“White Paper 1”) . EPA believes that permit
drafting in this fashion will assure compliance with these types
of facility-wide applicable requirements.
Petitioner’s invocation of EPA Region IV’s objection to a
proposed permit issued by the State of Mississippi to First
Chemical Corporation is misplaced. The relevant passage of the
Region IV objection letter .states:
The proposed permit and the permit application fail to
adequately account for all emission units and all points of
emissions in sufficient detail to establish a basis for
applicability of requirements under the Clean Air Act (42
U.S.C. § 7 401—7671q) . Thus, the proposed permit and
supporting information fail to account for all HAP
[ hazardous air pollutant] emissions which are (relevant] to
the demonstration of minor source HAP emissions. [ 40 C.F.R.
§ 7 0.5(c) (3)].
First Chemical Objection at 2. Region IV objected to the
proposed First Chemical Corporation permit in part because, by
failing to identify all emission units in the permit and permit
application, Region IV concluded that the permitting authority
had incorrectly determined that First Chemical Corporation was a
minor source of HAPs and that the permit therefore failed to
impose applicable emission limitations related to a National
Emission Standard for Hazardous Air Pollutants. As discussed in
more detail in response to the fourth allegation below, EPA has
not concluded at this time either that the permit fails to
adequately identify emission units or that it fails to assure
compliance with any applicable requirements for the Roosevelt
Landfill.
For the reasons stated above, Petitioner’s first claim does
not demonstrate that the Roosevelt Landfill Permit fails to
comply with requirements of the Act or Part 7Q•3
To the extent that Petitioner is alleging that the
failure of the permit to identify specific emission units, such
as the “transfer station area of the landfill,” has resulted in
an underestimation of emissions, which has in turn resulted in a
failure of the permittee to comply with federal NSR requirements,
this issue is discussed below under the Petitioner’s fourth
allegation.
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Petitioner’s second claim alleges that the permit fails to
adequately calculate voc emissions from the handling of PCS and
the use of PCS as daily cover. In support, the petition cit to
the same flegion IV objection, for the proposition that ooject ion
to a permit is warranted for the permit’s failure to “contain
sufficient data regarding emissions from a facility.” TPST
Petition at 2.
As noted above, EPA will object to a permit in response to a
petition where a petitioner has demonstrated that the permit is
not in compliance with applicable requirements of the Act or the
requirements of Part 70. Here, Petitioner fails to show any
applicable requirement that has been omitted from the Roosevelt
Landfill Permit because of the alleged failure of the permit to
adequately calculate VOC emissions. 4 In addition, EPA’s review
has not uncovered missing applicable requirements resulting from
the infirmities alleged by Petitioner. Therefore, Petitioner has
failed to demonstrate that the permit warrants objection by EPA.
Again, Petitioner’s reliance on EPA Region IV’s objection to
the First Chemical Corporation permit is misplaced. Region IV
objected to the First Chemical Corporation permit because the
permit and supporting documentation failed to include information
needed to determine the basis for the applicability of Clean Air
Act requirement. This stemmed from the lack of an adequate
demonstration there that the ompany’s potential to emit HAP
emissions was below the major source applicability threshold. As
discussed in more detail in response to the fourth allegation
below, EPA has not concluded at this time that emissions from the
facility have been underestimated and that this has in turn
resulted in a failure to include all applicable requirements in
the title V permit for the Roosevelt Landfill.
Petitioner’s third claim alleges that the permit and its
supporting documentation fail to “explain any basis for
establishing vastly different types of controls on PCS at two
similar landfill facilities in Central Washington (the Roosevelt
Landfill and the Ryegrass landfill near Ellensburg, Washington) .“
Again, to the extent that Petitioner is alleging that
VOC emissions from this facility have been underestimated, which
has in turn resulted in a failure by the permittee to comply with
federal requirements for NSR, this issue is discussed below under
the Petitioner’s fourth allegation.
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TPST Petition at 2. Neither Petitioner nor any other party
raised the specific issue of the difference in controls between
the Ryegrass Landfill and the Roosevelt Landfill in public
comments to Ecology on the draft permit. Accordingly, the
Petitioner’s third claim is not based upon an objection that was
raised with reasonable specificity during the public comment
period on the draft operating permit. As a result of this
failing, and because the grounds for this objection were present
and practicable for Petitioner to raise during the comment
period, Petitioner’s third claim is hereby denied. CAA §
505(b) (2); 40 CFR § 70.8(d).
Even if Petitioner had established the basis for this claim
during the prior comment period, however, or even if Petitioner’s
public comments could be read to preserve its ability to raise
this claim, EPA nonetheless believes that this claim should be
rejected on its merits. Addressing Petitioner’s implicit
criticism of the PCS controls at the Roosevelt Landfill, 6 EPA
Petitioner did, however, comment on the difference in
emissions estimates, and the resulting difference in required
controls, between the Roosevelt Landfill and two PCS treatment
facilities in Grant County, Washington. TPST Comment Letter
at 15.
6 As above, to the extent that Petitioner is alleging
that emissions from the Roosevelt Landfill are actually higher
than originally thought to be during the minor NSR permitting
process and that the Roosevelt Landfill should have been
permitted as a major source under the Prevention of Significant
7

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concludes that Petitioner has failed to demonstrate that the
permit does not assure compliance with applicable requirements of
the Act or Part 70.
The merits of minor NSR issues (and issues under other
federal preconstructiori review programs such as Prevention of
Significant Deterioration (“PSD”) and major nonattainment NSR)
can be ripe for consideration in a timely petition to object
under title V. Order In re Shintech Inc., at 3 n.2 (Sept.
10, 1997). Under 40 CFR § 70.1(b), “all sources subject to T t1e
V must have a permit to operate that assures compliance by the
source with all applicable requirements.” Applicable
requirements are defined in 40 CFR § 70.2 to include: “(1) any
standard or other requirement provided for in the applicable
implementation plan approved or promulgated by EPA through
rulemaking under Title I of the (Clean Air) Act.. . .“ Such
applicable requirements include the requirement to obtain
precoristruction permits that comply with applicable
preconstruction review requirements under the Act, EPA
regulations, and State Implementation Plans (“SIPs”) .
generally CAPI §5 110(a) (2) (C), 160—69, & 173; 40 CFR §5 51.160-66
& 52.21. Thus, the applicable requirements of the Roosevelt
Landfill Permit include the requirement to obtain a minor NSR
permit that in turn complies with applicable minor JSR
requirements under the Act, EPA regulations, and the Washington
SIP.
The Roosevelt Landfill has a minor NSR permit that reflects
best available control technology (“BACT”) imposed pursuant to
the Washington SIP. 8 The Roosevelt Landfill operating permit
Deterioration program, that issue is discussed in response to the
fourth allegation below.
The Ecology regulations define “applicable require-
ment,” in relevant part, to include “any standard or other
requirement provided for in the applicable implementation plan
approved or promulgated by EPA through rule making under title I
of the Federal Clean Air Act.” WAC 173—401—200(4) (a) (i)
Under the Washington SIP’s minor NSR program, any
proposed new source or modification must employ BACT for all
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properly reflects the conditions of its minor NSR permit as
“applicable requirements” under 40 CFR Part 70 and WAC Chapter
173-401. Petitioner here criticizes the controls on PCS (or
absence of such controls) drawn from the Roosevelt Landfill’s
minor NJSR permit and reflected in the facility’s operating
permit. Petitioner bases its criticism on a comparison between
the controls at the Roosevelt Landfill arid the Ryegrass fac l ty,
making the implicit contention that the Roosevelt Landfill’s
controls are deficient as compared to the controls reflected in
the Ryegrass facility’s minor NSR permit. EPA will evaluate s cr.
criticism under title V’s standard that operating permits must
assure compliance with applicable requirements of the Act.
In determining BACT under a minor NSR program, as in
implementing other aspects of SIP preconstruction review
programs, a State exercises considerable discretion. Thus, EPA
lacks authority to take corrective action merely because the
Agency disagrees with a State’s lawful exercise of discretion in
making BACT-related determinations. State discretion is bounded,
however, by the fundamental requirements of administrative law
that agency decisions not be arbitrary or capricious, be beyond
statutory authority, or fail to comply with applicable
procedures. Consequently, state-issued pre-constructiofl permits
- such as minor NSR permits - must conform to the applicable
requirements of the Clean Air Act and the SIP, and failure to do
so may result in corrective action by EPA. Such corrective
action may take the form of an objection to an operating permit
in response to a public petition.
Having evaluated the minor L4SR permit conditions reflected
in the Roosevelt Landfill Permit and accompanying materials, EPA
concludes that Petitioner has failed to demonstrate that the
permit does not assure compliance with relevant applicable
requirements 1 including the requirement to obtain a pre-
pollutants not previously emitted or whose emissions would
increase as a result of the new source or modification. WAC 173-
400-112 & —113. For the PSD and major NSR permit programs,
preconstrUCtiOn review requirements include use of BACT or lowest
achievable emission rates, respectively, for each regulated
pollutant that would be emitted in significant amounts and at
each emissions unit at which an emissions increase would occur.
CAA § 165(a) (4) and 40 CFR § 52.21(b) (12), (i), & (j); CAA §
173(a) (2) and 40 CFR §S 51.165(a) (1) (xiii) & (a) (2).
9

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construction permit that complies with applicable pre—
construction review requirements under the Act, EPA regulations,
and the Washington SIP. EPA does not believe that differences
between PCS controls in the Roosevelt Landfill Permit and the
Ryegrass minor NSR permit evince an arbitrary or otherwise
unlawful minor BACT determination by the State for the Roosevelt
facility. To the contrary, EPA concludes that the Roosevelt
Landfill Permit reflects a reasoned determination that is well
within the State permitting authority’s discretion to reach.
Reasons for this conclusion follow.
First, the Roosevelt Landfill’s 1990 minor NSR permit, and
in turn the facility’s operating permit, do not require treatmeri:
of PCS before it can be used as cover. By contrast, the 1995
minor NSR permit issued to Taneum Recovery Corporation
(“Taneum”), located at the Ryegrass Landfill, does specify such
treatment. 9 Taneum remediates PCS at a treatment facility
located on a specific portion of the Ryegrass Landfill. However,
the minor NSR permit for Taneum does not preclude other
disposition of the PCS, including disposal of untreated Pcs, at
the co-located and separately permitted Ryegrass Landfill. The
landfill itself does not restrict the disposal of PCS and may ise
both treated and untreated PCS from the treatment facility for
daily cover. EPA does not believe that the two landfj.lls have
significantly different control requirements related to PCS
disposal. Furthermore, while the Roosevelt Landfill is required
to dispose of the PCS once it is accepted, Taneum may ship the
bioremediated PCS offsite for usage or disposal (and may ship
offsite any un-remediated soil for disposal or treatment
elsewhere) . In other words, the different control requirements
appear to be a reflection of the allowable different end uses of
the PCS.
Second, the Roosevelt Landfill is required to collect and
destroy landfill gases, whereas the Ryegrass Landfill is not.
The Roosevelt Landfill’s 1990 minor NSR permit requires the
collection of landfill gases, arid its 1993 minor NSR permit
Although the Petitioner refers to the Ryegrass Landfill
permit, we presume that the intent was to compare the Roosevelt
Landfill controls to those imposed upon the Taneum facility
located at the Ryegrass Landfill, since the Ryegrass Landfill
itself has not recently been permitted.
10

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requires 99% destruction of the collected gases. ° Subsequent to
receipt of its minor NSR permits, the Roosevelt Landfill became
subject to the MSW Landfill New Source Performance Standard
(“NSPS”) promulgated in 1996, which also requires the collection
of landfill gases arid 98% destruction of the Collected gases.
The Ryegrass Landfill is not subject to any requirement to
collect and destroy landfill gases. EPA therefore concludes that.
the Roosevelt Landfill minor NSR permit contains more stringent
requirements than those required at the older Ryegrass Landfill,
a difference in control requirements that is appropriate due to
the improvements in technology since the opening of the Ryegr ss
Landfill.
Third, the Roosevelt Landfill minor NSR permit includes a
three million tori per year limit on total MSW — which includes
PCS, nonhazardous commercial and industrial waste, oily sludge,
dry cleaning sludge, agricultural waste, asbestos, pharmaceutical
waste, as well as household waste — that the landfill can accept.
Historically, PCS has constituted about 15% of the MSW disposed
of at the Roosevelt Landfill. The Taneum treatment facility has
a 60,000 ton per year limit on total PCS, of which no more than
15,000 tons per year may be gasoline contaminated soil. There .s
no limit on the amount or type of PCS that may be disposed at the
Ryegrass Landfill. In any event, these limits appear to be
largely reflective of the differences in size among the Roosevelt
Landfill, the Taneum treatment facility and the Ryegrass
Landfill.
Finally, EPA notes that disposal of PCS at landfills is not
generally regulated except through NSR permitting and by a few
jurisdictions iith significant ozone nonattainrnerit problems,
whereas treatment of PCS is frequently regulated. The areas n
which these Washington landfills are located have never been
found to be in noriattajnrnerit with the federal ozone standard, so
it was reasonable for the State not to require the disposal of
PCS to be treated separately from other waste allowed in MSW
10 Landfill gases are the gases generated by the
decomposition of organic waste deposited in the landfill and the
gases derived from the evolution of organic compounds in the
waste, and would include some of the VOC5 remaining in the PCS
used as daily cover in the landfill. The gases are collected by
a system of pipes installed in the landfill. The collected gases
are then directed to a combustion unit.
11

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landfills. EPA’s Region X reasonably Concluded in a letter to
the permitting authority that “if PCS is in a MSW landfill,
collection and 98 percent control as part of the landfill gas
would be appropriate.” Letter from Anita Frankel, EPA Region X,
to Lynnette Hailer, Washington Dep’t of Ecology (July 31, 1998),
at 3.
Based on the foregoing reasons, EPA does not believe that
the permitting authority has been arbitrary or otherwise unlawful
in establishing the control requirements in the Roosevelt
Landfill’s minor NSR permit that are reflected in its operatlng
permit. Petitioner has failed to demonstrate that the Roosevelt
Landfill Permit does not assure compliance with relevant
applicable requirements, and the petition’s third claim seeking
objection to the permit is hereby denied.
Petitioner’s final claim alleges that the permit “fails to
reflect the comments of [ EPA] Region 10’s New Source Review
personnel regarding controls on PCS, or to reflect the fact that
the facility is either currently in noncompliance with New Source
Review requirements or will be facing new source requirements
within two years.” TPST Petition at 2. The petition asserts
that “if the facility is currently not in compliance with the New
Source Review requirements either because it fails to address all
emissions units or because it incorrectly calculates and greatly
underestimates VOC emissions, then the (operating] Permit is
issued illegally by wholly failing to address issues of
noncompliance.” j • ,
This last allegation appears to be at the heart of the
Petitioner’s concern with the Roosevelt Landfill Permit. EPA’s
Part 70 regulations and the corresponding Washington operating
permit regulations require that, for sources that are not in
compliance with all applicable requirements at the time of permit
issuance, the permit must contain a schedule of compliance that
includes “a schedule of remedial measures, including an
enforceable sequence of actions with milestones, leading to
compliance with any applicable requirements for which the source
will not be in compliance at the time of permit issuance.” 40
CFR §S 70.5(c) (8) (iii) (C) & 70.6(c) (3); WAC 173—401—
510(2) (h) (iii) & —630(3).
The crux of Petitioner’s allegation is that the permittee
and Ecology underestimated the VOC emissions from this facility,
and that the Roosevelt Landfill is a major source of VOC because
12

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its potential to emit is greater than 250 tons per year. As a
major source of VOC, the Roosevelt Landfill would have been
required to obtain a PSD permit prior to construction. If the
Roosevelt Landfill were a major source of VOC, because it did ncr
obtain a PSD permit prior to construction, it would then not be
in compliance with all applicable requirements of the Act,
specifically PSD permitting requirements under CAA section 165,
40 CFR § 52.21 and the Washington SIP. Accordingly, if this
allegation were true, the Roosevelt Landfill Permit should not
have been issued unless it contained a compliance schedule
requiring the perriuttee to go through the PSD permitting process.
EPA has carefully considered the Petitioner’s claim that the
Roosevelt Landfill is a major source of VOC emissions. The
permitting authority, in consultation with EPA, calculated total
VOCs for the Roosevelt Landfill by using a published emission
factor for non-methane organic compound (“NMOC”) emissions from
MSW landfills. The resulting estimate of non-fugitive emissions
was less than 250 tons per year. Additional calculations by the
permitting authority, which include the fugitive component of the
NMOC estimation and the VOC emissions from PCS handling on the
working face of the landfill, as estimated by the permittee, also
result in an estimate that is less than 250 tons per year.
In contrast, the Petitioner appears to be advocating that
the total VOC emissions (fugitive and non—fugitive) for the
Roosevelt Landfill be calculated by adding the NMOC emissions
from the municipal solid waste to total VOC emissions from all
PCS. TPST Comment Letter at 27-31. The Petitioner would
calculate the PCS emissions based on the total tonnage of soil
disposed of at the landfill (not just the working face component)
and the type and level of contamination. The Petitioner does not
specify how fugitive and non—fugitive emissions will be
apportioned for P50 applicability purposes.”
Although EPA is conducting a technical analysis and
comparison of the two different methods for estimating emissions
For PSD applicability purposes, landfills are not
required to include fugitive emissions in determining whether the
stationary source is a major stationary source. 40 CFR §
51.166(b) (1) (i) (C) (iii) & 51.166(i) (4) (ii); see also Qenerally
Memorandum from John Seitz, Classification of Emissions from
Landfills for NSR Applicability Purposes (Oct. 21, 1994)
13

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from this source, EPA was unable to Conclude at the time of
perm c issuance, and is unable to conclude at this time, that one
method more accurately estimates VOC emissions from the Roosevelt
Landfill. Moreover, EPA is uncertain whether either method
accurately apportions fugitive and non-fugitive emissions for
applicability purposes. Petitioner has also made no satisfac:orj
showing that its PCS emissions calculation method estimates or
apportions VOC emissions more accurately than the method employee
by Ecology. Therefore, Petitioner has failed to demonstrate tr.ac
the permit warrants objection by EPA due to the improper
exclusion of a compliance schedule requiring the permittee to
undergo PSD permitting.
Accordingly, EPA is not prepared to conclude at this time
that the Roosevelt Landfill is out of compliance with the
requirements of PSD. However, EPA intends to continue to
evaluate the emissions from this facility. As noted in EPA
Region X’s December 30, 1998 letter to Ecology indicating that
EPA did not object to issuance of the Roosevelt Landfill Permit,
if Ecology or EPA later determines that the Roosevelt Landfill is
a major source of VOC and should have gone through PSD permitting
prior to construction, the Roosevelt Landfill Permit will be
reopened to incorporate an appropriate compliance schedule and
any new applicable requirements that may result from the PSD
permitting process. In fact, the operating permit’s Statement of
Basis discusses the ongoing nature of two compliance
determinations (see 3.5 on page 8 of 54), one of which is this
PSD permitting issue.
In drafting the Roosevelt Landfill title V permit, Ecology
consulted extensively with EPA and other state agency offices.
Region X provided comments, both oral and written, on the
Roosevelt Landfill Permit on a number of occasions over an
extended period of time. Because the Petitioner does not specify
which of EPA’s comments it believes are not reflected in the
Roosevelt Landfill Permit, EPA is unable to substantively respond
to Petitioner’s allegation that “the Permit fails to reflect the
comments of Region 10’s New Source Review Personnel.” At any
rate, the petition’s vague reference to unspecified Region X
comments fails to demonstrate that the permit is currently not n
compliance with applicable requirements of the Act or
requirements under Part 70.
EPA does believe, however, that the Roosevelt Landfill
Permit reflects Region X’s comments regarding PCS. Because the
14

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PCS issues raised are complex, are still to some extent
unresolved, and were discussed over a period of time, it may be
that there are discrepancies between the comments of some EPA
staff and the contents of the permit. These could be attributec
to a number of factors, including issues that, upon further
discussion with Ecology, were resolved differently than
originally suggested by EPA, or comments presented as
recommendations or nonbinding technical advice rather than as
binding interpretation of law, or Petitioner may be interpret1.n.g
comments made by EPA out of context. In any event, EPA is
unaware of any outstanding issue regarding PCS that is not
reflected in the Roosevelt Landfill Permit.
The Petitioner also asserts that the Roosevelt Landfill
Permit fails to acknowledge that the facility will be facing new
source requirements within two years. EPA is perplexed by this
comment, because Condition 2.25 (page 10 of 51) of the Roosevelt
Landfill Permit prohibits new construction or modification
without prior new source review approval (which includes PSD) and
condition 4.0 (page 12 of 51) requires that the perrnittee meet
all applicable requirements on a timely basis that become
effective during the permit term. In addition, condition
2.24.1.1 (page 10 of 51) of the permit requires that the permit
be reopened to address new applicable requirements to which the
source becomes subject if more than three years remain on the
permit term. The Statement of Basis also discusses the fact that
Roosevelt Landfill has filed a PSD application with Ecology in
connection with a proposal to install, at some future date,
additional landfill gas flares (see last paragraph of 11.53 on
page 44 of 54).
III. Conclusion
For the reasons set forth above and pursuant to section
505(b) (2) of the Clean Air Act, I deny the petition of TPST
requesting the Administrator to object to issuance of the
Roosevelt Landfill Permit.
May 4. 1999 _____________________
Dated: Carol M. Browner,
Administrator.
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ATTAC 4 E ,T 3
UN TED STATES ENViRONMENTAL. PROTECTION AGENCY
REGION 10
12OO! xthAvenue
J Seattle,WA981O1
RepI% To
* .(TnOf OAQ.107
MEMORAiNDUM
SUBJECT. Petition to Object to Title V Permit
FROM Chuck Clarke, Regional Administrator
Region 10
TO Carol Browner
Administrator
EPA Region 10 received a petition from TPS Technologies, Inc. (TPST or petitioner)
requesting that the Administrator object to an operating permit issued to the Roosevelt Regional
Landfill Regional Disposal Company (Roosevelt Landfill) under Title V of the Clean Air Act by
the Washington Department of Ecology (Ecology). Region 10 recommends that you sign the
attached Order denying the petition based on the reasons set forth in the Order
Background
Under the authonty of Section 505(b)(2) of the Clean Air Act and 40 C.F.R. § 70.8(d),
any person may petition the Administrator within 60 days after expiration of EPA ’s 45-day
review period to object to issuance of a Title V permit. Such a petition must, in general, be based
on objections to the permit that were raised with reasonable specificity during the public
comment period for the permit. A petition for review does not stay the effectiveness of the
permit or its requirements if the permit was issued after expiration of EPA’s 45-day review
period and before receipt of the objection. If EPA objects to a permit in response to a petition,
EPA will modify, terminate, or revoke such a permit consistent with the procedures in 40 C F R
§ 70.7(g)(4) or (g)(5)(I) and (ii) for reopening a permit for cause except in unusual
circumstances. 57 FR. 32250, 32290 (July 21, 1992).
TPST petitioned the Administrator to object to the Roosevelt Landfill permit based on the
following allegations:
1. The permit failed to identify all emissions units.
2. The permit did not adequately calculate VOC emissions from the handling of
petroleum contaminated soil (PCS) as daily cover.
3. The permit and supporting documentation failed to explain different types of controls
PMnt.d on Rcycl. .i Pip.

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on PCS at two similar landfill facilities.
4. The permit did not reflect the comments of Region 10’s New Source Review
personnel and is issued illegally by failing to address issues of PSD noncompliance
Because the permit has already been issued, the permit would be reopened in accordance with 40
C F R. § 7 0. 7 (g)(4) or (g)(5)(1) and (ii) if EPA determines that the petiuon has ment
Recommendation
In consultation with OAQPS and OGC, Region 10 has conducted a thorough review of
the Roosevelt Landfill Title V permit, the permit application, the Statement of Basis, additional
information provided by the permitting authonty in response to mquines, and the information
provided by the petitioner Based on this review, Region 10 believes that the petitioner has riot
proven any of the four allegations and, in particular, has not shown that the Roosevelt Landfill is
in noncompliance with PSD and, therefore, the petition should be denied. Our reasons for these
conclusions are discussed in detail m the attached Order.
If you have any questions on this recommendation or the attached Order, please call me at
(206) 553-0479, or Elizabeth Waddell, of my staff at (206) 553-4303.
Attachment

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ATTACF 1.ENT u
[ Federal Register May 11, 1999 (Volume 64, Number 90)]
[ Notices]
[ Page 25336]
From the Federal Register Online via GPO Access [ waisaccess.gpo,gov]
[ DOCID:frl 1my99.57]
ENVIRONMENTAL PROTECTION AGENCY
[ FRL-6340-5]
Clean Air Act Operating Permit Program; Petition for Objection to
State Operating Permit for Roosevelt Regional Landfill Regional
Disposal Company, Klickitat County, Washington
AGENCY: Environmental Protection Agency (EPA).
ACTIONS Notice of final order on petition to object to state operating
permit.
SUMMARY. Pursuant to Clean Air Act section 505(bX2) and 40 CFR
70.8(d), the EPA Administrator is hereby denying a petition to object
to a state operating permit issued by the Washington Department of
Ecology to Roosevelt Regional Landfill, Regional Disposal Company,
Klickitat County, Washington. This order constitutes final action on
the petition submitted by TPS Technologies, Inc. Pursuant to section
505(b)(2) of the Clean Air Act (“Act”), petitioner may seek judicial
review in the United States Court of Appeals for the appropriate
circuit within 60 days of this decision under section 307 of the Act.
ADDRESSES: Copies of the final order, the petition and all pertinent
information relating thereto are on file at the following location:
Environmental Protection Agency, Region X, Office of Air Quality, 1200
Sixth Avenue, Seattle, Washington, 98101. The final order is also
available electronically at the following address: http://www.epa.gov/
ttnloarpglt5sn.htm l
FOR FURTHER INFORMATION CONTACT: Elizabeth Waddell, Office of Air
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Quality, EPA Region X, telephone (206) 553-4303, e-mail
waddell elizabeth epa.gov. Interested parties may also contact the
Washington Department of Ecology, Central Regional Office, 15 West
Yakima, Suite 200, Yakinia, Washington 98902-3401.
SUPPLEMENTARY INFORMATION: The Clean Air Act affords EPA the
opportunity for a 45-day period to review, and object to as
appropnate, operating permits proposed by State permitting
authorities. Section 505(b)(2) of the Act authorizes any person to
petition the EPA Administrator within 60 days after the expiration of
this review period to object to State operating permits if EPA has not
done so Petitions must be based only on objections to the permit that
were raised with reasonable specificity during the public comment
period provided by the State, unless the petitioner demonstrates that
it was impracticable to raise these issues during the comment period or
the grounds for the issues arose after this period.
TPS Technologies, Inc. submitted a petition to the Administrator on
February 26, 1999, seeking EPA’s objection to the operating permit
issued to Roosevelt Regional Landfill, Regional Disposal Company. The
petitioner maintains that the Roosevelt Landfill operating permit is
inconsistent with the Act because the permit fails to: (1) Adequately
identify all emissions units at this municipal solid waste landfill;
(2) adequately calculate emissions of volatile organic compounds from
the handling of petroleum contaminated soil and the use of such soil as
daily cover; (3) explain the basis for establishing different types of
controls on petroleum contaminated soil at two similar landfill
facilities; and (4) reflect the comments of EPA Region X’s new source
review ( ‘NSR”) personnel regarding controls on petroleum contaminated
soil, to reflect that the facility is either currently out of
compliance with NSR requirements or will be subject to NSR in two
years. The order denying this petition explains the reasons behind
EPA’s conclusion that petitioner has failed to demonstrate that the
Roosevelt Regional Landfill permit does not assure compliance with the
Clean Air Act on the grounds raised.
Dated: May 5, 1999.
Carol M. Browner,
Administrator.
[ FR Doc 99-11833 Filed 5-10-99; 8:45 am]
BILLfNG CODE 6560-50-P

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Reply To
o Of RA-140
MEMORANDUM
SUBJECT: Petition to Object to Title V Permit
FROM Chuck Clarke, Regional Adimnistrator
Region 10
T0 Carol Browner
Administrator
EPA Region 10 received a petition from TPS Technologies, Inc (TPST or petitioner)
requesting that the Administrator object to an operating permit issued to the Roosevelt Regional
Landfill Regional Disposal Company (Roosevelt Landfill) under Title V of the Clean Air Act by
the Washington Department of Ecology (Ecology). Region 10 recommends that you sigii the
attached Order denying the petition based on the reasons set forth in the Order.
cc w/attachment:
Kirt Cox, OAQPS
Robert Dresdner, OECA
Anna Duncan, OAQPS
John Walke, OGC
bcc: Roosevelt Regional Landfill source file
Elizabeth Waddell, FDAPU
g oaq’nlcover wpd
IflitialI!
Date:

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23

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MEMORANDUM
SUBJECT. Guidance for Funding Air and Radiation Activities Using the STAG Appropriation
FROM Robert D Brenner
Acting Deputy Assistant Administrator
TO Addressees (See below)
Since the establishment of our new appropnation structure, regional offices have raised
questions about the appropriate use of funds in the State and Tribal Msistanc Grant (STAG)
appropriation for air and radiation-related activities The regional office questions fall generally in
three broad categories appropriate statutory authorities, eligible recipients, and allowable uses.
In general, the appropriate use of the STAG appropnation is defined by three sets of intersecting
requirements
• The grant authorities of the Clean Air Act (CAA) and the Toxic Substances Control
Act (TSCA). OAR grant-making authonty can be found in CAA sections 103, 105, and
106 and in TSCA sections 10 and 306 These sections are described in more detail in
attachment one to this memo
• EPA’s Appropriations Act The Congress established the STAG appropriation primarily
to combine all of EPA’s continuing environmental program assistance funds (e g, CAA
105 and TSCA 306) into a single appropriation EPA generally must use funds from its
other appropriation accounts, particularly from the Environmental Programs and
Management (EPM) or Science and Technology (S&T) appropriations for funding its
other assistance activities (e g, CAA 103)
• The provisions of EPA’s budget justifications The budget justifications identify the
specific programs and activities for which the Agency is requesting funds from the
Congress and the appropriation accounts the Agency will use Activities or programs not
explicitly identified or implicitly included in the justification or the resultant appropriations
act or conference report for a given appropnation account are not eligible for fundmg
from that account

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Several attachments have been prepared to assist employees in determining activities
appropriate for funding with the STAG account Attachment 1 to this memo provides guidance
on how to determine which appropriation account to use when funding air and radiation contract
or assistance activities Of particular concern are those STAG-funded projects which the Agency
is undertaking at the request of the state According to EPA’s Office of the 9eneral Counsel
(OGC), those associated program support costs (e g, contractor technical support for emissions
inventories, modeling, outreach) that the Agency decides to fund after determining the allotment
of the CAA section 105 or TSCA section 306 grant funds among state and loc al agencies should
be awarded in the form of in-kind CAA 105 assistance Allotment occurs wh n OAR applies the
algorithms for allocating section 105 grant dollars among regions Associated program support
costs that are identified before allotment do not need to be included in 105 grants as in-kind
assistance. Detailed guidance on the process for requesting in-kind assistance is contained in
Attachment 2 Attachment 3 is the first in what is anticipated to be a series of questions and
answers clarifying the appropnate uses of STAG funds in support of state, tnbal, and local air and
radiation programs
It is critical that we use funds for the purposes for which they were appropriated by
Congress The attached guidance should serve as a useful tool when making resource
management decisions Katherine Moore in OAR/OPMO (202/564-1514) is available to answer
any questions about this guidance or to provide support in applying it to funding air and radiation-
related activities
Attachments (3)
ADDRESSEES
Regional Air Directors
Assistant Regional Administrators
OAR Office Directors
cc Leslie Darman, OGC
Steve Pressman, OGC
Jim Drummond, OGC
Becky Fredericks, OCFO
Delia Scott, OCFO
Regional Air Grant Coordinators, Reg I-X
Planning Officers, OAR
Mary Smith, OARJORIA/IED
File F stagmemo fin wpd

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How to Determine the Correct Appropriation to Use When
Funding Air and Radiation Contract and Assistance Activities,
Attachment 1 (November 1999)
Purpose The purpose of this guidance is to assist EPA employees in determming the correct
appropnation to use when funding air and radiation-related assistance agreements and
contracts for in-kind assistance and direct implementation of federal programs in the
absence of an acceptable state or tnbal program
Background In 1996, EPA’s appropriation account structure was dramatically changed by the
Congress This has led to questions about what type of acquisition and assistance
activities may be funded from the State and Tribal Assistance Grants (STAG)
appropriation account This guidance, which was prepared in consultation with the
Office of General Counsel and the Office of the Comptroller, focuses on that issue
Three Listed below are the three pnmaiy appropriation accounts available for use in funding
Appropriations air and radiation activities
Acronym
Appropriation Title
EPM
Environmental Programs and Management
S&T
Science and Technology
STAG
State and Tribal Assistance Grants
Assistance OAR’s assistance authorities are found in both the Clean Air Act (CAA) and the Toxic
Authorities Substances Control Act (TSCA) The CAA assistance authorities are generally
descnbed in the table below
CAA Statute
Description
Section 103
Provides broad authority for conducting and promoting research,
investigations, expenments, demonstrations, surveys, studies and
traimng related to air pollution
Section 105
Provides authonty to make grants to air pollution control agencies, as
defined in section 302(b) of the CAA, for developing and
implementing programs for the prevention and control of air pollution
or implementation of national pnmaiy and secondaiy ambient air
quality standards
Section 106
Provides authority to support certain interstate air quality agencies or
coimmssions (Note Only the Ozone Transport Commission is eligible, at present)
onhnued on next page
1-3

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How to Determine the Correct Appropriation to Use When
Funding Air and Radiation Contract and Assistance Activities
(November 1999), Continued
Assistance
Authorities
(continued)
The TSCA assistance authorities are generally described below.
TSCA Statute
Description
TSCA section 10,
Provides authority for grants for research development, and
as supplemented by
monitoring and for public education, training, demonstrations,
PL 106-74
and studies
TSCA section 306
Provides authority for assistance to States for radon programs
(t’Jote EPA expects to be able to award grants to Indian tribes and intertnbal consortla
under TSCA section 306 when the proposed rule for Environmental Program Grants for
Indian tribes (40 CFR Past 35, Subpart B) is finalized)
This guidance references several grant recipient organizations They are defined as
follows
• Air Pollution Control Agency (APCA): An entity must meet one of five cnteria
outlined m CAA section 302(b) m order to be designated as an air pollution
control agency, and thereby eligible to receive CAA 105 funding
• Non-profit Organization: A non-profit organization is any organization
incorporated as a non-profit entity (For purposes of this guidance for CAA sect
103 it also refers to other public and nonprofit private agencies, institutions and
organizations)
• Multi-jurisdictional Organization (MJO): A non-profit organization whose
board of directors or membership is made up of CAA section 302(b) agency
officers or radon program directors and whose mission is to support the continuing
air or radon environmental programs of the states
• Interstate Air Quality Agencies or Commissions: Any commission established
under CAA section 1 76A or CAA section 184 or any interstate agency designated
by the Governors of the affected states pursuant to the cnteria of CAA section
106, formed for the purpose of developing implementation plans for any mterstate
air quality control region designated pursuant to CAA secltion 107 or of
implementing CAA section 176A or CAA section 184 (I’ OTh The Ozone
Transport Commission is the only eligible entity at this time )
Which
Appropriation
to Use for
Assistance
Activities
The table below provides mitial guidance for use m determinmg the orrect appropnation to
use when funding air and radiation assistance projects However, STAG funds may not
actually be available for the grant activities and programs listed below (other than section
105 grants and section 103 PM monitoring grants). STAG funds are available for other
grants under CAA section 103, and CAA section 106; and TSCA section 10 only !f the
grant activity or program is explicitly identified or implicitly included in the Agency’s
budget justification or appropriations act as being funded from STAG.
Recipients
Defined
1-4

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Continued on next page
1-5

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How to Determine the Correct Appropriation to Use When Funding Air
and Radiation Contract and Assistance Activities (Nov. 1999), Continued
Which Furthermore, if funds are arguably available for the activity or program in two
Appropriation appropriation accounts, but are not specifically provided in either appropriation account,
to Use for you must pick one of the accounts to fund the activity and stick with that selection for all
Assistance expenditures for that activity or program, unless otherwise authorized by Congress
Activities (commonly known as the “pick and stick” rule). Therefore, careful consideration should be
given to selecting the correct appropriation account to be used for each grant funded.
continued Questions on this guidance can be directed to Katherine Moore, OAR/OPMO, 202/564-
1514.
For
Section...
If the purpose is...
And the recipient
is...
Then use...
CAA 103
Conducting investigations, expenments, demonstrations,
surveys, studies and trairung to support program
implementation
-non-profit org
-APCA
EP&M
Conducting investigations, expenments, demonstrations,
surveys, studies and traimng to support applied research
- non-profit org
- APCA
S&T
Conducting air quality assessment activities to deternune
a tribe’s need to develop a CAA program
- federally
recogmzed tribe
STAG
Supporting training for CAA section 302(b) air pollution
control agency staff
- State/Tribal college
or university; or a
-Multi-Junsdict Org
STAG
Conducting investigations, experiments, demonstrations,
surveys, studies and training in support of the
US/Mexico border imtiative
- State or local
government
STAG
Coordinating or facilitating a multi-jurisdictional
approach to cariying out programs for the prevention and
control of air pollution by means of conducting
investigations, expenments, demonstrations, surveys,
studies and training
Multi-Jurisdictional
Org (MJO)
STAG
Momtoring and data collection activities in support of the
establishment of a PM 2 5 momtoring network
(Authorization to use STAG funds for this activity was
explicitly included in the FY 1999 appropriation act)
- air pollution
control ag ncy
(APCA)
STAG
CAA 105
Developing and implementing programs for the
prevention and control of air pollution or implementing
national pnmary and secondaiy ambient air quality stds
- air pollution
control agency
(APCA)
STAG
CAA 106
Supporting interstate commissions designated pursuant to
CAA section 107, or of implementing CAA section
176A or section 184 (Note Only the Ozone Transport Commission
currently is cilgibic)
- Interstate Air
Quality Agency or
Commission
STAG
Continued on next page
1-6

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How to Determine the Correct Appropriation to Use When
Funding Air and Radiation Contract and Assistance Activities
(November 1999), Continued
Which The table below provides initial guidance for use in detennming the correct
Appropriation appropnation to use when funding air and radiation assistance projects However,
to Use for STAG funds are available for TSCA § 10 only f the grant activity or program is
Assistance explicitly identified or implicitly included in the Agency’s budget justification or
Activities appropriations act as being funded from STAG. Furthermore, if funds are
(continued) arguably available for the activity or program in two appropriation accounts,
but are not specifically provided in either appropriation account, you must pick
one of the accounts to fund the activity or program and stick with that selection
for all expenditures for that activity or program, unless otherwise authorized by
Congress (commonly known as the “pick and stick” rule). Therefore, careful
consideration should be given to selecting the correct appropriation account to
be used for each grant funded.
For Section...
If the purpose is...
And the recipient is...
Then use...
TSCA 10, as
supplemented
by PL-106-74
Supporting research, development and
monitoring related to indoor radon and, if
the FY 2000 appropnation bills are
enacted in their current form, for public
education, training, demonstrations, and
studies related to indoor radon
Federally recognized
tnbe
,
STAG
TSCA 306
Assisting states in the development and
implementation of programs for the
assessment and mitigation of radon
- State agency

and intertnbal consoilia under
TSCA section 306 when the
proposed rule for
Environmental Program Grants
for Indian tribes (40 CFR part
35, Subpart B) is finalized)
STAG
Continued on next page
1-7

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How to Determine the Correct Appropriation to Use When
Funding Air and Radiation Contract and Assistance Activities,
(November 1999) continued
Which Generally, contractor support is procured usmg the Environmental Programs and
Appropriation Management (EPM) or the Science and Technology (S&T) appropriations However,
to Use for there are some contracts for which OAR may use STAG funds They are:
Contract
Activities Contractor support for direct implementation by EPA of a program required by
law in the absence of an acceptable state or tnbal program (as authonzed by
EPA’s FY 1998 appropnations act, PL 105-65, 111 Stat 1344, 1374 (1997))
• Contractor support being procured as rn-kind assistance for!the recipient, if the
assistance agreement for which rn-kind assistance is provided is funded using
STAG funds (Special documentation required For more information on rn-kind
assistance, see Attachment 2 entitled, “Guidance for Providing In-Kind
Assistance” or EPA Order 5 700-1
• Contractor support for associated program support costs (e g activities
specifically requested by states pnor to the allotment of the CAA 105 funding to
the regions)
File F KMoore slagmap fin.wpcl
1-8

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Guidance For Providing In-kind Assistance (Nov 1999) --
Attachment 2
Purpose The purpose of this guidance is to present the concept of “in-kind” assistance and
document the rules associated with its use
What is In-kind In-kind assistance is non-monetary support which EPA is providing to a recipient in
Assistance? addition to or m lieu of monetary support In-kind assistance is appropnate only when
it is more efficient for EPA, rather than the recipient, to provide the equipment or
services In addition, the costs associated with the in-kind assistance must be allowable
under the grant if it were to be directly acquired by the recipient using grant funds
Examples of rn-kind assistance are
• Transfer of equipment
• Use of EPA contractor services
Who Requests In-kind assistance can be requested by the recipient or recommended to the recipient by
In-Kind EPA
Assistance?
• In a CAA section 103 or TSCA section 10 grant, EPA can unilaterally decide
to offer rn-kind assistance in lieu of funds and then determine if the grantee will
accept the grant with that condition
• In a CAA section 105 or TSCA section 306 state grant, wfhere the state is
allotted funds in accordance with the statute and the appropnation act, if the
state insists on receiving funds rather than rn-kind assistai ice, EPA will provide
the money
Recipient If the recipient initiates a request for rn-kind assistance, the recipient should
Responsibilities
• Provide a wntten request for rn-kind assistance This can be done either in the
grant application or, if the activity is already contained in the grant application,
rn a separate letter to the EPA Project Officer The request should also include
a rationale as to why EPA, instead of the recipient, should procure/provide this
support
• Include the value of the rn-kind assistance in the total budget costs
NOTE In using and disposing of equipment and supplies furmshed on an in-kind basis, the
recipient is also responsible for complying with the property standards contained in
40 CFR Part 30 and Part 31 These standards include record keeping requirements.
Continued on next page
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Guidance For Providing In-Kind Assistance (Nov. 1999), Continued
Fri If the EPA Project Officer initiates the request for rn-kind assistance, the Project Officer should
oj provide the recipient with our rationale for recommending this type of support If the recipient
ect agrees, the recipient must modify/amend its budget to mclude the rn-kind assistance and account for
Of its value
fic
er Pursuant to EPA Order 5700 1, ¶ 9, regardless of who mitiates the request for m-kmd assistance, the Project
ReOfficer is responsible for ensuring that
sp
on i The assistance file or decision memo contains an explanation of the expected savings of cost or time
sib Sample documentation follows
jut
ies “EPA will procure momtonng eqmpment under EPA’s National Procurement for PM-Fine
Momtors for ( Name of State ) and provide the equipment as in-kind assi tance under this grant
The states are expected to have sites operational by ( Date ) The use of this national contract
will save time and money as compared to the state’s conducting its own procurement”
• All charges are to the assistance object class series
NOTE State and Tnbal Assistance Grants (STAG) funds can be used for procuring rn-kind services for a
STAG-funded assistance project
• Once rn-kind assistance has been completed, notify Grants Payment Center m Las Vegas of
fulfillment of this requirement
NOTE If equipment is being provided as in-kind assistance, the Project Officer should also be familiar
with the property standards For example, recipients are required to submit an annual inventory of
Federally owned property to EPA (40 CFR 30 33(a) and 31 32(0(2))
File Fmknidfin.wpd(l1/99)
2-2

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ATTACHMENT 3
STAG AIR AND RADIATION QUESTIONS AND ANSWERS
(November 1999)
Question: Do the recipients of grants and cooperative agreements pursuant to CAA section 105 or 106 or
TSCA section 306 have to provide matching funds for contractor support, equipment, or other “rn-kind”
assistance mcluded in the assistance agreement 9
Answer: Yes In-kind assistance is no different than other (monetary) assistance rncluded rn the total value
of the assistance agreement and, therefore, must be used to calculate the match required by the recipient
There is no match requirement for CAA section 103 and TSCA 10 grants
Question: Can EPA provide in-kmd assistance to a grant recipient by awarding a separate grant to another
entity? For example, can EPA award a CAA section 103 grant to a non-profit organization or a state
umversity as in-kind assistance included in a state’s CAA section 105 grant?
Answer: No EPA cannot use separate grants to provide in-kind assistance unless there is specific statutory
authority, as there is for the SEE program, that authonzes EPA to award assistance notwithstanding the
Federal Grants and Cooperative Agreement Act (FGCAA), which prohibits the award of grants when the
principal purpose is for the direct use of the federal government
Question: When EPA uses funds from the STAG appropriation to acquire contractor support for direct
implementation activities, should this activity be included in the CAA section 105 grants as rn-kind
assistance?
Answer: No While direct implementation (DI) activities can be funded from th STAG
appropriation, these activities are not rn-kind assistance, they are not assistance at all Under the Federal
Grant and Cooperative Agreement Act, assistance agreements (i e , grants and cooperative agreements)
cannot be used by EPA to carry out its own responsibilities DI activities are EPA’s re ponsibility in the
absence of an acceptable state or tribal program DI contracts are awarded not to assist the states and tribes
but to help the Agency meet its Clean Air Act responsibilities Therefore, EPA cannot include the cost of DI
in state or tribal grants as rn-kind assistance
Question: Can services provided by another federal agency or department through an rnter-agency
agreement with EPA be part of an assistance agreement with a multi-state, state, tnbal, or local recipient?
Answer: Yes under certarn limited circumstances EPA can negotiate an Economy Act interagency
agreement with another federal agency or department to perform services to address state, tribal, or local
needs as associated program support costs and use STAG funds the interagency agreement as long as the
value of the lAG is mcluded in a STAG-funded assistance agreement and the services to be performed are
included in the assistance agreement as in-kind assistance
3-1

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Question: Can EPA award a CAA section 103 grant or cooperative agreement using funds from the STAG
appropriation?
Answer: STAG funds can be used to fund CAA section 103 grants or cooperative agreements only if the
grant activity or program is explicitly identified or implicitly included in the Agency’s budget justification or
appropriations act as being funded from STAG (See Attachment 2 for the types of section 103 grants that
are explicitly or implicitly identified in the Agency’s budget justification or appropnations act as eligible for
funding from the STAG account) EPA cannot fund the same activity from two different appropnation
accounts On the other hand, there is no prohibition against making CAA section 103 grants from more than
one appropriation account as long as there is some meaningful difference between the types of grants funded
from each account
Question: Can the STAG appropnation be used to fund Senior Environmental Employment Program
(SEEP) enrollees who will support state activities (i e , a type of associated program support cost)
Answer Only if it is handled as rn-kind assistance and three conditions are met With the exception
of SEEP enrollees being used by EPA for direct implementation activities, STAG can o ily be used to fund
SEEP enrollees if 1) the SEEP enrollee support is explicitly agreed to by a state(s) or tribe(s) in the TSCA
section 306 or CAA section 105 grant work plan and the value of the support is included m the grant total, 2)
the state(s) provide the match required by TSCA section 306 or CAA section 105 for the value of the rn-kind
assistance, and 3) the SEEP enrollee is dedicated SOLELY to supporting the state program(s) Extra care
should be taken to make certain the SEEP enrollee does not perform tasks that merely support EPA in
carrying out its own activities and responsibilities related to state or tribal programs
Question: Can we use the STAG appropnation to directly fund CAA section 103 assistance
agreements to multi-jurisdictional organizations (MJO) for coordmating or facilitating a multi-junsdictional
approach to carrymg out state air pollution programs 9
Answer: Yes, because we have notified the Congress through our Congressional budget justification
that STAG funds are being used to fund CAA 103 grants to these non-profit, multi-jurisdictional
orgamzations for these purposes, and Congress did not prohibit such use of STAG funds However, it is
OAR policy that the level of funding for these orgamzations be determined based on discussions with the
affected states pnor to the establishment of state allotments
Questions: What is the process for notif ring OAR of the activities in support of state programs
(associated program costs) that the region wants to fund directly, not as in-kind assistance?
Answer: The regions should seek state endorsement of associated program costs during the review of
EPA’s annual grant guidance The annual regional grant guidance would then be modi ed to indicate those
activities which are to be funded prior to determining the region-by-region allotment
F STAGmemo fin wpd (11/99)
3-2

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3-3

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UNITED STATES ENVIRONMENTAL PROTECTiON AGENCY
WASHINGTON. D.C. 20460
JUL 182008
OF 1CE OF
ENFORCeMENT AND
cOMPUANcE ASSURANCE
MEMORANDUM
SUBJECT: Supplemental Environmental Projects to Reduce Diesel Emissions
FROM. Walker B. Smith, DireetorUfrS
Office of Civil Enforcement
TO: Regional Counsel
Regional Enforcement Coordinators
Regional Enforcement Division Directors
OECA Office Directors
The purpose of this memorandum is to provide guidelines in connection with the
recently enacted legislation which authorizes EPA to accept diesel emissions reduction
Supplemental Environmental Projects (SEPs) in enforcement settlements,
notwithstanding any congressional appropnations to EPA or other federal agency for
diesel projects.
Senate Bill 2146 was signed into law on June 30. 2008. It authorizes EPA to
accept any type of diesel SE?, even if EPA or other federal agency has received
Congressional appropriations for diesel projects.’ The legislation provides that EPA may
accept a diesel SEP provided that the project: (1) protects human health or the
environment; (2) is related to the underlying alleged violations; (3) does not constitute
activities that the defendant would otherwise be legally required to perform; and (4) does
not provide funds for the staff of the Agency or for contractors to carry out the Agency’s
internal operations.
The legislation also provides that EPA must require defendants in settlement
agreements that include diesel SEPs certify that they would have performed a
comparably valued SEP had the Agency been precluded by law from accepting a diesel
emissions reduction SEP. Accordingly, all administrative and civil judicial settlements
not concluded as of the date of this memorandum that include diesel SEPs should include
the Following language:
“DefendantiRespondent certifies under penalty of law that it would have agreed
to perform a comparably valued, alternative project other than a diesel emissions
See Public Law 110-255, June 30, 2008, a ai1ab1c from Thomas (Library of Con&ess),
http f/thpn s loc.gov . A copy of the enrolled bill is attached to this memorandunt
Internet Addrese (URL) • httpJ/wnw ape gov
R.cycl.d/Rscyclbles Printed with Vegeta I. 0 5 Based 1r43 on 100% Pose onsume. Procese Chiodna Free Recycled Paper

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reduction Supplemental Environmental Project, if the Agency were precluded by
law from accepting a diesel emissions reduction Supplemental Environmental
Proj eeL”
We have determined as a policy matter that, in aridition to complying with the
requirements in this legislation, diesel SEPs should comply with all requirements in
EPA ’s 1998 SEP Policy, except for the provision regarding congressional appropriations
(Legal Guideline C.5.b.) 2
If you have any questions regarding this memorandum, please contact Beth
Cavalier (202-564-3271) or Melissa Raack (202-564-7039), the Office of Civil
Enforcement’s National SEP Coordinators. We appreciate your efforts to ensure
compliance with the diesel SEP legislation.
Attachment
cc: Regional and HQ SEP Coordinators
OCE Division Directors
B. Gelber, DOJ
K. Dworkin, DOJ
Legal Guideline C.5.b. provides the followiiig
A project may not provide EPA or any federal agency with additional resources to perform a particular
activity for which Congress has specifically appropnated funds. A project may not provide EPA with
additional resources to perform a particular activity for which Congress has earmarked funds n an
appropnations committee report. Further, a project cannot be used to satisfy EPA’s statutory or
carmark obligation, or another federal a cncy’s statutory obligation, to spend funds on a particular
activity. A project, however, may be related to a particular activity for which Congress has specifically
appropriated or earmarked funds
SEP Policy at p. 6 (footnote omitted).

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S. 2146
ene Jiundrcd tcnth on rczz
of th
i nitcd tatez of nierIc
AT THE SECOND SESSION
Begun nnd held ul tIw City of ff’u hingtou on Thursdu
the third duy of Juntiury. two iho,:,und (111(1 eighl
n tt
To authorize the Adinmistratni- of the Environmental Protection Agency to occept ,
as part of a settlement, diesel emission reduction Supplemental Environmental
Projects, and for other purposes
Be it enacted by the Senate and House of Representatives of
the United States ofAmerica in Congress assembled,
SECTION 1. EPA AUTHORITY TO ACCEPT DIESEL EMiSSIONS REDUC-
TION SUPPLEMENTAL ENVIRONMENTAL PROJECTS.
The Administrator of the Environmental Protection Agency
(hereinafter, the “Agency”) may accept (notwithstanding sections
3302 and 1301 of title 31, United States Code) diesel emissions
reduction Supplemental Environmental Projects if’ the projects, as
part of a settlement of any alleged violations of environmental
law—
(1) protect human health or the environment;
(2) are related to the underlying alleged violations,
(3) do not constitute activities that the defendant would
otherwise be legally required to perform; and
(4) do not provide funds for the staff of the Agency or
for contractors to carry out the Agency’s internal operations.
SEC. 2. SETTLEMENT AGREEMENT PROVISIONS.
In any settlement agreement regarding alleged violations of
environmental law in which a defendant agrees to perform a diesel
emissions reduction Supplemental Environmental Project, the
Administrator of the Environrnent.a) Protection Agency shall require
the defendant to include in the settlement documents a certification
under penalty of law that the defendant would have agreed to
perform a comparably valued, alternative project other than a diesel
emissions reduction Supplemental Environmental Project if the
Administrator were precluded by law from accepting a diesel emis-
sion reduction Supplemental Environmental Project. A failure by
the Administrator to include this language in such a settlement
agreement shall not create a cause of action against the United
States undeF the Clean Air Act or any other law or create a
basis for overturning a settlement agreement entered into by the
United States.
SEC. 3. INCLUSION OF THE DISTRICT OF COLUMBIA IN CERTAIN STATE
ANI) LOCAL GRANT PROGRAMS FOR DIESEL EMISSION
REDUCTIONS.
(a) IN GENEi L.—Section 791 of the Energy Policy’Act of 2005
(42 U.S C. 16131) is amended by adding at the end thereof the
follo ’ing:

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S. 2146—2
“(9) DEFINITION OF STATE —The term ‘State ’ includes the
District of Columbia.”
(b) CONFORMING AMENDMENTS —(1) Section 793(dX2) of such
Act (42 U.S.C. 16133(d)(2)) s amended by striking “Governor” and
inserting “chief executive”.
(2) Subparagraphs (A) and (B) of section 793(c)(2) of such
Act are each amended by striking “50” and inserting and
by striking ‘ 2 percent” and insert ing ul.96 percent” in each place
such terms appear.
Speaker of the House of Representatwes
Vice Preszdent of the United States and
President of the Senate.

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